{"version":"1.0","encoding":"UTF-8","feed":{"xmlns":"http://www.w3.org/2005/Atom","xmlns$openSearch":"http://a9.com/-/spec/opensearchrss/1.0/","xmlns$blogger":"http://schemas.google.com/blogger/2008","xmlns$georss":"http://www.georss.org/georss","xmlns$gd":"http://schemas.google.com/g/2005","xmlns$thr":"http://purl.org/syndication/thread/1.0","id":{"$t":"tag:blogger.com,1999:blog-17908317"},"updated":{"$t":"2026-11-10T09:21:33.283-08:00"},"category":[{"term":"Commerce Clause"},{"term":"Constitution"},{"term":"United States"},{"term":"borders"},{"term":"boundaries"},{"term":"common law"},{"term":"emigration"},{"term":"exit costs"},{"term":"federal"},{"term":"franchise"},{"term":"immigration"},{"term":"law"},{"term":"legal positivism"},{"term":"legal realism"},{"term":"libertarian"},{"term":"monarchy"},{"term":"natural law"},{"term":"property"}],"title":{"type":"text","$t":"Unenumerated"},"subtitle":{"type":"html","$t":"An unending variety of topics"},"link":[{"rel":"http://schemas.google.com/g/2005#feed","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/posts\/default"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default?alt=json\u0026max-results=150"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/"},{"rel":"hub","href":"http://pubsubhubbub.appspot.com/"},{"rel":"next","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default?alt=json\u0026start-index=151\u0026max-results=150"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"generator":{"version":"7.00","uri":"http://www.blogger.com","$t":"Blogger"},"openSearch$totalResults":{"$t":"351"},"openSearch$startIndex":{"$t":"1"},"openSearch$itemsPerPage":{"$t":"150"},"entry":[{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-582101972123401084"},"published":{"$t":"2018-03-23T10:54:00.001-07:00"},"updated":{"$t":"2018-03-23T14:56:25.990-07:00"},"title":{"type":"text","$t":"The many traditions of non-governmental money (part i)"},"content":{"type":"html","$t":"\u003Cspan style=\"font-size: large;\"\u003EThe central bank of the United States, the Federal Reserve, has put out\u003Ca href=\"https:\/\/files.stlouisfed.org\/research\/publications\/page1-econ\/2018\/03\/01\/bitcoin-money-or-financial-investment_SE.pdf\"\u003E “educational material”\u003C\/a\u003E on Bitcoin for teachers and students (including a quiz!). The Bitcoin parts are odd enough, but this and a subsequent blog post will focus on the following statement: “traditionally, currency is produced by a nation's government.“ Is that a fair representation of monetary traditions? At the very least it is quite incomplete. This two-part series will proceed back in time, showing some of the many examples non-governmental money, in order to fill in some of the gaps.\u003Cbr \/\u003E\u0026nbsp;\u003C\/span\u003E\u003Cbr \/\u003E\n\u003Cspan style=\"font-size: large;\"\u003EPrivately issued IOUs\u0026nbsp; and privately minted coins are covered here in part (i) of the series. \u003C\/span\u003E\u003Cspan style=\"font-size: large;\"\u003EThese IOUs can more specifically be described as bearer promissory notes, and even more specifically, when issued by banks, bank notes\u003Cspan style=\"font-size: large;\"\u003E.\u0026nbsp;\u003C\/span\u003E\u003C\/span\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cspan style=\"font-size: large;\"\u003E\u003Cspan style=\"font-size: large;\"\u003EThe Bitcoin public blockchain implements a global settlement layer (\"layer 1\" in bitcoin parlance).\u0026nbsp; \u003C\/span\u003EThe closest historical analog to the Bitcoin settlement layer is not to the bank notes, nor even to the coins (despite its name), it is to the monetary metal that for most of monetary history from ancient civilization to the 20th century ultimately underlay the IOUs. This \"metal layer\" of historical money systems will be\u0026nbsp; covered in part (ii) of this series, as will some even more ancient forms of non-governmental money.\u003C\/span\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ch3\u003E\n\u003Cu\u003E\u003Cspan style=\"font-size: large;\"\u003EBank notes\u003C\/span\u003E\u003C\/u\u003E\u003C\/h3\u003E\n\u003Cbr \/\u003E\n\u003Cspan style=\"font-weight: normal;\"\u003E\u003Cspan style=\"font-size: large;\"\u003E\u003Cspan style=\"font-size: large;\"\u003EHigher \nlayers of the bitcoin ecosystem, which can include exchanges \n(centralized or decentralized) as well as more trust-minimized systems \nsuch as \u003Ca href=\"https:\/\/lightning.network\/lightning-network-paper.pdf\" target=\"_blank\"\u003ELightning\u003C\/a\u003E,\n correspond most closely in our rough historical analogies to checking accounts (which, although often counted by economists as part of the money supply, and not created or managed by governments, will be so familiar to most readers that they will not be covered in this series) and to private \nbank notes.\u0026nbsp; In these higher layer monetary systems, a more computationally (or for bank notes physically) \nefficient medium is substituted for a less efficient medium (for bank \nnotes, often the underlying metal), usually (as is the case with checking accounts, bank notes, and centralized bitcoin exchanges alike) at the cost of \nincreasing trust and thus vulnerability and risk in the system.\u003C\/span\u003E\u003C\/span\u003E\u003C\/span\u003E\u003Cbr \/\u003E\n\u003Cdiv class=\"separator\" style=\"clear: both; text-align: left;\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"separator\" style=\"clear: both; text-align: left;\"\u003E\n\u003Cspan style=\"font-size: large;\"\u003E\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgSC2rwnre_Hm-McZVtnlvFl2SroTSeQpj5Tsyi_UeRZom4Dr065huKubFNzNBWnF22Hef1GCYqVwBvXyU1TxYoDttrkMKIAchnVQNpusLaJXZ5sFCMr7NzMNSJOE-3qk5mbzL5\/s1600\/One+Pound+Note+1945+North+of+Scotland+Bank+Limited.JPG\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" data-original-height=\"899\" data-original-width=\"1600\" height=\"358\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgSC2rwnre_Hm-McZVtnlvFl2SroTSeQpj5Tsyi_UeRZom4Dr065huKubFNzNBWnF22Hef1GCYqVwBvXyU1TxYoDttrkMKIAchnVQNpusLaJXZ5sFCMr7NzMNSJOE-3qk5mbzL5\/s640\/One+Pound+Note+1945+North+of+Scotland+Bank+Limited.JPG\" width=\"640\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr align=\"left\"\u003E\u003Ctd class=\"tr-caption\"\u003E\u003Cspan style=\"font-size: large;\"\u003E\u003Cspan style=\"font-family: inherit;\"\u003E\u003C\/span\u003EBank\n note (bearer promissory instrument) issued by the North of Scotland \nBank, 1945. Many banks besides central banks have issued bank notes that\n circulated as \ncurrency.\u0026nbsp; \u003Ca href=\"https:\/\/en.wikipedia.org\/wiki\/George_Selgin\" target=\"_blank\"\u003EGeorge Selgin\u003C\/a\u003E and \u003Ca href=\"https:\/\/en.wikipedia.org\/wiki\/Lawrence_H._White\" target=\"_blank\"\u003ELawrence White\u003C\/a\u003E among others have done \nextensive work in \u003Ca href=\"https:\/\/en.wikipedia.org\/wiki\/Free_banking\" target=\"_blank\"\u003Ethis area\u003C\/a\u003E. Knowledge of the long \nhistory of non-governmental money was one of the inspirations of the original invention \nof trust-minimized cryptocurrency.\u0026nbsp; This practice continues to this day in Hong Kong and Scotland.\u003C\/span\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003C\/span\u003E\u003Cspan style=\"font-size: large;\"\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"separator\" style=\"clear: both; text-align: center;\"\u003E\n\u003C\/div\u003E\n\u003Cspan style=\"font-size: large;\"\u003E\n\u003C\/span\u003E\n\u003Cbr \/\u003E\n\u003Cdiv class=\"separator\" style=\"clear: both; text-align: left;\"\u003E\n\u003Cspan style=\"font-size: large;\"\u003E\u0026nbsp;\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEg3zb_ge1eTIKJYGlWzHi5DLUgwHqCO_7oD2kmvaLWswmcsT73TcOaCtW2CeDrsSw_odpzDRUQbkCpgKRFkQ9yPKzPT2qI1QDHgxEnf8A7FnQ6nPBCqpqsCwLLA9Q1bk9Eq0Q3Y\/s1600\/PrivateBankNoteStockholmEnskildaBank1876.JPG\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" data-original-height=\"899\" data-original-width=\"1600\" height=\"358\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEg3zb_ge1eTIKJYGlWzHi5DLUgwHqCO_7oD2kmvaLWswmcsT73TcOaCtW2CeDrsSw_odpzDRUQbkCpgKRFkQ9yPKzPT2qI1QDHgxEnf8A7FnQ6nPBCqpqsCwLLA9Q1bk9Eq0Q3Y\/s640\/PrivateBankNoteStockholmEnskildaBank1876.JPG\" width=\"640\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr align=\"left\"\u003E\u003Ctd class=\"tr-caption\"\u003E\u003Cspan style=\"font-size: large;\"\u003EStockholms \nEnskilda Bank note, Sweden, 1876. Critics have said that decentralized note \nissue, following the same principles of fractional reserve and maturity \nmismatch as central banks, were just as or more prone to runs on the bank. Defenders\n have argued that competition between note-issuing banks formed a \npeer-to-peer system where banks could redeem competitors' notes, making \nit more reliable and robust form of fractional reserve banking than a central bank run or managed fractional reserve.\u003C\/span\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"separator\" style=\"clear: both; text-align: left;\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"separator\" style=\"clear: both; text-align: left;\"\u003E\n\u003Cspan style=\"font-size: large;\"\u003E\u0026nbsp;\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiPzsjDJESrn40KiGdalvvtpxQjMORXCIlcFVhRIOQk7j7zGAD28osv1Ir1IF5H1mUE7-gzoc2w26-GUhKy25BtxSDId5vyAwZg1s5qYk3i3cxxxw92jUZeFTOsdJb5Fda8IftI\/s1600\/PrivateBankNoteHSBC2009Cropped.png\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" data-original-height=\"465\" data-original-width=\"900\" height=\"330\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiPzsjDJESrn40KiGdalvvtpxQjMORXCIlcFVhRIOQk7j7zGAD28osv1Ir1IF5H1mUE7-gzoc2w26-GUhKy25BtxSDId5vyAwZg1s5qYk3i3cxxxw92jUZeFTOsdJb5Fda8IftI\/s640\/PrivateBankNoteHSBC2009Cropped.png\" width=\"640\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr align=\"left\"\u003E\u003Ctd class=\"tr-caption\"\u003E\u003Cspan style=\"font-size: large;\"\u003E\u003Cspan style=\"font-size: x-large;\"\u003E\u003Cspan style=\"font-family: inherit;\"\u003E\u003Cspan style=\"font-size: large;\"\u003EHong Kong \u0026amp; Shanghai Banking Corporation (HSBC) bank note, 2009. \u003C\/span\u003E\u003C\/span\u003E\u003C\/span\u003E\u003C\/span\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"separator\" style=\"clear: both; text-align: left;\"\u003E\n\u003Cspan style=\"font-size: large;\"\u003E\u0026nbsp;\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEh8OcyPL9HAqWi5qxe7bf4ZPaxmH6t0trvw9xd6KkUhSblBY-Rt4UY7NxifBz0bBpAT_tEQs7eqpf-Z_dMS5TcTcBqS07CsdMGnUVeHJs6aT_S662OfDOcCGBxC_0vi3hgixKyr\/s1600\/IpswichBankNote1820s.jpg\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" data-original-height=\"576\" data-original-width=\"1024\" height=\"360\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEh8OcyPL9HAqWi5qxe7bf4ZPaxmH6t0trvw9xd6KkUhSblBY-Rt4UY7NxifBz0bBpAT_tEQs7eqpf-Z_dMS5TcTcBqS07CsdMGnUVeHJs6aT_S662OfDOcCGBxC_0vi3hgixKyr\/s640\/IpswichBankNote1820s.jpg\" width=\"640\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr align=\"left\"\u003E\u003Ctd class=\"tr-caption\"\u003E\u003Cspan style=\"font-size: large;\"\u003EIpswich \nBank, a \"country\" (non-London) bank in England, 1820s (this instance \nunissued).\u0026nbsp; Traditionally country banks, like the Bank of England, \nredeemed for specie, i.e. the official coin, which contained a standard \nweight of monetary metal (usually in this era silver). After 1833, Bank \nof England notes became legal tender which holders of country bank notes\n had to accept in lieu of specie.\u003C\/span\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"separator\" style=\"clear: both; text-align: center;\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"separator\" style=\"clear: both; text-align: center;\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cbr \/\u003E\n\u003Cdiv class=\"separator\" style=\"clear: both; text-align: center;\"\u003E\n\u003C\/div\u003E\n\u003Cdiv class=\"separator\" style=\"clear: both; text-align: center;\"\u003E\n\u003C\/div\u003E\n\u003Cbr \/\u003E\n\u003Cdiv class=\"separator\" style=\"clear: both; text-align: center;\"\u003E\n\u003C\/div\u003E\n\u003Cdiv class=\"separator\" style=\"clear: both; text-align: center;\"\u003E\n\u003C\/div\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhYIcIXOkFhzwJcAK6HuHOko4KyuAT1PL6iUL5uWUlD-mqgGB_4dclzYnFlbl6rYGbXYX2aIUDNSuWxFlqtSPXd2Tm5ZnxSHAWLGCav7SI1-Mq7ii_qgv8VmVjRYgH8Vkf4wFi7\/s1600\/PrivateBankNoteCandaBankPrinceEdwardIsland.jpg\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" data-original-height=\"477\" data-original-width=\"1099\" height=\"275\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhYIcIXOkFhzwJcAK6HuHOko4KyuAT1PL6iUL5uWUlD-mqgGB_4dclzYnFlbl6rYGbXYX2aIUDNSuWxFlqtSPXd2Tm5ZnxSHAWLGCav7SI1-Mq7ii_qgv8VmVjRYgH8Vkf4wFi7\/s640\/PrivateBankNoteCandaBankPrinceEdwardIsland.jpg\" width=\"640\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr align=\"left\"\u003E\u003Ctd class=\"tr-caption\"\u003E\u003Cspan style=\"font-size: large;\"\u003EBank of Prince Edward Island note, Canada, 1871\u003C\/span\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cbr \/\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEj6KowtWNHROEhmDN3MDpYIUobOtTSlhNCUFT7gT8TVF8M4ZrmmvaB6j7033mact6SClM637qusb-vSERuQ5A2IowlH03DSqjCx5yZai1b56k6PCriR0pydIH7cswv_ulVQQ3ds\/s1600\/PrivateBankNoteMechanicsBank1856.png\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" data-original-height=\"687\" data-original-width=\"1600\" height=\"274\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEj6KowtWNHROEhmDN3MDpYIUobOtTSlhNCUFT7gT8TVF8M4ZrmmvaB6j7033mact6SClM637qusb-vSERuQ5A2IowlH03DSqjCx5yZai1b56k6PCriR0pydIH7cswv_ulVQQ3ds\/s640\/PrivateBankNoteMechanicsBank1856.png\" width=\"640\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr align=\"left\"\u003E\u003Ctd class=\"tr-caption\"\u003E\u003Cspan style=\"font-size: large;\"\u003EMechanic’s Bank note of 1856, Augusta, Georgia. Before our Civil War, most paper money in the United States was \nprivately issued.\u003C\/span\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cdiv class=\"separator\" style=\"clear: both; text-align: center;\"\u003E\n\u003C\/div\u003E\n\u003Cbr \/\u003E\n\u003Cdiv class=\"separator\" style=\"clear: both; text-align: center;\"\u003E\n\u003C\/div\u003E\n\u003Cbr \/\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgeX50TND0O5OZCir0nb2WG_qQO7V3oNnvIsxStsvuAPe3idKbVJPkBFtNval7BmSuAYRvKqR6eur4IpXqzd0zkyw5rBI696Q8L_wROrO1x3U4VwHyRrOvOasMz22eZo6xxFpdM\/s1600\/BooneCountyBank20Large.jpg\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" data-original-height=\"330\" data-original-width=\"700\" height=\"299\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgeX50TND0O5OZCir0nb2WG_qQO7V3oNnvIsxStsvuAPe3idKbVJPkBFtNval7BmSuAYRvKqR6eur4IpXqzd0zkyw5rBI696Q8L_wROrO1x3U4VwHyRrOvOasMz22eZo6xxFpdM\/s640\/BooneCountyBank20Large.jpg\" width=\"640\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr align=\"left\"\u003E\u003Ctd class=\"tr-caption\"\u003E\u003Cspan style=\"font-size: large;\"\u003E\u003Cspan style=\"font-family: inherit;\"\u003EBoone County Bank note, Lebanon, Indiana 1858.\u0026nbsp; \"\u003Cspan style=\"-webkit-text-stroke-width: 0px; background-color: white; display: inline !important; float: none; font-variant-caps: normal; font-variant-ligatures: normal; letter-spacing: normal; text-align: start; text-decoration-color: initial; text-decoration-style: initial; text-indent: 0px; text-transform: none; white-space: normal; word-spacing: 0px;\"\u003EDuring\n this era the U.S. had no central bank and paper money was issued by a \nvariety of private banks. Some was even issued by manufacturing and \nretail companies. This money was backed by gold, silver, real estate, \nstocks, bonds, and a wide variety of other assets. You can no longer \ncash them in, but they are now worth often substantial sums as \ncollectibles...the note designs were more varied and creative than \nmodern money, and were remarkably free of \u003C\/span\u003E\u003C\/span\u003E\u003C\/span\u003E\u003Cspan style=\"font-size: large;\"\u003E\u003Cspan style=\"font-family: inherit;\"\u003E\u003Cspan style=\"-webkit-text-stroke-width: 0px; background-color: white; display: inline !important; float: none; font-variant-caps: normal; font-variant-ligatures: normal; letter-spacing: normal; text-align: start; text-decoration-color: initial; text-decoration-style: initial; text-indent: 0px; text-transform: none; white-space: normal; word-spacing: 0px;\"\u003Epoliticians' faces.\" \u003Ca href=\"https:\/\/unenumerated.blogspot.com\/2008\/05\/bank-notes-from-free-banking-era.html\" target=\"_blank\"\u003ESource\u003C\/a\u003E\u003C\/span\u003E\u003C\/span\u003E\u003C\/span\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiBZ9KC3PtrqueDsmCwUJBWVEsW7LWuy_7sMSsTLLFXowlTFATzbLb9HI9GwrDpiHTUGJO2LZRKV3-9I6aSSu3zEw8-U_GvIScruP3y6VTyU5ecRVetuK8iT0X44oH4iujHKRSS\/s1600\/BankOfDeSotoLarge.jpg\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" data-original-height=\"360\" data-original-width=\"837\" height=\"274\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiBZ9KC3PtrqueDsmCwUJBWVEsW7LWuy_7sMSsTLLFXowlTFATzbLb9HI9GwrDpiHTUGJO2LZRKV3-9I6aSSu3zEw8-U_GvIScruP3y6VTyU5ecRVetuK8iT0X44oH4iujHKRSS\/s640\/BankOfDeSotoLarge.jpg\" width=\"640\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr align=\"left\"\u003E\u003Ctd class=\"tr-caption\"\u003E\u003Cspan style=\"font-size: large;\"\u003EBank of De Soto note, De Soto, Nebraska, 1863. Critics have called this era of U.S. private bank note issue the \"wildcat banking\" era. Collectors sometimes call surviving private bank notes \"broken bank notes\", because notes from banks that were quickly or never redeemed are much more likely to have survived in reasonable to excellent condition.\u003C\/span\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjCep7Ji-whlyOwz5g3EgrvvrBkht1vrZtyGf_3rP3ya4hj9rHLvA-eMdssgTeQnzHDac9_Ip5WZ0bB5O2-RwBtBX7IfCdfdcB1KlNp5zzOZydmotJZvhDzRAwkQ1fHiuO1AnPb\/s1600\/HagerstownBankNote.jpg\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" data-original-height=\"447\" data-original-width=\"1000\" height=\"286\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjCep7Ji-whlyOwz5g3EgrvvrBkht1vrZtyGf_3rP3ya4hj9rHLvA-eMdssgTeQnzHDac9_Ip5WZ0bB5O2-RwBtBX7IfCdfdcB1KlNp5zzOZydmotJZvhDzRAwkQ1fHiuO1AnPb\/s640\/HagerstownBankNote.jpg\" width=\"640\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr align=\"left\"\u003E\u003Ctd class=\"tr-caption\"\u003E\u003Cspan style=\"font-size: large;\"\u003EHagerstown Bank note, Hagerstown, Missouri, 1850s (this instance unissued).\u0026nbsp; Some other scholars within the Federal Reserve remembered the private note-issuing era in the United States; their central bankers' view of it can be found \u003Ca href=\"https:\/\/www.minneapolisfed.org\/research\/qr\/qr931.pdf\"\u003Ehere\u003C\/a\u003E.\u0026nbsp; \u003C\/span\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cbr \/\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cbr \/\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjQCc3Khnl3vB0L14Mu91x1RObX1KHEjfMjtzD1DhSI-9pUpt4W3Pgtypyh0LEVHBbfadIUNdLbkFe8vNXoHriMKGWurp_JgV7pbfd3linlObzEfg6m0MbOdBK7hyphenhyphenCumD5RPcrO\/s1600\/Jiao_zi_SongDynastyNote.jpg\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" data-original-height=\"537\" data-original-width=\"308\" height=\"400\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjQCc3Khnl3vB0L14Mu91x1RObX1KHEjfMjtzD1DhSI-9pUpt4W3Pgtypyh0LEVHBbfadIUNdLbkFe8vNXoHriMKGWurp_JgV7pbfd3linlObzEfg6m0MbOdBK7hyphenhyphenCumD5RPcrO\/s400\/Jiao_zi_SongDynastyNote.jpg\" width=\"228\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr align=\"left\"\u003E\u003Ctd class=\"tr-caption\"\u003E\u003Cspan style=\"font-size: large;\"\u003EJiaozi, a bearer promissory note\nfrom the Song Dynasty. The earliest jiaozi were issued in Sichuan province by\nmerchants to relieve their fellow merchants of the high costs of transporting\nthe heavy government-issued iron coins.\u003C\/span\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cspan style=\"font-size: large;\"\u003E\u003Cspan style=\"font-size: large;\"\u003EGordon Tullock wrote of bearer promissory notes in an earlier time and different part of China,\u0026nbsp;\u003C\/span\u003E\u003C\/span\u003E\u003Cbr \/\u003E\n\u003Cblockquote class=\"tr_bq\"\u003E\n\u003Cdiv style=\"direction: ltr; margin-bottom: 0pt; margin-left: 0in; margin-top: 7.2pt; text-align: left; text-indent: 0in; unicode-bidi: embed; word-break: normal;\"\u003E\n\u003Cspan style=\"font-size: large;\"\u003EBy A.D. 700-800 there were shops in China which would accept valuables,\nand, for a fee, keep them safe. They would honour drafts drawn on the items in\ndeposit, and, as with the goldsmith's shops in Europe, their deposit receipts\ngradually began to circulate as money. It is not known how rapidly this process\ndeveloped, but by A.D. 1000 there were apparently a number of firms in China\nwhich issued regular printed notes and which had discovered that they could\ncirculate more notes than the amount of valuables they had on deposit.\u0026nbsp; [\u003Ca href=\"https:\/\/www.scribd.com\/document\/147318013\/Tullock-G-Paper-money-in-Mongol-China-pdfullock-G-Paper-money-in-Mongol-China-pdf\" target=\"_blank\"\u003ESource\u003C\/a\u003E]\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/blockquote\u003E\n\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Ch4\u003E\n\u003C\/h4\u003E\n\u003Ch4\u003E\n\u003C\/h4\u003E\n\u003Ch4\u003E\n\u003C\/h4\u003E\n\u003Ch4\u003E\n\u003Cu\u003E\u003Cspan style=\"font-size: large;\"\u003ECoins\u003C\/span\u003E\u003C\/u\u003E\u003C\/h4\u003E\n\u003Ch4\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003E\u003Cspan style=\"font-weight: normal;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/span\u003E\u003C\/h4\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"height: 492px; margin-left: auto; margin-right: auto; text-align: center; width: 653px;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhnVpNU3i1uQmQxBAUNiwhDA85u4mShj5Fo793jK6ZeFfjaj47pgMXkOst64ZJXYfLH_hjkz-ExS3Mcb-4ASE3q9MuPV6mseNZ29mxS5G2AXbiZGss-dLaeEvIEPnmq9nmDVTKo\/s1600\/PrivateCoinEdwardNightingaleHalfPennyBrass1670s.png\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" data-original-height=\"394\" data-original-width=\"808\" height=\"312\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhnVpNU3i1uQmQxBAUNiwhDA85u4mShj5Fo793jK6ZeFfjaj47pgMXkOst64ZJXYfLH_hjkz-ExS3Mcb-4ASE3q9MuPV6mseNZ29mxS5G2AXbiZGss-dLaeEvIEPnmq9nmDVTKo\/s640\/PrivateCoinEdwardNightingaleHalfPennyBrass1670s.png\" width=\"640\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr align=\"left\"\u003E\u003Ctd class=\"tr-caption\"\u003E\u003Cspan style=\"font-size: large;\"\u003E\u003Cspan style=\"font-size: large;\"\u003EA brass half-penny issued by grocer Edward Nightingale, probably dating from the early 1670s.\u0026nbsp;\u003C\/span\u003E\u003C\/span\u003E\u003Cspan style=\"font-size: large;\"\u003E\u003Cspan style=\"font-size: large;\"\u003E\u003Cspan style=\"font-size: large;\"\u003E\u003Cspan style=\"font-size: large;\"\u003E [\u003Ca href=\"https:\/\/archive.org\/download\/dudleytradesmens02perk\/dudleytradesmens02perk_bw.pdf\" target=\"_blank\"\u003ESource\u003C\/a\u003E]\u003C\/span\u003E\u003C\/span\u003E\n While in most times and places, coinage was a royal or otherwise \npolitical monopoly, there \nwere a number of important exceptions where coins were minted privately \nand successfully circulated as currency.\u003C\/span\u003E Per monetary historian Glyn Davies, during the English Commonwealth, Protectorate, and early\nRestoration occurred “a vast issue by\nmerchants, manufacturers, and municipalities, between 1644 and 1672, of copper\ntokens, mostly of farthings and halfpence.” [\u003Ca href=\"http:\/\/library.uniteddiversity.coop\/Money_and_Economics\/A_History_of_Money-From_Ancient_Times_to_the_Present_Day.pdf\" target=\"_blank\"\u003EDavies\u003C\/a\u003E p243] \u003C\/span\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cdiv style=\"text-align: right;\"\u003E\n\u003C\/div\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003E\u003Cspan style=\"font-weight: normal;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/span\u003E\n\u003Cdiv class=\"separator\" style=\"clear: both; text-align: center;\"\u003E\n\u003C\/div\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEja8I82FjzTvZCs_6YWkMbzCrWlRcvEIfmzF-3ehRoYHFlo2cu4ebkUJ-9TXJPj0cwcoYMriPBd6EGlHfX1B875S3a_NdWcOf7PnQA_OUGC1a-9IOFdWbxqR1ak9OfVtdc_m1SB\/s1600\/PrivateMintAngleseyMiningCompanyDruidHalfpenny.jpg\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" data-original-height=\"286\" data-original-width=\"291\" height=\"393\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEja8I82FjzTvZCs_6YWkMbzCrWlRcvEIfmzF-3ehRoYHFlo2cu4ebkUJ-9TXJPj0cwcoYMriPBd6EGlHfX1B875S3a_NdWcOf7PnQA_OUGC1a-9IOFdWbxqR1ak9OfVtdc_m1SB\/s400\/PrivateMintAngleseyMiningCompanyDruidHalfpenny.jpg\" width=\"400\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr align=\"left\"\u003E\u003Ctd class=\"tr-caption\"\u003E\u003Cspan style=\"font-size: small;\"\u003E\u003Cspan style=\"font-size: large;\"\u003EAnglesey \u0026amp; Mines druid half-penny, England, 1788. \u003C\/span\u003E\u003C\/span\u003E\u003Cspan style=\"font-size: small;\"\u003E\u003Cspan style=\"font-size: large;\"\u003E\"From 1787 to 1797, private\nmerchants and industrialists issued 600 tons of custom-made 'commercial' copper\ncoin, which was more copper coin than the Royal Mint had supplied during the\nprevious half century.\" [\u003Ca href=\"http:\/\/www.independent.org\/store\/book.asp?id=75\" target=\"_blank\"\u003ESource\u003C\/a\u003E].\u003C\/span\u003E\u003C\/span\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cbr \/\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEh0ey_2O8wV4TD1lzx3Xz4nTINOmsVK6pi1HzRmW7GmWkyunJEDWkQw5igPHQ6xboEuOydNpYjI5m6x1-buqh8cLDQSQmZGhjDDiyjlYebwZkA3o9jQ5gp3cWJh7CjXHJXXhAW0\/s1600\/PrivateMintCoinCoalbrookdaleShropshire1792.jpg\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" data-original-height=\"202\" data-original-width=\"400\" height=\"201\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEh0ey_2O8wV4TD1lzx3Xz4nTINOmsVK6pi1HzRmW7GmWkyunJEDWkQw5igPHQ6xboEuOydNpYjI5m6x1-buqh8cLDQSQmZGhjDDiyjlYebwZkA3o9jQ5gp3cWJh7CjXHJXXhAW0\/s400\/PrivateMintCoinCoalbrookdaleShropshire1792.jpg\" width=\"400\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr align=\"left\"\u003E\u003Ctd class=\"tr-caption\"\u003E\u003Cspan style=\"font-size: large;\"\u003EIronbridge coin, minted by Coalbrookdale Works, Shropshire, England, 1782. In the industrial revolution, factories had to attract workers with frequent pay that could be spent at bargain shops. The Royal Mint was not producing low-denomination coins, so factories minted their own or used the coins minted by another firm.\u0026nbsp; A good review by Jeffrey Hummel of George Selgin's excellent analysis of this era here.\u003C\/span\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cbr \/\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhG1NZPISDMNPG8EwVPrk0hiEGkT43M4bY_qdUE1y44XC0Fkb70rqBhlmVIHgCGmR3qXv3qSi_gPKFNzGZB2_E8O0fhJbnTcjkDPv3-2ELtiqYP_C2HaZPTdsDbplEwaSsBCST5\/s1600\/PrivateMintSilverCoinsSezchuan1912.png\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" data-original-height=\"627\" data-original-width=\"983\" height=\"408\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhG1NZPISDMNPG8EwVPrk0hiEGkT43M4bY_qdUE1y44XC0Fkb70rqBhlmVIHgCGmR3qXv3qSi_gPKFNzGZB2_E8O0fhJbnTcjkDPv3-2ELtiqYP_C2HaZPTdsDbplEwaSsBCST5\/s640\/PrivateMintSilverCoinsSezchuan1912.png\" width=\"640\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr align=\"left\"\u003E\u003Ctd class=\"tr-caption\"\u003E\u003Cspan style=\"font-size: large;\"\u003E\u003Cspan style=\"font-size: large;\"\u003E\u003Cspan style=\"font-size: large;\"\u003EPrivately minted coins from Sichuan province, China, 1912. \u003C\/span\u003EWhile the minting of private coins, especially imitations of official \ncoins, was often banned in order to secure a royal or other political monopoly, the industrial revolution was not the only time \nor place where private entities minted.\u0026nbsp; \u003C\/span\u003EPrivate coinage was by no means even limited to the Anglosphere.\u0026nbsp; \u003C\/span\u003E\u003Cspan style=\"font-size: large;\"\u003E\u003Cspan style=\"font-size: large;\"\u003ENevertheless, the vast majority\n of coins in the numismatic record were minted by or under the license \nof kings, emperors, elected officials, and other kinds of political leaders, and these are also the kinds of coins prized by political historians as the most durable records of a leaders' reign. \u003C\/span\u003E\u003C\/span\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cspan style=\"font-size: large;\"\u003EIn part (ii) of this series we will explain and give a few examples of the monetary metals themselves, usually mined and processed by private entities. For most of monetary history, from ancient civilization until recent times, the monetary metals were the ultimate \"O\" in the IOUs -- the substances that bearer promissory notes were most often redeemed for -- and constituted the most common contents of the coins themselves. \u003C\/span\u003E\u003Cspan style=\"font-size: large;\"\u003EThe \nvarious forms into which monetary metals could be shaped, including \ncoins, were sampled and assayed for their metal content when used \noutside of the locale where they were issued or covered by legal tender \nlaws.\u003C\/span\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cspan style=\"font-size: large;\"\u003EPart (ii) will also explain why these metals, not any of their particular forms, are the closest analog we have to Bitcoin in monetary history. Finally, we will cover some the many other forms besides coins that these metals could take, the monetary and quasi-monetary functions of these forms, and get some glimpses of even more ancient forms that were the common ancestors of modern money and modern jewelry.\u0026nbsp; Part 2 can only scratch the surface of this vast topic and will refer the reader to more in-depth works including those of this author.\u003C\/span\u003E"},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/582101972123401084\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/582101972123401084","title":"13 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/582101972123401084"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/582101972123401084"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2018\/03\/the-many-traditions-of-non-governmental.html","title":"The many traditions of non-governmental money (part i)"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"media$thumbnail":{"xmlns$media":"http://search.yahoo.com/mrss/","url":"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgSC2rwnre_Hm-McZVtnlvFl2SroTSeQpj5Tsyi_UeRZom4Dr065huKubFNzNBWnF22Hef1GCYqVwBvXyU1TxYoDttrkMKIAchnVQNpusLaJXZ5sFCMr7NzMNSJOE-3qk5mbzL5\/s72-c\/One+Pound+Note+1945+North+of+Scotland+Bank+Limited.JPG","height":"72","width":"72"},"thr$total":{"$t":"13"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-341872952395479445"},"published":{"$t":"2017-03-29T00:25:00.000-07:00"},"updated":{"$t":"2017-03-29T01:04:59.810-07:00"},"title":{"type":"text","$t":"Collecting metal: the inner and outer worlds of jewelry, coins, bullion bits, and odd shiny things"},"content":{"type":"html","$t":"\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003EMillions of millennia\u0026nbsp;ago, in our own Milky Way galaxy, but far upstream of where we are today, two neutron stars spiraled around each other, each embodying the mass of a sun but smaller and faster than a speeding planet. Each of these tiny gigaworlds, millions of times denser than our sun, had been produced, not by a mere exploding star, but by a far more powerful supernova. Each supernova, burning a nuclear fire with a far greater power density than a normal star such as our sun, had besides a neutron star also produced a cavalcade of new elements.\u0026nbsp; For elements lighter than iron, this nuclear fusion releases energy; but for elements heavier than iron, including copper, silver, and gold, nuclear fusion requires a net energy input as well as astronomical power densities.\u0026nbsp; Our supernovae were powerful enough to create many metals, including copper and silver, from the fusion of lighter elements.\u0026nbsp; But they were not powerful enough to create gold. Gold awaited the current, far more powerful and rarer event.\u0026nbsp;\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p2\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003EOur two stars, fortuitously set into collision course by two separate supernovae, approached each other and then, captured by each others’ gravity, entered a death spiral.\u0026nbsp; They collided in an unimaginable explosion, unleashing a power density far greater than that of a mere supernova and trillions of times greater than if a mere mountain-sized asteroid had hit the earth. The collision was so intense that it created a black hole and a burst of extremely high energy light called gamma rays. Escaping the black hole along with the gamma rays was a spray of new, heavier metals, including gold.\u0026nbsp; This gold-rich cloud in part expanded and in part coalesced, participating in the subsequent formation of new solar systems, including our own. Due to this collision of rare intensity, our unusual solar system was seeded with astronomically rare heavy metals such as gold along with the more common supernova products such as copper and silver. [\u003Ca href=\"https:\/\/www.cfa.harvard.edu\/news\/2013-19#sthash.JnW4KQ0q.dpuf\" target=\"_blank\"\u003ESource\u003C\/a\u003E]\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p2\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgiNKL7SSeIpbxXSJgkjG4vp82f6-sd6QarS0urqMFYkRo-Dhc2Vi5OTChIpTHI75OMKcCUloP04Ah9WlpH5vBL29vGIMeyns-F4xnGrONpx_1Jb8LPbrXy7JgwaYsW62RAdkXa\/s1600\/CopperSilverGoldPeriodicTable.png\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"320\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgiNKL7SSeIpbxXSJgkjG4vp82f6-sd6QarS0urqMFYkRo-Dhc2Vi5OTChIpTHI75OMKcCUloP04Ah9WlpH5vBL29vGIMeyns-F4xnGrONpx_1Jb8LPbrXy7JgwaYsW62RAdkXa\/s320\/CopperSilverGoldPeriodicTable.png\" width=\"108\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: left;\"\u003E\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif; font-size: small;\"\u003E\u003Ci\u003ECopper (Cu), Silver (Ag), and Gold (Au) sit on top of each other on the periodic table, sharing many electrical, chemical, and material properties that enhance their durability and divisibility. Gold, the heaviest, required the most extreme conditions and energy to form, as all elements were generated, from lighter elements. Copper required easier conditions to form and is thus much more common, with silver in between.\u003C\/i\u003E\u003C\/span\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003EBillions of years later, naked apes evolved with hypertrophied brains and clever hands, living on a planet in this gold-dusted solar system. They dug out the gold and silver they could find and separated it from the more common earth.\u0026nbsp; Other more common metals were more useful for concretely usable tools; instead they fashioned the precious metals into what looks to our eyes like jewelry. They formed these precious metals into shapes both repetitive and unique, bragged about them, displayed them, stored them as “treasure”, “wealth”, and “money”. They fashioned gold and silver into wearable objects, transferred them to each other or stole them, even injuring or killing each other in pursuit of them. They used the gold and silver to pay each other compensation for those and many other injuries. People transferred gold and silver to each other in order to satisfy important obligations as well as to obtain items of more direct and obvious use.\u0026nbsp; Since the most important such obligations happened at many of the most fitness-critical junctures of life – marriage, death, injury, war – gold and silver, as treasure and as money, came to be greatly desired.\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p2\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003ESome metal collectibles came in a wide variety of artistically skilled forms. Others came in the form of coins: labeled, mass-produced pieces of metal stamped by the blow of a hammer or cast in molds, whereby a mostly-trusted brand named their alleged value. Still others came in forms that look odd to us, resembling neither coins nor fancy jewelry, but rather utilitarian-looking pieces that manage to make precious metals ugly, and that might have been worn but that look, long before the era of factories, like they were mass produced. .\u0026nbsp; People around the world wore gold jewelry proudly, and globe-straddling monetary systems, on which economies were said to be based, were defined around gold and silver objects and debts denominated in weights of those metals.\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p2\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003EWe can think of collectibles as coming at us at two levels, like railroads and trains, or like pipelines and the oil they carry. At the most basic or “inner layer” is the metal itself that constitutes the substance of the collectible: occasionally iron, more typically copper or bronze for the less valuable collectibles, and the precious metals, especially gold and silver, for the more valuable money and treasure.\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgibrlxbEnrflglKBRY2J6rOYPG0vFrh0NndkY6ToxGW2vc1r6ZKSD6xlGUpDDys1rvTZnEp2VPBagOx2Pm3EbQsesh1I_bebttcqQYKsHeEGqb69XUISEAKmX3H4dDAUVXeXOP\/s1600\/MetalProtocolStack.png\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"131\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgibrlxbEnrflglKBRY2J6rOYPG0vFrh0NndkY6ToxGW2vc1r6ZKSD6xlGUpDDys1rvTZnEp2VPBagOx2Pm3EbQsesh1I_bebttcqQYKsHeEGqb69XUISEAKmX3H4dDAUVXeXOP\/s320\/MetalProtocolStack.png\" width=\"320\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Cdiv class=\"p1\" style=\"text-align: start;\"\u003E\n\u003Ci\u003E\u003Cbr class=\"Apple-interchange-newline\" \/\u003E\u003C\/i\u003E\u003C\/div\u003E\n\u003Ci\u003E\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif; font-size: small;\"\u003EThe “protocol stack”, or distinct layers of cultural understanding, for objects made out of precious metals: the natural, rare, and durable substance itself, versus the particular forms given to it as artwork, jewelry, coins, etc.\u003C\/span\u003E\u003C\/i\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cdiv\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u003Ci\u003E\u003Cbr \/\u003E\u003C\/i\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003ESo important is the “lower layer” of the traditional cultural understanding of gold and silver, the natural substance itself, evaluated by its weight rather than by any value added via the craftsmanship or its form, that Europeans of earlier generations evolved a word for it: bullion.\u0026nbsp; Bullion is the metal itself, considered and valued only for its substance. Jewelry, coins, and other ways of shaping precious metals are just various forms of the underlying bullion.\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p2\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cstyle type=\"text\/css\"\u003E\np.p1 {margin: 0.0px 0.0px 0.0px 0.0px; font: 15.0px Menlo}\np.p2 {margin: 0.0px 0.0px 0.0px 0.0px; font: 15.0px Menlo; min-height: 18.0px}\n\u003C\/style\u003E\n\n\n\n\n\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003EThe famous gold\/silver ratio (exchange rate) operates at this basic level. The cost and supply of precious metals, given the technological similarity of the means for mining and processing each, are dominated by their natural origins in the stars above and the geology below.\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjaZ4ARpn5CAEQo_eV5TrA2s9Cle9Evv18oAEcYZZWhMQnINuZgeAGAYSomB_nrCR5htzA09539x44zPhGZ_lPMvQWP9Cr4ssLIw1HVBVNhGNH5FzjA2f0_UXbCrPnIElhtaBvy\/s1600\/VikingSilverHoard.jpg\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"320\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjaZ4ARpn5CAEQo_eV5TrA2s9Cle9Evv18oAEcYZZWhMQnINuZgeAGAYSomB_nrCR5htzA09539x44zPhGZ_lPMvQWP9Cr4ssLIw1HVBVNhGNH5FzjA2f0_UXbCrPnIElhtaBvy\/s320\/VikingSilverHoard.jpg\" width=\"262\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Cstyle type=\"text\/css\"\u003E\np.p1 {margin: 0.0px 0.0px 0.0px 0.0px; font: 15.0px Menlo}\n\u003C\/style\u003E\n\n\n\u003Cbr \/\u003E\n\u003Cdiv style=\"text-align: left;\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif; font-size: small;\"\u003E\u003Ci\u003EViking hoard unearted in Watlington, Scotland: silver coins, small ingots, and jewelry. Why were were coins (“money”) so often stashed with jewelry (“ornament”)? And what is up with those lumps?\u0026nbsp;\u003C\/i\u003E\u003Ci\u003E[\u003Ca href=\"http:\/\/www.britishmuseum.org\/about_us\/news_and_press\/press_releases\/2015\/viking_hoard_found.aspx\" target=\"_blank\"\u003ESource\u003C\/a\u003E]\u003C\/i\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003EBesides their different origins in neutron star collisions and supernovae respectively, once our solar system had formed, the way our earth and its moon were formed may have also been important: when another planet collided with an earlier form of the earth, and the resulting debris clouds reformed into the earth and moon as we know it, heavier metals tended to stick with the heavier body while the lighter ones (which don’t include precious metals) tended to stick with the moon. Another theory holds that this collision did not matter: practically all the mineable concentrations of gold sunk to the center anyway; the gold we mine today came from a spate of later asteroid bombardment, said asteroids also being formed in the gold-rich dust of our early solar system.\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p2\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003EMore local geology also played a role in where we have found gold and silver: equatorial Africa was formed with more gold than Europe, and Europe and Bolivia with more silver than China.\u0026nbsp; As a result, the value (in terms of other kinds of goods) of gold and silver could vary significantly across the planet, as well as the exchange rate between the two precious metals.\u0026nbsp; Only with modern transportation and ubiquitous markets has the gold:silver price ratio, as well as the exchange rates between precious metals and other goods, converged on ratios that hold the world over.\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Ch4\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003ESpheres of transfer and local distinctions\u003C\/span\u003E\u003C\/h4\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003EIn 1959 Paul Bohannan [1] coined the phrase “spheres of exchange” to refer to moral or legal distinctions made between different types of exchange. Often one set of collectibles was expected to be used in one kind of exchange, and another distinct set in another. Since there are several important kinds of wealth transfer besides exchange, we can generalize Bohannan’s idea to the concept of spheres of transfer.\u003C\/span\u003E\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u0026nbsp; \u003C\/span\u003E\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003EIn Western cultures (and many other modern cultures under their influence), for example, we make a strong distinction between money, meant for the rapid turnover of earning and spending, and heirlooms that are expected to stay in the family for generations, with feelings of guilt or shame occurring if we have to sell a family heirloom.\u003C\/span\u003E\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u0026nbsp; \u003C\/span\u003E\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003EBut it’s fine to use an heirloom ring for a marriage. Similarly, we make a strong distinction between stocks and bonds on the one hand and decorative wealth objects such as jewelry and artwork on the other.\u003C\/span\u003E\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u0026nbsp; \u003C\/span\u003E\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003ESo strong is our taboo that if a Western archaeologist finds a wearable (as in forager days they mostly were) collectible, it is automatically and dogmatically labeled “ornamental” or “symbolic”, with wealth-related uses seldom considered.\u003C\/span\u003E\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u0026nbsp; \u003C\/span\u003E\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E(It also doesn’t help that shells, often scarce and precious treasures in indigenous environments, look like cheap tourist knick-knacks to modern eyes).\u003C\/span\u003E\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u0026nbsp;\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjyTM7YyZ1U5rN4XWD66GBua1MI8sq90pJhaUBkK-RmfxdMoSfpdmC5tTuBX9oAnEua1wdfKspWYEHc0Qf5HRJwTiWt_7N5N8-WvnuRpMHdzPqjkWM70FP5ApbVmlC-IF5Ln-7E\/s1600\/NecklaceSpondylusCopperFoltestiVadulCatagatei.png\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"320\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjyTM7YyZ1U5rN4XWD66GBua1MI8sq90pJhaUBkK-RmfxdMoSfpdmC5tTuBX9oAnEua1wdfKspWYEHc0Qf5HRJwTiWt_7N5N8-WvnuRpMHdzPqjkWM70FP5ApbVmlC-IF5Ln-7E\/s320\/NecklaceSpondylusCopperFoltestiVadulCatagatei.png\" width=\"264\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: justify;\"\u003E\u003Ci style=\"text-align: start;\"\u003E\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif; font-size: small;\"\u003EThe transition from shell to metal: beads fashioned from copper (dark) and from Spondylus (spiny oyster) shells (light). The shells, transported by foot (probably by many feet and many hands) hundreds of miles from the Aegean Sea, had for thousands of years been popular in the Danube river basin when the world’s earliest metal artifacts were invented there. The first copper and gold artifacts were beads fashioned to substitute for the Spondylus beads in Danubian jewelry. [\u003Ca href=\"http:\/\/isaw.nyu.edu\/exhibitions\/oldeurope\/pdf\/spondylus.pdf\" target=\"_blank\"\u003ESource]\u003C\/a\u003E\u003C\/span\u003E\u003C\/i\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p2\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003ELegal or moral sanctions discourage transfer of objects from one sphere to another.\u003C\/span\u003E\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u0026nbsp; \u003C\/span\u003E\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003EIn feudal European societies it was shameful and often even illegal to sell or mortgage land: a lord’s duty was to preserve his land and devise it intact to his eldest son. In modern Western society, weddings are one sphere of transfer (where a gift of a finger-ring is expected, as well as some household items from the guests and a feast or party thrown by the parents), whereas commerce and legal remedy in civil law is another (where payment of money is expected).\u0026nbsp; Some aspects of our bodies (such as ownership of humans or payment for sex or body organs) are off limits to monetary compensation – one is expected to donate an organ, not to sell it – while many others are not (most health care, for example). All of these spheres can involve transfers of objects of substantial value, but it is disgraceful and\/or illegal if they are the too obviously the wrong ones for the given sphere.\u003C\/span\u003E\u003C\/div\u003E\n\u003Cstyle type=\"text\/css\"\u003E\np.p1 {margin: 0.0px 0.0px 0.0px 0.0px; font: 15.0px Menlo}\np.p2 {margin: 0.0px 0.0px 0.0px 0.0px; font: 15.0px Menlo; min-height: 18.0px}\n\u003C\/style\u003E\n\n\n\n\u003Cbr \/\u003E\n\u003Cdiv class=\"p2\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p2\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiYrxb_EFOpp6Upv4nLOPsNy6OjIneSaJeMusuVE24vOhhkZX0QwlS0u8OJWL1i_egfSDtrAPvDz3WZotxEFcb1O_sza43LeHHEDx6Fj5txttMt9W8XXEmhjyizd1ezQ7sYtUtD\/s1600\/GoldBeadOldest.jpg\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"179\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiYrxb_EFOpp6Upv4nLOPsNy6OjIneSaJeMusuVE24vOhhkZX0QwlS0u8OJWL1i_egfSDtrAPvDz3WZotxEFcb1O_sza43LeHHEDx6Fj5txttMt9W8XXEmhjyizd1ezQ7sYtUtD\/s320\/GoldBeadOldest.jpg\" width=\"320\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Cdiv style=\"text-align: start;\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif; font-size: small;\"\u003E\u003Ci\u003EThe world’s oldest gold artifact – a small bead from the lower Danube river basin (4,600-4,500 BC).\u0026nbsp;\u0026nbsp;[\u003Ca href=\"http:\/\/archaeologicalnews.tumblr.com\/post\/148745489421\/archeologists-find-what-may-be-worlds-oldest-gold\" target=\"_blank\"\u003ESource\u003C\/a\u003E]\u003C\/i\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u003Cbr \/\u003EIn the modern West, we consider the realm of jewelry and the realm of money to be very separate spheres of transfer. \u0026nbsp; It is considered either a shameful betrayal or a grim necessity if the winner of an Olympic or Nobel Prize medal or a Super Bowl ring sells it to raise money. The finger-ring is a central feature of modern weddings, but few things would offend a typical modern bride more than being paid a bride price, she or her kin being indemnified by money as if she, as we would see it, were a prostitute on long-term contract.\u0026nbsp; Meanwhile, our economists obsess over money while touching on the subject of jewelry hardly at all, and certainly not as any sort of form or variant of money.\u0026nbsp; We moderns can hardly imagine confusing such seemingly very different things, and indeed the very idea offends our sensibilities. But in many non-Western and earlier Western cultures this was far from the case. For them the fundamental protocol layer, the substance itself, is cherished for its own sake, and forms the great majority of the value of the item, while its protocol layer two, the “outer layer”, the particular form it has been fashioned into, while often of considerable interest, is usually quite secondary in determining its value for purposes of the display and transfer of wealth.\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEj_kiHRbGkTQeubq4ezq_cmxC0c7FAv0GPB0UX9dEawo0Hzr-ePGea2LcHVbfOcOrWckSqJsLJ5Z6UPUco0eUG8alarc10JIXvbjKOpFoCozi9w-m9LtCFgrtrQ6AaO8h6CmExk\/s1600\/CashForGold.jpg\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEj_kiHRbGkTQeubq4ezq_cmxC0c7FAv0GPB0UX9dEawo0Hzr-ePGea2LcHVbfOcOrWckSqJsLJ5Z6UPUco0eUG8alarc10JIXvbjKOpFoCozi9w-m9LtCFgrtrQ6AaO8h6CmExk\/s1600\/CashForGold.jpg\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: justify;\"\u003E\u003Ci style=\"text-align: start;\"\u003E\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif; font-size: small;\"\u003ERecycling of gold jewelry in the United States: usually to be recast as bullion bars for central bank and gold exchange-traded-fund (ETF) reserves, or for export to Asia for making jewelry for which the gold content is far more important than in the West. Occasionally cast into gold coins for “gold bugs” and collectors.\u003C\/span\u003E\u003C\/i\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cdiv class=\"p2\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003EThis modern Western restriction involves the more culturally local aspect of gold and silver, namely the particular form it takes (jewelry vs. coin), even though these objects are made out of the same underlying substance, and traditionally were mainly prized for the content by weight of that substance. Even in our own culture we have businesses that serve to transfer gold and silver from one sphere to another. Nevertheless, economists and other academicians often act as if money and jewelry are scientifically and objectively very distinct objects, when in fact this is a cultural convention that is largely confined to the modern West. \u0026nbsp;\u003C\/span\u003E\u003C\/div\u003E\n\u003Cstyle type=\"text\/css\"\u003E\np.p1 {margin: 0.0px 0.0px 0.0px 0.0px; font: 15.0px Menlo}\np.p2 {margin: 0.0px 0.0px 0.0px 0.0px; font: 15.0px Menlo; min-height: 18.0px}\n\u003C\/style\u003E\n\n\n\n\u003Cbr \/\u003E\n\u003Cdiv class=\"p2\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003EGlobe-trotting gold dealer Roy Sebag has [\u003Ca href=\"https:\/\/medium.com\/@roysebag\/the-gold-jewelry-standard-a-continuous-system-from-ancient-times-to-present-day-57e16fb63522\" target=\"_blank\"\u003Edescribed\u003C\/a\u003E] the differences between Asian and Western views of jewelry.\u0026nbsp; As he describes it, over\u0026nbsp;$2 trillion worth of jewelry is owned by about 2 billion people in India and China alone, constituting a much larger fraction of their wealth on average than in the West. The metal content of the gold jewelry constitutes the vast majority of its\u0026nbsp; sales price and its assessed value as collateral, as it also does in Brazil, Russia, and most other countries outside of Western Europe, the British Commonwealth, and the United States.\u0026nbsp; In the latter countries, precious metal content constitutes only a small fraction of the sales price or pawning value of jewelry.\u0026nbsp; “Jewelry is money” is how Sebag summarizes his observations of the modern Asian jewelry market.\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhG7iYRvdE5ezFgYf0R0C9wMR6QEJQxWRySg8NbGyYj9RVEO2Tn7fQEx92gyMmYhEyd_pQEuk3i0FP9eAHQ7xPE6rTeJll2ewD7OhyphenhyphenHjWcmBLm4dyXlDW24DYKsZFH-ZhACWEu0\/s1600\/RomanGoldCoinMadeIntoAngloSaxonPendant.jpg\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"164\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhG7iYRvdE5ezFgYf0R0C9wMR6QEJQxWRySg8NbGyYj9RVEO2Tn7fQEx92gyMmYhEyd_pQEuk3i0FP9eAHQ7xPE6rTeJll2ewD7OhyphenhyphenHjWcmBLm4dyXlDW24DYKsZFH-ZhACWEu0\/s320\/RomanGoldCoinMadeIntoAngloSaxonPendant.jpg\" width=\"320\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Cdiv style=\"text-align: start;\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif; font-size: small;\"\u003E\u003Ci\u003EIn cultures without a strong distinction between decorative jewelry and money, they often didn’t even bother melting it down to switch from coins to lower velocity but more displayable forms of wealth. Roman gold coin minted c. 400 AD, converted in the 7th century into an Anglo- Saxon pendant: [\u003Ca href=\"https:\/\/twitter.com\/caitlinrgreen\/status\/575061782743613441\" target=\"_blank\"\u003ESource]\u003C\/a\u003E [\u003Ca href=\"https:\/\/twitter.com\/caitlinrgreen\/status\/698431519191216128\" target=\"_blank\"\u003ESee also\u003C\/a\u003E]\u003C\/i\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003EWhile the “lower\" or \"inner\" \u0026nbsp;layer of the metal collectible “protocol stack” is its natural substance, its “upper\" or \"outer\" layer is the particular form it takes. Sometimes it is mass produced (as in coins and common bead shapes) and sometimes it is a unique work of exquisite and rare craftsmanship.\u0026nbsp; Form and style is the “protocol layer” of gold artifact most highly valued and distinguished in modern Western jewelry; but it is far less valued, compared to the natural substance itself, in the vast majority of Asian and pre-modern Western jewe\u003C\/span\u003E\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003Elry.\u003C\/span\u003E\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u0026nbsp; \u003C\/span\u003E\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003EAs with [\u003Ca href=\"https:\/\/unenumerated.blogspot.com\/2017\/02\/conflict-and-collectibles-among-yurok_87.html\" target=\"_blank\"\u003Epre-metal forms of collectibles\u003C\/a\u003E], the form of metal collectibles can be sub-divided, in a way generalizable across nearly all known cultures, into treasure (typically of high value and not as an object fungible or divisible, unless melted down destroying the particular object) and money (objects such as coins that are meant to be efficiently transferred and combined with other such objects to create the particular amount of value needed).\u003C\/span\u003E\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u0026nbsp;\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p2\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003EMetal or metaled\u0026nbsp;treasure has taken the form of gilded objects, sculptures, various utilitarian objects enhanced artistically and made out of the scarcer metals, as well as jewelry. Treasure was, and sometimes still is, typically used for heirlooms, displays of wealth, as collateral for loans of money, and for large wealth transfers. In traditional societies these wealth transfers usually accompanied fitness-critical events.\u0026nbsp; They often occurred at marriages, deaths, to satisfy obligations entered into to end wars, and as compensation for major injuries, as well as in helping to facilitate trade.\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p2\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"separator\" style=\"clear: both; text-align: center;\"\u003E\n\u003C\/div\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjDkgjxJD_YaXyvlPexM2fMxcSvv8MCrM4hTdxCMbmGrJ4fNRb96im7FavndxhZoZzlrdQxEVf5RqKLC3sOiRMOZmUHnleeiSNpz1U8dMpo6dK5thIbYxIDOjtZK3p2DiGLyS9j\/s1600\/StollhoffHoardCopperSpirals.png\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"239\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjDkgjxJD_YaXyvlPexM2fMxcSvv8MCrM4hTdxCMbmGrJ4fNRb96im7FavndxhZoZzlrdQxEVf5RqKLC3sOiRMOZmUHnleeiSNpz1U8dMpo6dK5thIbYxIDOjtZK3p2DiGLyS9j\/s320\/StollhoffHoardCopperSpirals.png\" width=\"320\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: justify;\"\u003E\u003Ci style=\"text-align: start;\"\u003E\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif; font-size: small;\"\u003EThe Stollhoff hoard – copper spirals and axe blades as well as gold discs from the upper Danube river watershed (modern Austria), c. 4000 BC. Spiral armbands were among the earliest large items worked from native copper, in the middle Danubian basin (modern Hungary) c. 5000-4500 BC.\u003C\/span\u003E\u003C\/i\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cdiv class=\"p2\"\u003E\n\u003Cstyle type=\"text\/css\"\u003E\np.p1 {margin: 0.0px 0.0px 0.0px 0.0px; font: 15.0px Menlo}\n\u003C\/style\u003E\n\n\n\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003EMoney as this work defines it, on the other hand, can be distinguished from treasure by its fungibility and divisibility.\u0026nbsp; In our Western tradition metal money and coins are practically synonymous, but with cross-cultural observations, as for example in [2] and [3], and even in modern Asia as Sebag has observed, the distinction between money and jewelry is far less clear-cut – with the proviso that in his mind, as well as in the minds of the jewelry customers and suppliers he observed, it is the divisibility and fungibility of the substance itself, not its form, that is paramount. Nevertheless, a significant fraction of the forms jewelry comes in, such as beads and constant-width wires, could be treated by their users if they so desired as fungible and divisible without destruction of even the form of the object.\u0026nbsp; Indeed, such forms in jewelry, especially in the archaeological record, are more common than would seem likely if solely artistic and never monetary considerations had been involved in their original design.\u0026nbsp; As a result of bringing their cultural assumptions to bear, endless energy has been wasted by Western observers trying to distinguish non-Western “money” or “primitive money” from non-Western “jewelry”.\u003C\/span\u003E\u003C\/div\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgPkHPGyE8lUyR873l_FJNVvQqJMEH4XbCN5ZyRcbuKWUazy6zao82WSUcINwI2tIuz2bZZeM1PeiW9FAbY8LurfhLcxkuDlA9PMdI8sUfQKtrSrCFa8ZxWWuRUf3iACkD4QAtA\/s1600\/SpiralMoneyDenmark2.jpg\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"212\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgPkHPGyE8lUyR873l_FJNVvQqJMEH4XbCN5ZyRcbuKWUazy6zao82WSUcINwI2tIuz2bZZeM1PeiW9FAbY8LurfhLcxkuDlA9PMdI8sUfQKtrSrCFa8ZxWWuRUf3iACkD4QAtA\/s320\/SpiralMoneyDenmark2.jpg\" width=\"320\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Cdiv class=\"separator\" style=\"clear: both; text-align: center;\"\u003E\n\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiUpgbvZ2NSz6F6SCOuawgcuYl0F1Lz91ryB0iT15nbImOayvgtfvj_DtZK9ALlQMrzbJC6v8-pMNVDx2AEl4DKl5ViElYp_pvYc66RxjLRwcg9ccGPcx7i9KbGTgcs6sYkBX-W\/s1600\/SpiralMoneyDenmark1.jpg\" imageanchor=\"1\" style=\"clear: right; float: right; margin-bottom: 1em; margin-left: 1em;\"\u003E\u003Cimg border=\"0\" height=\"212\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiUpgbvZ2NSz6F6SCOuawgcuYl0F1Lz91ryB0iT15nbImOayvgtfvj_DtZK9ALlQMrzbJC6v8-pMNVDx2AEl4DKl5ViElYp_pvYc66RxjLRwcg9ccGPcx7i9KbGTgcs6sYkBX-W\/s320\/SpiralMoneyDenmark1.jpg\" width=\"320\" \/\u003E\u003C\/a\u003E\u003C\/div\u003E\n\u003Cdiv style=\"text-align: start;\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif; font-size: small;\"\u003E\u003Ci\u003EBoringly standard, divisible, and fungible, in its particular form as well as in the underlying metal, but boasting neither the kings and dates on coins desired by historians nor the fine craftsmanship of unique work beloved of museums, and categorizable by the dominant academic ideologies as neither money nor art nor ornament, so it sits packed in boxes in the cellar of the Danish National Museum, like many other such mundane but important artifacts underneath museums around the world. About 2,000 small gold spirals were buried in a fur-lined wooden box in Denmark between 900-700 B.C.\u0026nbsp;\u0026nbsp;[\u003Ca href=\"https:\/\/twitter.com\/ticiaverveer\/status\/816748922836287488\" target=\"_blank\"\u003ESource\u003C\/a\u003E\u003C\/i\u003E\u003Ci\u003E]\u003C\/i\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Ch3\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003ELaw and “money”\u003C\/span\u003E\u003C\/h3\u003E\n\u003Cdiv class=\"p2\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p2\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003EWestern (roughly speaking, European-derived) law, which now dominates the world, can be very flexible when it comes to applying itself to money.\u0026nbsp; When supporting money with legal institutions, it tends to take a definition far more narrow the “medium of exchange and store of value” definition beloved of economists. When discouraging undesired forms, amounts, or velocities of money, on the other hand, law sometimes takes in a far broader scope of objects than Western economists think of as money.\u0026nbsp;\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p2\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003EOne of the more common modern legal definitions of “money”, used for laws that facilitate and support financial interchange (such as contracts for goods, checks, collateral for loans, etc.), is that money can only be an official government currency (see \u003Ca href=\"https:\/\/www.law.cornell.edu\/ucc\/1\/1-201#Money\" target=\"_blank\"\u003Efor example\u003C\/a\u003E). By definition, no substance or form of matter or pattern of information of any kind, regardless of how it functions or how it is used, can be money, if has not been authorized or adopted by a government. You cannot write a legal check in any of the United States for ounces of gold or Bitcoin, because gold and Bitcoin are not, per the Uniform Commercial Code, “money”.\u0026nbsp;\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p2\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003ESuch definitions, while quite necessary to understand if you hope to deal with money in the majority of modern countries with such laws, are hopelessly specific to a certain kind of culture and politics, as well as being scientifically unsound as a basis for reasoning about even just the role of money in exchange even in cultures living under such laws, much less its actual much wider role in wealth transfers and in other cultures without such laws. Thus outside of this section we will neglect such official definitions of money in this work. Instead we use the objective definition presented here. This is certainly not the only possible definition of “money”; many far wider,\u0026nbsp; far narrower, and very conflicting definitions of this word have been used in the ethnographic, anthropologic, archaeological, and economic literatures, usually implicitly rather than consciously, thereby causing the reader to join the author in being hopelessly confused about the subject.\u003C\/span\u003E\u003C\/div\u003E\n\u003Cstyle type=\"text\/css\"\u003E\np.p1 {margin: 0.0px 0.0px 0.0px 0.0px; font: 15.0px Menlo}\np.p2 {margin: 0.0px 0.0px 0.0px 0.0px; font: 15.0px Menlo; min-height: 18.0px}\n\u003C\/style\u003E\n\n\n\n\u003Cbr \/\u003E\n\u003Cdiv class=\"p2\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003EThus when enforcing rules for modern financial institutions, modern law uses a very narrow definition of money; the many other ways of storing and transferring wealth are not allowed to benefit from these advanced institutions. But when cracking down on alleged abuses of money, law often restricts a far wider array of objects used to store and transfer wealth. A great illustration of the monetary nature of jewelry is given by the current (as of this writing) Indian demonetization law.\u0026nbsp; The crackdown includes gold and focuses on its natural substance, not its mere form as coin (“money” to modern Western eyes) as opposed to jewelry (supposedly “ornament” not “money”).\u0026nbsp; Under Indian law it is all subject to stringent controls alongside the notes and coins:\u0026nbsp;\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p2\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cblockquote class=\"tr_bq\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u0026nbsp;…the rules governing when tax officials could seize gold: Nothing would happen “if the holding is limited to 500 grams per married woman, 250 grams per unmarried woman and 100 grams per male.” It also said that there would be no limits on jewelry “provided it is acquired… from inheritance.” [\u003Ca href=\"https:\/\/www.bloomberg.com\/view\/articles\/2016-12-04\/after-demonetization-modi-should-do-no-more-harm\" target=\"_blank\"\u003ESource\u003C\/a\u003E]\u003C\/span\u003E\u003C\/blockquote\u003E\n\u003Cdiv class=\"p2\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003EWhen Mongol conqueror Kublai Khan issued paper currency in late medieval China, to make this poorly trusted scheme work his government confiscated gold and silver, jewelry and coin alike, gems and pearls as well as gold and silver, in a forced exchange for the paper notes. [7]\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Ch3\u003E\n\u003Cdiv class=\"p2\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003EBullion bits and odd shiny things\u003C\/span\u003E\u003C\/h3\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cstyle type=\"text\/css\"\u003E\np.p1 {margin: 0.0px 0.0px 0.0px 0.0px; font: 15.0px Menlo}\n\u003C\/style\u003E\n\n\n\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003EDivisible and fungible metal forms such as coins, small thin ingots (hack-silver), \u003Ca href=\"https:\/\/unenumerated.blogspot.com\/2016\/12\/weigh-and-deliver-compensation-and.html\" target=\"_blank\"\u003Earm-rings and wire\u003C\/a\u003E, and beads have to a greater or lesser extent, depending on the culture, been used for small or frequent payments made to people who commonly need to make small acquisitions (such as the wages of soldiers and laborers), as well as to round out a value of a large wealth transfer to a specific desired value, that otherwise mostly constitutes treasure, indivisible and of a unique value somewhat different than the value desired, via custom, law, or negotiations, for the wealth transfer.\u0026nbsp;\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p2\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003EW.B. Dickinson observed the ubiquity, both as archaeological artifacts in many far-flung parts of Eurasia and in widespread use in East Asia and Indian Ocean regions, of precious metals (bullion) in wire, coil, and arm-ring, in bullion forms that looked more utilitarian than decorative, and noted the wear on such artifacts indicating that at least some had probably passed from hand to hand with a velocity more coin-like than treasure-like. He observed that their existence extended\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cblockquote class=\"tr_bq\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003Ethroughout countries extending from Syria, Arabia, Egypt, Socotra, the Persian Gulf to Ceylon, China, Japan, Siam, and the whole East, to the south-west coast of Africa, to the north of Europe, to England and to Ireland. That the people of so many places, and in so various ages, should have formed their bullion and other metals into this particular form solely for the purpose of barter, without attaching to it any monetary character, seems a conclusion very difficult to arrive at…these forms were to all intents and purposes the money of the respective lands.[4]\u003C\/span\u003E\u003C\/blockquote\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p2\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003ELarger ingots, and modern central bank gold bars, and ingots of intermediate value, such as the medieval Chinese silver sycee, also called 元寶: \u003Ca href=\"http:\/\/elaineou.com\/2016\/06\/30\/china-and-%e5%9c%93-and-%e5%85%83\/\" target=\"_blank\"\u003E“primary treasure”\u003C\/a\u003E.\u0026nbsp; Originally “sycee” was Cantonese for “fine silk”, when that costly cloth was a main form of treasure; later it was superseded as treasure by the boat-shaped silver ingots, which inherited the word “sycee”, since it by then had become the generic term in Cantonese for “treasure”.\u0026nbsp;\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p2\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003EEven though large ingots come in a standard form, divisible and fungible at large granularities of value, they can by our organizational scheme more properly be categorized as treasure than as money, since they were typically used like treasure in larger wealth transfers and as collateral for loans or (during the recent historical gold standard era) issues of debt-money.\u003C\/span\u003E \u0026nbsp;\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"separator\" style=\"clear: both; text-align: center;\"\u003E\n\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiXFCgEIXnWjr-WTI0UwX4TVhbGxQvy02a65jM6FEOw7P8UeMCtUCpM4WDbYMCghP_r3RVBzWhw3RyHEgY4Jxv1XdUVwhYh0xR_amIIZOADUQo9KD1uWbL7AvNdNqsZZ-IQKLo4\/s1600\/ChineseSyceeStampedIngot.JPG\" imageanchor=\"1\" style=\"margin-left: 1em; margin-right: 1em;\"\u003E\u003Cimg border=\"0\" height=\"320\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiXFCgEIXnWjr-WTI0UwX4TVhbGxQvy02a65jM6FEOw7P8UeMCtUCpM4WDbYMCghP_r3RVBzWhw3RyHEgY4Jxv1XdUVwhYh0xR_amIIZOADUQo9KD1uWbL7AvNdNqsZZ-IQKLo4\/s320\/ChineseSyceeStampedIngot.JPG\" width=\"320\" \/\u003E\u003C\/a\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif; font-size: small;\"\u003E\u003Ci\u003ESilver stamped sycee ingot. [\u003Ca href=\"http:\/\/periodictable.com\/Items\/047.14\/index.html\" target=\"_blank\"\u003ESource\u003C\/a\u003E\u003C\/i\u003E\u003Ci\u003E]\u003C\/i\u003E\u003C\/span\u003E\u003Cbr \/\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003EOur distinction between treasure and money, it should be apparent, is not clear-cut and is not of crucial economic or political importance. More important and much more scientifically observable is the distinction between collectibles like coins, beads, and works\u0026nbsp;\u003C\/span\u003E\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003Eof laborious or uncommon craftsmanship on the one hand, and non-collectibles of concrete utility or trivial decoration on the other. I have described this distinction with many examples and much explanation in\u003C\/span\u003E\u003Ca href=\"https:\/\/unenumerated.blogspot.com\/2016\/07\/artifacts-of-wealth-patterns-in_15.html\" style=\"font-family: Georgia, \u0026quot;Times New Roman\u0026quot;, serif;\" target=\"_blank\"\u003E Artifacts of Wealth\u003C\/a\u003E\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E and \u003C\/span\u003E\u003Ca href=\"http:\/\/nakamotoinstitute.org\/shelling-out\/\" style=\"font-family: Georgia, \u0026quot;Times New Roman\u0026quot;, serif;\" target=\"_blank\"\u003EShelling Out: The Origins of Money\u003C\/a\u003E\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E.\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p2\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhT1BEGEZm7kxRvJ0-bMjVZ95KbVZ43OWObumW6DhD2d7-XncoGg20QWkfThPuBLs3t9U-1GJu8q2nRmFw9LOlHC0e5pQjmh7mAfBA99wNW_CGlOLPFP_IvoCvtDJ4hu1EQeufU\/s1600\/ArtifactsAsWealth.jpg\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"240\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhT1BEGEZm7kxRvJ0-bMjVZ95KbVZ43OWObumW6DhD2d7-XncoGg20QWkfThPuBLs3t9U-1GJu8q2nRmFw9LOlHC0e5pQjmh7mAfBA99wNW_CGlOLPFP_IvoCvtDJ4hu1EQeufU\/s320\/ArtifactsAsWealth.jpg\" width=\"320\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Ci style=\"text-align: start;\"\u003E\u003Cbr class=\"Apple-interchange-newline\" \/\u003E\u003C\/i\u003E\n\u003Cbr \/\u003E\n\u003Cdiv style=\"text-align: left;\"\u003E\n\u003Ci style=\"text-align: start;\"\u003E\u003Ci\u003E\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif; font-size: small;\"\u003EThe collectible continuum – more like money as we go towards the top left, more like treasure as we go towards the bottom right.\u003C\/span\u003E\u003C\/i\u003E\u003C\/i\u003E\u003C\/div\u003E\n\u003Ci style=\"text-align: start;\"\u003E\n\u003C\/i\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cdiv class=\"p2\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p2\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003EThe main differences between ingots and traditional treasure were that the latter were also used as displays of wealth, whence their highly varied forms, which served to show off often high levels of craftsmanship as well as the precious metal itself.\u003C\/span\u003E\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u0026nbsp; \u003C\/span\u003E\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003EA great variety of very subtle and clever techniques were developed for maximizing the surface area covered by a given weight of gold or silver, more bling for the buck, since the metal was the main feature of the show.\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p2\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003EA great many cultures were observed to use non-coinage metal objects as money (by our definition), or treasure, or both, and a great many more probable such cases are implicit in the archaeological record. We can only mention a fraction of these as examples in this work.\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p2\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003EIn Viking Iceland, silver rings (by weight) were used along with cloth and cattle to pay wergeld (compensation for injuries) and bridewealth, as well as a standard of value for exchange:\u003C\/span\u003E\u003C\/div\u003E\n\u003Cblockquote class=\"tr_bq\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003EFrithof breaks his ring in pieces and distributes it to his followers, so that they shall not be impecunious in the underworld. Rings were used in marriage payments and wergeld, the latter being estimated by haugatal or ring tale. A silver ring weighing 12 ounces was the compensation for the loss of a thrall, 100 rings or 100 head of cattle for a freeman.\u0026nbsp;\u003C\/span\u003E\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif; font-size: 15px;\"\u003E\u0026nbsp;([2] p284)\u003C\/span\u003E\u003C\/blockquote\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cstyle type=\"text\/css\"\u003E\np.p1 {margin: 0.0px 0.0px 0.0px 0.0px; font: 15.0px Menlo}\np.p2 {margin: 0.0px 0.0px 0.0px 0.0px; font: 15.0px Menlo; min-height: 18.0px}\n\u003C\/style\u003E\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003ERing-money and hack-silver were also made and used in the rest of the pagan European north, including Scandinavia and early Anglo-Saxon England. In Celtic Ireland, “rings” in the form of divisible coils of gold or bronze were used along with cattle and slaves in injury compensation and bridewealth. ([4], [2] p287, [3] p238).\u0026nbsp;\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003EIn Homeric Greece, injury compensation, slave sales, and bridewealth often included gold by weight.\u0026nbsp; ([5] p27, [11], [3] p91). In Rome before the introduction of coinage, bronze or copper ingots were used, per the Twelve Tables, to pay compensation for injuries.\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p2\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003ENon-coinage silver was also common until recent times in the vast Indian Ocean trade region as well as a number of inland cultures of south Asia. In Burma silver by weight was used for exchange and bridewealth:\u0026nbsp;\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cblockquote class=\"tr_bq\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003Eanybody wanting to transact business on the market must be provided with a lump of silver, a hammer, a chisel, weighing scales and weights.. he then quotes a price in weight. Thereupon they proceed to cut off from the lump of silver a corresponding piece which is then weighed. Often the operation has to be repeated several times until the correct weight is achieved.\u0026nbsp;\u003C\/span\u003E\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E([3] p95)\u003C\/span\u003E\u003C\/blockquote\u003E\n\u003C\/div\u003E\n\u003Cdiv class=\"p2\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003EIn Siam, gold and silver “flowers” and “leaves” were used for bridewealth and tribute. ([2] p215, 219); various weights of silver “lumps” (small ingots) were also in widespread use ([3] p93).\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p2\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003EIn the Hormuz and Lars in the Persian Gulf, and in some other parts around the Indian Ocean, were made the “fish-hook money” or silver larins used widely in the far-flung Indian Ocean trade.\u0026nbsp; Such silver wires were accepted by weight across a dizzying variety of cultures. [2] p192-196\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p2\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Ctable cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: left;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEi1NybGCbyoaimo2rR0TtzxQNzbQuAeYEJoWJcaUNfPy4j2hzXr0kOVUmDDnpPEuOdiud6gRzlGisrVbTyH5I_HP9-uaj_-oIkIbzVTxOUbhRx3z7enjPASIu3OdM2rvbV4Z8jw\/s1600\/SilverWireLarin.png\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u003Cimg border=\"0\" height=\"320\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEi1NybGCbyoaimo2rR0TtzxQNzbQuAeYEJoWJcaUNfPy4j2hzXr0kOVUmDDnpPEuOdiud6gRzlGisrVbTyH5I_HP9-uaj_-oIkIbzVTxOUbhRx3z7enjPASIu3OdM2rvbV4Z8jw\/s320\/SilverWireLarin.png\" width=\"220\" \/\u003E\u003C\/span\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: left;\"\u003E\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif; font-size: small;\"\u003E\u003Ci\u003ELarins, or silver wires bent double, and often stamped by maker; current in the very extensive Indian Ocean trade before and during the Age of Exploration. “If any suspect the goodness of the Plate it is the Custom to burn the Money in a fire red hot, and so put it in water; and if it be not then purely white it is not Currant Money.” ([2] p196)\u003Cspan style=\"text-align: start;\"\u003E\u0026nbsp;\u0026nbsp;\u003C\/span\u003E\u003Cspan style=\"text-align: start;\"\u003ESuch a technique would have worked for assaying a wide variety of wire-, coil-, or ring-like silver objects.\u003C\/span\u003E\u003C\/i\u003E\u003C\/span\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cdiv class=\"p2\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003EBronze bells manufactured in China were used to make high-value payments in several parts of the Chinese trading periphery, such as the Philippines.\u0026nbsp; ([3] p84). In the Philippine lowlands, metal luxury goods (kettles, gongs, and jars) as well as gold beads were used for a variety of wealth display and transfer purposes ([2] p265). In China bells were the first objects that were uniquely metallic; other early metal objects such as knives, beads, etc. had been made out of other materials much earlier. Thus the Chinese adopted the word and pictograph of a bell 金 for metal (and even for gold in particular). Metal spades were styled 錢, which, via the spades that became stylized and stamped to invent early coins, became the Chinese term for “money”. \u0026nbsp;[\u003C\/span\u003E\u003Ca href=\"http:\/\/elaineou.com\/2016\/06\/28\/china-and-%e9%8c%a2\/\" style=\"font-family: Georgia, \u0026quot;Times New Roman\u0026quot;, serif;\" target=\"_blank\"\u003ESource\u003C\/a\u003E\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E]\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"separator\" style=\"clear: both; text-align: left;\"\u003E\n\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgfSr_HdlKQpr8siKYpJOT_EnYlxx_5UNFgcvvQVnrKdOcqrS5edXRd698v7xlBbSRPnmps7yFM9vh9It_KVEd_sfZBv-X9t5VWdo0T3soJZgc_puv_QCEAmBqZY9ebCNHvMrIu\/s1600\/ChineseSpadeMoney.jpg\" imageanchor=\"1\" style=\"margin-left: 1em; margin-right: 1em;\"\u003E\u003Cimg border=\"0\" height=\"320\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgfSr_HdlKQpr8siKYpJOT_EnYlxx_5UNFgcvvQVnrKdOcqrS5edXRd698v7xlBbSRPnmps7yFM9vh9It_KVEd_sfZBv-X9t5VWdo0T3soJZgc_puv_QCEAmBqZY9ebCNHvMrIu\/s320\/ChineseSpadeMoney.jpg\" width=\"232\" \/\u003E\u003C\/a\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif; font-size: small;\"\u003E\u003Ci\u003EAmong the early coins – defined as standardized metal objects stamped with a standard value -- were the Chinese bronze spade money, c. 475-221 BC\u0026nbsp;\u003C\/i\u003E\u003Ci\u003E[\u003Ca href=\"http:\/\/elaineou.com\/2016\/06\/28\/china-and-%e9%8c%a2\/\" target=\"_blank\"\u003ESource\u003C\/a\u003E]\u003C\/i\u003E\u003C\/span\u003E\u003Cbr \/\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003ECopper crosses, rods, and similar shapes were popular forms of bridewealth and payment for exchange in the \u0026nbsp;many cultures of the Congo ([2] p78-80). \u0026nbsp;The Thonga, in what was then Portuguese East Africa, used brass rings along with mats, baskets, cattle, and beads for bridewealth, injury compensation, and fines. \u0026nbsp;([2] p104-5). \u0026nbsp;The Ndebele and Nguni of Zimbabwe used brass rings and cattle for bridewealth and exchange. ([\u003Ca href=\"https:\/\/www.britannica.com\/topic\/Ndebele-Zimbabwean-people\" target=\"_blank\"\u003ESource1\u003C\/a\u003E],\u0026nbsp;\u003C\/span\u003E\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E[\u003C\/span\u003E\u003Ca href=\"https:\/\/en.wikipedia.org\/wiki\/Lobolo\" style=\"font-family: Georgia, \u0026quot;Times New Roman\u0026quot;, serif;\" target=\"_blank\"\u003ESource2\u003C\/a\u003E\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E], and [2] p105)\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003EThe people of Alor, a small island north of Timor in Indonesia, used brass gongs, pigs, and (for small change \/ rounding out of a specific value) arrows for exchange, bridewealth, burial feasts, and “complicated financial transactions” to build large clan houses. ([3] p84-6). Brass gongs and beads were also used for bridewealth by some cultures in nearby Borneo ([8] p10). \u0026nbsp;Such gongs were used for injury compensation, bridewealth, large exchanges (memorialized in ceremony), and in peace-making payments also among the hill tribes of Siam, Burma and India ([2] p204-6, ) Brass pots and metal knives, axes, and hoes formed the largest part of the bridewealth of the Lakhers and Maras of the Lushai hills in India. ([8] p207).\u0026nbsp;\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003EMost peoples indigenous to the Pacific Coast of America used shell beads as treasure or money (for example the \u003Ca href=\"https:\/\/unenumerated.blogspot.com\/2017\/02\/conflict-and-collectibles-among-yurok_87.html\" target=\"_blank\"\u003EYurok\u003C\/a\u003E). \u0026nbsp;Among the few who also used copper were the Kwakiutl, who fished for abundant salmon and lived in villages in the Pacific Northwest. They used blankets and flat copper sheets (similar in form and function to hack-silver) for bridewealth, tribute, distributions to followers (roughly similar to wages paid to soldiers and laborers), and distributions at funeral ceremonies. \u0026nbsp;According to the anthropologist Frans Boas who observed them, these copper sheets served the “same function as a high-denomination bank note for us [early 20th century European-Americans].” ([2] p15, 300)\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003EIn their elaborate marketplaces, Aztecs used as payment gold dust measured out by volume from bone vials:\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p2\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cblockquote class=\"tr_bq\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003EThe moment we arrived in this immense market, we were perfectly astonished at the vast numbers of people, the profusion of merchandise which was exposed for sale, and at the good police and order that reigned throughout…instruments of brass, copper, and tin [and] gold dust as it is dug out of the mines, which was exposed to sale in tubes made of the bones of large geese…The value of these tubes of gold was estimated according to their length and thickness, and were taken for exchange, for instance, for so many mantles [of] cacao nuts, slaves or other merchandise.[5]\u003C\/span\u003E\u003C\/blockquote\u003E\n\u003Cdiv class=\"p2\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003EThe Aztecs also used metal money modeled on hoes (or axes) as a medium of exchange, along with cocoa beans for small change. Gold dust was also used for purchases in some parts of Siam.[3 p93].\u003C\/span\u003E\u003Cbr \/\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cstyle type=\"text\/css\"\u003E\np.p1 {margin: 0.0px 0.0px 0.0px 0.0px; font: 15.0px Menlo}\np.p2 {margin: 0.0px 0.0px 0.0px 0.0px; font: 15.0px Menlo; min-height: 18.0px}\n\u003C\/style\u003E\n\n\n\n\n\n\n\n\n\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003EWhy did such a wide variety of cultures use, and in some cases independently invent, the use of copper and its alloys, silver, and\/or gold as a store of and medium for the transfer of value?\u0026nbsp; Copper, silver, and gold have the same outermost electron cloud, giving them similar electrical, chemical, and material properties, such as resistance to oxidization -- albeit due to subtleties in this cloud gold resists oxidization better than silver, which resists it better than copper. These properties enhance their durability and divisibility. Their malleability and low melting point allow them to be recycled and formed into desired shapes and makes them readily divisible.\u0026nbsp; Heating the metals hot enough to glow, an ancient low-tech form of spectroscopy, allows the metals to be distinguished from fraudulent materials.\u0026nbsp; (We know now that the electron cloud around each atom gives, unique for each element, off a pattern of light at unique wavelengths, seen by the eye as a unique color).\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Ch3\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003ECoins\u003C\/span\u003E\u003C\/h3\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003EMetal stamped or cast with the brand of a highly reputable mint – often highly reputable because they were a large creditor that consistently accepted the coin in satisfaction of obligations -- had a significant, though not always decisive, advantage over other forms of metal money. Where the need for a fungible and divisible money that could change hands rapidly at low transaction costs was paramount, it came to displace other forms of metal money, and even significant amounts of treasure often ended up being recycled into coins. Coins could change hands in a reasonably secure manner with much less frequent\u0026nbsp;\u003C\/span\u003E\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003Eneed for weighing and assaying operations. Coins spread quickly, though not until modern times universally, from their origins in Greek and Chinese city-states.\u003C\/span\u003E\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u0026nbsp; \u003C\/span\u003E\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003EIn the Middle East and Europe coins were stamped; in China they were cast.\u003C\/span\u003E\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u0026nbsp;\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p2\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003EAlongside coins grew marketplaces.\u0026nbsp; As the Aztec gold dust, Persian Gulf larins,\u0026nbsp; Burmese silver “lumps”, and many other examples too numerous to mention demonstrate, coins were not necessary for the existence of marketplaces, but they did help make them more efficient and widespread. The Greek conqueror Alexander the Great looted the treasuries of the Near East, converting low-velocity treasure to high-velocity coinage, making his soldiers and Near East tradesmen better-paid in the process. The subsequent Hellenistic, Roman, Persian,\u0026nbsp; and Arabian empires were built on such coinage, as were medieval, Renaissance, and early industrial-era European economies. The European exploration explosion was fueled by the search for precious metals and their use to trade around the globe.\u0026nbsp;\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p2\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003EAs Peter Swetz, translator of \u003Ci\u003EThe Treviso Arithmetic\u003C\/i\u003E observes that a favorite textbook example, the alligation problem, which involved the mixing of substances in various ratios, was exemplified by the reminting\u0026nbsp;of coins. “[T]he value of money [coin] was not determined by its face value, but rather its content of precious metal…throughout the sixteenth century, chapters on alligation\u0026nbsp;in arithmetic books were particularly intended for German mint-masters …[and]…Italian goldsmiths.” This was not the only use of alligation – it also could be applied to compounding medicines, the mixing of wines, and to metallurgy more generally – but it was the most valuable and compelling example of the technique. Here is one of the problems as set forth for the student:\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p2\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003EA merchant has 46 marks 7 ounces of silver in which he knows there is 7 ¼ ounces of fine silver per mark. He wishes to reduce the purity of his silver to less than half [the example also serves to warn the apprentice merchant of such sharp practices], down to 3 ½ ounces of fine silver per mark. The question asks, “how much brass must be added to accomplish this”?\u0026nbsp;\u003C\/span\u003E\u003Cbr \/\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cstyle type=\"text\/css\"\u003E\np.p1 {margin: 0.0px 0.0px 0.0px 0.0px; font: 15.0px Menlo}\np.p2 {margin: 0.0px 0.0px 0.0px 0.0px; font: 15.0px Menlo; min-height: 18.0px}\n\u003C\/style\u003E\n\n\n\n\n\n\n\n\n\n\n\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003EThereafter follows multiplication and division using some Renaissance-era shortcuts suitable for this kind of problem. And \u003Ci\u003Evoila\u003C\/i\u003E, the minter’s coins have been successfully reduced in value (hopefully along with their stated face value – the textbook does not mention that aspect) and increased in number.\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjGQEpijHv3RPPvIBb7vrBg-LF51CPEntR0LXa_UaSDmUjLQysJjcHh0DNFBjVuafECwahBFkRHgb62UiTFKJlF6qd-a5wY0lOpRZDo0RQwOjYp0ptXm84JSz8T2m9KByS-2yZ4\/s1600\/TouchstoneNeedles.png\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"240\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjGQEpijHv3RPPvIBb7vrBg-LF51CPEntR0LXa_UaSDmUjLQysJjcHh0DNFBjVuafECwahBFkRHgb62UiTFKJlF6qd-a5wY0lOpRZDo0RQwOjYp0ptXm84JSz8T2m9KByS-2yZ4\/s320\/TouchstoneNeedles.png\" width=\"320\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: justify;\"\u003E\u003Ci style=\"text-align: start;\"\u003E\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif; font-size: small;\"\u003ETouchstone and needles used by traditional European goldsmiths for assaying gold, silver, and copper, whether as coins or as jewelry.\u0026nbsp;\u0026nbsp;Each needle presents the visual difference made by different percentage compositions of the three metals.\u003C\/span\u003E\u003C\/i\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003EOutside of this western Eurasian area, however, many non-coinage forms of money persisted and forms of debt and fiat money represented by paper were invented.\u0026nbsp;\u003C\/span\u003E\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003EWhen paper debt-money reaches the West, with bills of exchange to send money across hostile lands and later bank notes representing vaults hopefully full of gold, we have reached a more recent period of monetary history and our minds have ventured far beyond the origins of money. We will end here.\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Ch3\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003ENon-Internet References\u003C\/span\u003E\u003C\/h3\u003E\n\u003Cdiv class=\"p2\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E[1] Bohannan, Paul (1959). \"The Impact of money on an African subsistence economy\". The Journal of Economic History. 19 (4): 491–503.\u0026nbsp;\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p2\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E[2] A. Hingston Quiggin, \u003Ci\u003EA Survey of Primitive Money: The Beginnings of Currency\u003C\/i\u003E, Muethen \u0026amp; Co. Ltd., 1949\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p2\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E[3] Paul Einzig, \u003Ci\u003EPrimitive Money in Its Ethnological, Historical, and Economic Aspects\u003C\/i\u003E, Pergamon Press, 2nd ed. 1966\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p2\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E[4] W.B. Dickinson, “In Defense of Ring-Money as a Medium of Exchange”, The Numismatic Chronicle and Journal of the Numismatic Society, v. 16 (April 1853)\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p2\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E[5]\u0026nbsp; Grierson, Philip (1977) \u003Ci\u003EThe origins of money\u003C\/i\u003E. London: The Athlone Press, University of London.\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p2\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p2\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E[6] Howard J. Erlichman, \u003Ci\u003EConquest, Tribute, and Trade: The Quest for Precious Metals and the Birth of Globalization\u003C\/i\u003E, Promethus Books 2010.\u0026nbsp; Aztec gold dust quote on p97, quoting\u0026nbsp; Bernal de Castillo in The True and Full Account of the Discovery and Conquest of Mexico and New Spain\u003C\/span\u003E\u003Cbr \/\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cstyle type=\"text\/css\"\u003E\np.p1 {margin: 0.0px 0.0px 0.0px 0.0px; font: 15.0px Menlo}\n\u003C\/style\u003E\n\n\n\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif;\"\u003E[7] Weatherford, Jack (1997).\u003Ci\u003E The History of Mone\u003C\/i\u003Ey. Crown Publishing Group. ISBN 978-0-307-55674-5\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"separator\" style=\"clear: both; text-align: center;\"\u003E\n\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgpSLGChuLRZbJDvsPn8I0Hxjqyp0XQjGvb3mQYexMCcSIeFUQHxxHx0awmrl_0m4p-vCjw4ePWA-HVZcyHHXBlPsSJhX3fK1sJsbPqqlk2ueI5u1FsacCzR-mNN7NlpLKT3R0m\/s1600\/TrialOfPyx.png\" imageanchor=\"1\" style=\"margin-left: 1em; margin-right: 1em;\"\u003E\u003Cimg border=\"0\" height=\"177\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgpSLGChuLRZbJDvsPn8I0Hxjqyp0XQjGvb3mQYexMCcSIeFUQHxxHx0awmrl_0m4p-vCjw4ePWA-HVZcyHHXBlPsSJhX3fK1sJsbPqqlk2ueI5u1FsacCzR-mNN7NlpLKT3R0m\/s320\/TrialOfPyx.png\" width=\"320\" \/\u003E\u003C\/a\u003E\u003C\/div\u003E\n\u003Cdiv class=\"p1\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cspan style=\"font-family: \u0026quot;georgia\u0026quot; , \u0026quot;times new roman\u0026quot; , serif; font-size: small;\"\u003E\u003Ci\u003EJurors examining gold coins in a recent \u003Ca href=\"https:\/\/www.youtube.com\/watch?v=UZQfA2cRHJs\u0026amp;feature=youtu.be\" target=\"_blank\"\u003ETrial of the Pyx\u003C\/a\u003E. This assay and audit of the British Royal Mint has been conducted periodically \u003Ca href=\"http:\/\/www.royalmint.com\/discover\/uk-coins\/history-of-the-trial-of-the-pyx\" target=\"_blank\"\u003Esince the Middle Age\u003C\/a\u003Es. Isaac Newton and many other luminaries have been involved. It is structured much like an actual court trial, with a presiding judge, a jury of laymen, and a second jury of expert goldsmiths. It also includes the most advanced assay techniques available (today including detailed spectroscopy). The purpose of this \u003Ca href=\"https:\/\/www.thegoldsmiths.co.uk\/company\/today\/trial-pyx\/\" target=\"_blank\"\u003Eelaborate audit and ceremony\u003C\/a\u003E\u0026nbsp;is to ensure and to communicate to outsiders that the mere local cultural form is “pure”, i.e. that the coins accurately label and embody the actual amount of the actually desired natural substance. The British love their traditions and the Trial of the Pyx continues to this day.\u003C\/i\u003E\u003C\/span\u003E\u003Cbr \/\u003E\n\u003Cstyle type=\"text\/css\"\u003E\np.p1 {margin: 0.0px 0.0px 0.0px 0.0px; font: 15.0px Menlo}\n\u003C\/style\u003E\n\n\n\u003Cstyle type=\"text\/css\"\u003E\np.p1 {margin: 0.0px 0.0px 0.0px 0.0px; font: 15.0px Menlo}\np.p2 {margin: 0.0px 0.0px 0.0px 0.0px; font: 15.0px Menlo; min-height: 18.0px}\n\u003C\/style\u003E\u003Cstyle type=\"text\/css\"\u003E\np.p1 {margin: 0.0px 0.0px 0.0px 0.0px; font: 15.0px Menlo}\n\u003C\/style\u003E\u003Cstyle type=\"text\/css\"\u003E\np.p1 {margin: 0.0px 0.0px 0.0px 0.0px; font: 15.0px Menlo}\np.p2 {margin: 0.0px 0.0px 0.0px 0.0px; font: 15.0px Menlo; min-height: 18.0px}\n\u003C\/style\u003E\u003Cstyle type=\"text\/css\"\u003E\np.p1 {margin: 0.0px 0.0px 0.0px 0.0px; font: 15.0px Menlo}\n\u003C\/style\u003E\u003Cstyle type=\"text\/css\"\u003E\np.p1 {margin: 0.0px 0.0px 0.0px 0.0px; font: 15.0px Menlo; min-height: 18.0px}\np.p2 {margin: 0.0px 0.0px 0.0px 0.0px; font: 15.0px Menlo}\n\u003C\/style\u003E\u003Cstyle type=\"text\/css\"\u003E\np.p1 {margin: 0.0px 0.0px 0.0px 0.0px; font: 15.0px Menlo}\n\u003C\/style\u003E\u003Cstyle type=\"text\/css\"\u003E\np.p1 {margin: 0.0px 0.0px 0.0px 0.0px; font: 15.0px Menlo}\np.p2 {margin: 0.0px 0.0px 0.0px 0.0px; font: 15.0px Menlo; min-height: 18.0px}\n\u003C\/style\u003E\u003Cstyle type=\"text\/css\"\u003E\np.p1 {margin: 0.0px 0.0px 0.0px 0.0px; font: 15.0px Menlo}\n\u003C\/style\u003E\u003Cstyle type=\"text\/css\"\u003E\np.p1 {margin: 0.0px 0.0px 0.0px 0.0px; font: 15.0px Menlo}\n\u003C\/style\u003E\u003Cstyle type=\"text\/css\"\u003E\np.p1 {margin: 0.0px 0.0px 0.0px 0.0px; font: 15.0px Menlo}\np.p2 {margin: 0.0px 0.0px 0.0px 0.0px; font: 15.0px Menlo; min-height: 18.0px}\n\u003C\/style\u003E\u003Cstyle type=\"text\/css\"\u003E\np.p1 {margin: 0.0px 0.0px 0.0px 0.0px; font: 15.0px Menlo}\n\u003C\/style\u003E"},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/341872952395479445\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/341872952395479445","title":"4 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/341872952395479445"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/341872952395479445"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2017\/03\/collecting-metal-inner-and-outer-worlds.html","title":"Collecting metal: the inner and outer worlds of jewelry, coins, bullion bits, and odd shiny things"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"media$thumbnail":{"xmlns$media":"http://search.yahoo.com/mrss/","url":"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgiNKL7SSeIpbxXSJgkjG4vp82f6-sd6QarS0urqMFYkRo-Dhc2Vi5OTChIpTHI75OMKcCUloP04Ah9WlpH5vBL29vGIMeyns-F4xnGrONpx_1Jb8LPbrXy7JgwaYsW62RAdkXa\/s72-c\/CopperSilverGoldPeriodicTable.png","height":"72","width":"72"},"thr$total":{"$t":"4"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-7155695191612913217"},"published":{"$t":"2017-02-23T23:48:00.000-08:00"},"updated":{"$t":"2017-02-24T00:07:50.970-08:00"},"title":{"type":"text","$t":"Conflict and collectibles among the Yurok"},"content":{"type":"html","$t":"\n\n\n\n\n\n\n\n\n\n\n\n\n\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions 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mso-level-tab-stop:none;\n mso-level-number-position:left;\n text-indent:-.25in;\n font-family:\"Courier New\";\n mso-bidi-font-family:\"Times New Roman\";}\n@list l3:level3\n {mso-level-number-format:bullet;\n mso-level-text:;\n mso-level-tab-stop:none;\n mso-level-number-position:left;\n text-indent:-.25in;\n font-family:Wingdings;}\n@list l3:level4\n {mso-level-number-format:bullet;\n mso-level-text:;\n mso-level-tab-stop:none;\n mso-level-number-position:left;\n text-indent:-.25in;\n font-family:Symbol;}\n@list l3:level5\n {mso-level-number-format:bullet;\n mso-level-text:o;\n mso-level-tab-stop:none;\n mso-level-number-position:left;\n text-indent:-.25in;\n font-family:\"Courier New\";\n mso-bidi-font-family:\"Times New Roman\";}\n@list l3:level6\n {mso-level-number-format:bullet;\n mso-level-text:;\n mso-level-tab-stop:none;\n mso-level-number-position:left;\n text-indent:-.25in;\n font-family:Wingdings;}\n@list l3:level7\n {mso-level-number-format:bullet;\n mso-level-text:;\n mso-level-tab-stop:none;\n mso-level-number-position:left;\n text-indent:-.25in;\n font-family:Symbol;}\n@list l3:level8\n {mso-level-number-format:bullet;\n mso-level-text:o;\n mso-level-tab-stop:none;\n mso-level-number-position:left;\n text-indent:-.25in;\n font-family:\"Courier New\";\n mso-bidi-font-family:\"Times New Roman\";}\n@list l3:level9\n {mso-level-number-format:bullet;\n mso-level-text:;\n mso-level-tab-stop:none;\n mso-level-number-position:left;\n text-indent:-.25in;\n font-family:Wingdings;}\nol\n {margin-bottom:0in;}\nul\n {margin-bottom:0in;}\n--\u003E\n\u003C\/style\u003E\n\n\n\n\n\n\n\u003Cbr \/\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003EUntil about\n11,000 years ago all humans were foragers, living by hunting, gathering, or\nfishing.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003ETo study human evolution, and\nin particular the interest of this author, the long evolution of \u003Ca href=\"http:\/\/nakamotoinstitute.org\/shelling-out\/]\" target=\"_blank\"\u003Ecollectibles\u003C\/a\u003E -- non-fungible treasure and fungible\nmoney -- we must try to reconstruct the nature of our ancestral forager\ncultures.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EThe ancestors of the vast\nmajority of currently living people lived in areas that, due to their relative\necological abundance, have for centuries or millennia since been given over to\nagriculture. \u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003EOne possible\nway gather evidence about our ancestral cultures is to study what small\nfraction of their artifacts have been preserved by time and dug up by archaeologists. Fortunately one of\nthe desirable features of collectibles is their durability, so that a\ndisproportionate number of \u003Ca href=\"https:\/\/unenumerated.blogspot.com\/2016\/07\/artifacts-of-wealth-patterns-in_15.html\" target=\"_blank\"\u003Esuch artifacts\u003C\/a\u003E survive. Another way is to study recent\nobservations that travelers, missionaries, ethnologists, colonial officials,\ntraders, and the natives themselves made and recorded about forager cultures\nthat existed in recent\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003Etimes (albeit not\nancestral to the vast majority of today’s humans, but “cousins”), before these\ncultures were too severely disrupted by the many global waves of disease and\nmigration since Columbus.\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003EWith extremely few\nexceptions,\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003Eforager cultures either did\nnot undergo long-term recorded observation by ethnologists before severe\ndisruption to their native institutions (e.g. most indigenous American tribes,\nAndaman Islanders, Ainu, west coast Australian aborigines), or lived in\nnutrient-poor wastelands beyond the main streams of human evolution (Kalahari\ndesert, Australian outback, Arctic, American and Canadian Plains, etc.), living\nin cultures far more dispersed and mobile than is likely for the forager\nancestors of most current humans. Some may have been young refugee cultures\nfleeing the effects of the Columbian Exchange (for example, the \u003C\/span\u003E\u003Ca href=\"http:\/\/lchc.ucsd.edu\/mca\/Mail\/xmcamail.2014-12.dir\/pdf2Yb7JAO0ZG.pdf\" target=\"_blank\"\u003E\u003Cspan style=\"background: white; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003EPirahã\u003C\/span\u003E\u003C\/a\u003E\u003Cspan style=\"font-family: Times; font-size: 10.0pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003E\n\u003C\/span\u003E\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003Emay have lost some important\nlanguage features common to practically all other human languages).\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: Times; font-size: 10.0pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003EBy the time of\nColumbus, the Americas were the only continents with foraging cultures living\nin rich ecosystems – all other rich ecosystems had been converted to\nagriculture (as had many, but far from all, in the Americas). Most American\nforagers were soon disrupted beyond recognition by the massive waves of\npost-Columbian diseases and immigration. The Yurok was a group of indigenous\nAmerican foragers with shared language and customs. They lived in a rich dense\necosystem, yet furthest away from these biological and cultural tsunamis that had\noverwhelmed the rest of the post-Columbian Americas. The unique position of the\nYurok and some of its neighboring language groups, especially the \u003Ca href=\"https:\/\/en.wikipedia.org\/wiki\/Hupa\" target=\"_blank\"\u003EHupa\u003C\/a\u003E, and Karok or \u003Ca href=\"https:\/\/en.wikipedia.org\/wiki\/Karuk\" target=\"_blank\"\u003EKaruk\u003C\/a\u003E, (who occupied areas further up the\nKlamath River), and the \u003Ca href=\"https:\/\/en.wikipedia.org\/wiki\/Tolowa#History\" target=\"_blank\"\u003ETolowa\u003C\/a\u003E\n(who occupied the coast further northern into Oregon and the lowest reaches of\nthe Rogue River) can be visualized by comparing the Yuroks’ territories (their\npopulation lived almost entirely within a few miles of the Pacific Coast and\nthe lower Klamath River) at the end of the 19\u003Csup\u003Eth\u003C\/sup\u003E century to the\ngrowing American railroad network.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EThe\nPacific Northwest tribes more famous to anthropology had already been severely\ndisrupted by the time they were studied by ethnologists. \u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp;\u003C\/span\u003EWith no ongoing contacts with white immigrants\nuntil \u003Ca href=\"http:\/\/www.yuroktribe.org\/culture\/culture2.htm\" target=\"_blank\"\u003E1849\u003C\/a\u003E, the Yurok and Hupa\ndid not experience substantial disruption “\u003C\/span\u003E\u003Cspan style=\"background: white; color: black; mso-bidi-font-family: Arial; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003Euntil\nmuch later than other tribal groups in California and the United States”.\nEthnologists such as Goddard and Kroeber were able to interview Yurok and Hupa people\nwho had living memories of a minimally disturbed forager culture, including\nsome who still practiced much of the lifestyle.\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Ctable cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"float: right; margin-left: 1em; text-align: right;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjG0jnFWTV6PiE08vZxI83UDnQNMVuDDqNda6oE_e0IABh_eBDiYjttupVYCNHmSRssIaL6RxAbMrVxZiM-B85UbiVeFGs950V-QDcBHzbKUGANtzXftDIOQOCodL0DjyjQMElP\/s1600\/Yurok0.png\" style=\"clear: right; margin-bottom: 1em; margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"320\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjG0jnFWTV6PiE08vZxI83UDnQNMVuDDqNda6oE_e0IABh_eBDiYjttupVYCNHmSRssIaL6RxAbMrVxZiM-B85UbiVeFGs950V-QDcBHzbKUGANtzXftDIOQOCodL0DjyjQMElP\/s320\/Yurok0.png\" width=\"120\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E\u003Cspan style=\"font-size: 11.0pt;\"\u003ERailroads (red) within c. 300 miles of the Pacific\ncoast of the United States in 1890, vs. the extent of the Yurok tribe (blue) at\nthat time. The Yurok were among the last tribes in the rich ecosystems of the\nAmerican Pacific coast to succumb to the overwhelming influences of Western\nimmigration.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EAs a result, recorded\nobservations of the Yurok are almost the only ones we have of a forager people\nin a rich ecosystem in a nearly undisturbed and long-term equilibrium state.\u003C\/span\u003E\u003C\/i\u003E\u003C\/div\u003E\n\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"background: white; color: black; mso-bidi-font-family: Arial; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003EThe Pacific Coast of\nNorth America features uneven seasonal rain patterns that make it difficult to\nsupport early forms of agriculture.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp;\n\u003C\/span\u003EThus, even in nutrient-dense environments such as those populated by the\nYurok , this region was dominated by forager groups.\u003C\/span\u003E\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"mso-bidi-font-family: Helvetica;\"\u003EEven though the\nYurok didn’t have agriculture they did have permanent settlements due to the\nrich salmon fishing on the Klamath River. \u003C\/span\u003E\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003EWhen they finally encountered\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003Ethe\npost-Columbian wave of disease, immigration, and modernity in the mid 19\u003Csup\u003Eth\u003C\/sup\u003E\ncentury (possibly also encountering some of the waves of \u003Ca href=\"http:\/\/news.nationalpost.com\/news\/canada\/everyone-was-dead-when-europeans-first-came-to-b-c-they-confronted-the-aftermath-of-a-holocaust\" target=\"_blank\"\u003Edisease\u003C\/a\u003E that hit the\nPacific Coast as early as the 18\u003Csup\u003Eth\u003C\/sup\u003E century), almost every technology the Yurok and\ntheir indigenous neighbors had could probably have been encountered in similar\nform along many Eurasian coasts before the dawn of agriculture over ten\nthousand years ago, and perhaps even twenty or more thousand years ago.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003E\u003C\/span\u003E\u003Cspan style=\"mso-bidi-font-family: Helvetica;\"\u003EYurok was one of the very few such cultures, quite possibly similar\nto cultures that existed as long as tens of thousands of years ago, whose old\ncustoms were observed and recorded before they converted to modern law, money,\nand technology. \u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"mso-bidi-font-family: Helvetica;\"\u003EThe closest\n19th century railroad to the Yurok was hundreds of miles away, in contrast to the\nmore famous tribes of the Pacific Northwest, which were much more disrupted by\nimmigrants and their new laws before their customs were carefully observed and\nrecorded. \u003C\/span\u003E\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003EThe Yurok were one of\nthe very few forager cultures living in an abundant ecosystem, yet observed\nwithin recent memory of a probably largely undisturbed long-term equilibrium\ncultural state, and the recorded observations of this culture will almost\nsurely remain among the very few such records.\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"mso-bidi-font-family: Times; mso-no-proof: yes;\"\u003EThe Yurok lived in permanent\nbut very small villages. In 1900 their population was probably (per Kroeber) around 2,500\npeople living in over \u003Ca href=\"http:\/\/www.yuroktribe.org\/culture\/\" target=\"_blank\"\u003E50 \u003C\/a\u003Esuch villages: a handful of families per\nhamlet.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp;\u003C\/span\u003E\u003Cspan style=\"mso-spacerun: yes;\"\u003E\n\u003C\/span\u003EThis represented a population substantially reduced by immigrant-introduced\ndisease. Since this is estimated to have killed off \u003Ca href=\"http:\/\/www.yuroktribe.org\/culture\/culture2.htm\" target=\"_blank\"\u003E75%\u003C\/a\u003E of the Yurok population in the\nsecond half of the nineteenth century – compared to the 95% death rate of other\nindigenous Californians -- the original population may have been around 10,000.\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"mso-bidi-font-family: Times; mso-no-proof: yes;\"\u003EThe plurality of the \u003Ca href=\"http:\/\/www.yuroktribe.org\/culture\/\" target=\"_blank\"\u003EYurok diet\u003C\/a\u003E was salmon; they also caught steelhead\ntrout, lamprey eel, sturgeon, and candlefish on the lower Klamath River. \u003Cspan style=\"mso-spacerun: yes;\"\u003E\u003C\/span\u003EYurok also gathered acorns and shellfish and\nhunted large game (elk, deer, and sea lion).\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp;\n\u003C\/span\u003ESalmon were caught by nets, and during the height of salmon migration in\ntemporary weirs. They were finished off with long spears.\u003C\/span\u003E\n\n\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"background: white; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 27.0pt; margin-right: 31.5pt; margin-top: 4.4pt;\"\u003E\n\u003Cspan style=\"color: black; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003EThe aboriginal\nterritory of the Yurok people encompassed riparian lands along the lower forty\nmiles of the Klamath River, from its confluence with the Trinity River, its\nmajor tributary, to the Pacific Ocean. It also included coastal lands from a\nfew miles north of the river's month south to Trinidad. … The river was their\nworld. North, south, east, and west did not exist for them. The only directions\nwere upriver or downriver. \u003C\/span\u003E\u003Cspan style=\"mso-bidi-font-family: Times; mso-no-proof: yes;\"\u003E[Lufkin]\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003E\u003C\/span\u003E\u003Cspan style=\"color: black; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"background: white; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 27.0pt; margin-right: 31.5pt; margin-top: 4.4pt;\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003ELacking\nanimals or vehicles to ride, the Yurok often walked. But their main way to\ntravel long distance was by canoe, in both ocean-going and river-borne forms.\nThe two most strategic locations for the Yurok were \u003C\/span\u003E\u003Cspan style=\"color: black; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003EWelkwaw,\u003C\/span\u003E\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003E at the mouth of Klamath River, and Qu’nek,\nat the convergence of the Klamath and Trinity rivers.\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003EWhat the\nYurok could not eat during the spring and fall salmon migrations they preserved\nby \u003Ca href=\"http:\/\/visityurokcountry.com\/pauls-famous-smoked-salmon-jerky\/\" target=\"_blank\"\u003Eopen-pit smoking\u003C\/a\u003E.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EFood and other goods were stored in the many\nbaskets weaved by Yurok women. Salmon smoking, combined with the other abundant\nfood sources of the lower Klamath River and ocean environments, made their diet\nreliable year-round, despite the boom-or-bust nature of the salmon migrations,\nand let them settle in permanent and relatively dense habitations, in contrast\nto inland foragers, recently surviving examples of which lived in far sparser\npopulations and generally moved once to several times per year to follow game.\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003EThe Yurok\nhad no state, government officials, chiefs, or even clan heads. Among the\nhighest income earners were shamans, usually elderly females, a role that might\nbe best described in modern cultural terms as combining the role of priest with\nthat of medical doctor. On the other hand, most important property was owned by\nand most important wealth transfers decide by individual adult males, generally\nnot by females, no matter their earnings, nor by groups. These individuals\nsometimes owned fractional shares in some kinds of economic property, for\nexample in customarily defined spots for salmon fishing.\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003EInheritances,\nand the minority of claims that were not simply individual, were distributed\namong variable groups of males defined by their kin distances to the deceased\nor the bride.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EThere were no fixed kin\ngroups; instead “a group of kinsmen shades out … and integrates with others.”\n(Kroeber p392). Exogamy and endogamy were also defined this way, with respect\nto the variable group that was one’s particular relative kin, rather than with\nrespect to fixed villages, clans, or any other such groups sometimes found in\nother forager cultures.\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003EForager\nsocieties in general, and indigenous Californian societies in particular, were\nusually quite violent, \u003Ca href=\"http:\/\/www.sciencedirect.com\/science\/article\/pii\/S0278416513000603\" target=\"_blank\"\u003Eparticularly where populations were more dense\u003C\/a\u003E.\n\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp;\u003C\/span\u003ENext only to environmental nutrient\ndensity, violence was probably the main barrier to \u003Ca href=\"https:\/\/unenumerated.blogspot.jp\/2017\/02\/money-blockchains-and-social-scalability.html\" target=\"_blank\"\u003Esocial scalability\u003C\/a\u003E\namong foragers. Reducing and mitigating this violence so as to allow family and\neconomic institutions to work was a predominant function of indigenous social\ninstitutions. Violence took every form from one-on-one to small-scale,\ngang-like wars, typically between small kin groups.\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003EA leaderless\nand policeless social order like that of the Yurok depended more on custom and\nsupernatural sanctions than modern legal systems do. \u003C\/span\u003E\u003Cspan style=\"mso-bidi-font-family: \u0026quot;Menlo Regular\u0026quot;;\"\u003E\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp;\u003C\/span\u003E\u003C\/span\u003E\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003EYurok\nlaw contained a multitude of specific and negative taboos. \u003C\/span\u003EThe common\nexpectation that all sides should follow customary rules and, where\nappropriate, customary property valuations and exchange rates, reduced\nnegotiations and arguments, and thus reduced disputes, and thus reduced the\nviolence that was often engendered by disputes. \u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp;\u003C\/span\u003E\u003Cspan style=\"mso-bidi-font-family: \u0026quot;Menlo Regular\u0026quot;;\"\u003E“Both\nmarriage and [injury compensation] were definite, commercial, negotiated\ntransactions ; all property possessed a value fixed by custom, or by previous\nchanges of ownership, but negotiations were a cause of much dispute, each side\nclaiming as much as it dared, and usually ending in compromise.” (Quiggins\np296)\u003C\/span\u003E\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"mso-bidi-font-family: \u0026quot;Menlo Regular\u0026quot;;\"\u003EThe\nfollowing kin had priority for \u003C\/span\u003E\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003Einheritance\nof the largest pieces of property:\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoListParagraphCxSpFirst\" style=\"margin-bottom: 12.0pt; mso-add-space: auto; mso-layout-grid-align: none; mso-list: l0 level1 lfo2; mso-pagination: none; text-autospace: none; text-indent: -.25in;\"\u003E\n\u003Cspan style=\"mso-bidi-font-family: Cambria; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: Cambria; mso-fareast-theme-font: minor-latin;\"\u003E\u003Cspan style=\"mso-list: Ignore;\"\u003E1.\u003Cspan style=\"font: 7.0pt \u0026quot;Times New Roman\u0026quot;;\"\u003E\u0026nbsp;\u0026nbsp;\u0026nbsp;\u0026nbsp; \u003C\/span\u003E\u003C\/span\u003E\u003C\/span\u003E\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003Esons, but if none\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoListParagraphCxSpMiddle\" style=\"margin-bottom: 12.0pt; mso-add-space: auto; mso-layout-grid-align: none; mso-list: l0 level1 lfo2; mso-pagination: none; text-autospace: none; text-indent: -.25in;\"\u003E\n\u003Cspan style=\"mso-bidi-font-family: Cambria; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: Cambria; mso-fareast-theme-font: minor-latin;\"\u003E\u003Cspan style=\"mso-list: Ignore;\"\u003E2.\u003Cspan style=\"font: 7.0pt \u0026quot;Times New Roman\u0026quot;;\"\u003E\u0026nbsp;\u0026nbsp;\u0026nbsp;\u0026nbsp; \u003C\/span\u003E\u003C\/span\u003E\u003C\/span\u003E\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003Ebrothers, but if\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003Enone\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoListParagraphCxSpLast\" style=\"margin-bottom: 12.0pt; mso-add-space: auto; mso-layout-grid-align: none; mso-list: l0 level1 lfo2; mso-pagination: none; text-autospace: none; text-indent: -.25in;\"\u003E\n\u003Cspan style=\"mso-bidi-font-family: Cambria; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: Cambria; mso-fareast-theme-font: minor-latin;\"\u003E\u003Cspan style=\"mso-list: Ignore;\"\u003E3.\u003Cspan style=\"font: 7.0pt \u0026quot;Times New Roman\u0026quot;;\"\u003E\u0026nbsp;\u0026nbsp;\u0026nbsp;\u0026nbsp; \u003C\/span\u003E\u003C\/span\u003E\u003C\/span\u003E\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003Ebrothers’ sons\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003EProperty\nrights included incorporeal property, often bundled with corporeal\nproperty.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EFor example dance outfits,\noften made at great labor out of deer-skin and rare woodpecker scalps,\ndemonstrating wealth as splendor and usually passed on as heirlooms,\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003Ealways came bundled with prayers and spells\nthat only the owner of a particular dance outfit could use. \u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003E“[E]very\ninvasion of privilege or property must be explicitly compensated”. Compensation\nusually arrived at by “negotiation of the interested parties and their\nrepresentatives, and by them alone” – no chiefs etc., just strong custom and\nrespect for agreements. “Revenge causes two liabilities [to be compensated in\nmoney and treasure] where one lay before.” (Kroeber p390-2).\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003EFor the\npurposes of customary exchanges, bridewealth, and compensation for injuries, the\nvalue of property was “either fixed by custom, or can be valued by consideration\nof payments made for it in previous changes of ownership.” (Kroeber p392)\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EYurok law was “almost fully resolvable into\nclaims for property”.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EWhen faced with a\njudgment or agreement ending a vendetta,\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp;\n\u003C\/span\u003Eif a defendant could not cough up the specified value in property,\ngenerally in the form of \u003Ci style=\"mso-bidi-font-style: normal;\"\u003Edentalia \u003C\/i\u003Emoney\nand non-fungible treasure, he or she became a slave of the plaintiff (the\nvictim or a deceased victim’s next-of-kin). \u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003ESuch debt\nslavery was the only way a slave could be created among the Yurok, since they\ntook no male prisoners in the small-scale, gang-like warfare in which ad-hoc\nkin groups and allies sometimes engaged when disputes remained unsettled. They\neither adopted or returned the women and children prisoners as part of\npeace-making settlement (which indeed was not qualitatively distinguished from\nthe settling of smaller instances of violence).\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp;\n\u003C\/span\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003EIf a defendant\nin a dispute refused to either pay the agreed or adjudged compensation or\nsubmit to debt slavery, vendetta remained. The main outcomes of disputes were\neither continued violence, debt slavery, or (the most usual case) a final\ntransfer of wealth that sufficiently satisfied the disputants, their kin\ngroups, and third parties to bring an end to vendetta.\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003EYurok law\nwas “almost fully resolvable into claims for property” (Kroeber 1925).\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EIf a defendant could not pay, he or she\nbecame a slave of the defendant or of a deceased defendant’s next-of-kin. \u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003EThe Yurok\nhad at least two common kinds of procedures for settling disputes. The first\nwas direct negotiations between the disputants, usually including kin or\nallies. The second was a procedure whereby each side picked two jurors, who\nalso acted as intermediaries between the two parties, who would not meet.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp;\u0026nbsp; \u003C\/span\u003EThe first method was more dangerous, as\narguments often escalated into violence.:\u003C\/span\u003E\u003C\/div\u003E\n\u003Ctable cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"float: right; margin-left: 1em; text-align: right;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgznrNzL4QsJhSbBKw0WXn9cJacm350EaoJwmgABi-MtNsoRocERPXEiYl6hcs7sbEDAl-jgLklSlHGJa-u-8Wf3Wh1fh3JCc6g_b2m4H9zKWwrxb3a2c5k9Ut7xYnDEZBJVtfG\/s1600\/Yurok1.png\" imageanchor=\"1\" style=\"clear: right; margin-bottom: 1em; margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"320\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgznrNzL4QsJhSbBKw0WXn9cJacm350EaoJwmgABi-MtNsoRocERPXEiYl6hcs7sbEDAl-jgLklSlHGJa-u-8Wf3Wh1fh3JCc6g_b2m4H9zKWwrxb3a2c5k9Ut7xYnDEZBJVtfG\/s320\/Yurok1.png\" width=\"114\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\n\n\n\n\n\n\n\n\n\n\n\n\n\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n--\u003E\n\u003C\/style\u003E\n\n\n\n\n\n\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E\u003Cspan style=\"font-size: 11.0pt;\"\u003E\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp;\u003C\/span\u003E(Quiggin p294)\u003C\/span\u003E\u003C\/i\u003E\u003C\/div\u003E\n\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; margin-left: .25in; margin-right: 40.5pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 328.5pt; text-autospace: none;\"\u003E\n\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003EAmong the\nYurok…as typical among less specifically organized people, the ‘court’ was less\ndefinite, but it was nevertheless there. An aggrieved Yurok who felt he had a\nlegitimate claim engaged the legal services of two nonrelatives from a\ncommunity other than his own. The defendant then did likewise. These men were\ncalled ‘crossers’; they crossed back and forth between the litigants.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EThe principals to the dispute ordinarily did\nnot face each other during the course of the action.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EAfter hearing all that each side had to offer\nin evidence and pleading as to the relevant substantive law, the crossers\nrendered a decision for damages according to a well-established scale that was\nknown to all. For their footwork and efforts each [crosser] received a piece of\nshell currency called a ‘moccasin’.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp;\n\u003C\/span\u003E(Hoebel p25, citing Kroeber, ‘Yurok Law’, \u003Ci style=\"mso-bidi-font-style: normal;\"\u003E22\u003Csup\u003End\u003C\/sup\u003E Intl. Congress of Americanists\u003C\/i\u003E, 1924, p 551).\u003C\/span\u003E\u003Cspan style=\"font-family: Times; mso-bidi-font-family: Times;\"\u003E \u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Ci style=\"mso-bidi-font-style: normal;\"\u003EDentalia \u003C\/i\u003E(\u003Ca href=\"http:\/\/www.yuroktribe.org\/culture\/\" target=\"_blank\"\u003E\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E\u003Cspan style=\"background: white; color: black; mso-bidi-font-family: Arial; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003Eterk-term\u003C\/span\u003E\u003C\/i\u003E\u003C\/a\u003E\u003Cspan style=\"background: white; color: black; mso-bidi-font-family: Arial; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003E in the Yurok\nlanguage)\u003C\/span\u003E\u003Cspan style=\"mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003E \u003C\/span\u003Ewas a fungible form of\ncollectible – essentially money, and called such both by early Western\nobservers and by the Yurok themselves when they translated their language into\nEnglish.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EMost of the economic and legal\nfunctions of \u003Ci style=\"mso-bidi-font-style: normal;\"\u003Edentalia \u003C\/i\u003Eshells had been\nby the 20\u003Csup\u003Eth\u003C\/sup\u003E century either take over by dollars or \u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp;\u003C\/span\u003Eobsoleted by the move to the Western legal\nsystem and the abolition of shamans and bridewealth. \u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Ci style=\"mso-bidi-font-style: normal;\"\u003EDentalia\u003C\/i\u003E shells\nwere counted individually or in groups of five.\u003Cspan style=\"font-size: 10.0pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003E\n\u003C\/span\u003EThe value of a \u003Ci style=\"mso-bidi-font-style: normal;\"\u003Edentalium \u003C\/i\u003Eshell\nwas judged by its length, longer shells being disproportionately rarer. The\nlength of \u003Ci style=\"mso-bidi-font-style: normal;\"\u003Edentalia\u003C\/i\u003E shells judged with\nrespect to length between finger creases, or by tattoos which themselves had\nbeen made by shells of standard length. (p396).\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp;\n\u003C\/span\u003EThe technique was the same among the neighboring Hupa:\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 9.0pt; margin-right: 40.5pt; margin-top: 0in; tab-stops: .25in;\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 9.0pt; margin-right: 40.5pt; margin-top: 0in; tab-stops: .25in;\"\u003E\n\u003Cspan style=\"font-size: 11.0pt; mso-bidi-font-family: \u0026quot;Menlo Regular\u0026quot;;\"\u003EAs all hands and\narms are not of the same length it was necessary for the man on reaching\nmaturity to establish the values of the creases on his hand by comparison with\nmoney of known length. He had a set of lines tattooed on the inside of the\nforearm. These lines indicated the length of 5 shells of the several standards.\nThis was the principal means of estimating money. The first 5 on the string\nwere measured by holding the tip of the first shell at the thumbnail and\ndrawing the string along the arm and noting the tattooed mark reached by the\nbutt of the fifth shell (Goddard, 1903, p. 446).\u003C\/span\u003E\u003C\/div\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"float: right; margin-left: 1em; text-align: right;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiOTKyHuldRNyCRGiMub-p-iYwu-ZT5HzSFNrefQpmvf1Dt6rJpB7BPt4Om0olcLaNdMIIO6P9MFIKQeWES4JCIF8tYNJnMjojDSbtvEBqH29qx-r4nM129jdwXAHV6seatmKMe\/s1600\/Yurok2.png\" imageanchor=\"1\" style=\"clear: right; margin-bottom: 1em; margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"271\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiOTKyHuldRNyCRGiMub-p-iYwu-ZT5HzSFNrefQpmvf1Dt6rJpB7BPt4Om0olcLaNdMIIO6P9MFIKQeWES4JCIF8tYNJnMjojDSbtvEBqH29qx-r4nM129jdwXAHV6seatmKMe\/s320\/Yurok2.png\" width=\"320\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\n\n\n\n\n\n\n\n\n\n\n\n\n\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n--\u003E\n\u003C\/style\u003E\n\n\n\n\n\n\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Ci\u003E\u003Cspan style=\"background: white; color: #323232; font-size: 11.0pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003EMr. McCann [a Hupa, a language group upstream of the Yurok,\nwith many similar customs] “measuring \u003C\/span\u003E\u003C\/i\u003E\u003Cspan style=\"background: white; color: #323232; font-size: 11.0pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-bidi-font-style: italic; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003Edentalium\u003Ci\u003E shell\nmoney against tattoo marks on his forearm. Photograph by Pliny E. Goddard,\nHoopa, Humboldt County, 1901 (15-2947).”\u003C\/i\u003E\u003C\/span\u003E\u003Ci\u003E\u003Cspan style=\"color: #323232; font-size: 11.0pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003E \u003Cspan style=\"background: white;\"\u003ECredit: Hearst Museum\nBerkeley.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003E[\u003Ca href=\"https:\/\/cardinalguzman.wordpress.com\/2013\/03\/31\/the-history-of-tattoo-part-3-the-indians\/\" target=\"_blank\"\u003ESource\u003C\/a\u003E]\u003C\/span\u003E\u003C\/span\u003E\u003C\/i\u003E\u003Cspan style=\"font-size: 11.0pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\nCollectibles served as money (fungible, divisible, and\ntransferable wealth) or as treasure (displayable and transferable wealth). The\nchief collectibles of the Yurok were:\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: right;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhHDsQW9ksCKo0lA3cdKddtjFKLqq1aEi6Jpd1z61mdikDPKamK1G4BQx0QKVsTuacBzcSMyyYQvLiCxQnkXVEFtydITzgTVON1IAmeyKl4PvXL3JBCGeHa_Y6stA-GJ8usvkZo\/s1600\/Yurok3.png\" imageanchor=\"1\" style=\"clear: right; margin-bottom: 1em; margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"200\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhHDsQW9ksCKo0lA3cdKddtjFKLqq1aEi6Jpd1z61mdikDPKamK1G4BQx0QKVsTuacBzcSMyyYQvLiCxQnkXVEFtydITzgTVON1IAmeyKl4PvXL3JBCGeHa_Y6stA-GJ8usvkZo\/s200\/Yurok3.png\" width=\"197\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\n\n\n\n\n\n\n\n\n\n\n\n\n\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n--\u003E\n\u003C\/style\u003E\n\n\n\n\n\n\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E\u003Cspan style=\"font-size: 11.0pt;\"\u003EA splendid headdress featuring woodpecker scalps, from\nthe nearby Tolowa people, 1924. [\u003Ca href=\"https:\/\/www.washington.edu\/cartah\/projects\/tolowa\/pict12.html\" target=\"_blank\"\u003ESource\u003C\/a\u003E]\u003C\/span\u003E\u003C\/i\u003E\u003C\/div\u003E\n\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cdiv class=\"MsoListParagraphCxSpFirst\" style=\"margin-bottom: 12.0pt; mso-add-space: auto; mso-layout-grid-align: none; mso-list: l3 level1 lfo1; mso-pagination: none; text-autospace: none; text-indent: -.25in;\"\u003E\n\u003Cspan style=\"font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;\"\u003E\u003Cspan style=\"mso-list: Ignore;\"\u003E·\u003Cspan style=\"font: 7.0pt \u0026quot;Times New Roman\u0026quot;;\"\u003E\u0026nbsp;\u0026nbsp;\u0026nbsp;\u0026nbsp;\u0026nbsp;\n\u003C\/span\u003E\u003C\/span\u003E\u003C\/span\u003E\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003ESize-ranked\n\u003Ci style=\"mso-bidi-font-style: normal;\"\u003Edentalia \u003C\/i\u003Econstituted the most common\nmedia for satisfying obligations, a standard counter-performance for exchanges,\nand as a standard of value for determining the total value of a wealth transfer,\nusually from custom, sometimes by negotiation, or a combination thereof, for a\ngiven situation. \u003Ci style=\"mso-bidi-font-style: normal;\"\u003EDentalia \u003C\/i\u003Emade up a\nsubstantial part of nearly all, but usually less than half of most, of the\nvalue of the largest wealth transfers (shaman or doctor fees, injury\ncompensation, and bridewealth).\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoListParagraphCxSpMiddle\" style=\"margin-bottom: 12.0pt; mso-add-space: auto; mso-layout-grid-align: none; mso-list: l3 level1 lfo1; mso-pagination: none; text-autospace: none; text-indent: -.25in;\"\u003E\n\u003Cspan style=\"font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;\"\u003E\u003Cspan style=\"mso-list: Ignore;\"\u003E·\u003Cspan style=\"font: 7.0pt \u0026quot;Times New Roman\u0026quot;;\"\u003E\u0026nbsp;\u0026nbsp;\u0026nbsp;\u0026nbsp;\u0026nbsp;\n\u003C\/span\u003E\u003C\/span\u003E\u003C\/span\u003E\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003EWoodpecker\nscalps came in two sizes, exchanged at a 6:1 ratio.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EBesides a store of value they were used to\nadd splendor to dance headdresses and regalia.\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoListParagraphCxSpMiddle\" style=\"margin-bottom: 12.0pt; mso-add-space: auto; mso-layout-grid-align: none; mso-list: l3 level1 lfo1; mso-pagination: none; text-autospace: none; text-indent: -.25in;\"\u003E\n\u003Cspan style=\"font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;\"\u003E\u003Cspan style=\"mso-list: Ignore;\"\u003E·\u003Cspan style=\"font: 7.0pt \u0026quot;Times New Roman\u0026quot;;\"\u003E\u0026nbsp;\u0026nbsp;\u0026nbsp;\u0026nbsp;\u0026nbsp;\n\u003C\/span\u003E\u003C\/span\u003E\u003C\/span\u003E\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003EDeerskins\n(used in dances; the very rare albino pelt was quite valuable)\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoListParagraphCxSpLast\" style=\"margin-bottom: 12.0pt; mso-add-space: auto; mso-layout-grid-align: none; mso-list: l3 level1 lfo1; mso-pagination: none; text-autospace: none; text-indent: -.25in;\"\u003E\n\u003Cspan style=\"font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;\"\u003E\u003Cspan style=\"mso-list: Ignore;\"\u003E·\u003Cspan style=\"font: 7.0pt \u0026quot;Times New Roman\u0026quot;;\"\u003E\u0026nbsp;\u0026nbsp;\u0026nbsp;\u0026nbsp;\u0026nbsp;\n\u003C\/span\u003E\u003C\/span\u003E\u003C\/span\u003E\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003ELarge\nblades of obsidian or flint (the larger ones, either by being rarer or harder\nto make, could be quite valuable) \u003C\/span\u003E\u003Cbr \/\u003E\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Ctable cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"float: left; margin-right: 1em; text-align: left;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiBBGK2pZR-A99fseb5fJdXbZi9gGjY7xf5tIlBKASQet30Egq7os_nYkk0eKP7FO2oQNIG8g7XpTQV_ESOjZx19g4mU3mvTrdtDekszga6llB2CershWMBnGo6RfHjgzD03vnQ\/s1600\/Yurok4.png\" style=\"clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"213\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiBBGK2pZR-A99fseb5fJdXbZi9gGjY7xf5tIlBKASQet30Egq7os_nYkk0eKP7FO2oQNIG8g7XpTQV_ESOjZx19g4mU3mvTrdtDekszga6llB2CershWMBnGo6RfHjgzD03vnQ\/s320\/Yurok4.png\" width=\"320\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\n\n\n\n\n\n\n\n\n\n\n\n\n\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:Times;\n panose-1:2 0 5 0 0 0 0 0 0 0;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:3 0 0 0 1 0;}\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n--\u003E\n\u003C\/style\u003E\n\n\n\n\n\n\n\u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E\u003Cspan style=\"font-size: 11.0pt; mso-bidi-font-family: Times;\"\u003EYurok or Karuk obsidian\ntreasure blades displayed at the Denver Art Museum. The Yurok and their\nneighbors, like most other indigenous American tribes, used obsidian in\npractical axes, knives, and arrowheads. But they also knapped blades out of\nrare large pieces of obsidian and used them for wealth transfer and ceremonial\ndisplay [\u003Ca href=\"https:\/\/stephenbodio.blogspot.com\/2011\/10\/denver-art-museum-california-indian.html\" target=\"_blank\"\u003ESource\u003C\/a\u003E]\u003C\/span\u003E\u003C\/i\u003E\u003C\/div\u003E\n\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cbr \/\u003E\n\u003Ctable cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"float: right; margin-left: 1em; text-align: right;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiqPguMrG6kCu9Inulzdc9b7cvKZ4XrceBDr6I1JTdGhfYdB_RSb-U1L9oxas2rdM9cF3pWAWJiyhiKrUAN_TgYW-lROPKBXYxJNKIDdzdRHH3IyljtG8IdWtU0z5eucXzgbRU2\/s1600\/Yurok5.png\" imageanchor=\"1\" style=\"clear: right; margin-bottom: 1em; margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"320\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiqPguMrG6kCu9Inulzdc9b7cvKZ4XrceBDr6I1JTdGhfYdB_RSb-U1L9oxas2rdM9cF3pWAWJiyhiKrUAN_TgYW-lROPKBXYxJNKIDdzdRHH3IyljtG8IdWtU0z5eucXzgbRU2\/s320\/Yurok5.png\" width=\"220\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\n\n\n\n\n\n\n\n\n\n\n\n\n\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n--\u003E\n\u003C\/style\u003E\n\n\n\n\n\n\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E\u003Cspan style=\"font-size: 11.0pt;\"\u003EHupa in dance regalia made out of albino deerskin,\nwhich was very rare, and thus valuable as a collectible. [\u003Ca href=\"http:\/\/www.edwardscurtis.com\/Small%20Prints\/Volume%2013\/default.htm\" target=\"_blank\"\u003ESource\u003C\/a\u003E].\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EEthnographers themselves followed the\ncollecting instinct: most ethnographic evidence was selected in favor of the\nrare and alien and against the regular and normal. \u003C\/span\u003E\u003C\/i\u003E\u003C\/div\u003E\n\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003EAn unsettled\nvendetta could result in a disproportionate response leading to war. \u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp;\u003C\/span\u003EYurok customary law made “no distinction …\nbetween murder and war.” (Kroeber p420).\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp;\n\u003C\/span\u003EWar deaths and murder were settled by the same injury compensation rules\n(blood money).\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EYurok peace settlements\ninvolved the same settlement dances and kinds of wealth transfer (albeit\nusually on a larger scale) as individual homicide cases,.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EThey did not include tribute, which meant the\nvictors often had to pay more compensation than the vanquished.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EKrober recounts one such war (p422):\u003C\/span\u003E\u003C\/div\u003E\n\u003Ctable cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"float: right; margin-left: 1em; text-align: right;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEj_recnT6_v3eT1wUGQmFDRJTCnwQkR6zVeaAWXvFQv9LZZ64IqVFgaoalHSgLW2y2trzkOk_EnyDa6kD6UfxJ7gEwxWCeexW8RssvtluvxYUsucRpCLPXkxgsFEqS5-QbKwddn\/s1600\/Yurok6.png\" imageanchor=\"1\" style=\"clear: right; margin-bottom: 1em; margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"320\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEj_recnT6_v3eT1wUGQmFDRJTCnwQkR6zVeaAWXvFQv9LZZ64IqVFgaoalHSgLW2y2trzkOk_EnyDa6kD6UfxJ7gEwxWCeexW8RssvtluvxYUsucRpCLPXkxgsFEqS5-QbKwddn\/s320\/Yurok6.png\" width=\"224\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\n\n\n\n\n\n\n\n\n\n\n\n\n\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n--\u003E\n\u003C\/style\u003E\n\n\n\n\n\n\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E\u003Cspan style=\"font-size: 11.0pt;\"\u003EHupa arrows for fighting and hunting [\u003Ca href=\"https:\/\/anthromuseum.missouri.edu\/grayson\/americasarchery\/1994-0897-0691-0675hupa-arrows.shtml\" target=\"_blank\"\u003ESource\u003C\/a\u003E]\u003C\/span\u003E\u003C\/i\u003E\u003C\/div\u003E\n\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; margin-left: .25in; margin-right: 27.0pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003E“A feud of some\nnote took place between [the villages of] Sregon and Ko’otep. When the leading\nman [richest man and leader of this war party – not a permanent official] lost\nhis brother by sickness, he accused an inhabitant of [one of the small villages\nof] Wohtek or Wohkero of having poisoned him. The suspect was soon killed from\nambush. After this a Sregon man was attacked and killed at Ko’otep, which is\nonly a short distance from Wohtek. The act involved the people of Ko’otep,\nwhich was at that time a large village. After a time, settlement was proposed,\nand the two parties met at an open place below Sregon to conclude the\nnegotiations. Each side was ready to make a customary [settlement] dance, when\nsome one fired a shot. In the fight that ensued, a [village of] Meta ally of\nthe Sregon people was killed. The headman of Sregon now went down river with\nhis friends and lay in wait at an overhanging and bush bank near Serper, where\nthe current takes boats close in to shore. When a canoe of his foes came up, he\nattacked it and killed four of the inmates. The feud went on for some time.\nSregon, never a large village, fought, with only some aid from Meta, against\nKo’otep, Wohtek, and Pekwan, but lost only 3 men to 10 of their\nopponents’.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EThe headman at Sregon was\nsufficiently wealthy, when settlement came, to pay for all the satisfaction he\nhad earned [i.e. the blood money for the 11 men killed by his side]. He once\nsaid with reference to this experience in this and other feuds, that open\nbattles often took place without anyone being killed. Somehow men are hard to\nhit, he philosophized: arrows have a way of flying past a human being when a\nhunter is sure to strike a deer at the same distance….”\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003E(Kroeber p422)\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003EBecause \u003Ci style=\"mso-bidi-font-style: normal;\"\u003Edentalia \u003C\/i\u003Ewas the main way to avoid\nviolence and enslavement, win the best bride, and pay for spiritual and medical\nservices, the Yurok in consequence had a strong desire to acquire \u003Ci style=\"mso-bidi-font-style: normal;\"\u003Edentalia:\u003C\/i\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .25in; margin-right: .5in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 28.0pt 56.0pt 84.0pt 112.0pt 140.0pt 168.0pt 196.0pt 224.0pt 3.5in 280.0pt 308.0pt 336.0pt; text-autospace: none;\"\u003E\n\u003Cspan style=\"font-size: 11.0pt; mso-bidi-font-family: \u0026quot;Menlo Regular\u0026quot;;\"\u003EThey are firmly convinced that persistent\nthinking about money will bring it. Particularly is this believed to be true\nwhile one is engaged in any sweat-house occupation. Asaman climbs the hill to gather\nsweat-house wood always a meritorious practice, ... he puts his mind on \u003Ci style=\"mso-bidi-font-style: normal;\"\u003Edentalia\u003C\/i\u003E. He makes himself see them\nalong the trail or hanging from fir trees eating the leaves. ... In the\nsweat-house he looks until he sees more money-shells perhaps peering at him\nthrough the door. When he goes down to the river he stares into it and at last\nmay discern a shell as large as a salmon, with gills Working like those of a\nfish. . . . Saying a thing with sufficient intensity and frequency was a means\ntowards bringing it about. A man often kept calling ' I want to be rich ' or '\nI wish \u003Ci style=\"mso-bidi-font-style: normal;\"\u003Edentalia\u003C\/i\u003E ' perhaps weeping at\nthe same time…(Kroeber 1925, p 41)\u003C\/span\u003E\u003C\/div\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: right;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjetSylpg7BmziWDSXrYtjlRhXWRGDyxI2mFvD58gIXn1jiLQYlvgOJ0eaNdwN-Ni2lU0Oaw9wGnekoR6I0qjsz1CYbWWmBG60yihRgrLFz6tRd8wVrqDtX3mQWJgxz2Uj0XQaW\/s1600\/Yurok8.png\" style=\"clear: right; margin-bottom: 1em; margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"256\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjetSylpg7BmziWDSXrYtjlRhXWRGDyxI2mFvD58gIXn1jiLQYlvgOJ0eaNdwN-Ni2lU0Oaw9wGnekoR6I0qjsz1CYbWWmBG60yihRgrLFz6tRd8wVrqDtX3mQWJgxz2Uj0XQaW\/s320\/Yurok8.png\" width=\"320\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E\u003Cspan style=\"font-size: 11.0pt; mso-bidi-font-family: Times;\"\u003ETolowa man measuring a \u003C\/span\u003E\u003C\/i\u003E\u003Cspan style=\"font-size: 11.0pt; mso-bidi-font-family: Times;\"\u003Edentalia \u003Ci style=\"mso-bidi-font-style: normal;\"\u003Eshell string “thumb to shoulder”.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003E[\u003Ca href=\"http:\/\/www.edwardscurtis.com\/Small%20Prints\/Volume%2013\/default.htm\" target=\"_blank\"\u003ESource\u003C\/a\u003E]\u003C\/i\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Ctable border=\"1\" cellpadding=\"0\" cellspacing=\"0\" class=\"MsoTableGrid\" style=\"border-collapse: collapse; border: none; mso-border-alt: solid windowtext .5pt; mso-padding-alt: 0in 5.4pt 0in 5.4pt; mso-yfti-tbllook: 1184;\"\u003E\n \u003Ctbody\u003E\n\u003Ctr style=\"mso-yfti-firstrow: yes; mso-yfti-irow: 0;\"\u003E\n  \u003Ctd style=\"border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 128.8pt;\" valign=\"top\" width=\"129\"\u003E\n  \u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E\u003Cspan style=\"font-family: Times; mso-bidi-font-family: Times;\"\u003ELength of\n  shell (estimated by length between finger creases or tattoo marks that had\n  been measured from standard shells; translated into English inches)\u003C\/span\u003E\u003C\/i\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n  \u003Ctd style=\"border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 115.1pt;\" valign=\"top\" width=\"115\"\u003E\n  \u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E\u003Cspan style=\"font-family: Times; mso-bidi-font-family: Times;\"\u003EShells to\n  a string of “thumb to shoulder” length (about 27 and ½ inches)\u003C\/span\u003E\u003C\/i\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n  \u003Ctd style=\"border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.75in;\" valign=\"top\" width=\"126\"\u003E\n  \u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E\u003Cspan style=\"font-family: Times; mso-bidi-font-family: Times;\"\u003ERough\n  typical value of shell in c. 2010s U.S. dollars, based on c. 1900 dollar\n  value in trade with white immigrants and internal exchange after\n  incorporation of U.S. money\u003C\/span\u003E\u003C\/i\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n \u003C\/tr\u003E\n\u003Ctr style=\"mso-yfti-irow: 1;\"\u003E\n  \u003Ctd style=\"border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 128.8pt;\" valign=\"top\" width=\"129\"\u003E\n  \u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E\u003Cspan style=\"font-family: Times; mso-bidi-font-family: Times;\"\u003E2 ½\u003C\/span\u003E\u003C\/i\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n  \u003Ctd style=\"border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 115.1pt;\" valign=\"top\" width=\"115\"\u003E\u003Cbr \/\u003E\u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E\u003Cspan style=\"font-family: Times; mso-bidi-font-family: Times;\"\u003E11\u003C\/span\u003E\u003C\/i\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n  \u003Ctd style=\"border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.75in;\" valign=\"top\" width=\"126\"\u003E\n  \u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E\u003Cspan style=\"font-family: Times; mso-bidi-font-family: Times;\"\u003E$150\u003C\/span\u003E\u003C\/i\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n \u003C\/tr\u003E\n\u003Ctr style=\"mso-yfti-irow: 2;\"\u003E\n  \u003Ctd style=\"border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 128.8pt;\" valign=\"top\" width=\"129\"\u003E\n  \u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E\u003Cspan style=\"font-family: Times; mso-bidi-font-family: Times;\"\u003E2 5\/16\u003C\/span\u003E\u003C\/i\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n  \u003Ctd style=\"border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 115.1pt;\" valign=\"top\" width=\"115\"\u003E\n  \u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E\u003Cspan style=\"font-family: Times; mso-bidi-font-family: Times;\"\u003E12\u003C\/span\u003E\u003C\/i\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n  \u003Ctd style=\"border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.75in;\" valign=\"top\" width=\"126\"\u003E\n  \u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E\u003Cspan style=\"font-family: Times; mso-bidi-font-family: Times;\"\u003E$90\u003C\/span\u003E\u003C\/i\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n \u003C\/tr\u003E\n\u003Ctr style=\"mso-yfti-irow: 3;\"\u003E\n  \u003Ctd style=\"border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 128.8pt;\" valign=\"top\" width=\"129\"\u003E\n  \u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E\u003Cspan style=\"font-family: Times; mso-bidi-font-family: Times;\"\u003E2 1\/8\u003C\/span\u003E\u003C\/i\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n  \u003Ctd style=\"border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 115.1pt;\" valign=\"top\" width=\"115\"\u003E\n  \u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E\u003Cspan style=\"font-family: Times; mso-bidi-font-family: Times;\"\u003E13\u003C\/span\u003E\u003C\/i\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n  \u003Ctd style=\"border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.75in;\" valign=\"top\" width=\"126\"\u003E\n  \u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E\u003Cspan style=\"font-family: Times; mso-bidi-font-family: Times;\"\u003E$30\u003C\/span\u003E\u003C\/i\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n \u003C\/tr\u003E\n\u003Ctr style=\"mso-yfti-irow: 4;\"\u003E\n  \u003Ctd style=\"border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 128.8pt;\" valign=\"top\" width=\"129\"\u003E\n  \u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E\u003Cspan style=\"font-family: Times; mso-bidi-font-family: Times;\"\u003E2\u003C\/span\u003E\u003C\/i\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n  \u003Ctd style=\"border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 115.1pt;\" valign=\"top\" width=\"115\"\u003E\n  \u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E\u003Cspan style=\"font-family: Times; mso-bidi-font-family: Times;\"\u003E14\u003C\/span\u003E\u003C\/i\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n  \u003Ctd style=\"border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.75in;\" valign=\"top\" width=\"126\"\u003E\n  \u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E\u003Cspan style=\"font-family: Times; mso-bidi-font-family: Times;\"\u003E$15\u003C\/span\u003E\u003C\/i\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n \u003C\/tr\u003E\n\u003Ctr style=\"mso-yfti-irow: 5; mso-yfti-lastrow: yes;\"\u003E\n  \u003Ctd style=\"border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 128.8pt;\" valign=\"top\" width=\"129\"\u003E\n  \u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E\u003Cspan style=\"font-family: Times; mso-bidi-font-family: Times;\"\u003E1 7\/8\u003C\/span\u003E\u003C\/i\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n  \u003Ctd style=\"border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 115.1pt;\" valign=\"top\" width=\"115\"\u003E\n  \u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E\u003Cspan style=\"font-family: Times; mso-bidi-font-family: Times;\"\u003E15\u003C\/span\u003E\u003C\/i\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n  \u003Ctd style=\"border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 1.75in;\" valign=\"top\" width=\"126\"\u003E\n  \u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E\u003Cspan style=\"font-family: Times; mso-bidi-font-family: Times;\"\u003E$7.50\u003C\/span\u003E\u003C\/i\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n \u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003EThe \u003Ci style=\"mso-bidi-font-style: normal;\"\u003Edentalia \u003C\/i\u003Eused by the Yurok and\nneighboring tribes came via repeated transfers from distant parts north.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003E\u003Ci style=\"mso-bidi-font-style: normal;\"\u003EDentalia\u003C\/i\u003E\nare found on the Pacific Coast above the 49\u003Csup\u003Eth\u003C\/sup\u003E parallel. \u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp;\u003C\/span\u003EIn the waters off the Vancouver and Queen\nCharlotte Islands, indigenous peoples dredged live shells from a sea bottom\ntens of feet below the surface.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003E“\u003C\/span\u003E\u003Cspan style=\"mso-bidi-font-family: \u0026quot;Menlo Regular\u0026quot;;\"\u003EThey let down long poles to which\nare attached pieces of wood fitted with spikes or teeth, between which the\nshells become fixed.”\u003C\/span\u003E\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003E Shells\nharvested live have, even many decades after having been killed, a different\ncolor than the dead \u003Ci style=\"mso-bidi-font-style: normal;\"\u003Edentalia \u003C\/i\u003Eshells\nthat commonly wash up on many Pacific Coast beaches. The former were valued as\nscarce collectibles; the latter were not, and were not used by the Yurok or\ntheir neighbors.\u003C\/span\u003E\u003Cspan style=\"mso-bidi-font-family: \u0026quot;Menlo Regular\u0026quot;;\"\u003E\n(Quiggins, p293-4)\u003C\/span\u003E\u003C\/div\u003E\n\u003Cbr \/\u003E\u003Ctable cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"float: right; margin-left: 1em; text-align: right;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgtESTWaWZG2vJZg3KjhQ1nNMmL16u1NOLAoAKCNi4lUhQFguMDZkFj3vfqMoWUqvjGGjOY4SyBzGa4KcHMlLhrGg01r5ZUrx9GtZAdaF1X-NosSvMYdb3rXpLYLzDOAGXuwwW_\/s1600\/Yurok7.png\" style=\"clear: right; margin-bottom: 1em; margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"320\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgtESTWaWZG2vJZg3KjhQ1nNMmL16u1NOLAoAKCNi4lUhQFguMDZkFj3vfqMoWUqvjGGjOY4SyBzGa4KcHMlLhrGg01r5ZUrx9GtZAdaF1X-NosSvMYdb3rXpLYLzDOAGXuwwW_\/s320\/Yurok7.png\" width=\"320\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"background: white; color: #333333; font-size: 11.0pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003EDentalia\n\u003Ci style=\"mso-bidi-font-style: normal;\"\u003Eshell string and Northern California elk antler\npurse for holding it. Probably Hupa. 1800s. \u003Cspan style=\"mso-spacerun: yes;\"\u003E[\u003C\/span\u003E\u003Ca href=\"https:\/\/www.pinterest.com\/pin\/127930445636349594\/\" target=\"_blank\"\u003ESource\u003C\/a\u003E] \u003C\/i\u003E\u003C\/span\u003E\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E\u003Cspan style=\"font-size: 11.0pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003E\u003C\/span\u003E\u003C\/i\u003E\u003C\/div\u003E\n\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003EYurok cosmology\n– their view of the shape and size of the universe -- was largely bounded by\ntheir personal experience and defined by the topology of the Pacific Coast and\nthe flow of the lower Klamath River and its immediate tributaries. \u003Ci style=\"mso-bidi-font-style: normal;\"\u003EDentalia \u003C\/i\u003Ewere obtained from transfers\ndown the Pacific Coast, from tribes further north, including trade in various\ntreasures and slaves with some Pacific Northwest tribes. “They speak in their\ntraditions of … strange but enviable peoples … who suck the flesh out of the [\u003Ci style=\"mso-bidi-font-style: normal;\"\u003Edentalia\u003C\/i\u003E] univalves.”\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003E(Kroeber p394)\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EAs \u003Ci style=\"mso-bidi-font-style: normal;\"\u003Edentalia\n\u003C\/i\u003Epercolated down the coast, their scarcity rose and their exchange rate\nstrengthened. “\u003Cspan style=\"mso-bidi-font-weight: bold;\"\u003EIn Northern Oregon or\namong the Yurok\u003C\/span\u003E\u003C\/span\u003E\u003Cspan style=\"font-size: 13.0pt; mso-bidi-font-family: Times; mso-bidi-font-weight: bold; mso-text-raise: 1.0pt; position: relative; top: -1.0pt;\"\u003E \u003C\/span\u003E\u003Cspan style=\"mso-bidi-font-family: Times; mso-bidi-font-weight: bold;\"\u003Ea slave was worth 1 string. Among the Nootka [who harvested the live \u003Ci style=\"mso-bidi-font-style: normal;\"\u003Edentalia \u003C\/i\u003Eoff Vancouver Island], it took\n5 fathoms to buy a slave.” (Einzig p173).\u003C\/span\u003E\u003C\/div\u003E\n\u003Ctable cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"float: right; margin-left: 1em; text-align: right;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiXF5kauSde0rue6mcO0tWI64BCzc0hkYt2IFCZ7f9wl9QD0NoxX_t1z55_jxSXSau-_N-ZWf_7zfvLzkJ5kO9NoS8C80n20vpFSMmjRWaNhJFb8wpyG0SVLBUMA5e4PlAROVw0\/s1600\/Yurok9.png\" imageanchor=\"1\" style=\"clear: right; margin-bottom: 1em; margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"320\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiXF5kauSde0rue6mcO0tWI64BCzc0hkYt2IFCZ7f9wl9QD0NoxX_t1z55_jxSXSau-_N-ZWf_7zfvLzkJ5kO9NoS8C80n20vpFSMmjRWaNhJFb8wpyG0SVLBUMA5e4PlAROVw0\/s320\/Yurok9.png\" width=\"210\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\n\n\n\n\n\n\n\n\n\n\n\n\n\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n--\u003E\n\u003C\/style\u003E\n\n\n\n\n\n\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E\u003Cspan style=\"font-size: 11.0pt;\"\u003EPrimary (net) directions of \u003C\/span\u003E\u003C\/i\u003E\u003Cspan style=\"font-size: 11.0pt;\"\u003Edentalia\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E shell\ntransfers along the two topological axes of the Yurok: south along the Pacific\ncoast and up the Klamath River system.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp;\n\u003C\/span\u003EThe source of \u003C\/i\u003Edentalia\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E used by\nthe Yurok as a fungible media for the satisfaction of obligations was far from\nlocal; the main source was probably the Vancouver Islands in British Columbia.\n(The long distance\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003Eof users from the\nsource ensured unforgeable costliness, i.e. a reliably and securely constrained\nsupply curve, a pattern repeated with many other instances of shell and stone\nmoney).\u003C\/i\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003EAs with the \u003Ca href=\"https:\/\/archive.fo\/TEF3E\" target=\"_blank\"\u003Ekula ring\u003C\/a\u003E of Melanesia, the net flow of specific\ntransfers of \u003Ci style=\"mso-bidi-font-style: normal;\"\u003Edentalia \u003C\/i\u003Eshells followed\na geographical network, in this case from a source in the distant northern\nPacific Coast to sinks further south along that coast and up the Klamath River.\n\u003C\/span\u003E\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp;\u003C\/span\u003EMany of the traditional stories\nof the Yurok involve \u003Ci style=\"mso-bidi-font-style: normal;\"\u003Edentalia\u003C\/i\u003E.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EAt least one such story follows the journey\nof two characters along this network -- down the Pacific coast and up the\nKlamath River -- and how they dispense of their shells. Their \u003Ci style=\"mso-bidi-font-style: normal;\"\u003Edentalia \u003C\/i\u003Eare in demand in some [hamlets]\n(or the hamlets are friendly, and allow them to trade), and not in other ones\n(or they are hostile). Various payments do or do not occur as our characters\ntake follow the main flow of dentalia up the Klamath River.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003E(Kroeber p397)\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003ETwo other\nmarine shells were often used as fungible money among the indigenous peoples of\nwestern North America, even well inland, but not among coastal peoples such as\nthe Yurok:\u003C\/span\u003E\u003C\/div\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"float: right; margin-left: 1em; text-align: right;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhzPgloxadB1VexktUtvp4k-dlR6bgEQT5GV1uoNibTU-gXLMWfdRJVtua27pSBIIytNF3CjbvTkCJjAriT5QmkrWppEVzjlYdBv-VrnNH85GhHpAql8JZro42QxE-MEgb71mDF\/s1600\/Hupa+Female+Shaman.jpg\" imageanchor=\"1\" style=\"clear: right; margin-bottom: 1em; margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"320\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhzPgloxadB1VexktUtvp4k-dlR6bgEQT5GV1uoNibTU-gXLMWfdRJVtua27pSBIIytNF3CjbvTkCJjAriT5QmkrWppEVzjlYdBv-VrnNH85GhHpAql8JZro42QxE-MEgb71mDF\/s320\/Hupa+Female+Shaman.jpg\" width=\"229\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\n\n\n\n\n\n\n\n\n\n\n\n\n\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n--\u003E\n\u003C\/style\u003E\n\n\n\n\n\n\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E\u003Cspan style=\"font-size: 11.0pt;\"\u003EHupa shaman \u003C\/span\u003E\u003C\/i\u003E\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E\u003Cspan style=\"font-size: 11.0pt;\"\u003E[\u003Ca href=\"http:\/\/www.edwardscurtis.com\/Small%20Prints\/Volume%2013\/default.htm\" target=\"_blank\"\u003ESource\u003C\/a\u003E].\u003C\/span\u003E\u003C\/i\u003E\u003C\/div\u003E\n\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; margin-left: .25in; margin-right: .5in; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"mso-bidi-font-family: Times; mso-bidi-font-weight: bold;\"\u003EOther\nshells used as currency in the Western States included \u003Ci\u003Eolivella \u003C\/i\u003Eand\npieces of [the abalone shell] \u003Ci\u003Ehaliotis. \u003C\/i\u003EThe latter was in various\ndenominations according to its size... The value of pieces of the same size\nvaried according to the degree of their brilliance. There was a time when one\nsingle shell bought a horse in New Mexico. (Einzig p173)\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; margin-left: 0in; margin-right: -9.0pt; margin-top: 0in; mso-layout-grid-align: none; mso-pagination: none; tab-stops: 369.0pt; text-autospace: none;\"\u003E\n\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E\u003Cspan style=\"mso-bidi-font-family: Times; mso-bidi-font-weight: bold;\"\u003EHaliotis \u003C\/span\u003E\u003C\/i\u003E\u003Cspan style=\"mso-bidi-font-family: Times; mso-bidi-font-weight: bold;\"\u003Eshells “were\ntraded all down the West Coast from Alaska to Mexico” (Quiggin p299)\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EBut among the Yurok, the \u003Ci style=\"mso-bidi-font-style: normal;\"\u003Ehaliotis\u003C\/i\u003E shell was common enough in the local environment that it\nwas only used whole, as a pendant with minor treasure value. \u003Ci style=\"mso-bidi-font-style: normal;\"\u003EOlivella \u003C\/i\u003Ewas also locally abundant and\nused liberally as an ornament, but not as substantial money or treasure. With\nboth fungible money and non-fungible treasure, we again see the signature\neconomics of collectibles at work: the unique interplay between supply and\ndemand, in particular the demand for scarce supply, which distinguishes a\ncollectible from a normal commodity. \u003C\/span\u003E\u003Cbr \/\u003E\u003Cspan style=\"mso-bidi-font-family: Times; mso-bidi-font-weight: bold;\"\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E\u003Cspan style=\"font-size: 11.0pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003EThe main kinds of Yurok obligations or deals, and the wealth\ntransfers that satisfied them.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003E\u003C\/span\u003E\u003C\/i\u003E\u003C\/div\u003E\n\u003Ctable border=\"1\" cellpadding=\"0\" cellspacing=\"0\" class=\"MsoTableGrid\" style=\"border-collapse: collapse; border: none; mso-border-alt: solid windowtext .5pt; mso-padding-alt: 0in 5.4pt 0in 5.4pt; mso-yfti-tbllook: 1184; width: 446px;\"\u003E\n \u003Ctbody\u003E\n\u003Ctr style=\"mso-yfti-firstrow: yes; mso-yfti-irow: 0;\"\u003E\n  \u003Ctd style=\"border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 110.7pt;\" valign=\"top\" width=\"111\"\u003E\n  \u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cb style=\"mso-bidi-font-weight: normal;\"\u003E\u003Cspan style=\"font-family: Times; mso-bidi-font-family: Times;\"\u003EObligation\u003C\/span\u003E\u003C\/b\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n  \u003Ctd style=\"border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 335.7pt;\" valign=\"top\" width=\"336\"\u003E\n  \u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cb style=\"mso-bidi-font-weight: normal;\"\u003E\u003Cspan style=\"font-family: Times; mso-bidi-font-family: Times;\"\u003EType of\n  wealth\u003C\/span\u003E\u003C\/b\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n \u003C\/tr\u003E\n\u003Ctr style=\"mso-yfti-irow: 1;\"\u003E\n  \u003Ctd style=\"border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 110.7pt;\" valign=\"top\" width=\"111\"\u003E\n  \u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"font-family: Times; mso-bidi-font-family: Times;\"\u003EShaman fees\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n  \u003Ctd style=\"border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 335.7pt;\" valign=\"top\" width=\"336\"\u003E\n  \u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"font-family: Times; mso-bidi-font-family: Times;\"\u003EAny kind of collectible treasure or the\n  occasional useful good of great value (e.g. canoe), almost always including\n  some \u003Ci style=\"mso-bidi-font-style: normal;\"\u003Edentalium\u003C\/i\u003E but usually for no\n  more than half the value. Most common treasures used in these larger wealth\n  transfers were woodpecker scalps and large stone blades. \u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n \u003C\/tr\u003E\n\u003Ctr style=\"mso-yfti-irow: 2;\"\u003E\n  \u003Ctd style=\"border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 110.7pt;\" valign=\"top\" width=\"111\"\u003E\n  \u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"font-family: Times; mso-bidi-font-family: Times;\"\u003EInjury compensation\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n  \u003Ctd style=\"border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 335.7pt;\" valign=\"top\" width=\"336\"\u003E\n  \u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"font-family: Times; mso-bidi-font-family: Times;\"\u003ESimilar variety and frequency of items as\n  for shaman fees \u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n \u003C\/tr\u003E\n\u003Ctr style=\"mso-yfti-irow: 3;\"\u003E\n  \u003Ctd style=\"border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 110.7pt;\" valign=\"top\" width=\"111\"\u003E\n  \u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"font-family: Times; mso-bidi-font-family: Times;\"\u003EBridewealth\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"font-family: Times; mso-bidi-font-family: Times;\"\u003ERecipient priority (p401): \u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoListParagraphCxSpFirst\" style=\"margin-bottom: 12.0pt; mso-add-space: auto; mso-layout-grid-align: none; mso-list: l2 level1 lfo3; mso-pagination: none; text-autospace: none; text-indent: -.25in;\"\u003E\n\u003Cspan style=\"font-family: Times; mso-bidi-font-family: Times; mso-fareast-font-family: Times;\"\u003E\u003Cspan style=\"mso-list: Ignore;\"\u003E1.\u003Cspan style=\"font: 7.0pt \u0026quot;Times New Roman\u0026quot;;\"\u003E\u0026nbsp;\u0026nbsp;\u0026nbsp;\u0026nbsp;\n  \u003C\/span\u003E\u003C\/span\u003E\u003C\/span\u003E\u003Cspan style=\"font-family: Times; mso-bidi-font-family: Times;\"\u003Efather of bride\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoListParagraphCxSpMiddle\" style=\"margin-bottom: 12.0pt; mso-add-space: auto; mso-layout-grid-align: none; mso-list: l2 level1 lfo3; mso-pagination: none; text-autospace: none; text-indent: -.25in;\"\u003E\n\u003Cspan style=\"font-family: Times; mso-bidi-font-family: Times; mso-fareast-font-family: Times;\"\u003E\u003Cspan style=\"mso-list: Ignore;\"\u003E2.\u003Cspan style=\"font: 7.0pt \u0026quot;Times New Roman\u0026quot;;\"\u003E\u0026nbsp;\u0026nbsp;\u0026nbsp;\u0026nbsp;\n  \u003C\/span\u003E\u003C\/span\u003E\u003C\/span\u003E\u003Cspan style=\"font-family: Times; mso-bidi-font-family: Times;\"\u003Ebrothers of bride\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoListParagraphCxSpLast\" style=\"margin-bottom: 12.0pt; mso-add-space: auto; mso-layout-grid-align: none; mso-list: l2 level1 lfo3; mso-pagination: none; text-autospace: none; text-indent: -.25in;\"\u003E\n\u003Cspan style=\"font-family: Times; mso-bidi-font-family: Times; mso-fareast-font-family: Times;\"\u003E\u003Cspan style=\"mso-list: Ignore;\"\u003E3.\u003Cspan style=\"font: 7.0pt \u0026quot;Times New Roman\u0026quot;;\"\u003E\u0026nbsp;\u0026nbsp;\u0026nbsp;\u0026nbsp;\n  \u003C\/span\u003E\u003C\/span\u003E\u003C\/span\u003E\u003Cspan style=\"font-family: Times; mso-bidi-font-family: Times;\"\u003Euncles of bride\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n  \u003Ctd style=\"border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 335.7pt;\" valign=\"top\" width=\"336\"\u003E\n  \u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003ESimilar variety and frequency of items as for shaman fees (Quiggin\n  p296) “\u003C\/span\u003E\u003Cspan style=\"mso-bidi-font-family: \u0026quot;Menlo Regular\u0026quot;;\"\u003EThere was no\n  fixed price, for that depended on the rank and wealth of the individual, and\n  social status depended on the amount paid.” (Kroeber, 1925, pp. 21-2).\u003C\/span\u003E\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003E Sometimes there were dowry\n  counter-payments, e.g. if the bride’s father was particularly wealthy. \u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n \u003C\/tr\u003E\n\u003Ctr style=\"mso-yfti-irow: 4;\"\u003E\n  \u003Ctd style=\"border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 110.7pt;\" valign=\"top\" width=\"111\"\u003E\n  \u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"font-family: Times; mso-bidi-font-family: Times;\"\u003EDivorce (p402-3)\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoListParagraphCxSpFirst\" style=\"margin-bottom: 12pt; text-align: left; text-indent: -0.25in;\"\u003E\n\u003Cspan style=\"font-family: Times; mso-bidi-font-family: Times;\"\u003E\u0026nbsp;\u0026nbsp;\u0026nbsp;\u0026nbsp;\u0026nbsp; any time at a woman’s choice, as long as her kin repays\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoListParagraphCxSpLast\" style=\"margin-bottom: 12pt; text-align: left; text-indent: -0.25in;\"\u003E\n\u003Cspan style=\"font-family: Wingdings; mso-bidi-font-family: Wingdings; mso-fareast-font-family: Wingdings;\"\u003E\u003Cspan style=\"mso-list: Ignore;\"\u003E\u003Cspan style=\"font: 7.0pt \u0026quot;Times New Roman\u0026quot;;\"\u003E\u003C\/span\u003E\u003C\/span\u003E\u003C\/span\u003E\u003Cspan style=\"font-family: Times; mso-bidi-font-family: Times;\"\u003E\u0026nbsp;\u0026nbsp;\u0026nbsp;\u0026nbsp;\u0026nbsp; man must show just cause to convince her kin to repay\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n  \u003Ctd style=\"border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 335.7pt;\" valign=\"top\" width=\"336\"\u003E\n  \u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"font-family: Times; mso-bidi-font-family: Times;\"\u003ERepayment depended on fertility:\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"font-family: Times; mso-bidi-font-family: Times;\"\u003EShe died early =\u0026gt; partial repayment\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"font-family: Times; mso-bidi-font-family: Times;\"\u003EOngoing infertility =\u0026gt; partial repayment\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"font-family: Times; mso-bidi-font-family: Times;\"\u003EEach child she bore =\u0026gt; smaller repayment\n  upon divorce, death, or subsequent infertility.\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n \u003C\/tr\u003E\n\u003Ctr style=\"mso-yfti-irow: 5; mso-yfti-lastrow: yes;\"\u003E\n  \u003Ctd style=\"border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 110.7pt;\" valign=\"top\" width=\"111\"\u003E\n  \u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"font-family: Times; mso-bidi-font-family: Times;\"\u003EExchange\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n  \u003Ctd style=\"border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 335.7pt;\" valign=\"top\" width=\"336\"\u003E\n  \u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"font-family: Times; mso-bidi-font-family: Times;\"\u003EUsually \u003Ci style=\"mso-bidi-font-style: normal;\"\u003Edentalia\n  \u003C\/i\u003Ecould be used to purchase a wide variety of treasures, useful goods,\n  fishing rights, hunting rights,\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp;\n  \u003C\/span\u003Eincorporeal rights (e.g. rights to say prayers and cast spells), etc.\n  at either customary or negotiated exchange rates\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n \u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"mso-layout-grid-align: none; mso-pagination: none; tab-stops: 28.0pt 56.0pt 84.0pt 112.0pt 140.0pt 168.0pt 196.0pt 224.0pt 3.5in 280.0pt 308.0pt 336.0pt; text-autospace: none;\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003EDentalia, \u003C\/span\u003E\u003C\/i\u003E\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003Eunlike treasure, was fungible and divisible.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EIn consequence the values of individual\npieces of treasure, expressed as the Yurok did in terms of their customary or\nmost recent exchange rate into \u003Ci style=\"mso-bidi-font-style: normal;\"\u003Edentalia,\u003C\/i\u003E\ncould in principle have been counted, summed, and subtracted to compute a net\nsettlement in satisfaction of two opposing obligations. In practice, the\nindigenous Californians lacked calculating devices for accomplishing this –\nthey had neither any sort of abacus nor methods of algorithmic writing used in\nEurasia. Because of such difficulties in computing and thus comparing the\nvalues of money and treasure, bilateral large payments (such as bridewealth and\ndowry in a marriage, or bilateral damages incurred in a war) that included such\ntreasures, as they almost always did, were not net settled, but instead each\nside paid in full.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EIf two men married\neach others’ sisters, each paid the full bridewealth to the other (Quiggin\np296).\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003EProperty\nwith concrete utility was also sometimes used as part of large wealth\ntransfers, albeit far less commonly than collectibles:\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoListParagraphCxSpFirst\" style=\"margin-bottom: 12.0pt; mso-add-space: auto; mso-layout-grid-align: none; mso-list: l3 level1 lfo1; mso-pagination: none; text-autospace: none; text-indent: -.25in;\"\u003E\n\u003Cspan style=\"font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;\"\u003E\u003Cspan style=\"mso-list: Ignore;\"\u003E·\u003Cspan style=\"font: 7.0pt \u0026quot;Times New Roman\u0026quot;;\"\u003E\u0026nbsp;\u0026nbsp;\u0026nbsp;\u0026nbsp;\u0026nbsp;\n\u003C\/span\u003E\u003C\/span\u003E\u003C\/span\u003E\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003EFishing\nrights\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoListParagraphCxSpMiddle\" style=\"margin-bottom: 12.0pt; mso-add-space: auto; mso-layout-grid-align: none; mso-list: l3 level1 lfo1; mso-pagination: none; text-autospace: none; text-indent: -.25in;\"\u003E\n\u003Cspan style=\"font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;\"\u003E\u003Cspan style=\"mso-list: Ignore;\"\u003E·\u003Cspan style=\"font: 7.0pt \u0026quot;Times New Roman\u0026quot;;\"\u003E\u0026nbsp;\u0026nbsp;\u0026nbsp;\u0026nbsp;\u0026nbsp;\n\u003C\/span\u003E\u003C\/span\u003E\u003C\/span\u003E\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003EHunting\nrights\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoListParagraphCxSpMiddle\" style=\"margin-bottom: 12.0pt; mso-add-space: auto; mso-layout-grid-align: none; mso-list: l3 level1 lfo1; mso-pagination: none; text-autospace: none; text-indent: -.25in;\"\u003E\n\u003Cspan style=\"font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;\"\u003E\u003Cspan style=\"mso-list: Ignore;\"\u003E·\u003Cspan style=\"font: 7.0pt \u0026quot;Times New Roman\u0026quot;;\"\u003E\u0026nbsp;\u0026nbsp;\u0026nbsp;\u0026nbsp;\u0026nbsp;\n\u003C\/span\u003E\u003C\/span\u003E\u003C\/span\u003E\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003ECanoes\n(cross-river ferries, up-and-down-river polling-and-paddling, ocean-going\npaddling) \u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoListParagraphCxSpLast\" style=\"margin-bottom: 12.0pt; mso-add-space: auto; mso-layout-grid-align: none; mso-list: l3 level1 lfo1; mso-pagination: none; text-autospace: none; text-indent: -.25in;\"\u003E\n\u003Cspan style=\"font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;\"\u003E\u003Cspan style=\"mso-list: Ignore;\"\u003E·\u003Cspan style=\"font: 7.0pt \u0026quot;Times New Roman\u0026quot;;\"\u003E\u0026nbsp;\u0026nbsp;\u0026nbsp;\u0026nbsp;\u0026nbsp;\n\u003C\/span\u003E\u003C\/span\u003E\u003C\/span\u003E\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003ESlaves\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003EAbout five\npercent of the population were slaves. They “entered into this condition solely\nthrough debt,\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003Enever through violence” –\nadult male prisoners of war were killed, with women and children returned upon\nsettlement or adopted. \u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp;\u003C\/span\u003EThe debt was\nalmost always incurred in a dispute settlement – if the adjudged party could\nnot pay the amount in question, whether through \u003Ci style=\"mso-bidi-font-style: normal;\"\u003Edentalia \u003C\/i\u003Eor other treasures or property, they became the slave of the\nadjudged victim.\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"background: white; margin-top: 4.35pt; tab-stops: 0in;\"\u003E\n\u003Cspan style=\"color: black; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003EFishing sites were\n(and to a great extent still are) considered privately owned and\ntransferable.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EFishing rights could be\nloaned for a portion of the harvest. Owners of the best sites were envied\n“aristocrats”. (Lufkin). \u003C\/span\u003E\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003E“Prolific\neddies” were defined as discrete fishing spots by custom, which generally\nforbade the establishment of new locations, since these would usually degrade\nthe fishing in current locations. A fishing spot could be individually owned,\nbut since it usually generated more food than a family could eat, the spot was\nmore often jointly owned in fractional shares by several men, who then used the\nspot in rotation.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EThe shares were\ninheritable and sellable as individual property.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003E(Kroeber p405)\u003C\/span\u003E\u003Cspan style=\"color: black; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"background: white; margin-top: 4.35pt; tab-stops: 0in;\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Ctable cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"float: right; margin-left: 1em; text-align: right;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEi0v3m8ErCOfPVNAq3AQUfikEo0KIKiafJIMZhigk-o8MK3Ep654v9NQziay_0j2y4CmlbUT_9JhirrT6AcgxlF7PXUMg9qTjnUqLKb3KAj71k377HeiKPID6dV1ySLw1D-GBPj\/s1600\/Yurok10.png\" imageanchor=\"1\" style=\"clear: right; margin-bottom: 1em; margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"255\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEi0v3m8ErCOfPVNAq3AQUfikEo0KIKiafJIMZhigk-o8MK3Ep654v9NQziay_0j2y4CmlbUT_9JhirrT6AcgxlF7PXUMg9qTjnUqLKb3KAj71k377HeiKPID6dV1ySLw1D-GBPj\/s320\/Yurok10.png\" width=\"320\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\n\n\n\n\n\n\n\n\n\n\n\n\n\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:Times;\n panose-1:2 0 5 0 0 0 0 0 0 0;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:3 0 0 0 1 0;}\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n--\u003E\n\u003C\/style\u003E\n\n\n\n\n\n\n\u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12pt; text-align: center;\"\u003E\n\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E\u003Cspan style=\"font-size: 11.0pt; mso-bidi-font-family: Times;\"\u003EA Yurok man fishes for salmon\nwith a plunge net at pame-kya’-ra-m, a “usual and accustomed” fishing site on\nthe Klamath River, California, before 1898.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp;\n\u003C\/span\u003E[\u003Ca href=\"http:\/\/americanhistory.si.edu\/onthewater\/exhibition\/3_2.html\" target=\"_blank\"\u003ESource\u003C\/a\u003E\u003C\/span\u003E\u003C\/i\u003E\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E\u003Cspan style=\"font-size: 11.0pt; mso-bidi-font-family: Times;\"\u003E]\u003C\/span\u003E\u003C\/i\u003E\u003C\/div\u003E\n\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003EIf a piece\nof land was less than a mile or so from rivers or coast (the main sources of\nthe Yuroks’ food) and good hunting, it was likely to be privately owned,\nmeaning one needed the permission of the owner to hunt on it; otherwise it was common\nand permissionless. Deer and elk were the principle prey – smaller game were\nscarce or otherwise not worth the trouble. \u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp;\u003C\/span\u003ESpecial rights pertained to taking sea lions\non the coast. The only punishable kind of trespassing was poaching, and\npoachers could be shot without incurring a blood money liability. (Kroeber p406).\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003EA case of\npositive claim-rights to sea-lion flippers described by Hoebel illustrates a\ncycle of broken-down negotiations and revenge, culminating in a property\nsettlement that satisfied principles and kin sufficiently to terminate the\nvendetta.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EA certain M had a generally\nacknowledged hereditary claim to have handed over to him the flippers of all\nsea-lions taken on a certain 4-mile section of beach. \u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp;\u003C\/span\u003E(Apparently sea lion flippers can be made into\nboots that grip slippery surfaces, \u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp;\u003C\/span\u003Efishing net floats, or glue, and at least\nfarther up the Pacific Coast flipper meat was widely considered to be great\ndelicacy: [\u003Ca href=\"http:\/\/alaska-native-news.com\/alutiiq-word-of-the-week-may-18-2014-10842\" target=\"_blank\"\u003ESource\u003C\/a\u003E]).\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EA certain L allegedly killed sea-lions on the\nbeach but kept their flippers in violation of M’s claim. A series of attack,\nclaim, counter-attack, etc., including murder of L by M, eventually led to a settlement\nwith L’s next-of-kin receiving the sea lion flipper claim rights that started\nthe dispute. (Hoebel p54-55)\u003C\/span\u003E\u003C\/div\u003E\n\u003Ctable cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"float: right; margin-left: 1em; text-align: right;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjYKFRxE6QXO8a8hUTYXMfFSAn7_R8nPrUkMc0jG8rdpQiLCPq-rh0ZBaPp2W0UoMwrQqRshZqXArHg-Kiu5vbtxo4dX2IDEwKy5FSZGq6c0rnats30LmTKUyHo9y9XsIWNF9pT\/s1600\/Yurok11.png\" imageanchor=\"1\" style=\"clear: right; margin-bottom: 1em; margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"254\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjYKFRxE6QXO8a8hUTYXMfFSAn7_R8nPrUkMc0jG8rdpQiLCPq-rh0ZBaPp2W0UoMwrQqRshZqXArHg-Kiu5vbtxo4dX2IDEwKy5FSZGq6c0rnats30LmTKUyHo9y9XsIWNF9pT\/s320\/Yurok11.png\" width=\"320\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\n\n\n\n\n\n\n\n\n\n\n\n\n\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:Times;\n panose-1:2 0 5 0 0 0 0 0 0 0;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:3 0 0 0 1 0;}\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n--\u003E\n\u003C\/style\u003E\n\n\n\n\n\n\n\u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E\u003Cspan style=\"font-family: Times; font-size: 11.0pt; mso-bidi-font-family: Times;\"\u003EYurok\ncanoe on the Trinity River, c. 1923. [\u003Ca href=\"http:\/\/americanhistory.si.edu\/onthewater\/exhibition\/3_2.html\" target=\"_blank\"\u003ESource\u003C\/a\u003E]\u003C\/span\u003E\u003C\/i\u003E\u003C\/div\u003E\n\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cb style=\"mso-bidi-font-weight: normal;\"\u003E\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003EConclusion\u003C\/span\u003E\u003C\/b\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003EThe ability\nto transfer wealth was crucial during many events critical to the Darwinian\nfitness of evolving humans, especially death (inheritance), dispute settlement,\nand marriage.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EWith the Yurok and their\nneighboring tribes, this wealth typically took the form of collectibles that\nlacked concrete use – either non-fungible treasure, which came in a variety of\nforms, or fungible money in the form of \u003Ci style=\"mso-bidi-font-style: normal;\"\u003Edentalia\n\u003C\/i\u003Eshells and strings of same.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EThe use\nof money and treasure in some transactions (e.g. for use mitigating violence)\nmade it available and encouraged its use in others (e.g. trade).\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003ECollectibles\ninvolved a unique interplay of supply and demand whereby demand was based in\nlarge part on a predictable constraint in supply.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EA common way cultures met this constraint was\nby using collectibles that originated in a very distant region and percolated\ninto the local region via a relatively constant stream of transfers (which\ncould be long-distance trade, but could also be a series of transfers\nthemselves as injury compensation or bridewealth). Collectibles flowed from\nrelatively plentiful at the origin to relatively scarce in the region they are used\nas collectibles. For fungible and divisible collectibles such as \u003Ci style=\"mso-bidi-font-style: normal;\"\u003Edentalia \u003C\/i\u003Eshells, they worked best as\nmoney where a geographical balance was struck between sufficient scarcity for\nvalue density and sufficient abundance to allow for its divisibility and\nfungibility. Such a collectible could be put to best use as money in a\n“Goldilocks region” in between where it was overly scarce and where it was\noverly abundant.\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cb style=\"mso-bidi-font-weight: normal;\"\u003E\u003Cspan style=\"font-family: Times; mso-bidi-font-family: Times;\"\u003EReferences\u003C\/span\u003E\u003C\/b\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"background: white; color: black; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003E\u003Ca href=\"http:\/\/www.yuroktribe.org\/culture\/\" target=\"_blank\"\u003E“Yurok Culture: History”\u003C\/a\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"background: white; color: black; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003ELufkin,\nAlan, editor.\u0026nbsp;\u003Ci\u003ECalifornia's Salmon and Steelhead: The Struggle to\nRestore an Imperiled Resource, \u003C\/i\u003E\u003Cspan style=\"mso-bidi-font-style: italic;\"\u003Echapter\n2.\u003Ci\u003E\u0026nbsp;\u003C\/i\u003E\u003C\/span\u003EBerkeley: \u0026nbsp;University of California Press,\n\u0026nbsp;c1991. [\u003Ca href=\"http:\/\/ark.cdlib.org\/ark:\/13030\/ft209nb0qn\/%20%20via%20http:\/\/publishing.cdlib.org\/ucpressebooks\/view?docId=ft209nb0qn;chunk.id=d0e1553;doc.view=print\" target=\"_blank\"\u003ELink\u003C\/a\u003E] \u003C\/span\u003E\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003E\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u003C\/span\u003E\u003C\/span\u003E\u003Cspan style=\"background: white; color: black; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003EE. Adamson\nHoebel, \u003Ci style=\"mso-bidi-font-style: normal;\"\u003EThe Law of Primitive Man, \u003C\/i\u003EAtheneum\n\/ Harvard University Press 1954\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003EKroeber,\nA.L., \u003Ci style=\"mso-bidi-font-style: normal;\"\u003EHandbook of the Indians of\nCalifornia, \u003C\/i\u003EChapter 2, as reprinted in R.F. Heizer and M.A. Whipple eds., \u003Ci style=\"mso-bidi-font-style: normal;\"\u003EThe California Indians: A Sourcebook, \u003C\/i\u003EUniversity\nof California Press 1971\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"mso-layout-grid-align: none; mso-pagination: none; tab-stops: 28.0pt 56.0pt 84.0pt 112.0pt 140.0pt 168.0pt 196.0pt 224.0pt 3.5in 280.0pt 308.0pt 336.0pt; text-autospace: none;\"\u003E\n\u003Cspan style=\"mso-bidi-font-family: \u0026quot;Menlo Regular\u0026quot;;\"\u003EKroeber, A. L\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E., Handbook\nof the Indians of California\u003C\/i\u003E , Bureau Amer. Ethn. Bull., 1925, as cited in\nQuiggins op. cit.\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"mso-layout-grid-align: none; mso-pagination: none; tab-stops: 28.0pt 56.0pt 84.0pt 112.0pt 140.0pt 168.0pt 196.0pt 224.0pt 3.5in 280.0pt 308.0pt 336.0pt; text-autospace: none;\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"color: black; mso-bidi-font-family: \u0026quot;Menlo Regular\u0026quot;; mso-themecolor: text1;\"\u003EGoddard,P.E., \u003Ci style=\"mso-bidi-font-style: normal;\"\u003ELife and Culture of the Hupa\u003C\/i\u003E, The University Press, 1903. [\u003Ca href=\"https:\/\/ia800204.us.archive.org\/29\/items\/cu31924104079433\/cu31924104079433.pdf\" target=\"_blank\"\u003ELink\u003C\/a\u003E]\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003EA. Hingston\nQuiggin, \u003Ci style=\"mso-bidi-font-style: normal;\"\u003EA Survey of Primitive Money, \u003C\/i\u003EMethuen\n\u0026amp; Co. Ltd. 1949\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003EPaul Einzig,\n\u003Ci style=\"mso-bidi-font-style: normal;\"\u003EPrimtive Money, 2\u003Csup\u003End\u003C\/sup\u003E ed.,\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003E\u003C\/i\u003EPergamon Press 1966.\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n"},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/7155695191612913217\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/7155695191612913217","title":"1 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/7155695191612913217"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/7155695191612913217"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2017\/02\/conflict-and-collectibles-among-yurok_87.html","title":"Conflict and collectibles among the Yurok"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"media$thumbnail":{"xmlns$media":"http://search.yahoo.com/mrss/","url":"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjG0jnFWTV6PiE08vZxI83UDnQNMVuDDqNda6oE_e0IABh_eBDiYjttupVYCNHmSRssIaL6RxAbMrVxZiM-B85UbiVeFGs950V-QDcBHzbKUGANtzXftDIOQOCodL0DjyjQMElP\/s72-c\/Yurok0.png","height":"72","width":"72"},"thr$total":{"$t":"1"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-5749706586188307786"},"published":{"$t":"2017-02-09T09:22:00.000-08:00"},"updated":{"$t":"2017-02-09T09:36:22.392-08:00"},"title":{"type":"text","$t":"Money, blockchains, and social scalability"},"content":{"type":"html","$t":"\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n\t{font-family:\"ＭＳ 明朝\";\n\tmso-font-charset:78;\n\tmso-generic-font-family:auto;\n\tmso-font-pitch:variable;\n\tmso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n\t{font-family:\"Cambria Math\";\n\tpanose-1:2 4 5 3 5 4 6 3 2 4;\n\tmso-font-charset:0;\n\tmso-generic-font-family:auto;\n\tmso-font-pitch:variable;\n\tmso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n\t{font-family:Cambria;\n\tpanose-1:2 4 5 3 5 4 6 3 2 4;\n\tmso-font-charset:0;\n\tmso-generic-font-family:auto;\n\tmso-font-pitch:variable;\n\tmso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n\t{mso-style-unhide:no;\n\tmso-style-qformat:yes;\n\tmso-style-parent:\"\";\n\tmargin:0in;\n\tmargin-bottom:.0001pt;\n\tmso-pagination:widow-orphan;\n\tfont-size:12.0pt;\n\tfont-family:Cambria;\n\tmso-ascii-font-family:Cambria;\n\tmso-ascii-theme-font:minor-latin;\n\tmso-fareast-font-family:\"ＭＳ 明朝\";\n\tmso-fareast-theme-font:minor-fareast;\n\tmso-hansi-font-family:Cambria;\n\tmso-hansi-theme-font:minor-latin;\n\tmso-bidi-font-family:\"Times New Roman\";\n\tmso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n\t{mso-style-type:export-only;\n\tmso-default-props:yes;\n\tfont-family:Cambria;\n\tmso-ascii-font-family:Cambria;\n\tmso-ascii-theme-font:minor-latin;\n\tmso-fareast-font-family:\"ＭＳ 明朝\";\n\tmso-fareast-theme-font:minor-fareast;\n\tmso-hansi-font-family:Cambria;\n\tmso-hansi-theme-font:minor-latin;\n\tmso-bidi-font-family:\"Times New Roman\";\n\tmso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n\t{size:8.5in 11.0in;\n\tmargin:1.0in 1.25in 1.0in 1.25in;\n\tmso-header-margin:.5in;\n\tmso-footer-margin:.5in;\n\tmso-paper-source:0;}\ndiv.WordSection1\n\t{page:WordSection1;}\n\u003C\/style\u003E\n\n\u003C\/div\u003E\n\n\u003Ch3\u003E\n\u003Cb style=\"mso-bidi-font-weight: normal;\"\u003EIntroduction \u003C\/b\u003E\u003C\/h3\u003E\n\n\u003Cdiv class=\"MsoNormal\" style=\"margin-right: -27.0pt;\"\u003E\n\u003Cspan style=\"font-size: small;\"\u003E\u003Cspan style=\"font-family: inherit;\"\u003EBlockchains are all the rage. The\noldest and biggest blockchain of them all is \u003Ca href=\"http:\/\/nakamotoinstitute.org\/bitcoin\/\" target=\"_blank\"\u003EBitcoin\u003C\/a\u003E,\nwhich over its eight-year history so far starshipped in value from 10,000 bitcoins per\npizza (before there were exchanges that priced bitcoin in traditional\ncurrencies) to over $1,000 per bitcoin. As of this writing Bitcoin has a market\ncapitalization of over $16 billion. Running non-stop for eight years, with\nalmost no financial loss on the chain itself, it is now in important ways the\nmost reliable and secure financial network in the world.\u003C\/span\u003E\u0026nbsp;\u003C\/span\u003E\u003C\/div\u003E\n\n\u003Cdiv class=\"MsoNormal\" style=\"margin-right: -27pt;\"\u003E\n\u003Cspan style=\"font-size: small;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-right: -27pt;\"\u003E\n\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n\t{font-family:\"ＭＳ 明朝\";\n\tmso-font-charset:78;\n\tmso-generic-font-family:auto;\n\tmso-font-pitch:variable;\n\tmso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n\t{font-family:\"Cambria Math\";\n\tpanose-1:2 4 5 3 5 4 6 3 2 4;\n\tmso-font-charset:0;\n\tmso-generic-font-family:auto;\n\tmso-font-pitch:variable;\n\tmso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n\t{font-family:Cambria;\n\tpanose-1:2 4 5 3 5 4 6 3 2 4;\n\tmso-font-charset:0;\n\tmso-generic-font-family:auto;\n\tmso-font-pitch:variable;\n\tmso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n\t{mso-style-unhide:no;\n\tmso-style-qformat:yes;\n\tmso-style-parent:\"\";\n\tmargin:0in;\n\tmargin-bottom:.0001pt;\n\tmso-pagination:widow-orphan;\n\tfont-size:12.0pt;\n\tfont-family:Cambria;\n\tmso-ascii-font-family:Cambria;\n\tmso-ascii-theme-font:minor-latin;\n\tmso-fareast-font-family:\"ＭＳ 明朝\";\n\tmso-fareast-theme-font:minor-fareast;\n\tmso-hansi-font-family:Cambria;\n\tmso-hansi-theme-font:minor-latin;\n\tmso-bidi-font-family:\"Times New Roman\";\n\tmso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n\t{mso-style-type:export-only;\n\tmso-default-props:yes;\n\tfont-family:Cambria;\n\tmso-ascii-font-family:Cambria;\n\tmso-ascii-theme-font:minor-latin;\n\tmso-fareast-font-family:\"ＭＳ 明朝\";\n\tmso-fareast-theme-font:minor-fareast;\n\tmso-hansi-font-family:Cambria;\n\tmso-hansi-theme-font:minor-latin;\n\tmso-bidi-font-family:\"Times New Roman\";\n\tmso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n\t{size:8.5in 11.0in;\n\tmargin:1.0in 1.25in 1.0in 1.25in;\n\tmso-header-margin:.5in;\n\tmso-footer-margin:.5in;\n\tmso-paper-source:0;}\ndiv.WordSection1\n\t{page:WordSection1;} \u003C\/style\u003E\u003Cspan style=\"font-size: small;\"\u003EThe secret to Bitcoin’s success\nis certainly not its computational efficiency or its scalability in the\nconsumption of resources. \u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp;\u003C\/span\u003ESpecialized Bitcoin\nhardware is designed by highly paid experts to perform only one particular\nfunction – to repetitively solve a very specific and intentionally very\nexpensive kind of computational puzzle. That puzzle is called a proof-of-work,\nbecause the sole output of the computation is just a proof that the computer\ndid a costly computation. Bitcoin’s puzzle-solving hardware probably consumes\nin total over 500 megawatts of electricity.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp;\n\u003C\/span\u003EAnd that is not the only feature of Bitcoin that strikes an engineer or\nbusinessman who is focused on minimizing resource costs as highly quixotic. Rather\nthan reduce its protocol messages to be as few as possible, each\nBitcoin-running computer sprays the Internet with a redundantly large number of\n“inventory vector” packets to make very sure that all messages get accurately through\nto as many other Bitcoin computers as possible.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp;\n\u003C\/span\u003EAs a result, the Bitcoin blockchain cannot process as many transactions per second as a\ntraditional payment network such as PayPal or Visa. Bitcoin offends the\nsensibilities of resource-conscious and performance-measure-maximizing\nengineers and businessmen alike.\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-right: -27pt;\"\u003E\n\u003Cspan style=\"font-size: small;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-right: -27pt;\"\u003E\n\u003Cspan style=\"font-size: small;\"\u003EInstead, the secret to\nBitcoin’s success is that its prolific resource consumption and poor\ncomputational scalability is buying something even more valuable: social\nscalability. Social scalability is the ability of an institution –- a\nrelationship or shared endeavor, in which multiple people repeatedly\nparticipate, and featuring customs, rules, or other features which constrain or\nmotivate participants’ behaviors -- to overcome shortcomings in human minds and\nin the motivating or constraining aspects of said institution that limit who or\nhow many can successfully participate. \u003Cspan style=\"mso-bidi-font-family: Helvetica;\"\u003ESocial\nscalability is about the ways and extents to which participants can think about\nand respond to institutions and fellow participants as the variety and numbers\nof participants in those institutions or relationships grow.\u0026nbsp; It's about\nhuman limitations, not about technological limitations or physical resource\nconstraints.\u003C\/span\u003E There are separate engineering disciplines, such as\ncomputer science, for assessing the physical limitations of a technology itself,\nincluding the resource capacities needed for a technology to handle a greater\nnumber of users or a greater rate of use. Those engineering scalability\ndisciplines are not, except by way of contrast with social scalability, the\nsubject of this essay.\u003C\/span\u003E\u003Cbr \/\u003E\n\u003Cspan style=\"font-size: small;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\n\u003Cspan style=\"font-size: small;\"\u003EEven though social scalability\nis about the cognitive limitations and behavior tendencies of minds, not about\nthe physical resource limitations of machines, it makes eminent sense, and\nindeed is often crucial, to think and talk about the social scalability of a\ntechnology that facilitates an institution. The social scalability of an\ninstitutional technology depends on how that technology constrains or motivates\nparticipation in that institution, including protection of participants and the\ninstitution itself from harmful participation or attack. \u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp;\u003C\/span\u003EOne way to estimate the social scalability of\nan institutional technology is by the number of people who can beneficially\nparticipate in the institution. Another way to estimate social scalability is by\nthe extra benefits and harms an institution bestows or imposes on participants,\nbefore, for cognitive or behavioral reasons, the expected costs and other harms\nof participating in an institution grow faster than its benefits. \u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp;\u003C\/span\u003EThe cultural and jurisdictional diversity of\npeople who can beneficially participate in an institution is also often\nimportant, especially in the global Internet context. The more an institution\ndepends on local laws, customs, or language, the less socially scalable it is.\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-right: -27pt;\"\u003E\n\u003Cspan style=\"font-size: small;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-right: -27pt;\"\u003E\n\u003Cspan style=\"font-size: small;\"\u003EWithout institutional and\ntechnological innovations of the past, participation in shared human endeavors\nwould usually be limited to at most about 150 people – the famous “Dunbar number”.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EIn the Internet era, new innovations continue\nto scale our social capabilities. In this article I will discuss how\nblockchains, and in particular public blockchains that implement\ncryptocurrencies, increase social scalability, even at a dreadful reduction in\ncomputational efficiency and scalability.\u003C\/span\u003E\u003C\/div\u003E\n\u003Cbr \/\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjOvjiA_9Qm3dWn78uC8LMbIQFuC0mzTo2S-RR7Dyuf8pXttQE9Z6J9rI0eARYOiz5QxBJl6u2j6tp0B-f5pO4_c_YhlqaCPBEbNL8Ld8K8bBWNVjnmZ80VJ6wihPaEVipEzkUS\/s1600\/MBSS0.png\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"219\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjOvjiA_9Qm3dWn78uC8LMbIQFuC0mzTo2S-RR7Dyuf8pXttQE9Z6J9rI0eARYOiz5QxBJl6u2j6tp0B-f5pO4_c_YhlqaCPBEbNL8Ld8K8bBWNVjnmZ80VJ6wihPaEVipEzkUS\/s320\/MBSS0.png\" width=\"320\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n\t{font-family:\"ＭＳ 明朝\";\n\tmso-font-charset:78;\n\tmso-generic-font-family:auto;\n\tmso-font-pitch:variable;\n\tmso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n\t{font-family:\"Cambria Math\";\n\tpanose-1:2 4 5 3 5 4 6 3 2 4;\n\tmso-font-charset:0;\n\tmso-generic-font-family:auto;\n\tmso-font-pitch:variable;\n\tmso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n\t{font-family:Cambria;\n\tpanose-1:2 4 5 3 5 4 6 3 2 4;\n\tmso-font-charset:0;\n\tmso-generic-font-family:auto;\n\tmso-font-pitch:variable;\n\tmso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n\t{mso-style-unhide:no;\n\tmso-style-qformat:yes;\n\tmso-style-parent:\"\";\n\tmargin:0in;\n\tmargin-bottom:.0001pt;\n\tmso-pagination:widow-orphan;\n\tfont-size:12.0pt;\n\tfont-family:Cambria;\n\tmso-ascii-font-family:Cambria;\n\tmso-ascii-theme-font:minor-latin;\n\tmso-fareast-font-family:\"ＭＳ 明朝\";\n\tmso-fareast-theme-font:minor-fareast;\n\tmso-hansi-font-family:Cambria;\n\tmso-hansi-theme-font:minor-latin;\n\tmso-bidi-font-family:\"Times New Roman\";\n\tmso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n\t{mso-style-type:export-only;\n\tmso-default-props:yes;\n\tfont-family:Cambria;\n\tmso-ascii-font-family:Cambria;\n\tmso-ascii-theme-font:minor-latin;\n\tmso-fareast-font-family:\"ＭＳ 明朝\";\n\tmso-fareast-theme-font:minor-fareast;\n\tmso-hansi-font-family:Cambria;\n\tmso-hansi-theme-font:minor-latin;\n\tmso-bidi-font-family:\"Times New Roman\";\n\tmso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n\t{size:8.5in 11.0in;\n\tmargin:1.0in 1.25in 1.0in 1.25in;\n\tmso-header-margin:.5in;\n\tmso-footer-margin:.5in;\n\tmso-paper-source:0;}\ndiv.WordSection1\n\t{page:WordSection1;}\n\u003C\/style\u003E\n\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-right: -27pt; text-align: justify;\"\u003E\n\u003Cspan style=\"font-size: small\"\u003E\n\u003Ci\u003E\nCognitive capacity – here in the form of the relative size of a\nspecies’ neocortex – set limits on how large primate groups can be.\u0026nbsp; Maintaining animal or intimate human groups\nrequires extensive emotional communications and investments in relationships,\nsuch as grooming in primates and gossiping, humor, story-telling, and other\nconversations, songs, and play in traditional human groups. Overcoming human\ncognitive limits to who or how many people can participate in an institution –\nthe famous “Dunbar number” of around 150 people -- requires institutional and\ntechnological innovation. (\u003Ca href=\"http:\/\/whatsupnah.com\/2009\/02\/twitter-vs-the-dunbar-number-and-the-rise-of-weak-ties\/\" target=\"_blank\"\u003ESource\u003C\/a\u003E)\u0026nbsp;\u003C\/i\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n\t{font-family:\"ＭＳ 明朝\";\n\tmso-font-charset:78;\n\tmso-generic-font-family:auto;\n\tmso-font-pitch:variable;\n\tmso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n\t{font-family:\"ＭＳ 明朝\";\n\tmso-font-charset:78;\n\tmso-generic-font-family:auto;\n\tmso-font-pitch:variable;\n\tmso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n\t{font-family:Cambria;\n\tpanose-1:2 4 5 3 5 4 6 3 2 4;\n\tmso-font-charset:0;\n\tmso-generic-font-family:auto;\n\tmso-font-pitch:variable;\n\tmso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n\t{mso-style-unhide:no;\n\tmso-style-qformat:yes;\n\tmso-style-parent:\"\";\n\tmargin:0in;\n\tmargin-bottom:.0001pt;\n\tmso-pagination:widow-orphan;\n\tfont-size:12.0pt;\n\tfont-family:Cambria;\n\tmso-ascii-font-family:Cambria;\n\tmso-ascii-theme-font:minor-latin;\n\tmso-fareast-font-family:\"ＭＳ 明朝\";\n\tmso-fareast-theme-font:minor-fareast;\n\tmso-hansi-font-family:Cambria;\n\tmso-hansi-theme-font:minor-latin;\n\tmso-bidi-font-family:\"Times New Roman\";\n\tmso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n\t{mso-style-type:export-only;\n\tmso-default-props:yes;\n\tfont-family:Cambria;\n\tmso-ascii-font-family:Cambria;\n\tmso-ascii-theme-font:minor-latin;\n\tmso-fareast-font-family:\"ＭＳ 明朝\";\n\tmso-fareast-theme-font:minor-fareast;\n\tmso-hansi-font-family:Cambria;\n\tmso-hansi-theme-font:minor-latin;\n\tmso-bidi-font-family:\"Times New Roman\";\n\tmso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n\t{size:8.5in 11.0in;\n\tmargin:1.0in 1.25in 1.0in 1.25in;\n\tmso-header-margin:.5in;\n\tmso-footer-margin:.5in;\n\tmso-paper-source:0;}\ndiv.WordSection1\n\t{page:WordSection1;}\n\u003C\/style\u003E\u0026nbsp;\n\n\n\n\n\n\n\u003Cbr \/\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-right: -27pt;\"\u003E\n\u003Cspan style=\"font-size: small;\"\u003EInnovations in social\nscalability involve institutional and technological improvements that move\nfunction from mind to paper or mind to machine, lowering cognitive costs while\nincreasing the value of information flowing between minds, reducing vulnerability,\nand\/or searching for and discovering new and mutually beneficial participants.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003E\u003Cspan style=\"color: #333333; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003E\u003Ca href=\"https:\/\/en.wikipedia.org\/wiki\/Alfred_North_Whitehead\" target=\"_blank\"\u003EAlfred North Whitehead\u003C\/a\u003E said, \"It is a profoundly erroneous truism, repeated by all copy-books and\nby eminent people when they are making speeches, that we should cultivate the\nhabit of thinking what we are doing. The precise opposite is the case.\nCivilization advances by extending the number of important operations which we\ncan perform without thinking about them.\" Friedrich Hayek added: “We make\nconstant use of formulas, symbols, and rules whose meaning we do not understand\nand through the use of which we avail ourselves of the assistance of knowledge\nwhich individually we do not possess. We have developed these practices and\ninstitutions by building upon habits and institutions which have proved\nsuccessful in their own sphere and which have in turn become the foundation of\nthe civilization we have built up.”\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003E\u003C\/span\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-right: -27pt;\"\u003E\n\u003Cspan style=\"font-size: small;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-right: -27pt;\"\u003E\n\u003Cspan style=\"color: #333333; font-size: small; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003EA wide\nvariety of innovations reduce our vulnerability to fellow participants, intermediaries,\nand outsiders, and thereby lower our need to spend our scarce cognitive\ncapacities worrying about how an increasingly large number of increasingly\ndiverse people might behave. Another class of improvements motivates the\naccurate collection and transmission of valuable information between an\nincreasing number and variety of participants. Yet other advances enable a\nwider number or variety of mutually beneficial participants can discover each\nother.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EAll these kinds of innovations \u003C\/span\u003E\u003Cspan style=\"font-size: small;\"\u003Ehave\nover the course of human prehistory and history improved social scalability,\nsometimes dramatically so, making our modern civilization with its vast global\npopulation feasible. Modern information technology (IT), especially by making\nuse of the historically recent discoveries of computer science, can often\ndiscover many more mutually beneficial matches, can improve motivations for\ninformation quality, and can reduce the need for trust within certain kinds of\ninstitutional transactions, with respect to an increasingly large number and\nvariety of people, thereby further increasing social scalability in some very important\nways.\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-right: -27pt;\"\u003E\n\u003Cspan style=\"font-size: small;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-right: -27pt;\"\u003E\n\u003Cspan style=\"font-size: small;\"\u003EInformation flows between minds\n– what I have called \u003Ca href=\"http:\/\/www.fon.hum.uva.nl\/rob\/Courses\/InformationInSpeech\/CDROM\/Literature\/LOTwinterschool2006\/szabo.best.vwh.net\/tradition.html\" target=\"_blank\"\u003Eintersubjective protocols\u003C\/a\u003E – include spoken and written words, custom (tradition), the contents of law\n(its rules, customs, and case precedents), a variety of other symbols (e.g.\n“star” ratings common in online reputation systems), and market prices, among many others.\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-right: -27pt;\"\u003E\n\u003Cspan style=\"font-size: small;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-right: -27pt;\"\u003E\n\u003Cspan style=\"font-size: small;\"\u003ETrust minimization is reducing\nthe vulnerability of participants to each other’s and to outsiders’ and\nintermediaries’ potential for harmful behavior. \u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp;\u003C\/span\u003EMost institutions which have undergone a\nlengthy cultural evolution, such as law (which lowers vulnerability to\nviolence, theft, and fraud), as well as technologies of security, reduce, on\nbalance, and in more ways than the reverse, our vulnerabilities to, and thus\nour needs to trust, our fellow humans, compared with our vulnerabilities before\nthese institutions and technologies evolved. In most cases an often trusted and\nsufficiently trustworthy institution (such as a market) depends on its\nparticipants trusting, usually implicitly, another sufficiently trustworthy\ninstitution (such as contract law). These trusted institutions in turn traditionally\nimplement a variety of accounting, legal, security, or other controls that make\nthem usually and sufficiently, at least for facilitating the functionality of\ntheir client institutions, trustworthy, by minimizing vulnerability to their own\nparticipants (such as accountants, lawyers, regulators, and investigators). An\ninnovation can only partially take away some kinds of vulnerability, i.e.\nreduce the need for or risk of trust in other people. There is no such thing as\na fully trustless institution or technology.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp;\n\u003C\/span\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-right: -27pt;\"\u003E\n\u003Cspan style=\"font-size: small;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-right: -27pt;\"\u003E\n\u003Cspan style=\"font-size: small;\"\u003EThe nonexistence of complete\ntrustlessness is true even of our strongest security technology, encryption. Although\nsome cryptographic protocols do guarantee certain specific data relationships with\nastronomically high probability against opponents with astronomically high\ncomputing power, they do not provide complete guarantees when accounting for\nall possible behaviors of all participants. For example, encryption can\nstrongly protect an e-mail from direct eavesdropping by third parties, but the\nsender still trusts the recipient to not forward or otherwise divulge the\ncontents of that email, directly or indirectly to any undesired third parties.\nAs another example, in our strongest consensus protocols harmful behavior by\ncertain fractions of participants or intermediaries well short of 100% (as\nmeasured by their computing power, stake-holding, or individuation and\ncounting) can compromise the integrity of transactions or information flows\nbetween participants and thereby on balance harm the participants. \u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp;\u003C\/span\u003EThe historically recent breakthroughs of\ncomputer science can reduce vulnerabilities, often dramatically so, but they\nare far from eliminating all kinds of vulnerabilities to the harmful behavior\nof any potential attacker.\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-right: -27pt;\"\u003E\n\u003Cspan style=\"font-size: small;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-right: -27pt;\"\u003E\n\u003Cspan style=\"font-size: small;\"\u003EMatchmaking is facilitating the\nmutual discovery of mutually beneficial participants. Matchmaking is probably\nthe kind of social scalability at which the Internet has most excelled. Social\nnetworks like Usenet News, Facebook, and Twitter facilitate the mutual\ndiscovery of like-minded or otherwise mutually entertaining or mutually\ninforming people (and even future spouses!). After they have allowed people\nmore likely to be of mutual benefit to discover each other, social networks\nthen facilitate relationships at various levels of personal investment, from\ncasual to frequent to obsessive. \u003Ca href=\"http:\/\/www.lifewithalacrity.com\/previous\/2005\/10\/dunbar_group_co.html\" target=\"_blank\"\u003EChristopher Allen\u003C\/a\u003E among others has done some interesting and detailed analyses about group size\nand time spent mutually interacting in online games and associated social\nnetworks.\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-size: small;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-size: small;\"\u003EeBay, Uber, AirBnB, and online financial exchanges have\nbrought social scalability via often great improvements in commercial matchmaking:\nsearching for, finding, bringing together, and facilitating the negotiation of\nmutually beneficial commercial or retail deals.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp;\n\u003C\/span\u003EThese or related services also facilitate performances such as payment\nand shipping, as well as verification that other obligations undertaken by\nstrangers in these deals have been performed and communication about the\nquality of such performances (as with “star rating” systems, Yelp reviews, and\nthe like).\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-size: small;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-size: small;\"\u003EWhereas the main social scalability benefit of the Internet\nhas been matchmaking, the predominant direct social scalability benefit of\nblockchains is trust minimization. A blockchain can reduce vulnerability by locking\nin the integrity of some important performances (such as the creation and\npayment of money) and some important information flows, and in the future may\nreduce the vulnerability of the integrity of some important matchmaking\nfunctions.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003ETrust in the secret and\narbitrarily mutable activities of a private computation can be replaced by\nverifiable confidence in the behavior of a generally immutable public\ncomputation. This essay will focus on such vulnerability reduction and its\nbenefit in facilitating a standard performance beneficial to a wide variety of\npotential counterparties, namely trust-minimized money. \u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Ch4\u003E\n\u003Cb style=\"mso-bidi-font-weight: normal;\"\u003EMoney and Markets \u003C\/b\u003E\u003C\/h4\u003E\n\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-size: small;\"\u003EMoney and markets directly benefit the participants in each\nparticular trade by the market matching a buyer with a mutually beneficial\nseller and by a widely acceptable and standardized counter-performance (money).\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EI use markets here in the sense Adam Smith\nused the term: not as a specific place or service where buyers and sellers are\nbrought together (although it might sometimes involve these), but rather the\nbroad set of typically pairwise exchanges whereby the supply chain that makes a\nproduct is coordinated.\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-size: small;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-size: small;\"\u003EMoney and markets also incentivize creation of more accurate\nprice signals that reduce negotiation costs and errors for participants in\nother similar exchanges.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EThe potent combination\nof money and market thereby allowed a far higher number and variety of\nparticipants to coordinate their economic activities than previous exchange\ninstitutions, which more resembled bilateral monopolies than competitive markets.\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-size: small;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-size: small;\"\u003EMarkets and money involve matchmaking (bringing together\nbuyer and seller), trust reduction (trusting in the self-interest rather than\nin the altruism of acquaintances and strangers), scalable performance (via\nmoney, a widely acceptable and reusable medium for counter-performance), and\nquality information flow (market prices).\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-size: small;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-size: small;\"\u003EThe greatest early thinker about money and markets was Adam\nSmith.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EAt \u003Cspan style=\"background: white none repeat scroll 0% 0%; color: #333333; font-family: \u0026quot;georgia\u0026quot;;\"\u003Ethe dawn of the industrial revolution in\nBritain, Smith observed in \u003Ci\u003EThe Wealth of Nations\u003C\/i\u003E how making even the most humble of products depended,\ndirectly and indirectly, on the work of large numbers of a wide variety of\npeople:\u003C\/span\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cblockquote class=\"tr_bq\"\u003E\n\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n\t{font-family:\"ＭＳ 明朝\";\n\tmso-font-charset:78;\n\tmso-generic-font-family:auto;\n\tmso-font-pitch:variable;\n\tmso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n\t{font-family:\"Cambria Math\";\n\tpanose-1:2 4 5 3 5 4 6 3 2 4;\n\tmso-font-charset:0;\n\tmso-generic-font-family:auto;\n\tmso-font-pitch:variable;\n\tmso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n\t{font-family:Calibri;\n\tpanose-1:2 15 5 2 2 2 4 3 2 4;\n\tmso-font-charset:0;\n\tmso-generic-font-family:auto;\n\tmso-font-pitch:variable;\n\tmso-font-signature:-520092929 1073786111 9 0 415 0;}\n@font-face\n\t{font-family:Cambria;\n\tpanose-1:2 4 5 3 5 4 6 3 2 4;\n\tmso-font-charset:0;\n\tmso-generic-font-family:auto;\n\tmso-font-pitch:variable;\n\tmso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n\t{mso-style-unhide:no;\n\tmso-style-qformat:yes;\n\tmso-style-parent:\"\";\n\tmargin:0in;\n\tmargin-bottom:.0001pt;\n\tmso-pagination:widow-orphan;\n\tfont-size:12.0pt;\n\tfont-family:Cambria;\n\tmso-ascii-font-family:Cambria;\n\tmso-ascii-theme-font:minor-latin;\n\tmso-fareast-font-family:\"ＭＳ 明朝\";\n\tmso-fareast-theme-font:minor-fareast;\n\tmso-hansi-font-family:Cambria;\n\tmso-hansi-theme-font:minor-latin;\n\tmso-bidi-font-family:\"Times New Roman\";\n\tmso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n\t{mso-style-type:export-only;\n\tmso-default-props:yes;\n\tfont-family:Cambria;\n\tmso-ascii-font-family:Cambria;\n\tmso-ascii-theme-font:minor-latin;\n\tmso-fareast-font-family:\"ＭＳ 明朝\";\n\tmso-fareast-theme-font:minor-fareast;\n\tmso-hansi-font-family:Cambria;\n\tmso-hansi-theme-font:minor-latin;\n\tmso-bidi-font-family:\"Times New Roman\";\n\tmso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n\t{size:8.5in 11.0in;\n\tmargin:1.0in 1.25in 1.0in 1.25in;\n\tmso-header-margin:.5in;\n\tmso-footer-margin:.5in;\n\tmso-paper-source:0;}\ndiv.WordSection1\n\t{page:WordSection1;}\n\u003C\/style\u003E\n\u003C\/blockquote\u003E\n\u003Cblockquote class=\"tr_bq\"\u003E\n\u003Cspan style=\"font-size: small;\"\u003E\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E\u003Cspan style=\"background: white none repeat scroll 0% 0%; color: #333333; font-family: \u0026quot;calibri\u0026quot;;\"\u003EObserve\nthe accommodation of the most common artificer or day-laborer in a civilized\nand thriving country, and you will perceive that the number of people of whose\nindustry a part, though but a small part, has been employed in procuring him\nthis accommodation, exceeds all computation. The woolen coat, for example,\nwhich covers the day laborer, as coarse and rough as it may appear, is the\nproduce of the joint labor of a great multitude of workmen. The shepherd, the\nsorter of the wool, the wool-comber or carder, the dyer, the scribbler, the\nspinner, the weaver, the fuller, the dresser, with many others, must all join\ntheir different arts in order to complete even this homely production. How many\nmerchants and carriers, besides, must have been employed in transporting the\nmaterials from some of those workmen to others who often live in a very distant\npart of the country! How much commerce and navigation in particular, how many\nshipbuilders, sailors, sail makers, rope makers, must have been employed in\norder to bring together the different drugs made use of by the dyer, which\noften come from the remotest corners of the world! What a variety of labor,\ntoo, is necessary in order to produce the tools of the meanest of those\nworkmen! To say nothing of such complicated machines as the ship of the sailor,\nthe mill of the fuller, or even the loom of the weaver, let us consider only\nwhat a variety of labor is requisite in order to form that very simple machine,\nthe shears with which the shepherd clips the wool. The miner, the builder of\nthe furnace for smelting the ore, the feller of the timber, the burner of the\ncharcoal to be made use of in the smelting-house, the brick maker, the brick layer,\nthe workmen who attend the furnace, the millwright, the forger, the smith, must\nall of them join their different arts in order to produce them. Were we to\nexamine, in the same manner, all the different parts of his dress and household\nfurniture, the coarse linen shirt which he wears nest his skin, the shoes which\ncover his feet, the bed which he lies on, and all the different parts which\ncompose it, the kitchen grate at which be prepares his victuals, the coals\nwhich he makes use of for that purpose, dug from the bowels of the earth, and\nbrought to him perhaps by a long sea and a long land carriage, all the other\nutensils of his kitchen, all the furniture of his table, the knives and forks,\nthe earthen or pewter plates upon which he serves up and divides his victuals,\nthe different hands employed in preparing his bread and his beer, the glass\nwindow which lets in the heat and the light, and keeps out the wind and the\nrain, with all the knowledge and art requisite for preparing that beautiful and\nhappy invention, without which these northern parts of the world could scarce\nhave afforded a very comfortable habitation, together with the tools of all the\ndifferent workmen employed in producing those different conveniences; if we\nexamine, I say, all these things, and\u0026nbsp;\u003Cspan style=\"mso-bidi-font-style: italic;\"\u003Econsider what a variety of labor is employed about each of them, we\nshall be sensible that without the assistance and co-operation of many\nthousands, the very meanest person in a civilized country could not be provided\u003C\/span\u003E,\neven according to what we may falsely imagine the easy and simple manner in\nwhich he is commonly accommodated.\u003C\/span\u003E\u003C\/i\u003E\u003C\/span\u003E \u003C\/blockquote\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-size: small;\"\u003EAnd this was before the many successive waves of industrial\nrevolution and globalization between 1776 and now that refined, elaborated, and\nextended the division of labor many times more. Rather than trusting in the unlikely\naltruism of so many strangers, markets and money create many pairings of mutual\nbenefit and thus motivate this large network of mutually oblivious people to\nact in our interests:\u003C\/span\u003E\u003Cbr \/\u003E\n\u003Cblockquote class=\"tr_bq\"\u003E\n\u003Cspan style=\"font-size: small;\"\u003E\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E\u003Cspan style=\"font-family: \u0026quot;calibri\u0026quot;; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;\"\u003E In civilized society man stands at all times\nin need of the cooperation and assistance of great multitudes, while his whole\nlife is scarce sufficient to gain the friendship of a few persons…[In contrast\nto other animals, man has an almost constant occasion for the help of his\nbrethren, and it is vain for him to expect it from their benevolence only.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003E[Exchange is the] manner in which we obtain\nfrom another the far greater part of those good offices which we stand in need\nof. It is not from the benevolence of the butcher, the brewer, or the baker,\nthat we expect our dinner, but from their regard for their own interest. \u003C\/span\u003E\u003C\/i\u003E\u003C\/span\u003E\u003C\/blockquote\u003E\n\u003C\/div\u003E\n\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n\t{font-family:\"ＭＳ 明朝\";\n\tmso-font-charset:78;\n\tmso-generic-font-family:auto;\n\tmso-font-pitch:variable;\n\tmso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n\t{font-family:\"Cambria Math\";\n\tpanose-1:2 4 5 3 5 4 6 3 2 4;\n\tmso-font-charset:0;\n\tmso-generic-font-family:auto;\n\tmso-font-pitch:variable;\n\tmso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n\t{font-family:Cambria;\n\tpanose-1:2 4 5 3 5 4 6 3 2 4;\n\tmso-font-charset:0;\n\tmso-generic-font-family:auto;\n\tmso-font-pitch:variable;\n\tmso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n\t{mso-style-unhide:no;\n\tmso-style-qformat:yes;\n\tmso-style-parent:\"\";\n\tmargin:0in;\n\tmargin-bottom:.0001pt;\n\tmso-pagination:widow-orphan;\n\tfont-size:12.0pt;\n\tfont-family:Cambria;\n\tmso-ascii-font-family:Cambria;\n\tmso-ascii-theme-font:minor-latin;\n\tmso-fareast-font-family:\"ＭＳ 明朝\";\n\tmso-fareast-theme-font:minor-fareast;\n\tmso-hansi-font-family:Cambria;\n\tmso-hansi-theme-font:minor-latin;\n\tmso-bidi-font-family:\"Times New Roman\";\n\tmso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n\t{mso-style-type:export-only;\n\tmso-default-props:yes;\n\tfont-family:Cambria;\n\tmso-ascii-font-family:Cambria;\n\tmso-ascii-theme-font:minor-latin;\n\tmso-fareast-font-family:\"ＭＳ 明朝\";\n\tmso-fareast-theme-font:minor-fareast;\n\tmso-hansi-font-family:Cambria;\n\tmso-hansi-theme-font:minor-latin;\n\tmso-bidi-font-family:\"Times New Roman\";\n\tmso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n\t{size:8.5in 11.0in;\n\tmargin:1.0in 1.25in 1.0in 1.25in;\n\tmso-header-margin:.5in;\n\tmso-footer-margin:.5in;\n\tmso-paper-source:0;}\ndiv.WordSection1\n\t{page:WordSection1;}\n\u003C\/style\u003E\n\n\n\n\n\n\n\u003Cbr \/\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-size: small;\"\u003ESmith goes on to describe how division of labor, and thus\nlabor productivity, depends on the extent of the network of pairwise exchanges:\n“As it is the power of exchanging that gives occasion to the division of labor,\nso the extent of this division must always be limited by the extent of that\npower, or, in other words, by the extent of the market”.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EAs the exchange network around a country and\naround the globe grows, involving a greater number and variety of producers, so\ngrows the division of labor and thereby labor productivity.\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-size: small;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-size: small; mso-bidi-font-family: Helvetica;\"\u003EMoney\nfacilitates social scalability by increasing the opportunities for this\nexchange. By lowering coincidence problems (coincidence-of-wants in exchange\nand coincidence-of-want-and-event in unilateral transfers), via a widely\nacceptable and reusable form of wealth storage and transfer, money greatly\nlowered transaction costs, making possible more exchanges of a greater variety\nof goods and services involving exchanges and other wealth transfer\nrelationships with a much larger number and much wider variety of people.\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-size: small;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-size: small;\"\u003EA wide variety of media, from oral language itself, \u003Ca href=\"http:\/\/nakamotoinstitute.org\/the-playdough-protocols\/\" target=\"_blank\"\u003Eclay\u003C\/a\u003E,\npaper, telegraph, radio, and computer networks, have served to communicate\noffers, acceptances, and the resulting deals and prices, as well as performance\nmonitoring and other business communications. \u003Cspan style=\"mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003EOne of the most\nknowledgeable observations of the price network produced by markets and money can\nbe found in Friedrich Hayek’s essay, \u003Ca href=\"http:\/\/www.econlib.org\/library\/Essays\/hykKnw1.html\" target=\"_blank\"\u003E“The Use of Knowledge in Society”\u003C\/a\u003E:\u003C\/span\u003E\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E\u003Cspan style=\"font-family: \u0026quot;calibri\u0026quot;; mso-ascii-theme-font: major-latin; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;; mso-hansi-theme-font: major-latin;\"\u003E\u0026nbsp;\u003C\/span\u003E\u003C\/i\u003E\u003C\/span\u003E\u003Cbr \/\u003E\n\u003Cblockquote class=\"tr_bq\"\u003E\n\u003Cspan style=\"font-size: small;\"\u003E\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E\u003Cspan style=\"font-family: \u0026quot;calibri\u0026quot;; mso-ascii-theme-font: major-latin; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;; mso-hansi-theme-font: major-latin;\"\u003E\u0026nbsp;I\u003Cspan style=\"color: #333333;\"\u003En a system in which the knowledge of the relevant facts\nis dispersed among many people, prices can act to coordinate the separate\nactions of different people…in any society in which many people collaborate,\nthis planning, whoever does it, will in some measure have to be based on\nknowledge which, in the first instance, is not given to the planner but to\nsomebody else, which somehow will have to be conveyed to the planner. The\nvarious ways in which the knowledge on which people base their plans is\ncommunicated to them is the crucial problem for any theory explaining the\neconomic process, and the problem of what is the best way of utilizing\nknowledge initially dispersed among all the people is at least one of the main\nproblems of economic policy—or of designing an efficient economic system…\u003C\/span\u003E\u003C\/span\u003E\u003C\/i\u003E\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E\u003Cspan style=\"color: #333333; font-family: \u0026quot;calibri\u0026quot;; mso-ascii-theme-font: major-latin; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-hansi-theme-font: major-latin;\"\u003EThe mere fact that there is one price for any commodity—or\nrather that local prices are connected in a manner determined by the cost of\ntransport, etc.—brings about the solution which (it is just conceptually\npossible) might have been arrived at by one single mind possessing all the\ninformation which is in fact dispersed among all the people involved in the\nprocess…\u003C\/span\u003E\u003C\/i\u003E\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E\u003Cspan style=\"color: #333333; font-family: \u0026quot;calibri\u0026quot;; mso-ascii-theme-font: major-latin; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;; mso-hansi-theme-font: major-latin;\"\u003EThe marvel is that in a case like that of a scarcity of one raw\nmaterial, without an order being issued, without more than perhaps a handful of\npeople knowing the cause, tens of thousands of people whose identity could not\nbe ascertained by months of investigation, are made to use the material or its\nproducts more sparingly;\u0026nbsp;\u003Cspan style=\"mso-bidi-font-style: italic;\"\u003Ei.e., \u003C\/span\u003Ethey\nmove in the right direction….The price system is just one of those formations\nwhich man has learned to use (though he is still very far from having learned\nto make the best use of it) after he had stumbled upon it without understanding\nit. Through it not only a division of labor but also a coordinated utilization\nof resources based on an equally divided knowledge has become possible…a\nsolution is produced by the interactions of people each of whom possesses only\npartial knowledge.\u003C\/span\u003E\u003C\/i\u003E\u003C\/span\u003E\u003C\/blockquote\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Ch4\u003E\n\u003Cb style=\"mso-bidi-font-weight: normal;\"\u003EThe Social Scalability of Network Security \u003C\/b\u003E\u003C\/h4\u003E\n\u003C\/div\u003E\n\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003E\u003Cspan style=\"font-size: small;\"\u003EWhere long ago we used clay, and more recently paper, today\nprograms and protocols running on our computers and data networks implement\nmost of our commercial dealings. While this has greatly improved matchmaking\nand information flow, it has come at the cost of an increase in vulnerability\nto harmful behavior. \u003C\/span\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-size: small;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;times\u0026quot;; font-size: small; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003EAs networks grow, more people with\nfewer mutually understood habits of and constraints on behavior are added.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003ESecurity via root-trusting access control,\ndesigned for small and chummy offices like Bell Labs where co-workers were well\nknown and income and expenditures well controlled by paper procedures rather\nthan performed on these office computers, breaks down as an efficient and\neffective security mechanism as organizations become larger, as organizational\nboundaries are crossed, and as more valuable and concentrated resources such as\nmoney are put on or activated via the computers. The more strangers one\nreceives emails from, the more likely one is likely to get a phishing attack or\na malware-laced attachment.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003ETraditional\ncomputer security is not very socially scalable. \u003C\/span\u003E\u003Cspan style=\"font-size: small;\"\u003EAs I describe in \u003Ca href=\"https:\/\/unenumerated.blogspot.com\/2014\/12\/the-dawn-of-trustworthy-computing.html\" target=\"_blank\"\u003EThe Dawn of Trustworthy Computing\u003C\/a\u003E:\n\u003C\/span\u003E\u003C\/div\u003E\n\u003Cblockquote class=\"tr_bq\"\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n\t{font-family:\"ＭＳ 明朝\";\n\tmso-font-charset:78;\n\tmso-generic-font-family:auto;\n\tmso-font-pitch:variable;\n\tmso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n\t{font-family:\"Cambria Math\";\n\tpanose-1:2 4 5 3 5 4 6 3 2 4;\n\tmso-font-charset:0;\n\tmso-generic-font-family:auto;\n\tmso-font-pitch:variable;\n\tmso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n\t{font-family:Calibri;\n\tpanose-1:2 15 5 2 2 2 4 3 2 4;\n\tmso-font-charset:0;\n\tmso-generic-font-family:auto;\n\tmso-font-pitch:variable;\n\tmso-font-signature:-520092929 1073786111 9 0 415 0;}\n@font-face\n\t{font-family:Cambria;\n\tpanose-1:2 4 5 3 5 4 6 3 2 4;\n\tmso-font-charset:0;\n\tmso-generic-font-family:auto;\n\tmso-font-pitch:variable;\n\tmso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n\t{mso-style-unhide:no;\n\tmso-style-qformat:yes;\n\tmso-style-parent:\"\";\n\tmargin:0in;\n\tmargin-bottom:.0001pt;\n\tmso-pagination:widow-orphan;\n\tfont-size:12.0pt;\n\tfont-family:Cambria;\n\tmso-ascii-font-family:Cambria;\n\tmso-ascii-theme-font:minor-latin;\n\tmso-fareast-font-family:\"ＭＳ 明朝\";\n\tmso-fareast-theme-font:minor-fareast;\n\tmso-hansi-font-family:Cambria;\n\tmso-hansi-theme-font:minor-latin;\n\tmso-bidi-font-family:\"Times New Roman\";\n\tmso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n\t{mso-style-type:export-only;\n\tmso-default-props:yes;\n\tfont-family:Cambria;\n\tmso-ascii-font-family:Cambria;\n\tmso-ascii-theme-font:minor-latin;\n\tmso-fareast-font-family:\"ＭＳ 明朝\";\n\tmso-fareast-theme-font:minor-fareast;\n\tmso-hansi-font-family:Cambria;\n\tmso-hansi-theme-font:minor-latin;\n\tmso-bidi-font-family:\"Times New Roman\";\n\tmso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n\t{size:8.5in 11.0in;\n\tmargin:1.0in 1.25in 1.0in 1.25in;\n\tmso-header-margin:.5in;\n\tmso-footer-margin:.5in;\n\tmso-paper-source:0;}\ndiv.WordSection1\n\t{page:WordSection1;}\n\u003C\/style\u003E\u003Cspan style=\"font-size: small;\"\u003E\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E\u003Cspan style=\"background: white none repeat scroll 0% 0%; color: #333333; font-family: \u0026quot;calibri\u0026quot;;\"\u003EWhen we currently use a smart phone or a laptop\non a cell network or the Internet, the other end of these interactions\ntypically run on other solo computers, such as web servers. Practically all of\nthese machines have architectures that were designed to be controlled by a\nsingle person or a hierarchy of people who know and trust each other. From the\npoint of view of a remote web or app user, these architectures are based on\nfull trust in an unknown \"root\" administrator, who can control\neverything that happens on the server: they can read, alter, delete, or block\nany data on that computer at will.\u0026nbsp; Even data sent encrypted over a\nnetwork is eventually unencrypted and ends up on a computer controlled in this\ntotal way. With current web services we are fully trusting, in other words we\nare fully vulnerable to, the computer, or more specifically the people who have\naccess to that computer, both insiders and hackers, to faithfully execute our\norders, secure our payments, and so on. If somebody on the other end wants to\nignore or falsify what you've instructed the web server to do, no strong\nsecurity is stopping them, only fallible and expensive human institutions,\nwhich often stop at national borders.\u003C\/span\u003E\u003C\/i\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/blockquote\u003E\n\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n\t{font-family:Times;\n\tpanose-1:2 0 5 0 0 0 0 0 0 0;\n\tmso-font-charset:0;\n\tmso-generic-font-family:auto;\n\tmso-font-pitch:variable;\n\tmso-font-signature:3 0 0 0 1 0;}\n@font-face\n\t{font-family:\"ＭＳ 明朝\";\n\tmso-font-charset:78;\n\tmso-generic-font-family:auto;\n\tmso-font-pitch:variable;\n\tmso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n\t{font-family:\"Cambria Math\";\n\tpanose-1:2 4 5 3 5 4 6 3 2 4;\n\tmso-font-charset:0;\n\tmso-generic-font-family:auto;\n\tmso-font-pitch:variable;\n\tmso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n\t{font-family:Cambria;\n\tpanose-1:2 4 5 3 5 4 6 3 2 4;\n\tmso-font-charset:0;\n\tmso-generic-font-family:auto;\n\tmso-font-pitch:variable;\n\tmso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n\t{mso-style-unhide:no;\n\tmso-style-qformat:yes;\n\tmso-style-parent:\"\";\n\tmargin:0in;\n\tmargin-bottom:.0001pt;\n\tmso-pagination:widow-orphan;\n\tfont-size:12.0pt;\n\tfont-family:Cambria;\n\tmso-ascii-font-family:Cambria;\n\tmso-ascii-theme-font:minor-latin;\n\tmso-fareast-font-family:\"ＭＳ 明朝\";\n\tmso-fareast-theme-font:minor-fareast;\n\tmso-hansi-font-family:Cambria;\n\tmso-hansi-theme-font:minor-latin;\n\tmso-bidi-font-family:\"Times New Roman\";\n\tmso-bidi-theme-font:minor-bidi;}\np.MsoListParagraph, li.MsoListParagraph, div.MsoListParagraph\n\t{mso-style-priority:34;\n\tmso-style-unhide:no;\n\tmso-style-qformat:yes;\n\tmargin-top:0in;\n\tmargin-right:0in;\n\tmargin-bottom:0in;\n\tmargin-left:.5in;\n\tmargin-bottom:.0001pt;\n\tmso-add-space:auto;\n\tmso-pagination:widow-orphan;\n\tfont-size:12.0pt;\n\tfont-family:Cambria;\n\tmso-ascii-font-family:Cambria;\n\tmso-ascii-theme-font:minor-latin;\n\tmso-fareast-font-family:\"ＭＳ 明朝\";\n\tmso-fareast-theme-font:minor-fareast;\n\tmso-hansi-font-family:Cambria;\n\tmso-hansi-theme-font:minor-latin;\n\tmso-bidi-font-family:\"Times New Roman\";\n\tmso-bidi-theme-font:minor-bidi;}\np.MsoListParagraphCxSpFirst, li.MsoListParagraphCxSpFirst, div.MsoListParagraphCxSpFirst\n\t{mso-style-priority:34;\n\tmso-style-unhide:no;\n\tmso-style-qformat:yes;\n\tmso-style-type:export-only;\n\tmargin-top:0in;\n\tmargin-right:0in;\n\tmargin-bottom:0in;\n\tmargin-left:.5in;\n\tmargin-bottom:.0001pt;\n\tmso-add-space:auto;\n\tmso-pagination:widow-orphan;\n\tfont-size:12.0pt;\n\tfont-family:Cambria;\n\tmso-ascii-font-family:Cambria;\n\tmso-ascii-theme-font:minor-latin;\n\tmso-fareast-font-family:\"ＭＳ 明朝\";\n\tmso-fareast-theme-font:minor-fareast;\n\tmso-hansi-font-family:Cambria;\n\tmso-hansi-theme-font:minor-latin;\n\tmso-bidi-font-family:\"Times New Roman\";\n\tmso-bidi-theme-font:minor-bidi;}\np.MsoListParagraphCxSpMiddle, li.MsoListParagraphCxSpMiddle, div.MsoListParagraphCxSpMiddle\n\t{mso-style-priority:34;\n\tmso-style-unhide:no;\n\tmso-style-qformat:yes;\n\tmso-style-type:export-only;\n\tmargin-top:0in;\n\tmargin-right:0in;\n\tmargin-bottom:0in;\n\tmargin-left:.5in;\n\tmargin-bottom:.0001pt;\n\tmso-add-space:auto;\n\tmso-pagination:widow-orphan;\n\tfont-size:12.0pt;\n\tfont-family:Cambria;\n\tmso-ascii-font-family:Cambria;\n\tmso-ascii-theme-font:minor-latin;\n\tmso-fareast-font-family:\"ＭＳ 明朝\";\n\tmso-fareast-theme-font:minor-fareast;\n\tmso-hansi-font-family:Cambria;\n\tmso-hansi-theme-font:minor-latin;\n\tmso-bidi-font-family:\"Times New Roman\";\n\tmso-bidi-theme-font:minor-bidi;}\np.MsoListParagraphCxSpLast, li.MsoListParagraphCxSpLast, div.MsoListParagraphCxSpLast\n\t{mso-style-priority:34;\n\tmso-style-unhide:no;\n\tmso-style-qformat:yes;\n\tmso-style-type:export-only;\n\tmargin-top:0in;\n\tmargin-right:0in;\n\tmargin-bottom:0in;\n\tmargin-left:.5in;\n\tmargin-bottom:.0001pt;\n\tmso-add-space:auto;\n\tmso-pagination:widow-orphan;\n\tfont-size:12.0pt;\n\tfont-family:Cambria;\n\tmso-ascii-font-family:Cambria;\n\tmso-ascii-theme-font:minor-latin;\n\tmso-fareast-font-family:\"ＭＳ 明朝\";\n\tmso-fareast-theme-font:minor-fareast;\n\tmso-hansi-font-family:Cambria;\n\tmso-hansi-theme-font:minor-latin;\n\tmso-bidi-font-family:\"Times New Roman\";\n\tmso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n\t{mso-style-type:export-only;\n\tmso-default-props:yes;\n\tfont-family:Cambria;\n\tmso-ascii-font-family:Cambria;\n\tmso-ascii-theme-font:minor-latin;\n\tmso-fareast-font-family:\"ＭＳ 明朝\";\n\tmso-fareast-theme-font:minor-fareast;\n\tmso-hansi-font-family:Cambria;\n\tmso-hansi-theme-font:minor-latin;\n\tmso-bidi-font-family:\"Times New Roman\";\n\tmso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n\t{size:8.5in 11.0in;\n\tmargin:1.0in 1.25in 1.0in 1.25in;\n\tmso-header-margin:.5in;\n\tmso-footer-margin:.5in;\n\tmso-paper-source:0;}\ndiv.WordSection1\n\t{page:WordSection1;}\n\u003C\/style\u003E\n\n\n\n\n\n\n\u003Cbr \/\u003E\n\u003Cdiv class=\"MsoListParagraph\" style=\"margin-left: 0in; mso-add-space: auto;\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;times\u0026quot;; font-size: small; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003EMany server computers are not valuable enough for insiders\nor outsiders to attack. But an increasing number of others contain valuable\nconcentrations of resources, motivating attack. Centralized root-trusting\nsecurity scales poorly. As the resources controlled by computers become more\nvaluable and more concentrated, traditional root-trusting security becomes more\nlike the “call the cop” security we are used to in the physical world.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EFortunately, with blockchains we can do much\nbetter for many of our most important computations.\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Ch4\u003E\n\u003Cb style=\"mso-bidi-font-weight: normal;\"\u003EBlockchains and\nCryptocurrencies\u003C\/b\u003E\u003C\/h4\u003E\n\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003E\u003Cspan style=\"font-size: small;\"\u003EScalable markets and prices require scalable money. Scalable\nmoney requires scalable security, so that a greater number and variety of\npeople can use the currency without losing its integrity against forgery,\ninflation, and theft.\u003C\/span\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003E\u003Cspan style=\"font-size: small;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003E\u003Cspan style=\"font-size: small;\"\u003EAn individual or group communicating under the name “Satoshi\nNakamoto” brought Bitcoin to the Internet in 2009. \u003Cspan style=\"mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003ESatoshi’s breakthrough\nwith money was to provide social scalability via trust minimization: reducing vulnerability\nto counterparties and third parties alike. By substituting computationally\nexpensive but automated security for computationally cheap but institutionally\nexpensive traditional security, Satoshi gained a nice increase in social\nscalability. A set of partially trusted intermediaries replaces a single and fully\ntrusted intermediary.\u003C\/span\u003E\u003C\/span\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cbr \/\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjwzUzCKcIkNQk0u2ZUs8kMA8f-oTge-UwP6r0CWeEA-liborz36ySbbFU1EtBTSgEggne3cAdO0_uvWTrjPAk4ktxx_viknrcoYz8L1QR6fPPCyKi5gYEaO5YAeh-j_rw32n4c\/s1600\/MBSS1.png\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"238\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjwzUzCKcIkNQk0u2ZUs8kMA8f-oTge-UwP6r0CWeEA-liborz36ySbbFU1EtBTSgEggne3cAdO0_uvWTrjPAk4ktxx_viknrcoYz8L1QR6fPPCyKi5gYEaO5YAeh-j_rw32n4c\/s320\/MBSS1.png\" width=\"320\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n\t{font-family:\"ＭＳ 明朝\";\n\tmso-font-charset:78;\n\tmso-generic-font-family:auto;\n\tmso-font-pitch:variable;\n\tmso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n\t{font-family:\"Cambria Math\";\n\tpanose-1:2 4 5 3 5 4 6 3 2 4;\n\tmso-font-charset:0;\n\tmso-generic-font-family:auto;\n\tmso-font-pitch:variable;\n\tmso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n\t{font-family:Cambria;\n\tpanose-1:2 4 5 3 5 4 6 3 2 4;\n\tmso-font-charset:0;\n\tmso-generic-font-family:auto;\n\tmso-font-pitch:variable;\n\tmso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n\t{mso-style-unhide:no;\n\tmso-style-qformat:yes;\n\tmso-style-parent:\"\";\n\tmargin:0in;\n\tmargin-bottom:.0001pt;\n\tmso-pagination:widow-orphan;\n\tfont-size:12.0pt;\n\tfont-family:Cambria;\n\tmso-ascii-font-family:Cambria;\n\tmso-ascii-theme-font:minor-latin;\n\tmso-fareast-font-family:\"ＭＳ 明朝\";\n\tmso-fareast-theme-font:minor-fareast;\n\tmso-hansi-font-family:Cambria;\n\tmso-hansi-theme-font:minor-latin;\n\tmso-bidi-font-family:\"Times New Roman\";\n\tmso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n\t{mso-style-type:export-only;\n\tmso-default-props:yes;\n\tfont-family:Cambria;\n\tmso-ascii-font-family:Cambria;\n\tmso-ascii-theme-font:minor-latin;\n\tmso-fareast-font-family:\"ＭＳ 明朝\";\n\tmso-fareast-theme-font:minor-fareast;\n\tmso-hansi-font-family:Cambria;\n\tmso-hansi-theme-font:minor-latin;\n\tmso-bidi-font-family:\"Times New Roman\";\n\tmso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n\t{size:8.5in 11.0in;\n\tmargin:1.0in 1.25in 1.0in 1.25in;\n\tmso-header-margin:.5in;\n\tmso-footer-margin:.5in;\n\tmso-paper-source:0;}\ndiv.WordSection1\n\t{page:WordSection1;}\n\u003C\/style\u003E\n\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"text-align: center;\"\u003E\n\u003Cspan style=\"font-size: small\"\u003E\n\u003Ci\u003E\nFinancial\ncontrols on computational steroids: a blockchain as an army of robots, each checking\nup on each other’s work.\u003C\/i\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u0026nbsp;\n\n\n\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n\t{font-family:\"ＭＳ 明朝\";\n\tmso-font-charset:78;\n\tmso-generic-font-family:auto;\n\tmso-font-pitch:variable;\n\tmso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n\t{font-family:\"Cambria Math\";\n\tpanose-1:2 4 5 3 5 4 6 3 2 4;\n\tmso-font-charset:0;\n\tmso-generic-font-family:auto;\n\tmso-font-pitch:variable;\n\tmso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n\t{font-family:Cambria;\n\tpanose-1:2 4 5 3 5 4 6 3 2 4;\n\tmso-font-charset:0;\n\tmso-generic-font-family:auto;\n\tmso-font-pitch:variable;\n\tmso-font-signature:-536870145 1073743103 0 0 415 0;}\n@font-face\n\t{font-family:Georgia;\n\tpanose-1:2 4 5 2 5 4 5 2 3 3;\n\tmso-font-charset:0;\n\tmso-generic-font-family:auto;\n\tmso-font-pitch:variable;\n\tmso-font-signature:3 0 0 0 1 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n\t{mso-style-unhide:no;\n\tmso-style-qformat:yes;\n\tmso-style-parent:\"\";\n\tmargin:0in;\n\tmargin-bottom:.0001pt;\n\tmso-pagination:widow-orphan;\n\tfont-size:12.0pt;\n\tfont-family:Cambria;\n\tmso-ascii-font-family:Cambria;\n\tmso-ascii-theme-font:minor-latin;\n\tmso-fareast-font-family:\"ＭＳ 明朝\";\n\tmso-fareast-theme-font:minor-fareast;\n\tmso-hansi-font-family:Cambria;\n\tmso-hansi-theme-font:minor-latin;\n\tmso-bidi-font-family:\"Times New Roman\";\n\tmso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n\t{mso-style-type:export-only;\n\tmso-default-props:yes;\n\tfont-family:Cambria;\n\tmso-ascii-font-family:Cambria;\n\tmso-ascii-theme-font:minor-latin;\n\tmso-fareast-font-family:\"ＭＳ 明朝\";\n\tmso-fareast-theme-font:minor-fareast;\n\tmso-hansi-font-family:Cambria;\n\tmso-hansi-theme-font:minor-latin;\n\tmso-bidi-font-family:\"Times New Roman\";\n\tmso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n\t{size:8.5in 11.0in;\n\tmargin:1.0in 1.25in 1.0in 1.25in;\n\tmso-header-margin:.5in;\n\tmso-footer-margin:.5in;\n\tmso-paper-source:0;}\ndiv.WordSection1\n\t{page:WordSection1;}\n\u003C\/style\u003E\n\u003Cbr \/\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"font-size: small; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003EWhen we can secure the most important\nfunctionality of a financial network by computer science rather than by the traditional\naccountants, regulators, investigators, police, and lawyers, we go from a\nsystem that is manual, local, and of inconsistent security to one that is\nautomated, global, and much more secure. Cryptocurrencies, when implemented\nproperly on public blockchains, can substitute an army of computers for a large\nnumber of traditional banking bureaucrats. \u003Cspan style=\"font-family: inherit;\"\u003E\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E“\u003C\/i\u003E\u003C\/span\u003E\u003C\/span\u003E\u003Cspan style=\"font-family: inherit;\"\u003E\u003Cspan style=\"background: white none repeat scroll 0% 0%; color: #333333; font-size: small;\"\u003EThese\nblock chain computers will allow us to put the most crucial parts of our online\nprotocols on a far more reliable and secure footing, and make possible\nfiduciary interactions that we previously dared not do on a global network.” (\u003Ca href=\"https:\/\/unenumerated.blogspot.com\/2014\/12\/the-dawn-of-trustworthy-computing.html\" target=\"_blank\"\u003ESource\u003C\/a\u003E)\u003C\/span\u003E\u003Cspan style=\"font-size: small; mso-bidi-font-family: Helvetica;\"\u003E\u0026nbsp;\u003C\/span\u003E\u003C\/span\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003E\u003Cspan style=\"font-size: small; mso-bidi-font-family: Helvetica;\"\u003EThe\ncharacteristics most distinctively valuable in blockchain technology in\ngeneral, and Bitcoin in particular — for example\u003C\/span\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003E\u003Cspan style=\"font-size: small;\"\u003E\u003C\/span\u003E\u003C\/span\u003E\n\u003Cul style=\"font-size: small;\"\u003E\n\u003Cli\u003Eindependence from existing institutions for its basic operations\u003C\/li\u003E\n\u003C\/br\u003E\n\u003Cli\u003Eability to operate seamlessly across borders\u003C\/li\u003E\n\u003C\/ul\u003E\n\n\u003Cdiv class=\"MsoNormal\" style=\"mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003E\u003Cspan style=\"font-size: small; mso-bidi-font-family: Helvetica;\"\u003Ecome from the\nhigh levels of security and reliability a blockchain can maintain without human\nintervention. Without that high security it’s just a gratuitously wasteful\ndistributed database technology still tied to the local bureaucracies it would\nhave to depend upon for its integrity.\u003C\/span\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgg_LzMUkNq6WafqQ9UuevyRgC6h6Z0OSLbR0qqiGl00Ir8mvw1otv8qPVrGCzhhcdMPXRA20OlWq7mrAwblDS7DRwU9IYQfOICJ6MfyOAzB1_BX748Qn9pzQ42t7yQiKNKgeq7\/s1600\/MBSS2.png\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"295\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgg_LzMUkNq6WafqQ9UuevyRgC6h6Z0OSLbR0qqiGl00Ir8mvw1otv8qPVrGCzhhcdMPXRA20OlWq7mrAwblDS7DRwU9IYQfOICJ6MfyOAzB1_BX748Qn9pzQ42t7yQiKNKgeq7\/s320\/MBSS2.png\" width=\"320\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n\t{font-family:\"ＭＳ 明朝\";\n\tmso-font-charset:78;\n\tmso-generic-font-family:auto;\n\tmso-font-pitch:variable;\n\tmso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n\t{font-family:\"Cambria Math\";\n\tpanose-1:2 4 5 3 5 4 6 3 2 4;\n\tmso-font-charset:0;\n\tmso-generic-font-family:auto;\n\tmso-font-pitch:variable;\n\tmso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n\t{font-family:Cambria;\n\tpanose-1:2 4 5 3 5 4 6 3 2 4;\n\tmso-font-charset:0;\n\tmso-generic-font-family:auto;\n\tmso-font-pitch:variable;\n\tmso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n\t{mso-style-unhide:no;\n\tmso-style-qformat:yes;\n\tmso-style-parent:\"\";\n\tmargin:0in;\n\tmargin-bottom:.0001pt;\n\tmso-pagination:widow-orphan;\n\tfont-size:12.0pt;\n\tfont-family:Cambria;\n\tmso-ascii-font-family:Cambria;\n\tmso-ascii-theme-font:minor-latin;\n\tmso-fareast-font-family:\"ＭＳ 明朝\";\n\tmso-fareast-theme-font:minor-fareast;\n\tmso-hansi-font-family:Cambria;\n\tmso-hansi-theme-font:minor-latin;\n\tmso-bidi-font-family:\"Times New Roman\";\n\tmso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n\t{mso-style-type:export-only;\n\tmso-default-props:yes;\n\tfont-family:Cambria;\n\tmso-ascii-font-family:Cambria;\n\tmso-ascii-theme-font:minor-latin;\n\tmso-fareast-font-family:\"ＭＳ 明朝\";\n\tmso-fareast-theme-font:minor-fareast;\n\tmso-hansi-font-family:Cambria;\n\tmso-hansi-theme-font:minor-latin;\n\tmso-bidi-font-family:\"Times New Roman\";\n\tmso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n\t{size:8.5in 11.0in;\n\tmargin:1.0in 1.25in 1.0in 1.25in;\n\tmso-header-margin:.5in;\n\tmso-footer-margin:.5in;\n\tmso-paper-source:0;}\ndiv.WordSection1\n\t{page:WordSection1;}\n\u003C\/style\u003E\n\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"text-align: justify;\"\u003E\n\u003Cspan style=\"font-size: small\"\u003E\n\u003Ci\u003E\nSince the mid-20\u003Csup\u003Eth\u003C\/sup\u003E\ncentury computing has increased in efficiency by many orders of magnitude, but\nhumans are using the same brains. This has created plenty of possibility for\novercoming human limitations, and institutions based solely on human minds,\nwith computational capabilities, including in security, doing what they do\nbest, with human minds doing what they still do best. As a result, humans have\nno more raw mental ability to scale up our institutions than we ever have. But\nthere is plenty of potential for improving social scalability by replacing some\nhuman functions with computational ones. (An important note – this argument\ndepends on the slope, not the absolute position, of the human ability line.\u0026nbsp; The absolute position shown above is\narbitrary and depends on what human “computation” we are measuring).\u003C\/i\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"mso-bidi-font-family: Helvetica;\"\u003E\n\n\n\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n\t{font-family:\"ＭＳ 明朝\";\n\tmso-font-charset:78;\n\tmso-generic-font-family:auto;\n\tmso-font-pitch:variable;\n\tmso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n\t{font-family:\"Cambria Math\";\n\tpanose-1:2 4 5 3 5 4 6 3 2 4;\n\tmso-font-charset:0;\n\tmso-generic-font-family:auto;\n\tmso-font-pitch:variable;\n\tmso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n\t{font-family:Cambria;\n\tpanose-1:2 4 5 3 5 4 6 3 2 4;\n\tmso-font-charset:0;\n\tmso-generic-font-family:auto;\n\tmso-font-pitch:variable;\n\tmso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n\t{mso-style-unhide:no;\n\tmso-style-qformat:yes;\n\tmso-style-parent:\"\";\n\tmargin:0in;\n\tmargin-bottom:.0001pt;\n\tmso-pagination:widow-orphan;\n\tfont-size:12.0pt;\n\tfont-family:Cambria;\n\tmso-ascii-font-family:Cambria;\n\tmso-ascii-theme-font:minor-latin;\n\tmso-fareast-font-family:\"ＭＳ 明朝\";\n\tmso-fareast-theme-font:minor-fareast;\n\tmso-hansi-font-family:Cambria;\n\tmso-hansi-theme-font:minor-latin;\n\tmso-bidi-font-family:\"Times New Roman\";\n\tmso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n\t{mso-style-type:export-only;\n\tmso-default-props:yes;\n\tfont-family:Cambria;\n\tmso-ascii-font-family:Cambria;\n\tmso-ascii-theme-font:minor-latin;\n\tmso-fareast-font-family:\"ＭＳ 明朝\";\n\tmso-fareast-theme-font:minor-fareast;\n\tmso-hansi-font-family:Cambria;\n\tmso-hansi-theme-font:minor-latin;\n\tmso-bidi-font-family:\"Times New Roman\";\n\tmso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n\t{size:8.5in 11.0in;\n\tmargin:1.0in 1.25in 1.0in 1.25in;\n\tmso-header-margin:.5in;\n\tmso-footer-margin:.5in;\n\tmso-paper-source:0;}\ndiv.WordSection1\n\t{page:WordSection1;}\n\u003C\/style\u003E\n\u003C\/span\u003E\u003C\/div\u003E\n\u003Cbr \/\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003E\u003Cspan style=\"font-size: small; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003EA new\ncentralized financial entity, a trusted third party without a “human\nblockchain” of the kind employed by traditional finance, is at high risk of\nbecoming the next Mt. Gox; it is not going to become a trustworthy financial\nintermediary without that bureaucracy.\u003C\/span\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003E\u003Cspan style=\"font-size: small; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003E\u003Cspan style=\"font-size: small; mso-bidi-font-family: Helvetica;\"\u003EComputers and networks are cheap.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EScaling computational resources requires\ncheap additional resources. Scaling human traditional institutions in a\nreliable and secure manner requires increasing amounts accountants, lawyers,\nregulators, and police, along with the increase in bureaucracy, risk, and\nstress that such institutions entail. Lawyers are costly. Regulation is to the\nmoon. Computer science secures money far better than accountants, police, and\nlawyers.\u003C\/span\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003E\u003Cspan style=\"font-size: small;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003E\u003Cspan style=\"font-size: small; mso-bidi-font-family: Helvetica;\"\u003EIn computer\nscience there are fundamental security versus performance tradeoffs. Bitcoin's automated\nintegrity comes at high costs in its performance and resource usage. Nobody has\ndiscovered any way to greatly increase the computational scalability of the\nBitcoin blockchain, for example its transaction throughput, and demonstrated\nthat this improvement does not compromise Bitcoin’s security.\u003C\/span\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"font-size: small;\"\u003E\u003Cspan style=\"font-family: inherit;\"\u003E\u003Cspan style=\"mso-bidi-font-family: Helvetica;\"\u003EIt is probable that no such big but integrity-preserving performance improvement is\npossible for the Bitcoin blockchain; this may be one of these unavoidable\ntradeoffs. \u0026nbsp;Compared to existing financial IT, Satoshi made radical\ntradeoffs in favor of security and against performance. The seemingly wasteful\nprocess of mining is the most obvious of these tradeoffs, but Bitcoin also\nmakes others. \u0026nbsp;Among them is that it requires high redundancy in its\nmessaging. \u0026nbsp;Mathematically provable integrity would require full broadcast\nbetween all nodes. \u0026nbsp;Bitcoin can’t achieve that but to even get anywhere\nclose to a good approximation of it requires a very high level of redundancy.\n\u0026nbsp;So a 1 MB block consumes far more resources than a 1 MB web page, because\nit has to be transmitted, processed, and stored with high redundancy for\nBitcoin to achieve its automated integrity.\u003C\/span\u003E\u003C\/span\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003E\u003Cspan style=\"font-size: small; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003EThese\nnecessary tradeoffs, sacrificing performance in order to achieve the security\nnecessary for independent, seamlessly global, and automated integrity, mean\nthat the Bitcoin blockchain itself cannot possibly come anywhere near Visa\ntransaction-per-second numbers and maintain the automated integrity that\ncreates its distinctive advantages versus these traditional financial systems.\nInstead, a less trust-minimized peripheral payment network (possibly \u003Ca href=\"https:\/\/lightning.network\/lightning-network-paper.pdf\" target=\"_blank\"\u003ELightning\u003C\/a\u003E )\nwill be needed to bear a larger number of lower-value bitcoin-denominated\ntransactions than Bitcoin blockchain is capable of, using the Bitcoin\nblockchain to periodically settle with one high-value transaction batches of peripheral network transactions.\u003C\/span\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003E\u003Cspan style=\"font-size: small;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"font-size: small;\"\u003E\u003Cspan style=\"font-family: inherit;\"\u003E\u003Cspan style=\"mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003EBitcoin supports a lower rate\ntransactions than Visa or PayPal, but due to its stronger automated security\nthese can be much more important transactions. \u003C\/span\u003E\u003Cspan style=\"mso-bidi-font-family: Helvetica;\"\u003EAnybody\nwith a decent Internet connection and a smart phone who can pay $0.20-$2\ntransaction fees – substantially lower than current remitance fees -- can\naccess Bitcoin any where on the globe.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp;\n\u003C\/span\u003ELower value transactions with lower fees will need to be implemented on\nperipheral bitcoin networks.\u003C\/span\u003E\u003C\/span\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"font-size: small;\"\u003E\u003Cspan style=\"font-family: inherit;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-size: small;\"\u003E\u003Cspan style=\"font-family: inherit;\"\u003E\u003Cspan style=\"mso-bidi-font-family: Helvetica;\"\u003EWhen it comes\nto small-b bitcoin, the currency, there is nothing impossible about paying\nretail with bitcoin the way you’d pay with a fiat currency —\nbitcoin-denominated credit and debt cards, for example, with all the \u003Ca href=\"https:\/\/en.wikipedia.org\/wiki\/Chargeback\" target=\"_blank\"\u003Echargeback\u003C\/a\u003E and transactions-per-second\ncapabilities of a credit or debit card. And there are also clever ways to do\nperipheral bitcoin retail payments in which small value payments happen\noff-chain and are only periodically bulk-settled on the Capital-B Bitcoin\nblockchain. That blockchain is going to evolve into a high-value settlement\nlayer as bitcoin use grows, and we will see peripheral networks being used for\nsmall-b bitcoin retail transactions.\u003C\/span\u003E\u003C\/span\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-size: small;\"\u003E\u003Cspan style=\"font-family: inherit;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-size: small;\"\u003E\u003Cspan style=\"font-family: inherit;\"\u003E\u003Cspan style=\"mso-bidi-font-family: Helvetica;\"\u003EWhen I designed \u003Ca href=\"https:\/\/web.archive.org\/web\/20070616052640\/http:\/\/unenumerated.blogspot.com\/2005\/12\/bit-gold.html\" target=\"_blank\"\u003Ebit gold\u003C\/a\u003E I already knew consensus did not scale to large transaction throughputs securely,\nso I designed it with a two-tier architecture: (1) bit gold itself, the\nsettlement layer, and (2) \u003Ca href=\"http:\/\/www.hit.bme.hu\/~buttyan\/courses\/BMEVIHIM219\/2009\/Chaum.BlindSigForPayment.1982.PDF\" target=\"_blank\"\u003EChaumian digital cash\u003C\/a\u003E,\na peripheral payment network which would provide retail payments with high\ntransactions-per-second performance and privacy (through Chaumian blinding),\nbut would like Visa be a trusted third party and thus require a “human\nblockchain” of accountants, etc. to operate with integrity. \u0026nbsp;The\nperipheral payment network can involve only small value transactions, thereby requiring\nmuch less of a human army to avoid the fate of Mt. Gox.\u003C\/span\u003E\u003C\/span\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjgZm-7BlpX9846EZNMo5FyZS4BX-Zr47ISBfjPwxiayMCbUV1kMWM4_UuVOWcLkm1hcmSBAsyLB2sBCSFhUPKfnBGbjYm7n2-TNvGjk20vLAS9Ma-Awz1aDRwmEZBLFnRvfbiM\/s1600\/MBSS3.png\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"175\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjgZm-7BlpX9846EZNMo5FyZS4BX-Zr47ISBfjPwxiayMCbUV1kMWM4_UuVOWcLkm1hcmSBAsyLB2sBCSFhUPKfnBGbjYm7n2-TNvGjk20vLAS9Ma-Awz1aDRwmEZBLFnRvfbiM\/s320\/MBSS3.png\" width=\"320\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n\t{font-family:\"ＭＳ 明朝\";\n\tmso-font-charset:78;\n\tmso-generic-font-family:auto;\n\tmso-font-pitch:variable;\n\tmso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n\t{font-family:\"Cambria Math\";\n\tpanose-1:2 4 5 3 5 4 6 3 2 4;\n\tmso-font-charset:0;\n\tmso-generic-font-family:auto;\n\tmso-font-pitch:variable;\n\tmso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n\t{font-family:Cambria;\n\tpanose-1:2 4 5 3 5 4 6 3 2 4;\n\tmso-font-charset:0;\n\tmso-generic-font-family:auto;\n\tmso-font-pitch:variable;\n\tmso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n\t{mso-style-unhide:no;\n\tmso-style-qformat:yes;\n\tmso-style-parent:\"\";\n\tmargin:0in;\n\tmargin-bottom:.0001pt;\n\tmso-pagination:widow-orphan;\n\tfont-size:12.0pt;\n\tfont-family:Cambria;\n\tmso-ascii-font-family:Cambria;\n\tmso-ascii-theme-font:minor-latin;\n\tmso-fareast-font-family:\"ＭＳ 明朝\";\n\tmso-fareast-theme-font:minor-fareast;\n\tmso-hansi-font-family:Cambria;\n\tmso-hansi-theme-font:minor-latin;\n\tmso-bidi-font-family:\"Times New Roman\";\n\tmso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n\t{mso-style-type:export-only;\n\tmso-default-props:yes;\n\tfont-family:Cambria;\n\tmso-ascii-font-family:Cambria;\n\tmso-ascii-theme-font:minor-latin;\n\tmso-fareast-font-family:\"ＭＳ 明朝\";\n\tmso-fareast-theme-font:minor-fareast;\n\tmso-hansi-font-family:Cambria;\n\tmso-hansi-theme-font:minor-latin;\n\tmso-bidi-font-family:\"Times New Roman\";\n\tmso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n\t{size:8.5in 11.0in;\n\tmargin:1.0in 1.25in 1.0in 1.25in;\n\tmso-header-margin:.5in;\n\tmso-footer-margin:.5in;\n\tmso-paper-source:0;}\ndiv.WordSection1\n\t{page:WordSection1;}\n\u003C\/style\u003E\n\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"text-align: center;\"\u003E\n\u003Cspan style=\"font-size: small\"\u003E\n\u003Ci\u003E\nRalph Merkle: pioneer\nof public-key cryptography and inventor of hierarchical hash-tree structures\n(Merkle trees).\u003C\/i\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n\t{font-family:\"ＭＳ 明朝\";\n\tmso-font-charset:78;\n\tmso-generic-font-family:auto;\n\tmso-font-pitch:variable;\n\tmso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n\t{font-family:\"Cambria Math\";\n\tpanose-1:2 4 5 3 5 4 6 3 2 4;\n\tmso-font-charset:0;\n\tmso-generic-font-family:auto;\n\tmso-font-pitch:variable;\n\tmso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n\t{font-family:Cambria;\n\tpanose-1:2 4 5 3 5 4 6 3 2 4;\n\tmso-font-charset:0;\n\tmso-generic-font-family:auto;\n\tmso-font-pitch:variable;\n\tmso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n\t{mso-style-unhide:no;\n\tmso-style-qformat:yes;\n\tmso-style-parent:\"\";\n\tmargin:0in;\n\tmargin-bottom:.0001pt;\n\tmso-pagination:widow-orphan;\n\tfont-size:12.0pt;\n\tfont-family:Cambria;\n\tmso-ascii-font-family:Cambria;\n\tmso-ascii-theme-font:minor-latin;\n\tmso-fareast-font-family:\"ＭＳ 明朝\";\n\tmso-fareast-theme-font:minor-fareast;\n\tmso-hansi-font-family:Cambria;\n\tmso-hansi-theme-font:minor-latin;\n\tmso-bidi-font-family:\"Times New Roman\";\n\tmso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n\t{mso-style-type:export-only;\n\tmso-default-props:yes;\n\tfont-family:Cambria;\n\tmso-ascii-font-family:Cambria;\n\tmso-ascii-theme-font:minor-latin;\n\tmso-fareast-font-family:\"ＭＳ 明朝\";\n\tmso-fareast-theme-font:minor-fareast;\n\tmso-hansi-font-family:Cambria;\n\tmso-hansi-theme-font:minor-latin;\n\tmso-bidi-font-family:\"Times New Roman\";\n\tmso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n\t{size:8.5in 11.0in;\n\tmargin:1.0in 1.25in 1.0in 1.25in;\n\tmso-header-margin:.5in;\n\tmso-footer-margin:.5in;\n\tmso-paper-source:0;}\ndiv.WordSection1\n\t{page:WordSection1;}\n\u003C\/style\u003E\u0026nbsp;\n\n\n\n\n\n\n\u003Cbr \/\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003E\u003Cspan style=\"font-size: small; mso-bidi-font-family: Helvetica;\"\u003EMoney requires\nsocial scalability in its design, via security. For example it should be very\nhard for any participant or intermediary to forge money (to dilute the supply\ncurve leading to undue or unexpected inflation). \u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp;\u003C\/span\u003EGold can have value anywhere in the world and\nis immune from hyperinflation because its value doesn’t depend on a central\nauthority. \u0026nbsp;Bitcoin excels at both these factors and runs online, enabling\nsomebody in Albania to use Bitcoin to pay somebody in Zimbabwe with minimal\ntrust in or and no payment of quasi-monopoly profits to intermediaries, and\nwith minimum vulnerability to third parties.\u003C\/span\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003E\u003Cspan style=\"font-size: small;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003E\u003Cspan style=\"font-size: small; mso-bidi-font-family: Helvetica;\"\u003EThere are all\nsorts of definitions of “blockchain” out there, almost all of them just\nimplicitly broad hand-waving amid the mountains of marketing hype. I suggest a\nclear definition that can be communicated to lay people. \u0026nbsp;It is a\nblockchain if it has blocks and it has chains. The “chains” should be \u003Ca href=\"https:\/\/en.wikipedia.org\/wiki\/Merkle_tree\" target=\"_blank\"\u003EMerkle trees\u003C\/a\u003E or other cryptographic structures with a similar integrity functionality of\n\u003Ca href=\"http:\/\/archive.is\/T9Y8P#selection-103.0-103.30#Post-unforgeable%20auditing%20logs\" target=\"_blank\"\u003Epost-unforgeable\u003C\/a\u003E\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp;\u0026nbsp; \u003C\/span\u003Eintegrity. \u0026nbsp;Also the transactions and any other data whose integrity is\nprotected by a blockchain should be replicated in a way objectively tolerant to\nworst-case malicious problems and actors to as high a degree as possible\n(typically the system can behave as previously specified up to a fraction of\n1\/3 to 1\/2 of the servers maliciously trying to subvert it to behave differently).\u003C\/span\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjtHlRzZB2L_GfB8FcRvR5ZSwDH4kaqA1xUonfwTZQHMtHCGwJ4ihKZrJoRGGpDQa1dG5yOkPkK34XJdlxftIl9OVb22YT4Q-FChc76T4omaUSdzoHyla2uYAn8sqTDhOKPV0TX\/s1600\/MBSS4.png\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"220\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjtHlRzZB2L_GfB8FcRvR5ZSwDH4kaqA1xUonfwTZQHMtHCGwJ4ihKZrJoRGGpDQa1dG5yOkPkK34XJdlxftIl9OVb22YT4Q-FChc76T4omaUSdzoHyla2uYAn8sqTDhOKPV0TX\/s400\/MBSS4.png\" width=\"400\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n\t{font-family:\"ＭＳ 明朝\";\n\tmso-font-charset:78;\n\tmso-generic-font-family:auto;\n\tmso-font-pitch:variable;\n\tmso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n\t{font-family:\"Cambria Math\";\n\tpanose-1:2 4 5 3 5 4 6 3 2 4;\n\tmso-font-charset:0;\n\tmso-generic-font-family:auto;\n\tmso-font-pitch:variable;\n\tmso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n\t{font-family:Cambria;\n\tpanose-1:2 4 5 3 5 4 6 3 2 4;\n\tmso-font-charset:0;\n\tmso-generic-font-family:auto;\n\tmso-font-pitch:variable;\n\tmso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n\t{mso-style-unhide:no;\n\tmso-style-qformat:yes;\n\tmso-style-parent:\"\";\n\tmargin:0in;\n\tmargin-bottom:.0001pt;\n\tmso-pagination:widow-orphan;\n\tfont-size:12.0pt;\n\tfont-family:Cambria;\n\tmso-ascii-font-family:Cambria;\n\tmso-ascii-theme-font:minor-latin;\n\tmso-fareast-font-family:\"ＭＳ 明朝\";\n\tmso-fareast-theme-font:minor-fareast;\n\tmso-hansi-font-family:Cambria;\n\tmso-hansi-theme-font:minor-latin;\n\tmso-bidi-font-family:\"Times New Roman\";\n\tmso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n\t{mso-style-type:export-only;\n\tmso-default-props:yes;\n\tfont-family:Cambria;\n\tmso-ascii-font-family:Cambria;\n\tmso-ascii-theme-font:minor-latin;\n\tmso-fareast-font-family:\"ＭＳ 明朝\";\n\tmso-fareast-theme-font:minor-fareast;\n\tmso-hansi-font-family:Cambria;\n\tmso-hansi-theme-font:minor-latin;\n\tmso-bidi-font-family:\"Times New Roman\";\n\tmso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n\t{size:8.5in 11.0in;\n\tmargin:1.0in 1.25in 1.0in 1.25in;\n\tmso-header-margin:.5in;\n\tmso-footer-margin:.5in;\n\tmso-paper-source:0;}\ndiv.WordSection1\n\t{page:WordSection1;}\n\u003C\/style\u003E\n\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"text-align: justify;\"\u003E\n\u003Cspan style=\"font-size: small\"\u003E\n\u003Ci\u003E\nBitcoin’s socially\nscalable security, based on computer science rather than on police and lawyers,\nallows, for example, customers in Africa to pay suppliers in China seamlessly\nacross borders. A private blockchain cannot accomplish this\nfeat nearly as easily, since it would require an identification scheme,\ncertificate authority, and PKI shared between these various jurisdictions. (\u003Ca href=\"https:\/\/twitter.com\/pesa_africa\/status\/812618598443319297\" target=\"_blank\"\u003ESource\u003C\/a\u003E)\u003C\/i\u003E\u003C\/span\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cbr \/\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"text-align: left;\"\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003E\u003Cspan style=\"font-size: small; mso-bidi-font-family: Helvetica;\"\u003EBecause\nof this fraction, and because of the (hopefully very rare) need to update\nsoftware in a manner that renders prior blocks invalid – an even riskier\nsituation called a hard fork -- blockchains also need a human governance layer\nthat is vulnerable to fork politics. The most successful blockchain, Bitcoin,\nhas maintained its immutable integrity via decentralized decision-making among\nexperts in the technology combined with a strong dogma of immutability, under\nwhich only the most important and rare bug fixes and design improvements, that\ncannot be made any other way, justify a hard fork. Under this philosophy of\ngovernance accounting or legal decisions (such as altering an account balance\nor undoing a transaction) never justify a hard fork, but should be accomplished\nby traditional governance outside of (or on top of) the system (e.g. via a\ncourt injunction forcing a Bitcoin user to send a new transaction that\neffectively undoes the old one, or confiscating the particular keys and thus\nthe particular holdings of a particular user).\u003C\/span\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"text-align: left;\"\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003E\u003Cspan style=\"font-size: small;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"text-align: left;\"\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003E\u003Cspan style=\"font-size: small; mso-bidi-font-family: Helvetica;\"\u003ETo say that\ndata is post-unforgeable or immutable means that it can’t be undetectably alteredafter being committed to the blockchain. Contrary to some hype this\ndoesn’t guarantee anything about a datum’s provenance, or its truth or falsity,\nbefore it was committed to the blockchain. That requires additional protocols,\noften including expensive traditional controls. Blockchains don’t guarantee\ntruth; they just preserve truth and lies from later alteration, allowing one to\nlater securely analyze them, and thus be more confident in uncovering the lies.\nTypical computers are computational etch-a-sketch, while blockchains are\ncomputational amber. Important data should be committed to blockchain amber as\nearly as possible, ideally directly from and cryptographically signed by the device\nin which it was generated, to maximize the blockchain’s benefit in securing its\nintegrity.\u003C\/span\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"text-align: left;\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"text-align: left;\"\u003E\n\u003Cspan style=\"mso-bidi-font-family: Helvetica;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgJu3evvRQeBgj_zcxcNy-lH_OrdaCxw5RB1BYRmAhvhb78rAbCCy_HrJ7g4gxpfxyJf60iW_hjhQY3UpwsiZQQVLkBaz_88vM-NWKL8zERw7T_uF7GMdhyphenhyphenwKC3Z5d8VN_xi5dV\/s1600\/MBSS5.png\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"284\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgJu3evvRQeBgj_zcxcNy-lH_OrdaCxw5RB1BYRmAhvhb78rAbCCy_HrJ7g4gxpfxyJf60iW_hjhQY3UpwsiZQQVLkBaz_88vM-NWKL8zERw7T_uF7GMdhyphenhyphenwKC3Z5d8VN_xi5dV\/s320\/MBSS5.png\" width=\"320\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n\t{font-family:\"ＭＳ 明朝\";\n\tmso-font-charset:78;\n\tmso-generic-font-family:auto;\n\tmso-font-pitch:variable;\n\tmso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n\t{font-family:\"ＭＳ 明朝\";\n\tmso-font-charset:78;\n\tmso-generic-font-family:auto;\n\tmso-font-pitch:variable;\n\tmso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n\t{font-family:Cambria;\n\tpanose-1:2 4 5 3 5 4 6 3 2 4;\n\tmso-font-charset:0;\n\tmso-generic-font-family:auto;\n\tmso-font-pitch:variable;\n\tmso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n\t{mso-style-unhide:no;\n\tmso-style-qformat:yes;\n\tmso-style-parent:\"\";\n\tmargin:0in;\n\tmargin-bottom:.0001pt;\n\tmso-pagination:widow-orphan;\n\tfont-size:12.0pt;\n\tfont-family:Cambria;\n\tmso-ascii-font-family:Cambria;\n\tmso-ascii-theme-font:minor-latin;\n\tmso-fareast-font-family:\"ＭＳ 明朝\";\n\tmso-fareast-theme-font:minor-fareast;\n\tmso-hansi-font-family:Cambria;\n\tmso-hansi-theme-font:minor-latin;\n\tmso-bidi-font-family:\"Times New Roman\";\n\tmso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n\t{mso-style-type:export-only;\n\tmso-default-props:yes;\n\tfont-family:Cambria;\n\tmso-ascii-font-family:Cambria;\n\tmso-ascii-theme-font:minor-latin;\n\tmso-fareast-font-family:\"ＭＳ 明朝\";\n\tmso-fareast-theme-font:minor-fareast;\n\tmso-hansi-font-family:Cambria;\n\tmso-hansi-theme-font:minor-latin;\n\tmso-bidi-font-family:\"Times New Roman\";\n\tmso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n\t{size:8.5in 11.0in;\n\tmargin:1.0in 1.25in 1.0in 1.25in;\n\tmso-header-margin:.5in;\n\tmso-footer-margin:.5in;\n\tmso-paper-source:0;}\ndiv.WordSection1\n\t{page:WordSection1;}\n\u003C\/style\u003E\n\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"text-align: justify;\"\u003E\n\u003Cspan style=\"font-size: small\"\u003E\n\u003Ci\u003E\nA Merkle\ntree of four transactions (tx0 through tx3). Combined with a proper\nreplication and chains of transaction blocks protected by proof-of-work, Merkle trees can make data such as transactions post-unforgeable by consensus. In Bitcoin, a Merkle\nroot hash securely summarizes and is used to verify the unaltered state of all\nthe transactions in a block.\u003C\/i\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"text-align: left;\"\u003E\n\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n\t{font-family:\"ＭＳ 明朝\";\n\tmso-font-charset:78;\n\tmso-generic-font-family:auto;\n\tmso-font-pitch:variable;\n\tmso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n\t{font-family:\"Cambria Math\";\n\tpanose-1:2 4 5 3 5 4 6 3 2 4;\n\tmso-font-charset:0;\n\tmso-generic-font-family:auto;\n\tmso-font-pitch:variable;\n\tmso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n\t{font-family:Cambria;\n\tpanose-1:2 4 5 3 5 4 6 3 2 4;\n\tmso-font-charset:0;\n\tmso-generic-font-family:auto;\n\tmso-font-pitch:variable;\n\tmso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n\t{mso-style-unhide:no;\n\tmso-style-qformat:yes;\n\tmso-style-parent:\"\";\n\tmargin:0in;\n\tmargin-bottom:.0001pt;\n\tmso-pagination:widow-orphan;\n\tfont-size:12.0pt;\n\tfont-family:Cambria;\n\tmso-ascii-font-family:Cambria;\n\tmso-ascii-theme-font:minor-latin;\n\tmso-fareast-font-family:\"ＭＳ 明朝\";\n\tmso-fareast-theme-font:minor-fareast;\n\tmso-hansi-font-family:Cambria;\n\tmso-hansi-theme-font:minor-latin;\n\tmso-bidi-font-family:\"Times New Roman\";\n\tmso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n\t{mso-style-type:export-only;\n\tmso-default-props:yes;\n\tfont-family:Cambria;\n\tmso-ascii-font-family:Cambria;\n\tmso-ascii-theme-font:minor-latin;\n\tmso-fareast-font-family:\"ＭＳ 明朝\";\n\tmso-fareast-theme-font:minor-fareast;\n\tmso-hansi-font-family:Cambria;\n\tmso-hansi-theme-font:minor-latin;\n\tmso-bidi-font-family:\"Times New Roman\";\n\tmso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n\t{size:8.5in 11.0in;\n\tmargin:1.0in 1.25in 1.0in 85.5pt;\n\tmso-header-margin:.5in;\n\tmso-footer-margin:.5in;\n\tmso-paper-source:0;}\ndiv.WordSection1\n\t{page:WordSection1;}\n\u003C\/style\u003E\n\u003C\/div\u003E\n\u003Cbr \/\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"text-align: left;\"\u003E\n\u003Cspan style=\"font-size: small; mso-bidi-font-family: Helvetica;\"\u003EMy own 1998 \u003Ca href=\"http:\/\/nakamotoinstitute.org\/secure-property-titles\/\" target=\"_blank\"\u003E“secure property title”\u003C\/a\u003E architecture\nhad Merkle trees and replication of data tolerant against an objective fraction\nof arbitrarily faulty software or malicious actors, but not blocks. \u0026nbsp;It\ndemonstrated my theory that you could protect the integrity of globally shared\ndata and transactions, and use that ability to design a cryptocurrency (bit\ngold). It did not have the more efficient and computationally scalable blocks-and-ledger system that Bitcoin does. Also like today’s private blockchains, secure property\ntitles assumed and required securely distinguishable and countable nodes.\u003C\/span\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cspan style=\"font-size: small; mso-bidi-font-family: Helvetica;\"\u003EGiven the\nobjective 51% hashrate attack limit to some important security goals of public\nblockchains like Bitcoin and Ethereum, we actually do care about the\ndistinguishable identity of the most powerful miners to answer the question\n“can somebody convince and coordinate the 51%?\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"text-align: left;\"\u003E\n\u003Cspan style=\"font-size: small;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"text-align: left;\"\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003E\u003Cspan style=\"font-size: small; mso-bidi-font-family: Helvetica;\"\u003EBlockchain\nsecurity is objectively limited and blockchain governance is heavily influenced\nby the potential for a 51% attack.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EAn\nattack of course does not have to be called an “attack” by the attackers;\ninstead they might call it “enlightened governance” or “democracy in\naction”.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EIndeed some kinds of software\nupdates needed to fix bugs or otherwise improve the protocol require a soft fork.\nSome other kinds of software updates require hard forks, which in Bitcoin pose\nan even greater security and continuity risks than soft forks. Blockchains,\nalthough reducing trust far more than any other network protocols, are still\nfar from trustless. Miners are partially trusted fiduciaries, and those who are\nnot expert developers or computer scientists who have invested a great deal of\ntime in learning the design principles and codebase of a blockchain must place a\ngreat deal of faith in the expert developer community, much as non-specialists\nwho want to understand the results of a specialized science do of the\ncorresponding scientists. During a hard fork exchanges can also be very\ninfluential by deciding which fork to support with their order books and trade\nsymbol continuity.\u003C\/span\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"text-align: left;\"\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003E\u003Cspan style=\"font-size: small;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"text-align: left;\"\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003E\u003Cspan style=\"font-size: small; mso-bidi-font-family: Helvetica;\"\u003EPublic\nblockchains thus mostly but not entirely dodge the identity-is-hard bullet and\ntake care of its remaining problem of identifying the most powerful miners at a\nhigher “wet”\/“social” level, where it is probably more appropriate, rather than\ntrying to securely map such an inherently wet (brain-based) concept onto the\nprotocol, as PKI (\u003Ca href=\"https:\/\/en.wikipedia.org\/wiki\/Public_key_infrastructure\" target=\"_blank\"\u003Epublic key infrastructure\u003C\/a\u003E) rather awkwardly tries\nto do.\u003C\/span\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"text-align: left;\"\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003E\u003Cspan style=\"font-size: small;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"text-align: left;\"\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003E\u003Cspan style=\"font-size: small; mso-bidi-font-family: Helvetica;\"\u003ESo I think\nsome of the “private blockchains” qualify as bona fide blockchains; others\nshould go under the broader rubric of “distributed ledger” or “shared database”\nor similar. \u0026nbsp;They are all very different from and not nearly as socially\nscalable as public and permissionless blockchains like Bitcoin and Ethereum.\u003C\/span\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"text-align: left;\"\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003E\u003Cspan style=\"font-size: small;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"text-align: left;\"\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003E\u003Cspan style=\"font-size: small; mso-bidi-font-family: Helvetica;\"\u003EAll of the\nfollowing are very similar in requiring an securely identified (distinguishable\nand countable) group of servers rather than the arbitrary anonymous membership\nof miners in public blockchains. In other words, they require some other,\nusually far less socially scalable, solution to the \u003Ca href=\"http:\/\/changingminds.org\/techniques\/propaganda\/sockpuppeting.htm\" target=\"_blank\"\u003ESybil (sockpuppet\u003C\/a\u003E) attack problem:\u003C\/span\u003E\u003C\/span\u003E\u003C\/div\u003E\n\n\u003Cdiv\u003E\n\u003Cul style=\"font-size: small;\"\u003E\n\n\u003Cli\u003E\u003Ca href=\"https:\/\/blog.ethereum.org\/2015\/08\/07\/on-public-and-private-blockchains\/\" target=\"_blank\"\u003EPrivate blockchains\u003C\/a\u003E\u003C\/li\u003E\n\u003C\/br\u003E\n\u003Cli\u003EThe “federated” model of \u003Ca href=\"https:\/\/www.blockstream.com\/sidechains.pdf\" target=\"_blank\"\u003Esidechains\u003C\/a\u003E (Alas, nobody has figured out how to do sidechains with any\nlesser degree of required trust, despite previous hopes or claims). \u0026nbsp;Sidechains\ncan also be private chains, and it’s a nice fit because their architectures and\nexternal dependencies (e.g. on a PKI) are similar.\u003C\/li\u003E\n\u003C\/br\u003E\n\u003Cli\u003E\u003Ca href=\"https:\/\/coincenter.org\/entry\/what-is-multi-sig-and-what-can-it-do\" target=\"_blank\"\u003EMultisig\u003C\/a\u003E-based\nschemes, even when done with blockchain-based smart contracts\u003C\/span\u003E\u003C\/li\u003E\n\u003C\/br\u003E\n\u003Cli\u003EThreshold-based “oracle” architectures for moving off-blockchain data onto blockchains\u003C\/li\u003E\n\n\u003C\/ul\u003E\n\u003C\/div\u003E\n\n\u003Cdiv class=\"MsoNormal\" style=\"text-align: left;\"\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003E\u003Cspan style=\"font-size: small;\"\u003ET\u003C\/span\u003E\u003Cspan style=\"font-size: small; mso-bidi-font-family: Helvetica;\"\u003Ehe dominant,\nbut usually not very socially scalable, way to identify a group of servers is\nwith a PKI based on trusted \u003Ca href=\"https:\/\/en.wikipedia.org\/wiki\/Certificate_authority\" target=\"_blank\"\u003Ecertificate authorities\u003C\/a\u003E (CAs).\nTo avoid the problem that \u003Ca href=\"http:\/\/nakamotoinstitute.org\/trusted-third-parties\/\" target=\"_blank\"\u003Emerely trusted third parties are security holes\u003C\/a\u003E, reliable CAs themselves must be expensive, labor-intensive\nbureaucracies that often do extensive background checks themselves or rely on\nothers (e.g. Dun and Bradstreet for businesses) to do so. \u0026nbsp;(I once led a\nteam that designed and built such a CA). \u0026nbsp;CAs also act as a gatekeeper,\nrendering these permissioned systems. CAs can become singular points of\npolitical control and failure. \u0026nbsp;\"Public blockchains are automated,\nsecure, and global, but identity is labor-intensive, insecure, and local.” \u003C\/span\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"text-align: left;\"\u003E\n\u003Cspan style=\"font-size: small;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"text-align: left;\"\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003E\u003Cspan style=\"font-size: small; mso-bidi-font-family: Helvetica;\"\u003EPKI-enabled\nprivate blockchains are a nice for banks and some other large enterprises\nbecause they already have mature in-house PKIs that cover the employees,\npartners, and private servers needed to approve important transactions.\n\u0026nbsp;Bank PKIs are relatively reliable. We also have semi-reliable CAs for web\nservers, but not generally speaking for web clients, even though people have\nbeen working on the problem of client certificates since the invention of the\nweb: for example advertisers would love to have a more secure alternative to\nphone numbers and cookies for tracking customer identities. Yet it hasn’t\nhappened. \u0026nbsp;\u003C\/span\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"text-align: left;\"\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003E\u003Cspan style=\"font-size: small;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"text-align: left;\"\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003E\u003Cspan style=\"font-size: small; mso-bidi-font-family: Helvetica;\"\u003EPKI can work\nwell for some important things and people but it is not nearly so nice or so\neasy for lesser entities. Its social scalability is limited by the traditional\nwet identity bureaucracy on which it depends.\u003C\/span\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"text-align: left;\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"text-align: left;\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEi91hozV3wT8hJ-vnoE5K4FWpoknlL21NY_UoesIWDLQskp1XINFbON1kldAGHYrBAeAtJZJ7r8IEmXxR17bQUv4WNwDbMdNg9BgFV6j8jYOyrAtW3c2-hnXabZGQiaPy5AeV7x\/s1600\/MBSS6.png\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"228\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEi91hozV3wT8hJ-vnoE5K4FWpoknlL21NY_UoesIWDLQskp1XINFbON1kldAGHYrBAeAtJZJ7r8IEmXxR17bQUv4WNwDbMdNg9BgFV6j8jYOyrAtW3c2-hnXabZGQiaPy5AeV7x\/s320\/MBSS6.png\" width=\"320\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr align=\"justify\"\u003E\u003Ctd class=\"tr-caption\"\u003E\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n\t{font-family:\"ＭＳ 明朝\";\n\tmso-font-charset:78;\n\tmso-generic-font-family:auto;\n\tmso-font-pitch:variable;\n\tmso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n\t{font-family:\"Cambria Math\";\n\tpanose-1:2 4 5 3 5 4 6 3 2 4;\n\tmso-font-charset:0;\n\tmso-generic-font-family:auto;\n\tmso-font-pitch:variable;\n\tmso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n\t{font-family:Cambria;\n\tpanose-1:2 4 5 3 5 4 6 3 2 4;\n\tmso-font-charset:0;\n\tmso-generic-font-family:auto;\n\tmso-font-pitch:variable;\n\tmso-font-signature:-536870145 1073743103 0 0 415 0;}\n@font-face\n\t{font-family:Georgia;\n\tpanose-1:2 4 5 2 5 4 5 2 3 3;\n\tmso-font-charset:0;\n\tmso-generic-font-family:auto;\n\tmso-font-pitch:variable;\n\tmso-font-signature:3 0 0 0 1 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n\t{mso-style-unhide:no;\n\tmso-style-qformat:yes;\n\tmso-style-parent:\"\";\n\tmargin:0in;\n\tmargin-bottom:.0001pt;\n\tmso-pagination:widow-orphan;\n\tfont-size:12.0pt;\n\tfont-family:Cambria;\n\tmso-ascii-font-family:Cambria;\n\tmso-ascii-theme-font:minor-latin;\n\tmso-fareast-font-family:\"ＭＳ 明朝\";\n\tmso-fareast-theme-font:minor-fareast;\n\tmso-hansi-font-family:Cambria;\n\tmso-hansi-theme-font:minor-latin;\n\tmso-bidi-font-family:\"Times New Roman\";\n\tmso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n\t{mso-style-type:export-only;\n\tmso-default-props:yes;\n\tfont-family:Cambria;\n\tmso-ascii-font-family:Cambria;\n\tmso-ascii-theme-font:minor-latin;\n\tmso-fareast-font-family:\"ＭＳ 明朝\";\n\tmso-fareast-theme-font:minor-fareast;\n\tmso-hansi-font-family:Cambria;\n\tmso-hansi-theme-font:minor-latin;\n\tmso-bidi-font-family:\"Times New Roman\";\n\tmso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n\t{size:8.5in 11.0in;\n\tmargin:1.0in 1.25in 1.0in 85.5pt;\n\tmso-header-margin:.5in;\n\tmso-footer-margin:.5in;\n\tmso-paper-source:0;}\ndiv.WordSection1\n\t{page:WordSection1;}\n\u003C\/style\u003E\n\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-size: small\"\u003E\n\u003Ci\u003ESome significant thefts in the broader bitcoin ecosystem. Whereas the Bitcoin blockchain\nitself is probably the most secure financial network in existence (and indeed must remain far more secure than traditional payment networks in order to maintain its low governance costs and seamless cross-border capability), its\nperipheral services based on older centralized web servers are very insecure. (Source: author)\u003C\/i\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"text-align: left;\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"text-align: left;\"\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003E\u003Cspan style=\"font-size: small; mso-bidi-font-family: Helvetica;\"\u003EWe need more\nsocially scalable ways to securely count nodes, or to put it another way to\nwith as much robustness against corruption as possible, assess contributions to\nsecuring the integrity of a blockchain. That is what proof-of-work and broadcast-replication\nare about: greatly sacrificing computational scalability in order to improve\nsocial scalability. \u0026nbsp;That is Satoshi’s brilliant tradeoff. \u0026nbsp;\u0026nbsp;It\nis brilliant because humans are far more expensive than computers and that gap\nwidens further each year. \u0026nbsp;And it is brilliant because it allows one to\nseamlessly and securely work across human trust boundaries (e.g. national\nborders), in contrast to “call-the-cop” architectures like PayPal and Visa that\ncontinually depend on expensive, error-prone, and sometimes corruptible\nbureaucracies to function with a reasonable amount of integrity.\u003C\/span\u003E\u003C\/span\u003E\u003Cbr \/\u003E\n\u003Ch4\u003E\n\u003Cb style=\"mso-bidi-font-weight: normal;\"\u003EConclusion \u003C\/b\u003E\u003C\/h4\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003E\u003Cspan style=\"font-size: small; mso-bidi-font-family: Helvetica;\"\u003E\u003C\/span\u003E\u003C\/span\u003E\n\u003C\/div\u003E   \u003C!-- add manually to close next div above --\u003E\n\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003E\u003Cspan style=\"font-size: small; mso-bidi-font-family: Helvetica;\"\u003E\u003Cspan style=\"font-family: inherit;\"\u003EThe rise of the Internet as seen the rise of a variety of\nonline institutions, among them social networks, “long-tail” retail (e.g.\nAmazon), and a variety of services that allow small and dispersed buyers and\nsellers to find and do business with each other (eBay, Uber, AirBnB, etc.)\u0026nbsp; These are just the initial attempts to take\nadvantage of our new abilities.\u0026nbsp; Due to\nthe massive improvements in information technology over recent decades, the\nnumber and variety of people who can successfully participate in an online\ninstitution is far less often restricted by the objective limits of computers\nand networks than it is by limitations of mind and institution that have usually\nhave not yet been sufficiently redesigned or further evolved to take advantage\nof those technological improvements.\u003C\/span\u003E\u003C\/span\u003E\u003C\/span\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003E\u003Cspan style=\"font-size: small;\"\u003EThese initial Internet efforts have been very centralized.  Blockchain technology, which implements data integrity via computer science rather than via “call the cops”, has so far made possible trust-minimized money -- cryptocurrencies – and will let us make progress in other financial areas as well as other areas where transactions can be based primarily on data available online.\u003C\/span\u003E\u003C\/span\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003E\u003Cspan style=\"font-size: small;\"\u003EThis is not to say that adapting our institutions to our new capabilities will be easy, or indeed in particular cases anything short of difficult and improbable.  Utopian schemes are very popular in the blockchain community, but they are not viable options. Reverse-engineering our highly evolved traditional institutions, and even reviving in new form some old ones, will usually work better than designing from scratch, than grand planning and game theory. One important strategy for doing so was demonstrated by Satoshi – sacrifice computational efficiency and scalability  -- consume more cheap computational resources -- in order to reduce and better leverage the great expense in human resources needed to maintain the relationships between strangers involved modern institutions such as markets, large firms, and governments.\n\u003C\/span\u003E\n\u003C!-- \/span --\u003E\n\u003C\/div\u003E\n\u003C!-- \/div --\u003E\n"},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/5749706586188307786\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/5749706586188307786","title":"14 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/5749706586188307786"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/5749706586188307786"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2017\/02\/money-blockchains-and-social-scalability.html","title":"Money, blockchains, and social scalability"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"media$thumbnail":{"xmlns$media":"http://search.yahoo.com/mrss/","url":"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjOvjiA_9Qm3dWn78uC8LMbIQFuC0mzTo2S-RR7Dyuf8pXttQE9Z6J9rI0eARYOiz5QxBJl6u2j6tp0B-f5pO4_c_YhlqaCPBEbNL8Ld8K8bBWNVjnmZ80VJ6wihPaEVipEzkUS\/s72-c\/MBSS0.png","height":"72","width":"72"},"thr$total":{"$t":"14"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-3187954982573654628"},"published":{"$t":"2016-12-18T14:54:00.001-08:00"},"updated":{"$t":"2016-12-18T14:54:47.772-08:00"},"title":{"type":"text","$t":"Weigh and deliver: compensation and the evolution of law and money"},"content":{"type":"html","$t":"\n\n\n\n\n\n\n\n\n\n\n\n\n\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\na:link, span.MsoHyperlink\n {mso-style-priority:99;\n color:blue;\n mso-themecolor:hyperlink;\n text-decoration:underline;\n text-underline:single;}\na:visited, span.MsoHyperlinkFollowed\n {mso-style-noshow:yes;\n mso-style-priority:99;\n color:purple;\n mso-themecolor:followedhyperlink;\n text-decoration:underline;\n text-underline:single;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n--\u003E\n\u003C\/style\u003E\n\n\n\n\n\u003Cspan style=\"font-family: inherit;\"\u003E\u003Cspan style=\"font-size: 12.5pt;\"\u003ELong\nbefore the invention of coins, the earliest written legal codes take for\ngranted the existence of commodity money that served both as a medium for\npaying fines and compensation and as a unit of account and standard of value\nassessing such penalties. The rules throughout the Sumerian \u003Ca href=\"https:\/\/en.wikipedia.org\/wiki\/Code_of_Ur-Nammu\" target=\"_blank\"\u003E“Code” of Ur-Nammu\u003C\/a\u003E [1],\u003C\/span\u003E\u003Cspan style=\"font-size: 12.5pt;\"\u003E \u003C\/span\u003E\u003Cspan style=\"font-size: 12pt;\"\u003Ec.\n2100–2050 BC. (about 1400 years before the invention of coinage),\u003C\/span\u003E\u003Cspan style=\"font-size: 12.5pt;\"\u003E show us that standard weights of silver were\nbeing used as a unit of account and the actual medium of payment: the code\nspecifically requires defendants adjudged guilty to “weigh and deliver” the\nspecified weight of silver. Over half of the extant rules specify fine or\ndamage payments in silver. The single rule specifying a silver payment that\nallows an alternative medium to be used calls it out as such: it specifies “he\nshall bring [a slave woman], if he has no slave woman, he shall instead weigh\nand deliver 10 shekels of silver; if he has no silver, he shall give him\nwhatever of value he has.” (Law 24).\u0026nbsp;\u003C\/span\u003E\u003C\/span\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003E\u003Cspan style=\"font-size: 12.5pt;\"\u003E\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003E\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"float: left; margin-right: 1em; text-align: left;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiy18DM-hswIlwjMdjyAgB4kF2Vy0i5qluSROx1008kGRBsjlww7uxWNg_gntlQjcKWzHRstnIlIY2HDlVxU4ZxjHTX4zZrlbON8v66X9dzj1rj7mdkqmsAMr-vCuK472rPkEfz\/s1600\/LawAndMoney1.png\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"203\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiy18DM-hswIlwjMdjyAgB4kF2Vy0i5qluSROx1008kGRBsjlww7uxWNg_gntlQjcKWzHRstnIlIY2HDlVxU4ZxjHTX4zZrlbON8v66X9dzj1rj7mdkqmsAMr-vCuK472rPkEfz\/s400\/LawAndMoney1.png\" width=\"400\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\u003Cdiv style=\"margin-bottom: .0001pt; margin: 0in;\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv style=\"margin-bottom: .0001pt; margin: 0in;\"\u003E\n\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E\u003Cspan style=\"color: black; font-family: Cambria; font-size: 12.0pt; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-bidi-theme-font: minor-bidi; mso-font-kerning: 12.0pt; mso-themecolor: text1;\"\u003E“In Mesopotamia, the\nadoption of a silver standard that equated measures of barley with a set amount\nof silver is illustrated by a rare example of a spiral coil of silver, lengths\nof which were snipped off to pay debts.” Given a standard cross-section, equal\nlengths of wire gave equal weights of metal. Coils could be audited by snipping\nthem at random points inspecting the cut section. \u003Ca href=\"http:\/\/oi.uchicago.edu\/museum-exhibits\/special-exhibits\/commerce-and-coins-ancient-near-east\" target=\"_blank\"\u003E[Link]\u003C\/a\u003E\u003C\/span\u003E\u003C\/i\u003E\u003C\/div\u003E\n\u003Cdiv style=\"margin-bottom: .0001pt; margin: 0in;\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003C\/span\u003E\u003C\/i\u003E\u003C\/span\u003E\u003C\/span\u003E\u003Cbr \/\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003E\u003Cspan style=\"font-size: 12.5pt;\"\u003EA medium for paying fines and damages\nimplies that the recipient (for example the king for a fine, or the victim for\ncompensation) could use that medium in further useful payments – likely for\ninheritance, tax, religious tithe, tribute, and exchange, among other\ntransactions. (These transactions, and how money emerges from them, will be\ndiscussed in future posts). Indeed, the frequency with which a an intermediate\ngood is used as a medium for paying legal penalties may serve as a useful proxy\nfor how much value that good adds (i.e. how much in transaction costs its\nsaves) to other transactions (including but not limited to legal penalties)\ninvolved in the circulation of that good\u003C\/span\u003E.\u003C\/span\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003E\u0026nbsp;\u003C\/span\u003E\n\n\n\n\n\n\n\n\n\n\n\n\n\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n--\u003E\n\u003C\/style\u003E\n\n\n\n\n\n\n\u003Cbr \/\u003E\n\u003Ctable border=\"1\" cellpadding=\"0\" cellspacing=\"0\" class=\"MsoTableGrid\" style=\"border-collapse: collapse; border: none; mso-border-alt: solid windowtext .5pt; mso-padding-alt: 0in 5.4pt 0in 5.4pt; mso-yfti-tbllook: 1184;\"\u003E\n \u003Ctbody\u003E\n\u003Ctr style=\"mso-yfti-firstrow: yes; mso-yfti-irow: 0;\"\u003E\n  \u003Ctd style=\"border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.05in;\" valign=\"top\" width=\"148\"\u003E\n  \u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003EPenalty\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n  \u003Ctd style=\"border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.05in;\" valign=\"top\" width=\"148\"\u003E\n  \u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003EFrequency\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n \u003C\/tr\u003E\n\u003Ctr style=\"mso-yfti-irow: 1;\"\u003E\n  \u003Ctd style=\"border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.05in;\" valign=\"top\" width=\"148\"\u003E\n  \u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003EWeigh\n  and deliver weight of silver\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n  \u003Ctd style=\"border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.05in;\" valign=\"top\" width=\"148\"\u003E\n  \u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003E19\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n \u003C\/tr\u003E\n\u003Ctr style=\"mso-yfti-irow: 2;\"\u003E\n  \u003Ctd style=\"border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.05in;\" valign=\"top\" width=\"148\"\u003E\n  \u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003EDeath\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n  \u003Ctd style=\"border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.05in;\" valign=\"top\" width=\"148\"\u003E\n  \u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003E4\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n \u003C\/tr\u003E\n\u003Ctr style=\"mso-yfti-irow: 3;\"\u003E\n  \u003Ctd style=\"border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.05in;\" valign=\"top\" width=\"148\"\u003E\n  \u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003EDefining\n  state of slavery \u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n  \u003Ctd style=\"border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.05in;\" valign=\"top\" width=\"148\"\u003E\n  \u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003E2\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n \u003C\/tr\u003E\n\u003Ctr style=\"mso-yfti-irow: 4;\"\u003E\n  \u003Ctd style=\"border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.05in;\" valign=\"top\" width=\"148\"\u003E\n  \u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003EReturn\n  of same or similar (measure and deliver volume of grain for injury involving\n  grain)\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n  \u003Ctd style=\"border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.05in;\" valign=\"top\" width=\"148\"\u003E\n  \u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003E2\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n \u003C\/tr\u003E\n\u003Ctr style=\"mso-yfti-irow: 5;\"\u003E\n  \u003Ctd style=\"border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.05in;\" valign=\"top\" width=\"148\"\u003E\n  \u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003EVariable\n  damages\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n  \u003Ctd style=\"border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.05in;\" valign=\"top\" width=\"148\"\u003E\n  \u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003E2\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n \u003C\/tr\u003E\n\u003Ctr style=\"mso-yfti-irow: 6;\"\u003E\n  \u003Ctd style=\"border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.05in;\" valign=\"top\" width=\"148\"\u003E\n  \u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003EMisc.\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n  \u003Ctd style=\"border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.05in;\" valign=\"top\" width=\"148\"\u003E\n  \u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003E2\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n \u003C\/tr\u003E\n\u003Ctr style=\"mso-yfti-irow: 7; mso-yfti-lastrow: yes;\"\u003E\n  \u003Ctd style=\"border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.05in;\" valign=\"top\" width=\"148\"\u003E\n  \u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003EUnknown\n  or no compensation\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n  \u003Ctd style=\"border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.05in;\" valign=\"top\" width=\"148\"\u003E\n  \u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003E6\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n \u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cbr \/\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003E\u0026nbsp;\n\n\n\n\n\n\n\n\n\n\n\n\n\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E\u003Cspan style=\"font-size: 12.5pt;\"\u003EFrequency of penalties in the “Code” of\nUr-Namma [1]\u003C\/span\u003E\u003C\/i\u003E\u003C\/span\u003E\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n--\u003E\u003C\/style\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Ch3\u003E\n\u0026nbsp;\u003Cstyle\u003E\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n--\u003C\/style\u003E\u003Cb style=\"mso-bidi-font-weight: normal;\"\u003E\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003EAn Indo-European example: the Old\nHittite laws\u003C\/span\u003E\u003C\/b\u003E\u003C\/h3\u003E\n\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n--\u003E\n\u003C\/style\u003E\n\n\n\n\n\n\n\u003Cbr \/\u003E\n\u003Ctable border=\"1\" cellpadding=\"0\" cellspacing=\"0\" class=\"MsoTableGrid\" style=\"border-collapse: collapse; border: none; mso-border-alt: solid windowtext .5pt; mso-padding-alt: 0in 5.4pt 0in 5.4pt; mso-yfti-tbllook: 1184;\"\u003E\n \u003Ctbody\u003E\n\u003Ctr style=\"mso-yfti-firstrow: yes; mso-yfti-irow: 0;\"\u003E\n  \u003Ctd style=\"border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.05in;\" valign=\"top\" width=\"148\"\u003E\n  \u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003EPenalty\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n  \u003Ctd style=\"border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.05in;\" valign=\"top\" width=\"148\"\u003E\n  \u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003EFrequency\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n \u003C\/tr\u003E\n\u003Ctr style=\"mso-yfti-irow: 1;\"\u003E\n  \u003Ctd style=\"border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.05in;\" valign=\"top\" width=\"148\"\u003E\n  \u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003EWeight\n  of silver\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n  \u003Ctd style=\"border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.05in;\" valign=\"top\" width=\"148\"\u003E\n  \u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003E71\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n \u003C\/tr\u003E\n\u003Ctr style=\"mso-yfti-irow: 2;\"\u003E\n  \u003Ctd style=\"border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.05in;\" valign=\"top\" width=\"148\"\u003E\n  \u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003ENumber\n  of slaves\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n  \u003Ctd style=\"border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.05in;\" valign=\"top\" width=\"148\"\u003E\n  \u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003E10\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n \u003C\/tr\u003E\n\u003Ctr style=\"mso-yfti-irow: 3;\"\u003E\n  \u003Ctd style=\"border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.05in;\" valign=\"top\" width=\"148\"\u003E\n  \u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003EEnslavement\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n  \u003Ctd style=\"border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.05in;\" valign=\"top\" width=\"148\"\u003E\n  \u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003E4\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n \u003C\/tr\u003E\n\u003Ctr style=\"mso-yfti-irow: 4;\"\u003E\n  \u003Ctd style=\"border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.05in;\" valign=\"top\" width=\"148\"\u003E\n  \u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003EDeath\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n  \u003Ctd style=\"border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.05in;\" valign=\"top\" width=\"148\"\u003E\n  \u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003E11\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n \u003C\/tr\u003E\n\u003Ctr style=\"mso-yfti-irow: 5;\"\u003E\n  \u003Ctd style=\"border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.05in;\" valign=\"top\" width=\"148\"\u003E\n  \u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003EVolume\n  of barley\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n  \u003Ctd style=\"border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.05in;\" valign=\"top\" width=\"148\"\u003E\n  \u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003E6\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n \u003C\/tr\u003E\n\u003Ctr style=\"mso-yfti-irow: 6;\"\u003E\n  \u003Ctd style=\"border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.05in;\" valign=\"top\" width=\"148\"\u003E\n  \u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003EReturn\n  objects in same or similar form as item(s) found or stolen\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n  \u003Ctd style=\"border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.05in;\" valign=\"top\" width=\"148\"\u003E\n  \u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003E40\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n \u003C\/tr\u003E\n\u003Ctr style=\"mso-yfti-irow: 7;\"\u003E\n  \u003Ctd style=\"border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.05in;\" valign=\"top\" width=\"148\"\u003E\n  \u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003EStorable\n  food (sheep, bread, and beer)\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n  \u003Ctd style=\"border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.05in;\" valign=\"top\" width=\"148\"\u003E\n  \u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003E3\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n \u003C\/tr\u003E\n\u003Ctr style=\"mso-yfti-irow: 8;\"\u003E\n  \u003Ctd style=\"border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.05in;\" valign=\"top\" width=\"148\"\u003E\n  \u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003ESheep\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n  \u003Ctd style=\"border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.05in;\" valign=\"top\" width=\"148\"\u003E\n  \u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003E7\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n \u003C\/tr\u003E\n\u003Ctr style=\"mso-yfti-irow: 9;\"\u003E\n  \u003Ctd style=\"border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.05in;\" valign=\"top\" width=\"148\"\u003E\n  \u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003ELand\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n  \u003Ctd style=\"border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.05in;\" valign=\"top\" width=\"148\"\u003E\n  \u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003E4\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n \u003C\/tr\u003E\n\u003Ctr style=\"mso-yfti-irow: 10;\"\u003E\n  \u003Ctd style=\"border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.05in;\" valign=\"top\" width=\"148\"\u003E\n  \u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003EEstate\n  division (land, slaves, livestock)\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n  \u003Ctd style=\"border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.05in;\" valign=\"top\" width=\"148\"\u003E\n  \u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003E5\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n \u003C\/tr\u003E\n\u003Ctr style=\"mso-yfti-irow: 11;\"\u003E\n  \u003Ctd style=\"border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.05in;\" valign=\"top\" width=\"148\"\u003E\n  \u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003EVariable\n  damages\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n  \u003Ctd style=\"border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.05in;\" valign=\"top\" width=\"148\"\u003E\n  \u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003E10\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n \u003C\/tr\u003E\n\u003Ctr style=\"mso-yfti-irow: 12;\"\u003E\n  \u003Ctd style=\"border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.05in;\" valign=\"top\" width=\"148\"\u003E\n  \u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003EMisc.\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n  \u003Ctd style=\"border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.05in;\" valign=\"top\" width=\"148\"\u003E\n  \u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003E7\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n \u003C\/tr\u003E\n\u003Ctr style=\"mso-yfti-irow: 13; mso-yfti-lastrow: yes;\"\u003E\n  \u003Ctd style=\"border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.05in;\" valign=\"top\" width=\"148\"\u003E\n  \u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003EUnknown\n  or no compensation\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n  \u003Ctd style=\"border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.05in;\" valign=\"top\" width=\"148\"\u003E\n  \u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003E18\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n \u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cbr \/\u003E\n\n\n\n\n\n\n\n\n\n\n\n\n\n\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n--\u003E\n\u003C\/style\u003E\n\n\n\n\n\n\n\u003Cbr \/\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003E\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E\u003Cspan style=\"font-size: 12.5pt;\"\u003EFrequency of penalties in the Old\nHittite Laws (c. 1650-1500 BC: still over 800 years before the invention of\ncoinage) [2]\u003C\/span\u003E\u003C\/i\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cbr \/\u003E\n\n\n\n\n\n\n\n\n\n\n\n\n\n\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n--\u003E\n\u003C\/style\u003E\n\n\n\n\n\n\n\u003Cbr \/\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cb style=\"mso-bidi-font-weight: normal;\"\u003E\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003EThe ubiquity and deep age of compensation culture \u003C\/span\u003E\u003C\/b\u003E\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003E[3]\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cspan style=\"font-family: Arial,Helvetica,sans-serif;\"\u003E\n\n\u003C\/span\u003E\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003E\u003Cspan style=\"font-size: 12.5pt;\"\u003EInstitutions of\nblood money and compensation via standard forms of wealth for other injuries have\nbeen observed and recorded by missionaries, traders, and ethnologists in every\nbranch of humans, including all major divisions of humans that left Africa as\nwell as many who stayed. It is possible that this ubiquitous geographical scope\nreflects a shared cultural influence that is more recent than our shared\nancestry in Africa (c. 70,000 BC) but prior to Columbus and Magellan. More\nlikely, it reflects a common cultural and genetic heritage dating back to at\nleast 70,000 BC before the exit of the ancestors of today’s Austronesian and\nEurasian peoples from Africa. This is also suggested by the deep age and\ncontinuity of the shell bead tradition detailed \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2016\/07\/artifacts-of-wealth-patterns-in_15.html\" target=\"_blank\"\u003Ehere\u003C\/a\u003E.\nShell beads were the predominant form of compensation money in cultures that\nmigrated out of the African and Eurasian core before the dawn of livestock\nagriculture and metallurgy, to such diverse places as Melanesia and the\nAmericas. These patterns will be laid out in detail, from descriptions derived from traveler, missionary, and ethnographic literature, in future post(s).\u003C\/span\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cbr \/\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjx75SG21VLajRT2o59NynUqynYSo8leSTbddHz06ylzaCqXkwgD4N2iPaEvLhbIOn9G_DM_BcSDz0KKSKf2kztOYIV5X5XmlM-oXXQqHZT_wP17kVbgc1VymJ0z5UdinS0suPa\/s1600\/LawAndMoney2.png\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"228\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjx75SG21VLajRT2o59NynUqynYSo8leSTbddHz06ylzaCqXkwgD4N2iPaEvLhbIOn9G_DM_BcSDz0KKSKf2kztOYIV5X5XmlM-oXXQqHZT_wP17kVbgc1VymJ0z5UdinS0suPa\/s320\/LawAndMoney2.png\" width=\"320\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\n\n\n\n\n\n\n\n\n\n\n\n\n\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n--\u003E\n\u003C\/style\u003E\n\n\n\n\n\n\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E\u003Cspan style=\"mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003E‘Shell-money\n\"Bakhia\", Solomon Islands, used as \"blood money\"’ [\u003Ca href=\"http:\/\/numisarchives.blogspot.com\/search\/label\/Blood%20money\" target=\"_blank\"\u003ELink\u003C\/a\u003E]\u003C\/span\u003E\u003C\/i\u003E\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\n\n\n\n\n\n\n\n\n\n\n\n\n\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n--\u003E\n\u003C\/style\u003E\n\n\n\n\n\n\n\u003Cbr \/\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cb style=\"mso-bidi-font-weight: normal;\"\u003E\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003ECustomary prices\u003C\/span\u003E\u003C\/b\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003EPrior to the rise of efficient competitive markets, prices for goods\nwere often specified by custom or law rather than negotiated. This served to\nconserve transaction costs in a high transaction cost culture where exchange\nrelationships \u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp;\u0026nbsp;\u003C\/span\u003Eresembled bilateral monopolies\nmore closely than they resembled spot markets.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp;\n\u003C\/span\u003EBargaining costs were high, and indeed bargaining failure often resulted\nin violence and destruction rather than merely in no deal. This made focal\npoints of negotiation, such as customary prices and customary compensation\namounts for specific injuries, a quite valuable and ubiquitous part of most\nNeolithic and earlier cultures.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EWhen\nspecified by law, these rules setting prices were often intermingled with laws\nspecifying legal penalties and used the same set of units: in the Mesopotamian\nand Anatolian law codes prior to coinage, most commonly weights of silver and\nvolumes of barley.\u003C\/span\u003E\u003C\/div\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003E\n\n\u003C\/span\u003E\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Ctable border=\"1\" cellpadding=\"0\" cellspacing=\"0\" class=\"MsoTableGrid\" style=\"border-collapse: collapse; border: none; mso-border-alt: solid windowtext .5pt; mso-padding-alt: 0in 5.4pt 0in 5.4pt; mso-yfti-tbllook: 1184;\"\u003E\n \u003Ctbody\u003E\n\u003Ctr style=\"mso-yfti-firstrow: yes; mso-yfti-irow: 0;\"\u003E\n  \u003Ctd style=\"border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.05in;\" valign=\"top\" width=\"148\"\u003E\n  \u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003EPrice\n  unit\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n  \u003Ctd style=\"border-left: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.05in;\" valign=\"top\" width=\"148\"\u003E\n  \u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003EFrequency\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n \u003C\/tr\u003E\n\u003Ctr style=\"mso-yfti-irow: 1;\"\u003E\n  \u003Ctd style=\"border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.05in;\" valign=\"top\" width=\"148\"\u003E\n  \u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003EWeight\n  of silver\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n  \u003Ctd style=\"border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.05in;\" valign=\"top\" width=\"148\"\u003E\n  \u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003E68\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n \u003C\/tr\u003E\n\u003Ctr style=\"mso-yfti-irow: 2;\"\u003E\n  \u003Ctd style=\"border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.05in;\" valign=\"top\" width=\"148\"\u003E\n  \u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003EVolume\n  of barley\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n  \u003Ctd style=\"border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.05in;\" valign=\"top\" width=\"148\"\u003E\n  \u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003E6\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n \u003C\/tr\u003E\n\u003Ctr style=\"mso-yfti-irow: 3;\"\u003E\n  \u003Ctd style=\"border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.05in;\" valign=\"top\" width=\"148\"\u003E\n  \u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003ENumber\n  of sheep\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n  \u003Ctd style=\"border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.05in;\" valign=\"top\" width=\"148\"\u003E\n  \u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003E7\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n \u003C\/tr\u003E\n\u003Ctr style=\"mso-yfti-irow: 4;\"\u003E\n  \u003Ctd style=\"border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.05in;\" valign=\"top\" width=\"148\"\u003E\n  \u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003ELabor\n  or military service appurtenant to land\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n  \u003Ctd style=\"border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.05in;\" valign=\"top\" width=\"148\"\u003E\n  \u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003E11\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n \u003C\/tr\u003E\n\u003Ctr style=\"mso-yfti-irow: 5; mso-yfti-lastrow: yes;\"\u003E\n  \u003Ctd style=\"border-top: none; border: solid windowtext 1.0pt; mso-border-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.05in;\" valign=\"top\" width=\"148\"\u003E\n  \u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003EOther\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n  \u003Ctd style=\"border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 2.05in;\" valign=\"top\" width=\"148\"\u003E\n  \u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003E1\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\n \u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003E\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E\u003Cspan style=\"font-size: 12.5pt;\"\u003EFrequency of legally specified prices\nand rents in the Old Hittite Laws [2]\u003C\/span\u003E\u003C\/i\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003EOne can also think blood-money-type fixed damages (compensation) and\nfines as customary prices for injuries. As with customary prices for goods,\ncustomary prices for injuries conserved on the transaction costs of bilateral\nmonopoly negotiations, in this case negotiations to settle legal disputes. Today\nthis is solved, to the extent it is, by each side predicting what damages or\npunishments they expect a court to assess, and negotiating accordingly.\u003C\/span\u003E\u003C\/div\u003E\n\u003Cbr \/\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiNZmZVEcUMVnJLuGQ2HHEhy5TQQHFWa8HzkWoFKpsgcjHWobUTP9FSQ5u-23KvsknolvbXx-_VzUF4aE2psKLrZ2Xi1veMxY_r-BSnyTnf1zkr-xx6-0J8DJDC_21F83wt4c6-\/s1600\/LawAndMoney3.png\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"239\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiNZmZVEcUMVnJLuGQ2HHEhy5TQQHFWa8HzkWoFKpsgcjHWobUTP9FSQ5u-23KvsknolvbXx-_VzUF4aE2psKLrZ2Xi1veMxY_r-BSnyTnf1zkr-xx6-0J8DJDC_21F83wt4c6-\/s320\/LawAndMoney3.png\" width=\"320\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\n\n\n\n\n\n\n\n\n\n\n\n\n\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:Times;\n panose-1:2 0 5 0 0 0 0 0 0 0;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:3 0 0 0 1 0;}\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\na:link, span.MsoHyperlink\n {mso-style-priority:99;\n color:blue;\n mso-themecolor:hyperlink;\n text-decoration:underline;\n text-underline:single;}\na:visited, span.MsoHyperlinkFollowed\n {mso-style-noshow:yes;\n mso-style-priority:99;\n color:purple;\n mso-themecolor:followedhyperlink;\n text-decoration:underline;\n text-underline:single;}\np\n {mso-style-priority:99;\n mso-margin-top-alt:auto;\n margin-right:0in;\n mso-margin-bottom-alt:auto;\n margin-left:0in;\n mso-pagination:widow-orphan;\n font-size:10.0pt;\n font-family:Times;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-bidi-font-family:\"Times New Roman\";}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n--\u003E\n\u003C\/style\u003E\n\n\n\n\n\n\n\u003Cdiv style=\"margin-bottom: .0001pt; margin: 0in;\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv style=\"margin-bottom: .0001pt; margin: 0in;\"\u003E\n\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E\u003Cspan style=\"color: black; font-family: Cambria; font-size: 12.0pt; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-bidi-theme-font: minor-bidi; mso-font-kerning: 12.0pt; mso-themecolor: text1;\"\u003ECopper spirals and gold discs, 4th millenium BC, Austria. Spiral armbands were among the earliest items worked from native copper,\nin what are now Serbia and Hungary, c. 5000-4500 BC. [\u003Ca href=\"http:\/\/www.digplanet.com\/wiki\/Stollhof_Hoard\" target=\"_blank\"\u003ELink\u003C\/a\u003E]\u003C\/span\u003E\u003C\/i\u003E\u003C\/div\u003E\n\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Ch3\u003E\n\u0026nbsp;\n\n\n\n\n\n\n\n\n\n\n\n\n\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n--\u003E\n\u003C\/style\u003E\n\n\n\n\n\n\n\u003C\/h3\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cb style=\"mso-bidi-font-weight: normal;\"\u003E\u003Cspan style=\"font-family: Helvetica; mso-bidi-font-family: Helvetica;\"\u003EEstimating\ndeterrence and fairness: eye-for-eye vs. measured punishments\u003C\/span\u003E\u003C\/b\u003E\u003C\/div\u003E\n\u003Cbr \/\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\n\n\n\n\n\n\n\n\n\n\n\n\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:\"Courier New\";\n panose-1:2 7 3 9 2 2 5 2 4 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536859905 -1073711037 9 0 511 0;}\n@font-face\n {font-family:Wingdings;\n panose-1:5 0 0 0 0 0 0 0 0 0;\n mso-font-charset:2;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:0 268435456 0 0 -2147483648 0;}\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\np.MsoListParagraph, li.MsoListParagraph, div.MsoListParagraph\n {mso-style-priority:34;\n mso-style-unhide:no;\n mso-style-qformat:yes;\n margin-top:0in;\n margin-right:0in;\n margin-bottom:0in;\n margin-left:.5in;\n margin-bottom:.0001pt;\n mso-add-space:auto;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\np.MsoListParagraphCxSpFirst, li.MsoListParagraphCxSpFirst, div.MsoListParagraphCxSpFirst\n {mso-style-priority:34;\n mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-type:export-only;\n margin-top:0in;\n margin-right:0in;\n margin-bottom:0in;\n margin-left:.5in;\n margin-bottom:.0001pt;\n mso-add-space:auto;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\np.MsoListParagraphCxSpMiddle, li.MsoListParagraphCxSpMiddle, div.MsoListParagraphCxSpMiddle\n {mso-style-priority:34;\n mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-type:export-only;\n margin-top:0in;\n margin-right:0in;\n margin-bottom:0in;\n margin-left:.5in;\n margin-bottom:.0001pt;\n mso-add-space:auto;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\np.MsoListParagraphCxSpLast, li.MsoListParagraphCxSpLast, div.MsoListParagraphCxSpLast\n {mso-style-priority:34;\n mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-type:export-only;\n margin-top:0in;\n margin-right:0in;\n margin-bottom:0in;\n margin-left:.5in;\n margin-bottom:.0001pt;\n mso-add-space:auto;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n \/* List Definitions *\/\n@list l0\n {mso-list-id:302582406;\n mso-list-type:hybrid;\n mso-list-template-ids:-625307476 -2144466160 67698691 67698693 67698689 67698691 67698693 67698689 67698691 67698693;}\n@list l0:level1\n {mso-level-start-at:14;\n mso-level-number-format:bullet;\n mso-level-text:;\n mso-level-tab-stop:none;\n mso-level-number-position:left;\n text-indent:-.25in;\n font-family:Symbol;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-bidi-font-family:Helvetica;}\n@list l0:level2\n {mso-level-number-format:bullet;\n mso-level-text:o;\n mso-level-tab-stop:none;\n mso-level-number-position:left;\n text-indent:-.25in;\n font-family:\"Courier New\";\n mso-bidi-font-family:\"Times New Roman\";}\n@list l0:level3\n {mso-level-number-format:bullet;\n mso-level-text:;\n mso-level-tab-stop:none;\n mso-level-number-position:left;\n text-indent:-.25in;\n font-family:Wingdings;}\n@list l0:level4\n {mso-level-number-format:bullet;\n mso-level-text:;\n mso-level-tab-stop:none;\n mso-level-number-position:left;\n text-indent:-.25in;\n font-family:Symbol;}\n@list l0:level5\n {mso-level-number-format:bullet;\n mso-level-text:o;\n mso-level-tab-stop:none;\n mso-level-number-position:left;\n text-indent:-.25in;\n font-family:\"Courier New\";\n mso-bidi-font-family:\"Times New Roman\";}\n@list l0:level6\n {mso-level-number-format:bullet;\n mso-level-text:;\n mso-level-tab-stop:none;\n mso-level-number-position:left;\n text-indent:-.25in;\n font-family:Wingdings;}\n@list l0:level7\n {mso-level-number-format:bullet;\n mso-level-text:;\n mso-level-tab-stop:none;\n mso-level-number-position:left;\n text-indent:-.25in;\n font-family:Symbol;}\n@list l0:level8\n {mso-level-number-format:bullet;\n mso-level-text:o;\n mso-level-tab-stop:none;\n mso-level-number-position:left;\n text-indent:-.25in;\n font-family:\"Courier New\";\n mso-bidi-font-family:\"Times New Roman\";}\n@list l0:level9\n {mso-level-number-format:bullet;\n mso-level-text:;\n mso-level-tab-stop:none;\n mso-level-number-position:left;\n text-indent:-.25in;\n font-family:Wingdings;}\nol\n {margin-bottom:0in;}\nul\n {margin-bottom:0in;}\n-\u003C\/style\u003E\u003Cspan style=\"font-family: inherit;\"\u003EAs kings and chiefs gained power, fines paid to them for criminal\nacts replaced compensation to victims. In some cases a separate set of laws\n(for example \u003Ca href=\"https:\/\/en.wikipedia.org\/wiki\/Tort\" target=\"_blank\"\u003Etort\u003C\/a\u003E laws) arose alongside the criminal law, or was\nevolved from the previous compensation culture, maintaining some compensation\nfor victims. Subsequently law usually evolved away from monetary compensation and towards punishments for deterrence.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EA chief\nconcern of criminal law became estimation of deterrence value. The king had\nincentives to perform punishments both as a public good and a public show. To\nallow themselves and their public to assess the deterrence value of punishments,\nthere were two major strategies:\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003E\n\n\u003C\/span\u003E\u003Cdiv class=\"MsoListParagraphCxSpFirst\" style=\"mso-layout-grid-align: none; mso-list: l0 level1 lfo1; mso-pagination: none; text-autospace: none; text-indent: -.25in;\"\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003E\u003Cspan style=\"mso-list: Ignore;\"\u003E·\u003Cspan style=\"font-feature-settings: normal; font-kerning: auto; font-language-override: normal; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-synthesis: weight style; font-variant: normal; font-weight: normal; line-height: normal;\"\u003E\u0026nbsp;\u0026nbsp;\u0026nbsp;\u0026nbsp;\u0026nbsp;\n\u003C\/span\u003E\u003C\/span\u003E“Eye for an eye”-type laws, which focus on comparing the punishment\nto the crime’s injury (often similar to the injury to maximize perceived\nfairness, but sometimes also more severe than the injury for extra deterrence\nvalue). In some of the non-silver compensation rules in the Mesopotamian and\nHittite law codes described above, barley, slaves, or other goods are\nsubstituted for silver because in order to correspond to an injury involving\nbarley, slaves, etc.: like for like.\u003C\/span\u003E\u003C\/div\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003E\n\n\u003C\/span\u003E\u003Cdiv class=\"MsoListParagraphCxSpMiddle\" style=\"mso-layout-grid-align: none; mso-list: l0 level1 lfo1; mso-pagination: none; text-autospace: none; text-indent: -.25in;\"\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003E\u003Cspan style=\"mso-list: Ignore;\"\u003E·\u003Cspan style=\"font-feature-settings: normal; font-kerning: auto; font-language-override: normal; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-synthesis: weight style; font-variant: normal; font-weight: normal; line-height: normal;\"\u003E\u0026nbsp;\u0026nbsp;\u0026nbsp;\u0026nbsp;\u0026nbsp;\n\u003C\/span\u003E\u003C\/span\u003EMeasured punishments, which, like monetary compensation for injury,\nallow the severity of different crimes to be compared and ranked, for example\u003C\/span\u003E\u003C\/div\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003E\n\n\u003C\/span\u003E\u003Cdiv class=\"MsoListParagraphCxSpMiddle\" style=\"margin-left: 1.0in; mso-add-space: auto; mso-layout-grid-align: none; mso-list: l0 level2 lfo1; mso-pagination: none; text-autospace: none; text-indent: -.25in;\"\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003E\u003Cspan style=\"mso-list: Ignore;\"\u003Eo\u003Cspan style=\"font-feature-settings: normal; font-kerning: auto; font-language-override: normal; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-synthesis: weight style; font-variant: normal; font-weight: normal; line-height: normal;\"\u003E\u0026nbsp;\u0026nbsp; \u003C\/span\u003E\u003C\/span\u003EWhipping (number\nof lashes)\u003C\/span\u003E\u003C\/div\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003E\n\n\u003C\/span\u003E\u003Cdiv class=\"MsoListParagraphCxSpLast\" style=\"margin-left: 1.0in; mso-add-space: auto; mso-layout-grid-align: none; mso-list: l0 level2 lfo1; mso-pagination: none; text-autospace: none; text-indent: -.25in;\"\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003E\u003Cspan style=\"mso-list: Ignore;\"\u003Eo\u003Cspan style=\"font-feature-settings: normal; font-kerning: auto; font-language-override: normal; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-synthesis: weight style; font-variant: normal; font-weight: normal; line-height: normal;\"\u003E\u0026nbsp;\u0026nbsp; \u003C\/span\u003E\u003C\/span\u003EPrison sentences\n(length of time), our dominant modern form of criminal punishment\u003C\/span\u003E\u003C\/div\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003E\n\n\u003C\/span\u003E\u003Cdiv class=\"MsoNormal\" style=\"mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003E\n\n\u003C\/span\u003E\u003Cdiv class=\"MsoNormal\" style=\"mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003EAs suggested above (and for reasons to be explicated in future\nposts), compensation according to a standard amount of a standard wealth good\n(pre-coinage money), the outcome of coercive negotiations between clans, was\nvery likely the dominant form of measured punishment during the vast majority\nof the time and in the vast majority of cultures from the dawn of our species\nto today.\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEijPwNEyGSH4R0N9bAtej5UwpoHmLeTFzAUI44sf-1JX8tqirIU1i0oU-AiWyMNvcCw0LfvT0srYszzmwarxEA7BjnSXjscmssKy3ITeW-1b7iyIroO3pR4ZiIWoHySLsYlvi4r\/s1600\/LawAndMoney4.png\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"319\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEijPwNEyGSH4R0N9bAtej5UwpoHmLeTFzAUI44sf-1JX8tqirIU1i0oU-AiWyMNvcCw0LfvT0srYszzmwarxEA7BjnSXjscmssKy3ITeW-1b7iyIroO3pR4ZiIWoHySLsYlvi4r\/s320\/LawAndMoney4.png\" width=\"320\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\n\n\n\n\n\n\n\n\n\n\n\n\n\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n--\u003E\n\u003C\/style\u003E\n\n\n\n\n\n\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E\u003Cspan style=\"mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003EIn\nNorthern Europe, blood money and other compensation for injury was known as\n“wergeld”.\u0026nbsp; If the guilty party didn't have the money on hand, they needed a money-lender.\u003C\/span\u003E\u003C\/i\u003E\u003Cb style=\"mso-bidi-font-weight: normal;\"\u003E\u003Cspan style=\"font-family: Helvetica; font-size: 12.5pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003E\u003C\/span\u003E\u003C\/b\u003E\u003C\/div\u003E\n\u0026nbsp;\u003C\/td\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u0026nbsp;\u003C\/td\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u0026nbsp;\u003C\/td\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u0026nbsp;\u003C\/td\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u0026nbsp;\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\n\n\n\n\n\n\n\n\n\n\n\n\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n--\u003E\n\u003C\/style\u003E\n\n\n\n\n\n\n\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cb style=\"mso-bidi-font-weight: normal;\"\u003E\u003Cspan style=\"font-family: Helvetica; mso-bidi-font-family: Helvetica;\"\u003EMarkets and the rise of variable damages\u003C\/span\u003E\u003C\/b\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003EThere was very little change between the Old Hittite Laws of (c.\n1600 BC) and the New Hittite Laws (c. 1200 BC).\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp;\n\u003C\/span\u003EBut between then and the Roman Twelve Tables (c. 400BC) there was a\nradical shift away from fixed fees and towards variable damages, assessed by\njudge or jury. This evolution was coincident with the rise of coinage, probably\ndue to the shift of trade in a wide variety of goods away from bilateral and\nhierarchical relationships and towards competitive marketplaces. Market deals were\nfacilitated by being able to transfer metal in branded form (coins) instead of\nthe cutting and weighing of coils or hack-silver or the laborious counting of\nshells (or error-prone approximations by length) which had dominated exchange\nup to that time. The lowering of negotiation costs by marketplaces, coins, and\nother developments substantially decreased the use of customary prices in favor\nof prices negotiated in a market.\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\nTo be continued!\u003C\/div\u003E\n"},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/3187954982573654628\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/3187954982573654628","title":"2 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/3187954982573654628"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/3187954982573654628"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2016\/12\/weigh-and-deliver-compensation-and.html","title":"Weigh and deliver: compensation and the evolution of law and money"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"media$thumbnail":{"xmlns$media":"http://search.yahoo.com/mrss/","url":"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiy18DM-hswIlwjMdjyAgB4kF2Vy0i5qluSROx1008kGRBsjlww7uxWNg_gntlQjcKWzHRstnIlIY2HDlVxU4ZxjHTX4zZrlbON8v66X9dzj1rj7mdkqmsAMr-vCuK472rPkEfz\/s72-c\/LawAndMoney1.png","height":"72","width":"72"},"thr$total":{"$t":"2"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-8042025871427528983"},"published":{"$t":"2016-07-31T00:04:00.004-07:00"},"updated":{"$t":"2016-07-31T07:21:59.165-07:00"},"title":{"type":"text","$t":"Artifacts of wealth: patterns in the evolution of collectibles and money"},"content":{"type":"html","$t":"\u003Ch3\u003E\nIntroduction\u003C\/h3\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\nThis is the first of at least two posts on the evolution of\ncollectibles and money.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EThe goal is to\nexplore the evolutionary and economic functions of the “ornamental” or\n“ceremonial” objects that are so common in the archaeological record. In this\narticle, we will look broadly and visually at the patterns of evolution of\nartifacts, in terms of their material and visual characteristics, of the most common kinds of collectibles -- those\nobjects that look to our modern eyes like jewelry.\u003C\/div\u003E\n\u003Cbr \/\u003E\n\u003Ctable cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"float: left; margin-right: 1em; text-align: left;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhAYkX7ypp5IPZKQnlyjcSxLWconpiZSca9TNZ29HdMva-aq7WC4N0y3PEtpf3KPFcYqXTrlkJG1PRkfbWctjCgdzqYNjTlNCpI3Xko2Zgw977HhB9cCzVJUQW2lR0_Ec96A9hN\/s1600\/Collectibles1.png\" imageanchor=\"1\" style=\"clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"298\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhAYkX7ypp5IPZKQnlyjcSxLWconpiZSca9TNZ29HdMva-aq7WC4N0y3PEtpf3KPFcYqXTrlkJG1PRkfbWctjCgdzqYNjTlNCpI3Xko2Zgw977HhB9cCzVJUQW2lR0_Ec96A9hN\/s400\/Collectibles1.png\" width=\"400\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u0026nbsp;\u003Cstyle\u003E\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:Times;\n panose-1:2 0 5 0 0 0 0 0 0 0;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:3 0 0 0 1 0;}\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\np\n {mso-style-priority:99;\n mso-margin-top-alt:auto;\n margin-right:0in;\n mso-margin-bottom-alt:auto;\n margin-left:0in;\n mso-pagination:widow-orphan;\n font-size:10.0pt;\n font-family:Times;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-bidi-font-family:\"Times New Roman\";}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n\u003C\/style\u003E\n\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cbr \/\u003E\n\u003Cdiv style=\"margin: 0in 0in 0.0001pt;\"\u003E\n\u003Cspan style=\"font-size: x-small;\"\u003E\u003Ci\u003E\u003Cspan style=\"color: black; font-family: \u0026quot;cambria\u0026quot;;\"\u003E‘Tomb Nr 7 from Yao Shan showing Jade implements\nand their position on or near the body. This display in the Museum gives a good\noverview of the multiple Jade pieces and shapes following the deceased Liangzhu\nNoble into to afterworld.' (Neolithic China, 3000 BC to 2000 BCE)\u003C\/span\u003E\u003C\/i\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cbr \/\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\nThis blog post will lay out a profound puzzle: the\nubiquity and importance of artifacts, often called “ornamental”, “decorative”, “ceremonial”,\nor “ritual”, the evolutionary function of which the anthropological and\narchaeological literature has never successfully explained. We will study the\ncommon instances, and the kinds of artifacts of most general importance across\nhuman cultures and timespans, and the connections between them, rather than\nthrilling to the rare and freakish artistry beloved of collectors, museums, and\nethnographers.\u003C\/div\u003E\n\u003Cbr \/\u003E\n\u003Ctable cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"float: left; margin-right: 1em; text-align: left;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhWbHcrE-p5Oxeo_rWrveIG-O_Yy9nkP2ttHnI1iBk57o6z18E_eQC-q7NrikcI0s5VTCPAXTAAO0Xan3VHgtSQNr_xGYOTQ2y66OzmcpNtP5wIN95cZvxRdbkFcLX_KB_zZszt\/s1600\/Collectibles2.png\" imageanchor=\"1\" style=\"clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"400\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhWbHcrE-p5Oxeo_rWrveIG-O_Yy9nkP2ttHnI1iBk57o6z18E_eQC-q7NrikcI0s5VTCPAXTAAO0Xan3VHgtSQNr_xGYOTQ2y66OzmcpNtP5wIN95cZvxRdbkFcLX_KB_zZszt\/s400\/Collectibles2.png\" width=\"205\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\na:link, span.MsoHyperlink\n {mso-style-priority:99;\n color:blue;\n mso-themecolor:hyperlink;\n text-decoration:underline;\n text-underline:single;}\na:visited, span.MsoHyperlinkFollowed\n {mso-style-noshow:yes;\n mso-style-priority:99;\n color:purple;\n mso-themecolor:followedhyperlink;\n text-decoration:underline;\n text-underline:single;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n\u003C\/style\u003E\n\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cbr \/\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-size: x-small;\"\u003E\u003Ci\u003ESungir (in the Russian plain, c. 200 km east of\nMoscow): burial with mammoth ivory bracelets and thousands of mammoth ivory\nbeads, 25000-17000 BC.\u0026nbsp;\u0026nbsp; This is long\nbefore the Neolithic (early agriculture era; the people represented in these\nburials were mammoth hunters. \u003Ca href=\"http:\/\/archaeology.about.com\/od\/sterms\/g\/sungir.htm\"\u003Ehttp:\/\/archaeology.about.com\/od\/sterms\/g\/sungir.htm\u003C\/a\u003E.\u0026nbsp; Randall White estimates that an individual\nbead took one to two hours of work, and as a result that the grave goods in\nsuch a burial represented nearly 10,000 hours of labor. [7]\u0026nbsp; “\u003C\/i\u003E\u003Ci\u003EEach of the three intact individuals\nwas lavishly decorated with thousands of painstakingly prepared ivory beads\narranged in dozens of strands... The man was adorned with 2,936 beads…” \u003Ca href=\"http:\/\/www.donsmaps.com\/sungaea.html\"\u003Ehttp:\/\/www.donsmaps.com\/sungaea.html\u003C\/a\u003E\u003C\/i\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u0026nbsp;\n\n\n\n\n\n\n\n\n\n\n\n\n\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n\u003C\/style\u003E\n\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\nTo describe my solution to these puzzles, in future posts\nI will elucidate updated versions of the theories laid out\non \u003Ca href=\"http:\/\/nakamotoinstitute.org\/shelling-out\/\" target=\"_blank\"\u003Ethe evolutionary functions of these objects[1].\u003C\/a\u003E\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u003C\/span\u003E\u003Cspan style=\"mso-bidi-font-family: Helvetica;\"\u003E These theories are not\nabout how people in these cultures perceived or thought about their axes and\nshells and their uses, much less about the interpretations and explanations\ngiven in the accounts of travelers and missionaries, and in the ethnographic\nliterature. These varied widely, both in how the natives themselves interpreted\ntheir thoughts and actions and how the various observers who recorded these thoughts\nand actions further interpreted them. Understanding the thoughts and feelings\nof people in such an alien culture is usually extremely difficult at best. Trying\nto get in the heads of people from long-extinct cultures is a futile exercise. Our\naccount will rather be about the evolutionary function of these objects and\ntheir uses, which was typically unconscious, but which we can infer from\narchaeological facts, objective aspects of ethnographic observations, and\ngeneral evolutionary and economic principles appropriately adapted.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EWe talk in short in terms of \u003Ci style=\"mso-bidi-font-style: normal;\"\u003Eultimate \u003C\/i\u003Erather than \u003Ci style=\"mso-bidi-font-style: normal;\"\u003Eproximate \u003C\/i\u003Eexplanations \u003Ca href=\"http:\/\/www.zoo.ox.ac.uk\/group\/west\/pdf\/Scott-Phillips_etal_11.pdf\" target=\"_blank\"\u003E[14]\u003C\/a\u003E: what were\nthe consequences in terms of Darwinian fitness for the non-concrete uses of\ncollectibles?\u003C\/span\u003E\u003C\/div\u003E\n\u003Ch3 class=\"MsoNormal\" style=\"mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"mso-bidi-font-family: Helvetica;\"\u003E\u003Cb\u003EArtifacts as Wealth \u003C\/b\u003E\u003C\/span\u003E\u003C\/h3\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cb style=\"mso-bidi-font-weight: normal;\"\u003E\u003Cspan style=\"font-family: \u0026quot;helvetica\u0026quot;; mso-bidi-font-family: Helvetica;\"\u003E\u003C\/span\u003E\u003C\/b\u003E\u003Cspan style=\"mso-bidi-font-family: Helvetica;\"\u003EThere were a\nwide variety of objects that at one time or another could have served as to a\ngreater or lesser extent as stores and displays of wealth, and to a greater or\nlesser extent media for the satisfaction of obligations and units of account.\n(I will describe what I mean by “media of obligation satisfaction” in future\nposts; for now it is sufficient to say that it is a generalization of the\neconomic idea of “medium of exchange” to include a wide variety of non-exchange\ntransactions that transfer wealth). \u003C\/span\u003E\n\n\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"mso-bidi-font-family: Helvetica;\"\u003EThe\nmanufacture and use of shell beads is more than 100,000 years old, and possibly\ndates to the earliest millennia of \u003Ci style=\"mso-bidi-font-style: normal;\"\u003Ehomo\nsapiens. \u003Cb style=\"mso-bidi-font-weight: normal;\"\u003E\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp;\u003C\/span\u003E\u003C\/b\u003E\u003C\/i\u003EThe use of “ritual” blades and points\nmay be even older, predating our species. The general pattern of artifacts in\ngeneral and collectibles in particular in terms of their abilities to store,\ndisplay, or transfer wealth can be diagrammed as follows:\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"mso-no-proof: yes;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"separator\" style=\"clear: both; text-align: center;\"\u003E\n\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiNgQWyZmf-lnOok1nNwZiyAo8EDsgAbRTjWw7d2ao_CKkfgSSeTno-e_LN5qgtFpR02PtZ9jYed6mOBXqNqBwOUrGyAOtgCv6d2RG0kSiD786SahyphenhyphenaExeT8FZXxdZOZtKB_ZjO\/s1600\/Collectibles3.png\" imageanchor=\"1\" style=\"margin-left: 1em; margin-right: 1em;\"\u003E\u003Cimg border=\"0\" height=\"480\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiNgQWyZmf-lnOok1nNwZiyAo8EDsgAbRTjWw7d2ao_CKkfgSSeTno-e_LN5qgtFpR02PtZ9jYed6mOBXqNqBwOUrGyAOtgCv6d2RG0kSiD786SahyphenhyphenaExeT8FZXxdZOZtKB_ZjO\/s640\/Collectibles3.png\" width=\"640\" \/\u003E\u003C\/a\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u0026nbsp;At the extreme upper left-hand corner is modern money – used\npurely as a medium of exchange and obligation satisfaction, and with high\nvelocity, typically several transactions per month.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EThe predominant such media in a culture also\nusually becomes its of account. At the opposite (southeast) extreme are pure\nstores of value – seldom if ever alienated, they usually change ownership only\nat death.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EAt the northeast extreme are\npure collectibles – a low-velocity (a few to a few dozen transfers per human\nlifetime) medium of obligation satisfaction and exchange, but also a store and\ndisplay of wealth.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EAt the southwest\nextremely are immediate consumables, such as food obtained from foraging in\ncultures that do not preserve or store their food.\n\n\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n“Media for the satisfaction of obligations” is a\ngeneralization of the idea from modern monetary theory that money serves as a media of\nexchange.\u003Cspan style=\"mso-spacerun: yes;\"\u003E The kinds of obligations that might be satisfied over the course of human evolution are far broader and deeper than just exchange, which was probably far from the most important kind of wealth transfer during the Paleolithic. \u003C\/span\u003E“Unit of account” is any\nmeasure or count that people in a society used as a general (across multiples\ngoods and services) \u003Ca href=\"http:\/\/szabo.best.vwh.net\/measuringvalue.html\" target=\"_blank\"\u003Eproxy measure of value\u003C\/a\u003E.\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\nAs for display of wealth, according to the theory of this\nseries this was the main function of ornamentation, and is derivative from the\nfunction of these objects as stores of wealth. In a future post we will discuss\nmore about what is meant by this terminology.\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\nThe correlations between media for the satisfaction of obligations\nand units of account, and between stores and displays of wealth, largely holds\ntrue for Paleolithic and Neolithic times when functions were condensed that are\nnow quite distinct . In more recent times there has been a strong divergence\nbetween stores of wealth and displays of wealth (e.g. stocks and bonds vs.\njewelry).\n\n\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\nMost of the durable artifacts that archaeologists dig up\nfrom the Paleolithic through Bronze Ages, including the early civilizations of\nMesopotamia, lived a mixed life – they were concretely useful objects \u003Cb\u003Eand\u003C\/b\u003E\nlow-velocity media of fitness-benefiting transactions \u003Cb\u003Eand\u003C\/b\u003E stores and\ndisplays of wealth, to varying degrees, but seldom if ever used as just any one\nof these. They \u003Ci style=\"mso-bidi-font-style: normal;\"\u003Econdensed\u003C\/i\u003E multiple\nfunctions that we now consider separate and often unrelated, as discussed\nfurther below.\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\nIt is important to keep in mind two very large selection\nbiases at work in archaeology.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EThe first\nis that apart from some exceptional environments (e.g. peat bogs) that preserve\norganic material, only durable objects survive to be dug up by the\narchaeologist.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EThis means that an\nartifact is more likely to be a collectible than the typical artifact in the\nculture (which quite preponderantly would have been organic materials for\nconcrete use that have not survived). The second selection bias is that nearly\nall collectors and museums, and most archaeologists, are heavily biased towards\ncollecting objects that more resemble unique artworks than they are interested\nin collecting or studying repetitive and boring objects.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EOvercoming this bias can result in\nsubstantial breakthroughs in understanding a culture. For example \u003Ca href=\"https:\/\/szabo.best.vwh.net\/seals.html\" target=\"_blank\"\u003EDenise Schmidt-Besserant\u003C\/a\u003E discovered the origins of writing in Mesopotamia by focusing on repetitive and unartful clay\ntokens that had been ignored by collectors and ther archaeologists. \n\n\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\nIn addition to the two general selection effects above,\nanother selection effect particularly impacts metals.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EThat is that metals, especially precious\nmetals but even baser metals such as copper and bronze, were recycled very\nefficiently. Metallic artifacts we find in archaeological digs are likely to be\nparticularly unrepresentative of the metallic artifacts most commonly used in a\nsociety.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EFor money in particular, unless\nthey were unique artworks of particular attraction to collectors, an earlier form of\nmetallic money has with very high probability been recycled into a later form\nof metallic money, or into some other metal object, the result being that the\nearlier forms are highly underrepresented in the archaeological record.\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n\u003C\/style\u003E\n\u003C\/div\u003E\n\u003Cbr \/\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhgfRbSXEiGnLnYbJ0-xj4gAd-wMRfYwoF-kWjfW7xJWsoJttYidVS7Ih1FQ0D_Sv8YzLldnIql7CLE6fpOldOsjxJs9W2M8K7iFauBW3Hczg3Pb5LqdzkKzo7hVkW5f02LXlsp\/s1600\/Collectibles4.png\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"245\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhgfRbSXEiGnLnYbJ0-xj4gAd-wMRfYwoF-kWjfW7xJWsoJttYidVS7Ih1FQ0D_Sv8YzLldnIql7CLE6fpOldOsjxJs9W2M8K7iFauBW3Hczg3Pb5LqdzkKzo7hVkW5f02LXlsp\/s400\/Collectibles4.png\" width=\"400\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n\u003C\/style\u003E\n\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; \u003Cspan style=\"font-size: x-small;\"\u003E\u003Ci\u003E\u003Cspan style=\"font-family: \u0026quot;cambria\u0026quot;;\"\u003EFrom the Gutenberg 42-line Bible\u003C\/span\u003E\u003C\/i\u003E \u003Ca href=\"https:\/\/www.wdl.org\/en\/item\/4102\/view\/1\/100\/\" target=\"_blank\"\u003E[source].\u003C\/a\u003E\u003C\/span\u003E \n\u003Cbr \/\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cb style=\"mso-bidi-font-weight: normal;\"\u003ESome Basic Patterns\nof Collectibles\u003C\/b\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\nThree of the most important patterns of collectibles that\nhave been discovered in this research are \u003Ci style=\"mso-bidi-font-style: normal;\"\u003Econdensation,\nauthority resemblance, \u003C\/i\u003Eand \u003Ci style=\"mso-bidi-font-style: normal;\"\u003Eunforgeable\ncostliness. \u003C\/i\u003EIn the former two cases these patterns are broadly applicable\nto artifacts in general. Taking these in turn:\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E1. Condensation -- \u003C\/i\u003Egenerally\nspeaking,\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E \u003C\/i\u003Ethe farther back we go in\ntime, the lesser the degree of specialization (division of labor) and thus\ndifferentiation of technology exists. Furthermore, the weight and bulk of\nartifacts per family was much lower in Neolithic society, with its much higher\ntransport costs, than today. In Paleolithic forager societies, which were\ntypically mobile, belongings had to be carried on the person, resulting in a\nstill radically lower weight or volume of goods controlled by a person or clan.\nThis results as we go back in time in \u003Ci style=\"mso-bidi-font-style: normal;\"\u003Econdensation:\u003C\/i\u003E\na given object tends to serve a greater variety of functions: it \u003Ci style=\"mso-bidi-font-style: normal;\"\u003Econdenses \u003C\/i\u003Ethe functions we consider or\ntake for granted today as separate and often unrelated functions.\u003C\/div\u003E\n\u003Cspan style=\"mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003E\u0026nbsp;\u003C\/span\u003E \u003Cbr \/\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003EObtaining fitness benefits by the\nwidest variety of available means within a society with a radically smaller\ndivision of labor and differentiation of technology. Thus institutions usually\ncondensed the functions of religion with business, business with politics and\nwar, law with lore, tort law with criminal law, ceremony with accounting, and\ngang warfare with a substantial body of customary rules. Objects could condense\nthe functions of jewelry with coinage, and concrete utility with media of\nobligation satisfaction and store of value\u003C\/span\u003E\u003Cspan style=\"font-family: \u0026quot;helvetica\u0026quot;; font-size: 12.5pt;\"\u003E.\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\nFrom our point of view functions in earlier periods are\nincreasingly condensed, and in Neolithic times were very highly condensed, and\nin Paleolithic times were radically condensed: a typical object tended to serve\nmany more purposes in the early Paleolithic than in the late Paleolithic, less\nstill in the Neolithic, and less still after the dawn of state-like\nagricultural societies. Contrariwise the general trend of economic development\nover millennia, and between stages of the Paleolithic and Neolithic, is \u003Ci style=\"mso-bidi-font-style: normal;\"\u003Edifferentiation.\u003Cb style=\"mso-bidi-font-weight: normal;\"\u003E\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003E\u003C\/b\u003E\u003C\/i\u003EMissionaries,\ntravellers, and ethnographic observers, as well as their readers, often\ncommitted the \u003Ci style=\"mso-bidi-font-style: normal;\"\u003Efallacy of exclusion\u003Cb style=\"mso-bidi-font-weight: normal;\"\u003E – \u003C\/b\u003E\u003C\/i\u003Econcluding that because an\nobject was used for one thing, that it was not used for another thing in what\nwe consider to be a separate sphere of activity.\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgQ-bIhA0ocwtaV3H4Nb9VZkrr-DnhRg120yIXeZs9ozi-gO2ZAG3T3BEkz_cuh9OXEVt1GtJgFSKNpVtGiQ2f90JfB8_hLE3TnW_MgLKoopuZayOjGakCMLDutgn3AswgIY6Lg\/s1600\/Collectibles5.png\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"247\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgQ-bIhA0ocwtaV3H4Nb9VZkrr-DnhRg120yIXeZs9ozi-gO2ZAG3T3BEkz_cuh9OXEVt1GtJgFSKNpVtGiQ2f90JfB8_hLE3TnW_MgLKoopuZayOjGakCMLDutgn3AswgIY6Lg\/s400\/Collectibles5.png\" width=\"400\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n\u003C\/style\u003E\n\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cdiv style=\"text-align: center;\"\u003E\n\u003Cspan style=\"font-size: x-small;\"\u003E\u003Ci\u003E\u003Cspan style=\"font-family: \u0026quot;cambria\u0026quot;;\"\u003EDetail from the \u003C\/span\u003E\u003C\/i\u003E\u003Cspan style=\"font-family: \u0026quot;cambria\u0026quot;;\"\u003EGiant Bible of Mainz\u003C\/span\u003E\u003Ci\u003E\u003Cspan style=\"font-family: \u0026quot;cambria\u0026quot;;\"\u003E, handwritten in the traditional way around the same time as Gutenberg produced the\nfirst printed Bible. \u003C\/span\u003E\u003C\/i\u003E\u003Ca href=\"http:\/\/www.hrc.utexas.edu\/exhibitions\/permanent\/gutenbergbible\/history\/\" target=\"_blank\"\u003E\u003Cspan style=\"font-family: \u0026quot;cambria\u0026quot;;\"\u003E[source]\u003C\/span\u003E\u003C\/a\u003E\u003C\/span\u003E\n\n\n\n\n\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"text-align: center;\"\u003E\n\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n\u003C\/style\u003E\n\u003C\/div\u003E\n\u003Cdiv style=\"text-align: center;\"\u003E\n\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E2. Authority resemblance\u003C\/i\u003E\n– Initial forms of innovative artifacts, of a kind the value of which was based\nat least in part on their authority, often borrowed authority from what they\nwere replacing by physical resemblance. Mimicry of or semblance to pre-existing\nauthoritative forms in a new medium was and is a very common feature of\ninnovations: examples range from Gutenberg’s printing press mimicking scribal\nscript to the private overnight parcel service Federal Express alluding\nby name and color scheme to the United States Postal Service.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; The ritualistic airstrips, offices, military drills, etc. of \u003C\/span\u003E\u003Ca href=\"https:\/\/en.wikipedia.org\/wiki\/Cargo_cult#Causes.2C_beliefs.2C_and_practices\" target=\"_blank\"\u003E\u003Cu\u003Ecargo cults\u003C\/u\u003E\u003C\/a\u003E were an extreme example of\nauthority resemblance, and it predominates in the design of\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003E\u003Ca href=\"https:\/\/en.wikipedia.org\/wiki\/Flag_of_the_United_States#First_flag\" target=\"_blank\"\u003Enational\u003C\/a\u003E flags and many other symbols (such\nas commercial brands) that invoke reputation or authority. Where not tabooed or\nbanned as counterfeiting or trademark violation, authority resemblance was and\nis a common feature of innovative collectibles, their form invoking a traditional authoratative form while pioneering a new media.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\nThe histories of art and architecture in religion, politics,\nfinance, and business are replete with examples of authority resemblance.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EThe designs of many of the very\nearliest coins, which differ greatly from the standard and presumably optimal form they soon converged on and have retained ever since, highlights what existing objects they were inspired by and suggests a similarity in intended role and function between the novel object and the old object whose form it has taken on. We will see in this and future posts that the earliest coins borrowed their form from shells, beads, and the\nmetal blades of tools.\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiS0QLhr-pNrUEuk1CIJKD48uXxnnOtXBn3d_ix8_wvfAndDNb0iCgWLy48e9b0WgQXZVh4yLIZUYkvImSH8kLqRBwmo9CBnlK0hPvGXyqMESztgKWykwb1dAByIYU3Gyb8S0Qs\/s1600\/Collectibles7.png\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"134\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiS0QLhr-pNrUEuk1CIJKD48uXxnnOtXBn3d_ix8_wvfAndDNb0iCgWLy48e9b0WgQXZVh4yLIZUYkvImSH8kLqRBwmo9CBnlK0hPvGXyqMESztgKWykwb1dAByIYU3Gyb8S0Qs\/s320\/Collectibles7.png\" width=\"320\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u0026nbsp;\u003Cstyle\u003E\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:Times;\n panose-1:2 0 5 0 0 0 0 0 0 0;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:3 0 0 0 1 0;}\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\np\n {mso-style-priority:99;\n mso-margin-top-alt:auto;\n margin-right:0in;\n mso-margin-bottom-alt:auto;\n margin-left:0in;\n mso-pagination:widow-orphan;\n font-size:10.0pt;\n font-family:Times;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-bidi-font-family:\"Times New Roman\";}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n\u003C\/style\u003E\n\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cdiv style=\"text-align: center;\"\u003E\n\u003Cspan style=\"font-size: x-small;\"\u003E\u003Ci\u003EDetail of necklace from a burial at Sungir, Russia, 28,000 BP.\nInterlocking and interchangeable beads. Each mammoth ivory bead may have required\none to two hours of labor to manufacture. [9]\u003C\/i\u003E\u003C\/span\u003E\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:Times;\n panose-1:2 0 5 0 0 0 0 0 0 0;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:3 0 0 0 1 0;}\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\np\n {mso-style-priority:99;\n mso-margin-top-alt:auto;\n margin-right:0in;\n mso-margin-bottom-alt:auto;\n margin-left:0in;\n mso-pagination:widow-orphan;\n font-size:10.0pt;\n font-family:Times;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-bidi-font-family:\"Times New Roman\";}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n\u003C\/style\u003E\n\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n\u003C\/style\u003E\n\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n3. \u003Ci style=\"mso-bidi-font-style: normal;\"\u003EUnforgeable\ncostliness – \u003C\/i\u003Ea wide variety of objects, which we call \u003Ci style=\"mso-bidi-font-style: normal;\"\u003Ecollectibles, \u003C\/i\u003Ehave as a necessary component and a secure costliness\n– either in search costs of collection, in manufacturing costs, or both – that\nserves to constraint its supply curve.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp;\n\u003C\/span\u003EThis is true for collectibles as media of obligation satisfaction as\nwell as collectibles as stores and displays of wealth.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhJzUIU6vVLa8i_PVA0ThjnzeDEzQswUNKn02qBP4jCTPK0H9mnDYaXdnTLMCKWCfCEaqqWXAdJOOajx1YfW_zRAcCT4F8y0z7pGBKClZZflPWBYmKEE83i498QQ5lj3Qycqvef\/s1600\/Collectibles8.png\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"182\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhJzUIU6vVLa8i_PVA0ThjnzeDEzQswUNKn02qBP4jCTPK0H9mnDYaXdnTLMCKWCfCEaqqWXAdJOOajx1YfW_zRAcCT4F8y0z7pGBKClZZflPWBYmKEE83i498QQ5lj3Qycqvef\/s320\/Collectibles8.png\" width=\"320\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n\u003C\/style\u003E\n\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cdiv style=\"text-align: center;\"\u003E\n\u003Cspan style=\"font-size: x-small;\"\u003E\u003Ci\u003E\u003Cspan style=\"font-family: \u0026quot;cambria\u0026quot;;\"\u003EEfficient symbolic communication – Mesolithic\ncave painting -- abundant surface and easily made pigments. Much information. \u003C\/span\u003E\u003C\/i\u003E\u003Ca href=\"http:\/\/www.mmdtkw.org\/EGtkw0142RockArt4.jpg\" target=\"_blank\"\u003E\u003Cspan style=\"font-family: \u0026quot;cambria\u0026quot;;\"\u003E[Source]\u003C\/span\u003E\u003C\/a\u003E\u003C\/span\u003E\n\n\n\n\n\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\nMany of the artifacts called here collectibles, especially\nPaleolithic and Neolithic beads, have been assumed by archaeologists to be\nprimarily “ornamental” and serve a “symbolic” function, i.e. are said to have\nbeen “information technology”[6]. If an artifact were purely symbolic (e.g. a\n\u003Ca href=\"https:\/\/szabo.best.vwh.net\/seals.html\" target=\"_blank\"\u003Eclay tablet\u003C\/a\u003E impressed with accounting\nrecords) we would expect symbol efficiency to be high given the available\nmaterials (e.g. clay) and technologies (e.g. symbols for words). But with\ncollectibles, people went out of their way to choose costly goods and undertake\ncostly methods of manufacture – collectibles such as beads typically had an\nextremely poor symbol efficiency compared to the available alternatives.\u0026nbsp; They must have had functions that were much more than symbolic, leading to competing\nrequirements that we must elucidate.\u003C\/div\u003E\n\u003Cbr \/\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhLhb3NQK6QMLt_wYTY15GSnpHbypIVE1vno4VR8G9JZpUNfN51M0PWyBdQQiNTd1Ha8LVGS9ddxTudimX5Ng3lCzVJ-kj5WzxT1KvTHgBxvk8_idVURngCjGzPwJsxFVElXiHJ\/s1600\/Collectibles9.png\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"250\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhLhb3NQK6QMLt_wYTY15GSnpHbypIVE1vno4VR8G9JZpUNfN51M0PWyBdQQiNTd1Ha8LVGS9ddxTudimX5Ng3lCzVJ-kj5WzxT1KvTHgBxvk8_idVURngCjGzPwJsxFVElXiHJ\/s400\/Collectibles9.png\" width=\"400\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n\u003C\/style\u003E\n\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cdiv style=\"text-align: center;\"\u003E\n\u003Cspan style=\"font-size: x-small;\"\u003E\u003Ci\u003E\u003Cspan style=\"font-family: \u0026quot;cambria\u0026quot;;\"\u003EEfficient symbolic communication – already\nexisting and otherwise useful flint painted with symbols (c. 5000 BC)\u003C\/span\u003E\u003C\/i\u003E\u003Cspan style=\"font-family: \u0026quot;cambria\u0026quot;;\"\u003E \u003Ca href=\"http:\/\/www.mmdtkw.org\/EGtkw0146DecimalFlintPetrie.jpg\" target=\"_blank\"\u003E[Source]\u003C\/a\u003E\u003C\/span\u003E\u003C\/span\u003E\n\n\n\n\n\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u0026nbsp;\n\n\n\n\n\n\n\n\n\n\n\n\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;} \u003C\/style\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\nAs we will see below, beads of shell, bone, and similar\nobjects were made, strung, and worn for tens of millennia in the vast majority\nof Upper Paleolithic and Neolithic cultures.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp;\n\u003C\/span\u003EGratuitous use of costly beads over tens of millennia would have been\nweeded out by Darwinian genetic selection. Beads, used as actually observed either\nin Epipaleolithic or Neolithic burials or as observed in the few recently\nobserved such cultures, are not, in contrast to spoken human language and every other information-rich symbolic system, used in any way remotely approaching the\nefficient coding scheme that would have emerged from natural selection if pure\nsymbolism were their main evolutionary function.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EBeads that are arranged in a pleasing regular\npattern, as they typically are, carry very little information – they are\nextremely inefficient in terms of information per unit of weight or volume and\nespecially per cost of collection and manufacture. Since forager bands were\ntypically mobile they had even more compelling evolutionary pressure to improve\nthe symbol efficiency of their media, by evolving choices and designs for the most\nefficient available such media, if such recorded communication was an\nevolutionary important (and evolutionarily accessible) problem. Instead, vocal\ncommunications were far more useful for mobile forager bands and underwent the\nradical and unique evolution of human spoken language, while remains of recorded\nsymbolic communications are sparse and rare.\u003C\/div\u003E\n\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgqcEF7CCYfh9TQ-owgyemGLGF9edOwWpr5raqi00v0cnBIyQTQEmLXyc6onrVTjwoOwUTOTeFBW3ztWdt6Xnkzvs4Z6pL_LejJbDcZJ9XRErM9gvGNPkwz28MtCkwQzGeV58kJ\/s1600\/Collectibles10.png\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"288\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgqcEF7CCYfh9TQ-owgyemGLGF9edOwWpr5raqi00v0cnBIyQTQEmLXyc6onrVTjwoOwUTOTeFBW3ztWdt6Xnkzvs4Z6pL_LejJbDcZJ9XRErM9gvGNPkwz28MtCkwQzGeV58kJ\/s400\/Collectibles10.png\" width=\"400\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n\u003C\/style\u003E\n\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cdiv style=\"text-align: center;\"\u003E\n\u003Cspan style=\"font-size: x-small;\"\u003E\u003Ci\u003EEfficient communication –\npainted pebbles (Norwegian Mesolithic, c. 11,000 BP)\u003C\/i\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"separator\" style=\"clear: both; text-align: center;\"\u003E\n\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cb style=\"mso-bidi-font-weight: normal;\"\u003E\u0026nbsp;\u003C\/b\u003E\n\n\n\n\n\n\n\n\n\n\n\n\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;\u003C\/style\u003E\u0026nbsp;\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\nNot only were beads of multiple varieties almost always\nstrung together in regular patterns that did not take advantage of the coding\ncapabilities of the multiple varieties, but the most common bead pattern was\nrepeating the same kind of bead over and over again, which carries no\ninformation whatsoever in the arrangement of the beads. The digital nature of\nshell beads makes this a tempting theory in our society so saturated by\ncomputer screens and codes, but it is wrong.\u0026nbsp;\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiDtovdL6s1nWRfoRe-OzPSnlebaCNRNNx3n40N3g-vJYoVdhclV6YdxwaCEHaI_s5O3SI8o9cHex23J7UvX81k-n6lbbcLZMdm2EeJoJUxSjOwCtZyZ9-11Nt-bzIgntPW_wSi\/s1600\/Collectibles11.png\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"232\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiDtovdL6s1nWRfoRe-OzPSnlebaCNRNNx3n40N3g-vJYoVdhclV6YdxwaCEHaI_s5O3SI8o9cHex23J7UvX81k-n6lbbcLZMdm2EeJoJUxSjOwCtZyZ9-11Nt-bzIgntPW_wSi\/s400\/Collectibles11.png\" width=\"400\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n\u003C\/style\u003E\n\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cdiv style=\"text-align: center;\"\u003E\n\u003Cspan style=\"font-size: x-small;\"\u003E\u003Ci\u003ECost-effective\ncommunication – pictures, pictograms and counting symbols in abundant clay\n(Transylvania, 5500-5300 BC)\u003C\/i\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n\u003C\/style\u003E\n\u003C\/div\u003E\n\u003Cbr \/\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\nWhat would have efficient symbolic coding of bead patterns\nlook like if contrary to the observed facts it had evolved? If there are, for\nexample, 16 different roles (what we would call “offices”) in a clan (elder,\nshaman, etc.), and there is evolutionary benefit (e.g. in minimizing disputes) to\nrepresenting title to those positions in permanent form, one does not need a\nlong string of beads.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EA clan only needs\n16 different objects, each representing a different office.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EIf the clan has only 2 different kinds of\nobjects available, they still only 4 of them (2^4 = 16 bits of information).\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EThere are a wide variety of coding schemes in\nbetween that would be this efficient or nearly so.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EBut no such efficient scheme, or any scheme\nanywhere nearly as efficient as such a scheme, using beads has ever been\nobserved in widespread use in a Paleolithic or Neolithic culture: neither in\ncontemporarily observed instances of such cultures nor in the archaeological\nrecord.\u003C\/div\u003E\n\u003Cbr \/\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEg8vpp8awCaeIgPz7cO_rIkqbYkKT-NVCwFSrBN8sT-3KQ4V3lhaitAIWxjNfyn-5I_PMRmSX84aCjW206WO-dvqh-YZG7hGW-iPpZT_payaVLCmFMjswcAVui6njgTmquUJarr\/s1600\/Collectibles12.png\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"225\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEg8vpp8awCaeIgPz7cO_rIkqbYkKT-NVCwFSrBN8sT-3KQ4V3lhaitAIWxjNfyn-5I_PMRmSX84aCjW206WO-dvqh-YZG7hGW-iPpZT_payaVLCmFMjswcAVui6njgTmquUJarr\/s640\/Collectibles12.png\" width=\"640\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n\u003C\/style\u003E\n\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cdiv style=\"text-align: center;\"\u003E\n\u003Cspan style=\"font-size: x-small;\"\u003E\u003Ci\u003E\u003Cspan style=\"font-family: \u0026quot;cambria\u0026quot;;\"\u003EWasteful as symbolic communication – regular\npattern (little information) and made of costly beads, as well as taking much\nadditional labor to assemble from the beads.\u0026nbsp;\nWampum, Museum of Ontario Archaeology.\u003C\/span\u003E\u003C\/i\u003E\u003Ca href=\"http:\/\/archaeologymuseum.ca\/wampum\/\" target=\"_blank\"\u003E\u003Cspan style=\"font-family: \u0026quot;cambria\u0026quot;;\"\u003E [Source]\u003C\/span\u003E\u003C\/a\u003E\u003C\/span\u003E\n\n\n\n\n\u0026nbsp;\n\n\n\n\n\n\n\n\n\n\n\n\n\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n\u003C\/style\u003E\n\u003C\/div\u003E\n\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\nIf Paleolithic and Neolithic beads had been as extremely\ncheap as mass-manufactured beads are today, and transportation and storage\ncosts had been those of today, the extremely poor symbolic efficiency of how\nbeads were used might be taken to not have mattered so much.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EBut beads were very costly to make and in a\nmobile forager society were costly to bring with. An example of how beads were\nfar too costly for purely symbolic communications is provided by the cost\nanalysis done on beads found in the Sungir Burials of the 29,000-15,000 BP\nepoch. Randall White estimates that an individual bead took one to two hours of\nwork, and as a result that the grave goods in such a burial represented nearly\n10,000 hours of labor. [7]\u003C\/div\u003E\n\u003Cbr \/\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEheSRcmI4xNaDJlNwhJclsWCrKrFAsKWSpwmovJTXdMJQYnVvlew_UD6K_C6l_-ysNLO6QhUhMPcVNMPi3Ld9wQayCwYEYjQd48vGsVOF59tbvDZA-Qw_VfnqbF3dVL3aYCzi_n\/s1600\/Collectibles13.png\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEheSRcmI4xNaDJlNwhJclsWCrKrFAsKWSpwmovJTXdMJQYnVvlew_UD6K_C6l_-ysNLO6QhUhMPcVNMPi3Ld9wQayCwYEYjQd48vGsVOF59tbvDZA-Qw_VfnqbF3dVL3aYCzi_n\/s1600\/Collectibles13.png\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n\u003C\/style\u003E\n\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cbr \/\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-size: x-small;\"\u003E\u003Ci\u003EQR codes are a great way for computers to read a label printed by another computer and affixed to a movable object, but a terrible technique for human-to-human\ncommunications, especially if as with shell beads each “pixel” had cost an hour\nor more of human labor to make. \u003C\/i\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\nSo while beads could have been and sometimes were used for\nsymbolic purposes, this could not have been their primary evolutionary function\n– symbolic aspects of their use would have been very secondary. A similar\nanalysis applies to most other kinds of collectibles, such as “ceremonial”\nblades and points (most commonly axes). Unforgeable costliness – the secure\nsupply curve of these objects relative to the much more common objects in the\nenvironment that were not used as collectibles – strongly suggests that these\ncollectibles had some function very important to Darwinian fitness related to\nwealth. What that function was has been explored in [1] which I hope to\nelaborate on in future post(s).\u003C\/div\u003E\n\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiStAVbSi1JBxvY8dXFrvtq0b5-rD5SB2exxnDunQ0abAfUyDtMOcqp_Cp9P-l74sHoLxhUYaeQvfdz-Q6HisQf_bxSyLODFVjflwTUCAXhnjnLPQJ8CuMuhIccv7LDEyKbP9Xa\/s1600\/Collectibles14.png\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"116\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiStAVbSi1JBxvY8dXFrvtq0b5-rD5SB2exxnDunQ0abAfUyDtMOcqp_Cp9P-l74sHoLxhUYaeQvfdz-Q6HisQf_bxSyLODFVjflwTUCAXhnjnLPQJ8CuMuhIccv7LDEyKbP9Xa\/s640\/Collectibles14.png\" width=\"640\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n\u003C\/style\u003E\n\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cdiv style=\"text-align: center;\"\u003E\n\u003Cspan style=\"font-size: x-small;\"\u003E\u003Ci\u003E\u003Cspan style=\"font-family: \u0026quot;cambria\u0026quot;;\"\u003ERegular pattern of costly beads. Wampum, British\nMuseum.\u003Ca href=\"http:\/\/www.britishmuseum.org\/research\/collection_online\/collection_object_details\/collection_image_gallery.aspx?partid=1\u0026amp;assetid=1345555001\u0026amp;objectid=529560\" target=\"_blank\"\u003E \u003C\/a\u003E\u003C\/span\u003E\u003C\/i\u003E\u003Ca href=\"http:\/\/www.britishmuseum.org\/research\/collection_online\/collection_object_details\/collection_image_gallery.aspx?partid=1\u0026amp;assetid=1345555001\u0026amp;objectid=529560\" target=\"_blank\"\u003E\u003Cspan style=\"font-family: \u0026quot;cambria\u0026quot;;\"\u003E[Source]\u003C\/span\u003E\u003C\/a\u003E\u003C\/span\u003E\n\n\n\n\n\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"text-align: center;\"\u003E\n\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n\u003C\/style\u003E\n\u003C\/div\u003E\n\u003Cbr \/\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\nIn some broad sense of the term any display of wealth is “symbolic”,\nespecially when its design invokes the reputation or authority of prior\ndisplays of wealth. Thus the commonality of authority resemblance in the design\nof paper money, coins, and jewelry, repeated tropes such as gold foil and\nexpensive ultramarine blue pigments in medieval and Renaissance European art,\netc. But it is the ability of the medium to serve as a secure store and display\nof wealth that is doing the heavy lifting here, not its ability to efficiently\nconvey information.\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\nWhen costliness becomes insecure, and authority resemblance\ncomes to predominate over genuine scarcity, we can get counterfeiting crises\nthat disrupt the culture relying on the old form of collectible.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EThe first craftsmen to pound copper and gold\nflat and apply it to surfaces could make far more surface look lavish than was\npossible with solid copper or gold. Such a counterfeiting crisis would have\nproduced a kind of inflation broader than monetary inflation: a change in\nexpectations about wealth securely displayed as well as wealth securely stored\nin an object. To the extent imitation cowrie shells (see below) could be made\nout of materials much cheaper than the genuine cowrie (e.g. stone) it could\nproduce such inflation. \u003Ca href=\"https:\/\/en.wikipedia.org\/wiki\/Trade_beads\" target=\"_blank\"\u003ETrade beads\u003C\/a\u003E were colonial examples: mass-produced\nbeads that were supernormal models of shell beads shiny from wear, usurping\ntheir authority, while being cheaply mass produced, undermining the previously\nunforgeable costliness of beads.\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:Times;\n panose-1:2 0 5 0 0 0 0 0 0 0;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:3 0 0 0 1 0;}\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n 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mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\np.MsoListParagraphCxSpLast, li.MsoListParagraphCxSpLast, div.MsoListParagraphCxSpLast\n {mso-style-priority:34;\n mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-type:export-only;\n margin-top:0in;\n margin-right:0in;\n margin-bottom:0in;\n margin-left:.5in;\n margin-bottom:.0001pt;\n mso-add-space:auto;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n \/* List Definitions *\/\n@list l0\n {mso-list-id:1266645574;\n mso-list-type:hybrid;\n mso-list-template-ids:-1725115424 908735250 67698713 67698715 67698703 67698713 67698715 67698703 67698713 67698715;}\n@list l0:level1\n {mso-level-text:\"\\(%1\\)\";\n mso-level-tab-stop:none;\n mso-level-number-position:left;\n margin-left:82.0pt;\n text-indent:-.5in;}\n@list l0:level2\n {mso-level-number-format:alpha-lower;\n mso-level-tab-stop:none;\n mso-level-number-position:left;\n margin-left:100.0pt;\n text-indent:-.25in;}\n@list l0:level3\n {mso-level-number-format:roman-lower;\n mso-level-tab-stop:none;\n mso-level-number-position:right;\n margin-left:136.0pt;\n text-indent:-9.0pt;}\n@list l0:level4\n {mso-level-tab-stop:none;\n mso-level-number-position:left;\n margin-left:172.0pt;\n text-indent:-.25in;}\n@list l0:level5\n {mso-level-number-format:alpha-lower;\n mso-level-tab-stop:none;\n mso-level-number-position:left;\n margin-left:208.0pt;\n text-indent:-.25in;}\n@list l0:level6\n {mso-level-number-format:roman-lower;\n mso-level-tab-stop:none;\n mso-level-number-position:right;\n margin-left:244.0pt;\n text-indent:-9.0pt;}\n@list l0:level7\n {mso-level-tab-stop:none;\n mso-level-number-position:left;\n margin-left:280.0pt;\n text-indent:-.25in;}\n@list l0:level8\n {mso-level-number-format:alpha-lower;\n mso-level-tab-stop:none;\n mso-level-number-position:left;\n margin-left:316.0pt;\n text-indent:-.25in;}\n@list l0:level9\n {mso-level-number-format:roman-lower;\n mso-level-tab-stop:none;\n mso-level-number-position:right;\n margin-left:352.0pt;\n text-indent:-9.0pt;}\nol\n {margin-bottom:0in;}\nul\n {margin-bottom:0in;}\n\u003C\/style\u003E\n\u003C\/div\u003E\n\u003Cbr \/\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; mso-outline-level: 3;\"\u003E\n\u003Cb\u003E\u003Cspan style=\"font-family: \u0026quot;times\u0026quot;; font-size: 13.5pt;\"\u003EAttributes\nof Collectibles \u003C\/span\u003E\u003C\/b\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;times\u0026quot;; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003EWhat attributes are we looking for in\nmedia of obligation satisfaction, units of account, and in stores and displays\nof wealth? \u003Ca href=\"https:\/\/szabo.best.vwh.net\/shell.html\" target=\"_blank\"\u003E\"Shelling Out: The Origins of Money\"\u003C\/a\u003E argued, and future posts will argue, that\u003C\/span\u003E\u003Cspan style=\"font-family: \u0026quot;times\u0026quot;; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003E\u0026nbsp;\u003C\/span\u003E\n\n\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-left: .5in;\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-left: .5in;\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;times\u0026quot;; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003E[C]ollectibles\nprovided a fundamental improvement to the workings of reciprocal altruism,\nallowing humans to cooperate in ways unavailable to other species. For them,\nreciprocal altruism is severely limited by unreliable memory. Some other\nspecies have large brains, build their own homes, or make and use tools. No\nother species has produced such an improvement to the workings of reciprocal\naltruism.\u0026nbsp;\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-left: .5in;\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-left: .5in; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;times\u0026quot;; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003E[Economist Karl]\nMenger called this first money an \"intermediate commodity\" -- what\nthis paper calls collectibles. An artifact useful for other things, such as\ncutting, could also be used as a collectible. However, once institutions\ninvolving wealth transfer became valuable, collectibles would be manufactured\njust for their collectible properties. What are these properties? For a\nparticular commodity to be chosen as a valuable collectible, it would have had,\nrelative to products less valuable as collectibles, at least the following\ndesirable qualities:\u0026nbsp;\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-left: .5in; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoListParagraphCxSpFirst\" style=\"margin-left: 82.0pt; mso-add-space: auto; mso-list: l0 level1 lfo1; tab-stops: 45.8pt 91.6pt 137.4pt 183.2pt 229.0pt 274.8pt 320.6pt 366.4pt 412.2pt 458.0pt 503.8pt 549.6pt 595.4pt 641.2pt 687.0pt 732.8pt; text-indent: -.5in;\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;courier\u0026quot;; mso-bidi-font-family: Courier; mso-fareast-font-family: Courier;\"\u003E\u003Cspan style=\"mso-list: Ignore;\"\u003E(1)\u003Cspan style=\"font: 7.0pt \u0026quot;Times New Roman\u0026quot;;\"\u003E\u0026nbsp;\u0026nbsp;\u0026nbsp;\n\u003C\/span\u003E\u003C\/span\u003E\u003C\/span\u003E\u003Cspan style=\"font-family: \u0026quot;courier\u0026quot;; mso-bidi-font-family: Courier;\"\u003EMore secure from accidental loss and theft.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EFor most of history this meant it could be\ncarried on the person and easy to hide.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp;\u0026nbsp;\n\u003C\/span\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoListParagraphCxSpMiddle\" style=\"margin-left: 82.0pt; mso-add-space: auto; tab-stops: 45.8pt 91.6pt 137.4pt 183.2pt 229.0pt 274.8pt 320.6pt 366.4pt 412.2pt 458.0pt 503.8pt 549.6pt 595.4pt 641.2pt 687.0pt 732.8pt;\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;courier\u0026quot;; mso-bidi-font-family: Courier;\"\u003E\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp;\u003C\/span\u003E\u003Cspan style=\"mso-tab-count: 1;\"\u003E \u003C\/span\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoListParagraphCxSpLast\" style=\"margin-left: 82.0pt; mso-add-space: auto; mso-list: l0 level1 lfo1; tab-stops: 45.8pt 91.6pt 137.4pt 183.2pt 229.0pt 274.8pt 320.6pt 366.4pt 412.2pt 458.0pt 503.8pt 549.6pt 595.4pt 641.2pt 687.0pt 732.8pt; text-indent: -.5in;\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;courier\u0026quot;; mso-bidi-font-family: Courier; mso-fareast-font-family: Courier;\"\u003E\u003Cspan style=\"mso-list: Ignore;\"\u003E(2)\u003Cspan style=\"font: 7.0pt \u0026quot;Times New Roman\u0026quot;;\"\u003E\u0026nbsp;\u0026nbsp;\u0026nbsp;\n\u003C\/span\u003E\u003C\/span\u003E\u003C\/span\u003E\u003Cspan style=\"font-family: \u0026quot;courier\u0026quot;; mso-bidi-font-family: Courier;\"\u003EHarder to forge its value.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EAn\nimportant subset of these are products that are unforgeably costly, and therefore\nconsidered valuable…\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-left: .5in; tab-stops: 45.8pt 91.6pt 137.4pt 183.2pt 229.0pt 274.8pt 320.6pt 366.4pt 412.2pt 458.0pt 503.8pt 549.6pt 595.4pt 641.2pt 687.0pt 732.8pt;\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoListParagraph\" style=\"margin-left: 82.0pt; mso-add-space: auto; mso-list: l0 level1 lfo1; tab-stops: 45.8pt 91.6pt 137.4pt 183.2pt 229.0pt 274.8pt 320.6pt 366.4pt 412.2pt 458.0pt 503.8pt 549.6pt 595.4pt 641.2pt 687.0pt 732.8pt; text-indent: -.5in;\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;courier\u0026quot;; mso-bidi-font-family: Courier; mso-fareast-font-family: Courier;\"\u003E\u003Cspan style=\"mso-list: Ignore;\"\u003E(3)\u003Cspan style=\"font: 7.0pt \u0026quot;Times New Roman\u0026quot;;\"\u003E\u0026nbsp;\u0026nbsp;\u0026nbsp;\n\u003C\/span\u003E\u003C\/span\u003E\u003C\/span\u003E\u003Cspan style=\"font-family: \u0026quot;courier\u0026quot;; mso-bidi-font-family: Courier;\"\u003EThis value was more accurately approximated by simple observations or\nmeasurements. These observations would have had more reliable integrity yet\nhave been less expensive. \u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-left: .5in; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-left: .5in; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;times\u0026quot;; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003EHumans\nacross the world are strongly motivated to collect items that better satisfy\nthese properties. Some of this motivation probably includes genetically evolved\ninstincts. Such objects are collected for the sheer pleasure of collecting them\n(not for any particularly good explicit and proximate reasons), and such\npleasure is nearly universal across human cultures. One of the immediate\nproximate motivations is decoration. According to Dr. Mary C. Stiner, an\narchaeologist at the University of Arizona, \"Ornamentation is universal\namong all modern human foragers.\" [W02] For an evolutionary psychologist,\nsuch a behavior that has a good ultimate explanation, in terms of natural\nselection, but has no proximate rationale other than pleasure, is a prime\ncandidate to be a genetically evolved pleasure that motivates the behavior.\nSuch is, if the reasoning in this essay is correct, the human instinct to\ncollect rare items, art, and especially jewelry.\u0026nbsp;\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-left: .5in; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhaSd3dFIoVJ_utpk82_bmKu4kRMO2ORQw1yZPz03M4pUqBrJgnXBshPz1sc_L1k4d1NiORpH1wn8EaMy5wRGoft3jrwocNqAal2vr2RoFEE4tYhkgGDKyhg-3I5olP1HR4m2K3\/s1600\/Collectibles15.png\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhaSd3dFIoVJ_utpk82_bmKu4kRMO2ORQw1yZPz03M4pUqBrJgnXBshPz1sc_L1k4d1NiORpH1wn8EaMy5wRGoft3jrwocNqAal2vr2RoFEE4tYhkgGDKyhg-3I5olP1HR4m2K3\/s1600\/Collectibles15.png\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n\u003C\/style\u003E\n\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cdiv style=\"text-align: center;\"\u003E\n\u003Cspan style=\"font-size: x-small;\"\u003E\u003Ci\u003E\u003Cspan style=\"color: black; font-family: \u0026quot;cambria\u0026quot;;\"\u003E“Miniature Bi disc”,\njade, from the late Neolithic to Bronze Ages, c. 3000-2000 BCE, diameter\n1.25\" to 2” \u003C\/span\u003E\u003C\/i\u003E\u003Ca href=\"http:\/\/www.trocadero.com\/stores\/schneiblefineart\/items\/1082001\/item1082001.html\" target=\"_blank\"\u003E\u003Cspan style=\"color: black; font-family: \u0026quot;cambria\u0026quot;;\"\u003E[Source]\u003C\/span\u003E\u003C\/a\u003E\u003C\/span\u003E\n\n\n\n \n\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:Times;\n panose-1:2 0 5 0 0 0 0 0 0 0;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:3 0 0 0 1 0;}\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\np\n {mso-style-priority:99;\n mso-margin-top-alt:auto;\n margin-right:0in;\n mso-margin-bottom-alt:auto;\n margin-left:0in;\n mso-pagination:widow-orphan;\n font-size:10.0pt;\n font-family:Times;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-bidi-font-family:\"Times New Roman\";}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n\u003C\/style\u003E\n\u003C\/div\u003E\n\u003Cbr \/\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-left: .5in; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-left: .5in; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;times\u0026quot;; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003EThe\nkind of mobile art made by Paleolithic humans, (small figurines and the\nlike) also matches these characteristics well. Indeed, Paleolithic peoples made\nvery few objects that were not either utilitarian, or shared characteristics\n(1)-(3). There are many puzzling instances of useless or at least unused flints\nwith \u003Ci\u003Ehomo sapiens\u003C\/i\u003E…Cunliffe [C94] discusses a European Mesolithic era\nfind of hundreds of flints, carefully crafted, but which micrograph analysis\nreveals were never used for cutting.\u0026nbsp;\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-left: .5in; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-left: .5in; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;times\u0026quot;; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003EFlints\nwere quite likely the first collectibles, preceding special-purpose\ncollectibles like jewelry. Indeed, the first flint collectibles would have been\nmade for their cutting utility. Their added value as a medium of wealth\ntransfer was a fortuitous side effect that enabled the institutions described\nin this article to blossom. These institutions, in turn, would have motivated\nthe manufacture of special-purpose collectibles, at first flints that need have\nno actual use as cutting tools, then the wide variety of other kinds of\ncollectibles that were developed by \u003Ci\u003Ehomo sapiens\u003C\/i\u003E. \u003C\/span\u003E\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp;\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"margin-left: .5in; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv style=\"margin-left: .5in;\"\u003E\n\u003Cspan style=\"font-size: 12.0pt;\"\u003EIt is no coincidence\nthat the attributes of collectibles are shared with precious metals, coins, and\nthe reserve commodities that have backed most non-fiat currencies. Money proper\nimplemented these properties a purer form than the collectibles used during\nalmost all of human prehistory. \u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgMeLedYsUYMc9JrWcLJJUyh-XQ1Nc7dzawv66adnS8FYp2R6LBy_ZEukB31AxNViNs3nCvYtLLjl3gU2eWQ7Bb3avTpPuO9rElFYeiqzLNEAkT9y11qTtmdWkURoNtp-T1zIIC\/s1600\/Collectibles16.png\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"320\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgMeLedYsUYMc9JrWcLJJUyh-XQ1Nc7dzawv66adnS8FYp2R6LBy_ZEukB31AxNViNs3nCvYtLLjl3gU2eWQ7Bb3avTpPuO9rElFYeiqzLNEAkT9y11qTtmdWkURoNtp-T1zIIC\/s320\/Collectibles16.png\" width=\"240\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:Times;\n panose-1:2 0 5 0 0 0 0 0 0 0;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:3 0 0 0 1 0;}\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\np\n {mso-style-priority:99;\n mso-margin-top-alt:auto;\n margin-right:0in;\n mso-margin-bottom-alt:auto;\n margin-left:0in;\n mso-pagination:widow-orphan;\n font-size:10.0pt;\n font-family:Times;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-bidi-font-family:\"Times New Roman\";}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n\u003C\/style\u003E\n\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cdiv style=\"text-align: center;\"\u003E\n\u003Cspan style=\"font-size: x-small;\"\u003E\u003Ci\u003E\u003Cspan style=\"color: black; font-family: \u0026quot;cambria\u0026quot;;\"\u003EGrave goods from Longshan or Liangzhu cultures (China,\n3000 to 2000 BCE)\u003C\/span\u003E\u003C\/i\u003E\u003C\/span\u003E\u003Cspan style=\"mso-bidi-font-style: normal;\"\u003E\u003Cspan style=\"color: black; font-family: \u0026quot;cambria\u0026quot;; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-bidi-theme-font: minor-bidi; mso-font-kerning: 12.0pt; mso-themecolor: text1;\"\u003E\u003Cspan style=\"font-size: x-small;\"\u003E \u003Ca href=\"http:\/\/www.chinadaily.com.cn\/culture\/art\/2014-08\/13\/content_18296380_3.htm\" target=\"_blank\"\u003E[Source]\u003C\/a\u003E\u003C\/span\u003E\u003C\/span\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv style=\"text-align: center;\"\u003E\n\u0026nbsp;\u0026nbsp;\n\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\nDue to endemic violence, high transaction costs, and the\nextremely low division of labor compared to later economies, there was nothing\nresembling modern efficient spot markets in Paleolithic or most Neolithic\nsocieties.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EAs a result, classical\naccounts of the origins of money like those of Smith, Menger, et. al. cannot be used as a\ntheory or guide to the actual historical origins of money without extremely\nheavy modification.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiNwX3GJQzD60kL_3Z4diwHb8r5NeNJErdxvqtlm2BvRPSbqcuWYxF5xJ9oG-4oWF8eobcLA83FDiyehhRn65LtUpw-HHSGtAeYWYlhPoG-y1dmsOQhP0ZlTJVssV-pJAQqdEtf\/s1600\/Collectibles17.png\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"320\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiNwX3GJQzD60kL_3Z4diwHb8r5NeNJErdxvqtlm2BvRPSbqcuWYxF5xJ9oG-4oWF8eobcLA83FDiyehhRn65LtUpw-HHSGtAeYWYlhPoG-y1dmsOQhP0ZlTJVssV-pJAQqdEtf\/s320\/Collectibles17.png\" width=\"260\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n\u003C\/style\u003E\n\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cdiv style=\"text-align: center;\"\u003E\n\u003Cspan style=\"font-size: x-small;\"\u003E\u003Ci\u003E\u003Cspan style=\"font-family: \u0026quot;cambria\u0026quot;;\"\u003ERare and lovingly worked shell collectibles\nbeing displayed for transfer at a bride price ceremony in Papua New Guinea (20\u003Csup\u003Eth\u003C\/sup\u003E\ncentury)\u003C\/span\u003E\u003C\/i\u003E\u003Ci\u003E \u003C\/i\u003E\u003Ca href=\"http:\/\/numisarchives.blogspot.com\/search\/label\/Blood%20money\" target=\"_blank\"\u003E[Source]\u003C\/a\u003E\u003C\/span\u003E \n\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n\u003C\/style\u003E\n\u003C\/div\u003E\n\u003Cbr \/\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cb style=\"mso-bidi-font-weight: normal;\"\u003EThe Snail Standard \u003C\/b\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\nCollectibles, even pure collectibles, have an extremely\nancient heritage that must have put them under prolonged evolutionary selection:\ncultural (memetic[2]) selection most obviously, but as we shall see, possibly\nalso genetic selection for a hankering to collect certain kinds of objects for\ndisplay and accumulation, not just for food. An evolutionarily gratuitous\npractice of such substantial cost would have soon died out, but collectibles\nwith the traits listed above have been a nearly ubiquitous and important part\nof human cultures for many tens of millennia and in all parts of the planet to\nwhich humans have spread.\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\nThe Upper Paleolithic period, as the tail end of the most\nrecent Ice Age, featured climates mostly cooler than today and sea levels that\nwere many tens of meters lower than they are today.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EThe vast majority of seaside communities of\nthat epoch now lie submerged under fathoms of ocean and are usually\nprohibitively costly for archaeologists to try to find.\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhQ-CP6mTwAoI5OCwR2O7CwXFyBbd8J1Qg5qoiwC4gAamDfc2ehMRQA3bzn_L3P5xCfh0sDdJ2uHebn_90kc5zr4-FL8DOpHgrOXcsby7bCf66S39NkO-JhCk2uD5kfAX3R4fGx\/s1600\/Collectibles18.png\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"168\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhQ-CP6mTwAoI5OCwR2O7CwXFyBbd8J1Qg5qoiwC4gAamDfc2ehMRQA3bzn_L3P5xCfh0sDdJ2uHebn_90kc5zr4-FL8DOpHgrOXcsby7bCf66S39NkO-JhCk2uD5kfAX3R4fGx\/s640\/Collectibles18.png\" width=\"640\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:Times;\n panose-1:2 0 5 0 0 0 0 0 0 0;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:3 0 0 0 1 0;}\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n\u003C\/style\u003E\n\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cdiv style=\"text-align: center;\"\u003E\n\u003Cspan style=\"font-size: x-small;\"\u003E\u003Ci\u003EConsistent form: \u003C\/i\u003ENassarius gibbosulus\u003Ci\u003E shells beads in varied stages of use-wear,\nfrom \u003C\/i\u003E\u003C\/span\u003E\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E\u003Cspan style=\"font-size: 10.0pt; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003E\u003Cspan style=\"font-size: x-small;\"\u003EÜçağızli\nCave I in Turkey.\u0026nbsp; Shell beads generally\nget shinier with wear. [6]\u003C\/span\u003E\u003C\/span\u003E\u003C\/i\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u0026nbsp;\n\n\n\n\n\n\n\n\n\n\n\n\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:Times;\n panose-1:2 0 5 0 0 0 0 0 0 0;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:3 0 0 0 1 0;}\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n--\u003C\/style\u003E\u0026nbsp;\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\nOne exception to this submersion is the set of \u003Cspan style=\"mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003EÜçağızli\ncaves along the thin stretch of Turkish coast that sits in front of Syria. The\napproach to the coast there is quite steep. As a result, even though the caves\nare still above sea level today, and were thus 60-80 meters above sea level in\nthe Upper Paleolithic, they lie a short (but steep) walk of probably around 1\nkilometer from that era’s shoreline.\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\nThe inhabitants of these caves lived in a climate that was\nmore like that of today’s Baltic Sea region than of today’s Mediterranean.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EThey feasted both on land animals such as\ndeer and on marine resources, a mix that trended from land resources to a mix\nof land and marine resources over the period recorded in the archaeological\nlayers. These people walked the shore not just in search of food, but also in\nsearch of a very specific set of uncommon yet authoritative objects – shells of\nthe sea snail \u003Ci style=\"mso-bidi-font-style: normal;\"\u003E\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003ENassarius gibbosulus. \u003C\/span\u003E\u003C\/i\u003E\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003EOnce\ncollected they were selected for size and intactness, and laboriously\nperforated.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EThey were then strung onto cords,\npresumably as necklaces, bracelets, or belts, or sewn onto clothes, as beads\nwould appear in later Paleolithic burials.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp;\n\u003C\/span\u003EExtensive cord-wear exists on most of the beads.\u003C\/span\u003E\u003C\/div\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr align=\"center\"\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjV6MPUI_3Q5gH09OEMTr4ZTERrSZrPNr29koPcZASGChfn5MDggrz60VASJTj4w0cjB8qkqKDH0JefkN8-wtuCv7KAkB08LK1KZ6F8b9tW7t3CCAaABTuzBqXkap3egTX18Y-r\/s1600\/Collectibles19.png\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"314\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjV6MPUI_3Q5gH09OEMTr4ZTERrSZrPNr29koPcZASGChfn5MDggrz60VASJTj4w0cjB8qkqKDH0JefkN8-wtuCv7KAkB08LK1KZ6F8b9tW7t3CCAaABTuzBqXkap3egTX18Y-r\/s320\/Collectibles19.png\" width=\"320\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr align=\"center\"\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:Times;\n panose-1:2 0 5 0 0 0 0 0 0 0;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:3 0 0 0 1 0;}\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n\u003C\/style\u003E\n\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cdiv style=\"text-align: center;\"\u003E\n\u003Cspan style=\"font-size: x-small;\"\u003E\u003Ci\u003E\u003Cspan style=\"font-family: \u0026quot;times\u0026quot;;\"\u003EConsistent\nsize distributions \u003C\/span\u003E\u003C\/i\u003E\u003Ci\u003Eof \u003C\/i\u003E\u003Ci\u003EÜçağızli\u003C\/i\u003E\u003Ci\u003E\u003Cspan style=\"font-family: \u0026quot;times\u0026quot;;\"\u003E Cave I beads by culture period from 41,000\nBP (start of Initial Upper Paleolithic) to 29,000 BP (end of Epipaleolithic) [6]\u003C\/span\u003E\u003C\/i\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\np.MsoListParagraph, li.MsoListParagraph, div.MsoListParagraph\n {mso-style-priority:34;\n mso-style-unhide:no;\n mso-style-qformat:yes;\n margin-top:0in;\n margin-right:0in;\n margin-bottom:0in;\n margin-left:.5in;\n margin-bottom:.0001pt;\n mso-add-space:auto;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\np.MsoListParagraphCxSpFirst, li.MsoListParagraphCxSpFirst, div.MsoListParagraphCxSpFirst\n {mso-style-priority:34;\n mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-type:export-only;\n margin-top:0in;\n margin-right:0in;\n margin-bottom:0in;\n margin-left:.5in;\n margin-bottom:.0001pt;\n mso-add-space:auto;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\np.MsoListParagraphCxSpMiddle, li.MsoListParagraphCxSpMiddle, div.MsoListParagraphCxSpMiddle\n {mso-style-priority:34;\n mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-type:export-only;\n margin-top:0in;\n margin-right:0in;\n margin-bottom:0in;\n margin-left:.5in;\n margin-bottom:.0001pt;\n mso-add-space:auto;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\np.MsoListParagraphCxSpLast, li.MsoListParagraphCxSpLast, div.MsoListParagraphCxSpLast\n {mso-style-priority:34;\n mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-type:export-only;\n margin-top:0in;\n margin-right:0in;\n margin-bottom:0in;\n margin-left:.5in;\n margin-bottom:.0001pt;\n mso-add-space:auto;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n\u003C\/style\u003E\n\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\nUpper Paleolithic shell bead manufacturers were very\nselective of which size and shape of shells they chose to turn into beads: the\nresulting beads had “great consistency…of size and shape” compared to the\nnatural biotic distribution of the shells.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp;\n\u003C\/span\u003EMost variation in shell species, shape, and size was eliminated during manufacture.\nThey were as similar in size, shape, and weight as it was possible for a\ncollectable set of natural objects in that environment to be. According to\nStiner et. al.:\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoListParagraph\"\u003E\nSomething about the basket-shaped forms in particular\n– their resemblance to something else or just their geometry – held the\ninterests of people over very long stretches of time. It is difficult to argue\nthat continuity in species and forms across such vast stretches of time and\nspace reflects cultural affinity or continuity, particularly in the case of\nbeautiful \u003Ci style=\"mso-bidi-font-style: normal;\"\u003Enatural \u003C\/i\u003Eobjects. While\npreferred shell forms stayed much the same, other aspects of culture varied a\ngreat deal.[6]\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003C\/div\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEglOcDMllu3Z28zKYCtASgRtX8lv6z6mmRq5ZwjQv72HMXCaJUNAkJa8xfjVhnW7NF43s2ebqBLTigbkPuUXuKi6-K4TI9ZUeoDqim0LgbsXCwMFDDykmgRQx9t5Bv8Kclv5sPM\/s1600\/Collectibles20.png\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"400\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEglOcDMllu3Z28zKYCtASgRtX8lv6z6mmRq5ZwjQv72HMXCaJUNAkJa8xfjVhnW7NF43s2ebqBLTigbkPuUXuKi6-K4TI9ZUeoDqim0LgbsXCwMFDDykmgRQx9t5Bv8Kclv5sPM\/s400\/Collectibles20.png\" width=\"300\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n 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mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\np.MsoListParagraphCxSpFirst, li.MsoListParagraphCxSpFirst, div.MsoListParagraphCxSpFirst\n {mso-style-priority:34;\n mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-type:export-only;\n margin-top:0in;\n margin-right:0in;\n margin-bottom:0in;\n margin-left:.5in;\n margin-bottom:.0001pt;\n mso-add-space:auto;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\np.MsoListParagraphCxSpMiddle, 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mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n\u003C\/style\u003E\n\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cdiv style=\"text-align: center;\"\u003E\n\u003Cspan style=\"font-size: x-small;\"\u003E\u003Ci\u003E\u003Cspan style=\"font-family: \u0026quot;times\u0026quot;;\"\u003ESevere conservatism\nof shells selected for use as beads at \u003C\/span\u003E\u003Cspan style=\"font-family: \u0026quot;cambria\u0026quot;;\"\u003EÜçağızli\n\u003C\/span\u003E\u003Cspan style=\"font-family: \u0026quot;times\u0026quot;;\"\u003Efrom\nc. 41,000 BP (layer I) to 29,000 BP (layer EPI) – time goes from bottom to top.\nRelative frequencies of Columbella, Nassarius, Dentalium, Gibbula, and other\ntaxa used as shell beads.\u0026nbsp; There was during\nthis long period a very strong preference for the “basket-shaped” shells of the\nmost typical size of Columbella and Nassarius over the many other and more\ncommon shapes and sizes of shells across the Mediterranean. [6]\u003C\/span\u003E\u003C\/i\u003E\u003C\/span\u003E\n\n\n\n \n\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cb style=\"mso-bidi-font-weight: normal;\"\u003E\u0026nbsp;\u003C\/b\u003E\n\n\n\n\n\n\n\n\n\n\n\n\n\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:Times;\n panose-1:2 0 5 0 0 0 0 0 0 0;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:3 0 0 0 1 0;}\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n 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margin-bottom:.0001pt;\n mso-add-space:auto;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n \/* List Definitions *\/\n@list l0\n {mso-list-id:748963580;\n mso-list-type:hybrid;\n mso-list-template-ids:1188572544 67698703 67698713 67698715 67698703 67698713 67698715 67698703 67698713 67698715;}\n@list l0:level1\n {mso-level-tab-stop:none;\n mso-level-number-position:left;\n text-indent:-.25in;}\n@list l0:level2\n {mso-level-number-format:alpha-lower;\n mso-level-tab-stop:none;\n mso-level-number-position:left;\n text-indent:-.25in;}\n@list l0:level3\n {mso-level-number-format:roman-lower;\n mso-level-tab-stop:none;\n mso-level-number-position:right;\n text-indent:-9.0pt;}\n@list l0:level4\n {mso-level-tab-stop:none;\n mso-level-number-position:left;\n text-indent:-.25in;}\n@list l0:level5\n {mso-level-number-format:alpha-lower;\n mso-level-tab-stop:none;\n mso-level-number-position:left;\n text-indent:-.25in;}\n@list l0:level6\n {mso-level-number-format:roman-lower;\n mso-level-tab-stop:none;\n mso-level-number-position:right;\n text-indent:-9.0pt;}\n@list l0:level7\n {mso-level-tab-stop:none;\n mso-level-number-position:left;\n text-indent:-.25in;}\n@list l0:level8\n {mso-level-number-format:alpha-lower;\n mso-level-tab-stop:none;\n mso-level-number-position:left;\n text-indent:-.25in;}\n@list l0:level9\n {mso-level-number-format:roman-lower;\n mso-level-tab-stop:none;\n mso-level-number-position:right;\n text-indent:-9.0pt;}\nol\n {margin-bottom:0in;}\nul\n {margin-bottom:0in;}\n\u003C\/style\u003E\u003Cbr \/\u003E\nBesides a consistent form, the beads were also manufactured\nin a supply that was very stable across the more than ten millennia recorded in\nthe \u003Cspan style=\"mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003EÜçağızli caves. The diet changed – at the beginning of this\ntimespan consisting almost entirely of land resources, at the end in a mix of\nland and marine resources -- but the shell bead supply remained remarkably\nsteady.\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\nConsider that objects constituting an efficient medium for\nthe satisfaction of obligations among forager peoples would satisfy two main\ncriteria:\u003Cbr \/\u003E\n\u003Cblockquote class=\"tr_bq\"\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003E1. They must be common and consistent enough to\nfind or make a sufficient number of fungible instances to allow divisibility,\nand\u003C\/span\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003E2. They must be rare enough or costly enough to make\nto constitute substantial wealth with low bulk and weight, and must fit snugly\nenough together when strung and worn, that they do not overburden the mobile\nforgers who carry them around when changing campsites (as they often did).\u003C\/span\u003E\u003C\/blockquote\u003E\n\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\nThese hard-to-find shells of \u003Ci style=\"mso-bidi-font-style: normal;\"\u003E\u003Cspan style=\"mso-bidi-font-family: Times;\"\u003ENassarius\u003C\/span\u003E\u003C\/i\u003E and \u003Ci style=\"mso-bidi-font-style: normal;\"\u003EColumbella \u003C\/i\u003Ewere the objects in the Mediterranean\nforager environments that best satisfied these criteria.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EIncorporating as they did unforgeable\ncostliness, they would have also made splendid stores and displays of\nwealth.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EIn any of these roles, they were\na pure collectible. The snail shell standard was far from arbitrary.\u003C\/div\u003E\n\u003Cbr \/\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEi-Ca3vo-9kgm6HBJJs_U_D3mdyBLcdC26v76pHvkOtRu_40CDCVzJy3uHFqF2dpP4z5TGZcny9KtKV2bcSkjCpAzQEcX6qqBa3d9MMVgYM7ObGlHA-e6t6TfhUi4Q0eRd1c1H2\/s1600\/Collectibles21.png\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"178\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEi-Ca3vo-9kgm6HBJJs_U_D3mdyBLcdC26v76pHvkOtRu_40CDCVzJy3uHFqF2dpP4z5TGZcny9KtKV2bcSkjCpAzQEcX6qqBa3d9MMVgYM7ObGlHA-e6t6TfhUi4Q0eRd1c1H2\/s400\/Collectibles21.png\" width=\"400\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n\u003C\/style\u003E\n\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cdiv style=\"text-align: center;\"\u003E\n\u003Cspan style=\"font-size: x-small;\"\u003E\u003Ci\u003EConsistent supply: abundance of beads (“ornaments”)\nvs. vertebrates (typically edible land animals) and edible shellfish (“shellfish”)\nfound in the successive \u003C\/i\u003E\u003Ci\u003EÜçağızli layers 41,000-29,000 BP.[6]\u003C\/i\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\nThe use of \u003Ci style=\"mso-bidi-font-style: normal;\"\u003EN.\ngibbosulus\u003C\/i\u003E shells as beads goes back much further in time than the 41,000\nBP starting point of this study of \u003Cspan style=\"mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003EÜçağızli\u003C\/span\u003E. The earliest evidence\nof this shell standard is dated from between 100,000 and 135,000 BP at Skuhl in\nIsrael, and similarly old beads were found in Algeria.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EThe institution prevailed for many tens of\nthousands of years across most of the length of the Mediterranean[11]. It was\nnot until the Epipaleolithic that there was even the slightest trace of\nSchumpeterian “creative destruction” in this institution.\u003C\/div\u003E\n\u003Cbr \/\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cb style=\"mso-bidi-font-weight: normal;\"\u003E\u0026nbsp;\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhOtdMY2hMRzyOv5psUa1_xOaEdFt9bz2_GX4MHY76tpCwKD2ErE34f4wQr0t7Xis_1eU9AJEp5o7n7jBRcBOyWMacbgmr2W-em5adscHXfye-Ffn_7J5i23KApL-dLaPbVZvDY\/s1600\/Collectibles22.png\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"225\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhOtdMY2hMRzyOv5psUa1_xOaEdFt9bz2_GX4MHY76tpCwKD2ErE34f4wQr0t7Xis_1eU9AJEp5o7n7jBRcBOyWMacbgmr2W-em5adscHXfye-Ffn_7J5i23KApL-dLaPbVZvDY\/s320\/Collectibles22.png\" width=\"320\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n\u003C\/style\u003E\n\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003C\/b\u003E\u003C\/div\u003E\n\u003Cdiv style=\"text-align: center;\"\u003E\n\u003Cspan style=\"font-size: x-small;\"\u003E\u003Ci\u003E\u003Cspan style=\"font-family: \u0026quot;cambria\u0026quot;;\"\u003E“Money Cowry; Length 2.6 cm; Palou Tello, Batu\nIslands, Indonesia.”\u003C\/span\u003E\u003C\/i\u003E\u003Cspan style=\"font-family: \u0026quot;cambria\u0026quot;;\"\u003E \u003Ca href=\"https:\/\/en.wiktionary.org\/wiki\/%E8%B2%9D\" target=\"_blank\"\u003E[Source]\u003C\/a\u003E\u003C\/span\u003E\u003C\/span\u003E\n\n\n\n\n\n\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n\u003C\/style\u003E \u003Cbr \/\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cb style=\"mso-bidi-font-weight: normal;\"\u003ECowries\u003C\/b\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003ECowry shells are among the most widely\ndistributed objects found in Eurasian Neolithic archaeology[8]. Peng and Zhu [2]\nuse the archaeological record to trace an early Bronze Age “Cowrie Road” roughly\nfollowing the arc of the later Silk Road across the mid-Eurasian steppes from\nthe Red Sea (where the species used probably lived) to what is now modern\nChina. \u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp;\u003C\/span\u003EThe lack of thick forests or\nfixed agriculture made the region relatively easy for merchants and other\ntravellers to traverse. \u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjPLNXqi2DQf-by1d-4ZbLrTRiILrnzK_jerJiRsPRXH2W7VXqrgaEPhjnYC3XedMX6ZikFYvFB2dH8obc2VRWAL4NqxysJ-SLBLC-EoitUFisyAeUAJAi0qMnzemXCjIGOuKmq\/s1600\/Collectibles23.png\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"456\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjPLNXqi2DQf-by1d-4ZbLrTRiILrnzK_jerJiRsPRXH2W7VXqrgaEPhjnYC3XedMX6ZikFYvFB2dH8obc2VRWAL4NqxysJ-SLBLC-EoitUFisyAeUAJAi0qMnzemXCjIGOuKmq\/s640\/Collectibles23.png\" width=\"640\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n\u003C\/style\u003E\n\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cdiv style=\"text-align: center;\"\u003E\n\u003Cspan style=\"font-size: x-small;\"\u003E\u003Ci\u003EFinds of cowries originating from the Red Sea (off the map\nto the left), during the middle and late Shang Dynasty, c. 1400-1040 BC. \u0026nbsp;This general West-to-East movement would be\nrepeated in much later times by a largely ship-borne movement of silver. [2]\u003C\/i\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003E\u0026nbsp;\u003C\/span\u003E\n\n\n\n\n\n\n\n\n\n\n\n\n\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n\u003C\/style\u003E\u003C\/div\u003E\n\u003Cspan style=\"mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003EThese cowries have also been found in\nmany Neolithic excavations within a few hundred kilometers of the Red Sea,\nincluding pre-dynastic Egypt and Jericho as far back as the second Neolithic\nstage (7000-6000BC). Cowries are also found in the steppe Djeitun culture (7000-6000\nBC). Cowrie shells did not however reach everywhere, and were far from the only\nshells used in the Eurasian Neolithic.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp;\n\u003C\/span\u003EIn southeastern China during the late Neolithic and early Bronze Age,\ncowries were not used, but instead four species of mollusk from China’s own\ncoast[2]. In the Mediterranean Neolithic \u003Ci style=\"mso-bidi-font-style: normal;\"\u003ESpondylus\n\u003C\/i\u003Eshells were often used [3], but there was also a significant presence of\ncowrie in Mesopotamia and the eastern Mediterranean. \u003C\/span\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ctable cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjscpBBxgQpQoz_P30ykBcshKHWtwZBBAIsaB3oHjA0Qn1GPeSxZrX9N5bKZH6qDMbf18b2TbMGrtwE1TxIwVWwve-8GuYVm716IubNemGk_nGKb1Xm8XgZQD8gxOvh77bel6GZ\/s1600\/Collectibles24.png\" style=\"clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"284\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjscpBBxgQpQoz_P30ykBcshKHWtwZBBAIsaB3oHjA0Qn1GPeSxZrX9N5bKZH6qDMbf18b2TbMGrtwE1TxIwVWwve-8GuYVm716IubNemGk_nGKb1Xm8XgZQD8gxOvh77bel6GZ\/s400\/Collectibles24.png\" width=\"400\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E\u003Cspan style=\"font-family: \u0026quot;cambria\u0026quot;; font-size: 10.0pt;\"\u003E\u003Cspan style=\"font-size: x-small;\"\u003EAuthority resemblance: bronze cowries (\u003C\/span\u003E\u003C\/span\u003E\u003Cspan style=\"font-size: x-small;\"\u003E\u003Cspan style=\"font-family: \u0026quot;cambria\u0026quot;;\"\u003EShang dynasty (\u003C\/span\u003E\u003Cspan style=\"color: #1c1c1c; font-family: \u0026quot;ｍｓ 明朝\u0026quot;;\"\u003E商代\u003C\/span\u003E\u003Cspan style=\"color: #1c1c1c; font-family: \u0026quot;cambria\u0026quot;;\"\u003E) 1600-1046 BC)\u003C\/span\u003E\u003Cspan style=\"color: #1c1c1c; font-family: \u0026quot;helvetica\u0026quot;;\"\u003E \u003C\/span\u003E\u003C\/span\u003E\u003C\/i\u003E\u003Cspan style=\"font-size: x-small;\"\u003E\u003Ca href=\"https:\/\/zh.wikipedia.org\/wiki\/%E9%93%9C%E8%B4%9D\" target=\"_blank\"\u003E\u003Cspan style=\"color: #1c1c1c; font-family: \u0026quot;helvetica\u0026quot;;\"\u003E[Source]\u003C\/span\u003E\u003C\/a\u003E\u003C\/span\u003E\u003Cspan style=\"font-family: \u0026quot;cambria\u0026quot;; font-size: 10.0pt;\"\u003E \u003C\/span\u003E\n\n\n\n\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiZIJKZz_VlsumylKc44q3Lux-2qBJYNBq-EdEKOHiHrGO37qMaQUFM-ETTfubVGKwe3SPI0D-TKv2eWn0a09rv1gsWMHwQ-4Xj39zc-asZ6v68gmMyTYm8HMNqSqyjHFL7IdNS\/s1600\/Collectibles25.png\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"296\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiZIJKZz_VlsumylKc44q3Lux-2qBJYNBq-EdEKOHiHrGO37qMaQUFM-ETTfubVGKwe3SPI0D-TKv2eWn0a09rv1gsWMHwQ-4Xj39zc-asZ6v68gmMyTYm8HMNqSqyjHFL7IdNS\/s400\/Collectibles25.png\" width=\"400\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Cspan style=\"font-size: x-small;\"\u003E\u003Ci\u003E\u003Cspan style=\"font-family: \u0026quot;cambria\u0026quot;;\"\u003E\"Ant-nose” coins (\u003C\/span\u003E\u003Cspan class=\"searchmatch\"\u003E\u003Cspan style=\"font-family: \u0026quot;cambria\u0026quot;;\"\u003EEastern\u003C\/span\u003E\u003C\/span\u003E\u003Cspan style=\"font-family: \u0026quot;cambria\u0026quot;;\"\u003E \u003Cspan class=\"searchmatch\"\u003EZhou\u003C\/span\u003E 770 to 221\nBC) \u003C\/span\u003E\u003C\/i\u003E\u003Ca href=\"https:\/\/zh.wikipedia.org\/wiki\/%E9%93%9C%E8%B4%9D\" target=\"_blank\"\u003E\u003Cspan style=\"color: #1c1c1c; font-family: \u0026quot;helvetica\u0026quot;;\"\u003E[Source]\u003C\/span\u003E\u003C\/a\u003E\u003C\/span\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cbr \/\u003E\nCowries are also recorded in historical times as being used\nas money, for example in parts of China. The cowrie shell symbol \u003Cspan style=\"font-family: \u0026quot;lantinghei tc heavy\u0026quot;; mso-bidi-font-family: \u0026quot;Lantinghei TC Heavy\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003E貝\u003C\/span\u003E is used as a component to\nwrite several \u003Ca href=\"http:\/\/elaineou.com\/2016\/06\/28\/china-and-%E9%8C%A2\/\" target=\"_blank\"\u003EChinese words\u003C\/a\u003E [5] associated with the transfer of value, including\u003Cbr \/\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;lantinghei tc heavy\u0026quot;; mso-bidi-font-family: \u0026quot;Lantinghei TC Heavy\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003E則\u003C\/span\u003E (rule,\nlaw, regulation) – a cowrie and a knife – possibly referring to the two main\nkinds of legal remedies (money and punishment), which I hope to explore in\ndepth in future posts\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;lantinghei tc heavy\u0026quot;; mso-bidi-font-family: \u0026quot;Lantinghei TC Heavy\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003E買 \u003C\/span\u003E(buy,\npurchase) – a net over a cowrie (cowrie in a pouch?)\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Ca href=\"https:\/\/en.wiktionary.org\/wiki\/%E8%B2%9D\" target=\"_blank\"\u003EExchange rates\u003C\/a\u003E between cowries and coins existed in at least\nIndia, Bengal, and Siam.\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjSujbWl0cbhPmWB_bE24mTV46QVg0NfR3eA4CKOuvM6lcsutUbjQLkumwLrPhhmTrNP2o03OT9jQqPdyOs41VnCfA3mYzVeUPa1j6XmdHR3R4Suo3mOHrvSxEVSfTDb_pri63m\/s1600\/Collectibles26.png\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"165\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjSujbWl0cbhPmWB_bE24mTV46QVg0NfR3eA4CKOuvM6lcsutUbjQLkumwLrPhhmTrNP2o03OT9jQqPdyOs41VnCfA3mYzVeUPa1j6XmdHR3R4Suo3mOHrvSxEVSfTDb_pri63m\/s320\/Collectibles26.png\" width=\"320\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n\u003C\/style\u003E\n\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cdiv style=\"text-align: center;\"\u003E\n\u003Cspan style=\"font-size: x-small;\"\u003E\u003Ci\u003E\u003Cspan style=\"font-family: \u0026quot;cambria\u0026quot;;\"\u003EObverse and reverse of a Ban Liang coin from the\nWestern Han Dynasty (206 BC – 204 AD)\u003C\/span\u003E\u003Cspan style=\"font-family: \u0026quot;cambria\u0026quot;;\"\u003E.\nLike beads, they were strung on strings.\u0026nbsp;\nThese “strings of cash” were the most common form of payment in China\nuntil colonial times.\u003C\/span\u003E\u003C\/i\u003E\u003Ci\u003E \u003C\/i\u003E\u003Ca href=\"https:\/\/en.wikipedia.org\/wiki\/Ancient_Chinese_coinage#Ban_Liang_coins\" target=\"_blank\"\u003E[Source]\u003C\/a\u003E\u003C\/span\u003E \n\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\nAuthority resemblance, the mimicry of pre-existing\nauthoritative forms in a new medium, is as described above a very common\nfeature of innovation.\u003Cspan style=\"mso-spacerun: yes;\"\u003E \u003C\/span\u003EThe earliest electrum coins invented near the Turkish coast appear, like the\nChinese bronze cowries and “ ant-nose” coins (so named by a much later\nnumismatist), to purposefully resemble pre-existing shell collectibles[13].\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EThis suggests that the earliest coins were\nintended to be authoritative for uses similar to what cowries in China and electrum\nbeads in Anatolia, respectively, were already being used for.\u0026nbsp;\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEith-i_PeRnceyzQAl6gxSBAQa0wzAI6n6Sq1h7zLcs5qjmG9QSKekTuFsaBlwG3G79px2EojWt1AL42VWHen8HE-6hcARxW1J93OsrTMGZrufPR6haMF_219tKPFRMhIMwMjlz\/s1600\/Collectibles27.png\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"121\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEith-i_PeRnceyzQAl6gxSBAQa0wzAI6n6Sq1h7zLcs5qjmG9QSKekTuFsaBlwG3G79px2EojWt1AL42VWHen8HE-6hcARxW1J93OsrTMGZrufPR6haMF_219tKPFRMhIMwMjlz\/s640\/Collectibles27.png\" width=\"640\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n\u003C\/style\u003E\n\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cdiv style=\"text-align: center;\"\u003E\n\u003Cspan style=\"font-size: x-small;\"\u003E\u003Ci\u003E\u003Cspan style=\"font-family: \u0026quot;cambria\u0026quot;;\"\u003EElectrum beads in the form of cowrie shells,\nfrom a burial in Middle Kingdom Egypt. Yet another likely case of authority\nresemblance.\u003C\/span\u003E\u003C\/i\u003E\u003Cspan style=\"font-family: \u0026quot;cambria\u0026quot;;\"\u003E \u003Ca href=\"http:\/\/www.penn.museum\/documents\/publications\/expedition\/PDFs\/56-1\/hidden-treasures.pdf\" target=\"_blank\"\u003E[Source]\u003C\/a\u003E\u003C\/span\u003E\u003C\/span\u003E\n\n\n\n\n\u003C\/div\u003E\n\u003Cbr \/\u003E\n\u003Cspan style=\"font-family: \u0026quot;cambria\u0026quot;; font-size: 12.0pt;\"\u003EShininess and other aesthetically desired\ncharacteristics could have served as \u003Ci style=\"mso-bidi-font-style: normal;\"\u003E\u003Ca href=\"http:\/\/szabo.best.vwh.net\/measuringvalue.html\" target=\"_blank\"\u003Eproxy measures\u003C\/a\u003E\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003E\u003C\/i\u003Eof scarcity during the long periods of the shell standards in the Upper Paleolithic, and these continue to be attractive attributes of jewelry to this day. \u003C\/span\u003E\u003Cbr \/\u003E\n\u003Cspan style=\"font-family: \u0026quot;cambria\u0026quot;; font-size: 12.0pt;\"\u003E\u003C\/span\u003E\u003Cbr \/\u003E\n\u003Cspan style=\"font-family: \u0026quot;cambria\u0026quot;; font-size: 12.0pt;\"\u003E\u003C\/span\u003E\n\n\u003Cbr \/\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"float: left; margin-right: 1em; text-align: left;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjDRtYWJiltVAtaqkL5gqyJNlq3QCoPFFJug2BChw6C_AI3YSBQS1EKwACjCSdeiFdmDB2T-WhaRJHtafGcXCIXKozEVOz2TScuEc9wH-BFS_IVIdtnrijY_Cq8Yki0P0W3VvHs\/s1600\/Collectibles28.png\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"320\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjDRtYWJiltVAtaqkL5gqyJNlq3QCoPFFJug2BChw6C_AI3YSBQS1EKwACjCSdeiFdmDB2T-WhaRJHtafGcXCIXKozEVOz2TScuEc9wH-BFS_IVIdtnrijY_Cq8Yki0P0W3VvHs\/s320\/Collectibles28.png\" width=\"198\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n\u003C\/style\u003E\n\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cspan style=\"font-size: x-small;\"\u003E\u003Ci\u003EElectrum and gold beads, Nubia, c. 1700-1550 BC\u003C\/i\u003E\u003C\/span\u003E\u003Cbr \/\u003E\n\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n\u003C\/style\u003E\u0026nbsp; \u003Cbr \/\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cb style=\"mso-bidi-font-weight: normal;\"\u003EConclusion\u003C\/b\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\nIt was once argued that the eye could not have evolved, for\nwhat use is half an eye, much less a quarter of an eye and so forth?\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003ERichard Dawkins called this “argument from\nlack of imagination.”\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EIt is hard to\nimagine objects much less functional than those we are familiar with as being\nuseful at all. But even one light-sensing cell can be useful in telling the\ndifference between night and day, which in some environments can be strongly\ncorrelated with the availability of food or protection from predators. Starting\nfrom that most rudimentary (yet useful in itself) of functions, there are a\nwide variety of useful steps to the sophisticated eyes of animals today. [4]\nSimilarly with the artifacts of archaeology, sometimes objects far less\nfunctional than the ones we take for granted could have been evolutionarily\ncrucial to humans dating back at least to the Middle Paleolithic.\u0026nbsp;\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cspan style=\"font-family: \u0026quot;cambria\u0026quot;; font-size: 12.0pt;\"\u003E\u0026nbsp;\u003C\/span\u003E\n\n\n\n\u003Cbr \/\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"float: left; margin-right: 1em; text-align: left;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjpxUGu6ZunZFQdU5WlxnrlroeAccJgNLgQJ18wTZ9NHKgo-meZmtah9pdRJek_hEa-VG1pRxMAVPvdHeWnSkEY70P_RDP9fyM6NMqZG6quiYYqmq6egYxcGSw5jitObZnC2bQA\/s1600\/Collectibles29.png\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"200\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjpxUGu6ZunZFQdU5WlxnrlroeAccJgNLgQJ18wTZ9NHKgo-meZmtah9pdRJek_hEa-VG1pRxMAVPvdHeWnSkEY70P_RDP9fyM6NMqZG6quiYYqmq6egYxcGSw5jitObZnC2bQA\/s200\/Collectibles29.png\" width=\"187\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n\u003C\/style\u003E\n\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cspan style=\"font-size: x-small;\"\u003E\u003Ci\u003E\u003Cspan style=\"font-family: \u0026quot;cambria\u0026quot;;\"\u003EElectrum bead, Mesopotamia c. 1000 BC. \u003C\/span\u003E\u003C\/i\u003E\u003Ca href=\"https:\/\/the-maac.com\/shop\/antique-jewelry\/early-mesopotamian-faience-electrum-necklace\/\" target=\"_blank\"\u003E[Source]\u003C\/a\u003E\u003C\/span\u003E \n\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:Word\u003C\/style\u003EA wide variety of artifacts have served to store, display,\nand transfer wealth in a wide variety of ways, ranging from unique artworks and\nheirlooms as we now understand them, to money as we now understand it\n(typically official government currencies, the modern legal definition of\nmoney), to a wide variety of forms and uses in between, most of which we no\nlonger know about or have a difficult time understanding.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EWhere artifacts are present in burials, they\nare most commonly these artifacts of wealth – these collectibles -- rather than\nconcretely useful tools. They are also common in the remainder of the\narchaeological record dating back many tens of millennia, strongly suggesting\nan important evolutionary function.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EDuring\nUpper Paleolithic times shell beads were manufactured in standard forms with a tradition so rigid that these forms existed largely unchanged for many thousands of years.\u003C\/div\u003E\n\u003Cbr \/\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"float: left; margin-right: 1em; text-align: left;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgUQzBv-RhsUqZhJwj6SjHJ7HiyJMoC_i6g0HJPy7qxxbjSysbmi9jmFMzVtjviztobnnnu2ZRWCnJtvs9BNr4Iho7Bso45f3OXfEJzE1A8Xrl-Lp71f9cHuNWw2Qgm3dWFJ0FP\/s1600\/Collectibles30.png\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"276\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgUQzBv-RhsUqZhJwj6SjHJ7HiyJMoC_i6g0HJPy7qxxbjSysbmi9jmFMzVtjviztobnnnu2ZRWCnJtvs9BNr4Iho7Bso45f3OXfEJzE1A8Xrl-Lp71f9cHuNWw2Qgm3dWFJ0FP\/s320\/Collectibles30.png\" width=\"320\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n\u003C\/style\u003E\n\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cspan style=\"font-size: x-small;\"\u003E\u003Ci\u003EElectrum bead necklace, Lydia (in what is now Turkey),\nc. 550-450 BC\u003C\/i\u003E\u003C\/span\u003E\u003Cbr \/\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\na:link, span.MsoHyperlink\n {mso-style-priority:99;\n color:blue;\n mso-themecolor:hyperlink;\n text-decoration:underline;\n text-underline:single;}\na:visited, span.MsoHyperlinkFollowed\n {mso-style-noshow:yes;\n mso-style-priority:99;\n color:purple;\n mso-themecolor:followedhyperlink;\n text-decoration:underline;\n text-underline:single;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n\u003C\/style\u003E\u003C\/div\u003E\n\u003Cbr \/\u003E\nStocks and bonds, futures and derivatives, the kind of money\nwe are familiar with (coins, paper money, digital money, etc.), high art, and\nmost other artifacts of wealth as we understand them did not exist in\nPaleolithic times, and even in Neolithic times, when some artifacts more\nclosely approached these ideals, they were still far less developed and\nspecialized than today.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EWe are not\ntalking about the highly evolved forms of collectibles, quite the opposite – we\nare talking about the most rudimentary of function, which nevertheless is quite\na bit better than nothing (which is what other animals have when it comes to\ncollectibles).\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp; \u003C\/span\u003EI described what such\nfunction is \u003Ca href=\"https:\/\/szabo.best.vwh.net\/shell.html\" target=\"_blank\"\u003Ehere\u003C\/a\u003E and will be elaborating these theories and demonstrating them further in future\npublications.\u003Cbr \/\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u0026nbsp; \u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u0026nbsp; \u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhiqD_cnuzai2ihVLvb0k8REQymOS392663ql2n9Yr8rEFYaIk8cO6dr2rGdVLYSu_zW49xfkfqt_h7GFoutqVuNRFNhfW7oYZO_F4cDHM0P3awOh6kD1gTy0945Eqhj6hyx6FW\/s1600\/Collectibles31.png\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"320\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhiqD_cnuzai2ihVLvb0k8REQymOS392663ql2n9Yr8rEFYaIk8cO6dr2rGdVLYSu_zW49xfkfqt_h7GFoutqVuNRFNhfW7oYZO_F4cDHM0P3awOh6kD1gTy0945Eqhj6hyx6FW\/s320\/Collectibles31.png\" width=\"235\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E\u003Cspan style=\"font-family: \u0026quot;cambria\u0026quot;; font-size: 10.0pt;\"\u003E\u003Cspan style=\"font-size: x-small;\"\u003EEarly electrum coins of the “Ionian-A” or\nEphesian type, in what is now Turkey, c. 625-575 BC. \u003C\/span\u003E\u003C\/span\u003E\u003C\/i\u003E\u003Cspan style=\"font-size: x-small;\"\u003E\u003Ca href=\"http:\/\/www.glebecoins.net\/electrum\/Early_Electrum\/Basic_Electrum_Types\/basic_electrum_types.html\" target=\"_blank\"\u003E\u003Cspan style=\"font-family: \u0026quot;cambria\u0026quot;;\"\u003E[Source]\u003C\/span\u003E\u003C\/a\u003E\u003C\/span\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u0026nbsp; \u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiJBeDH5rdMkBTO4aj6VTeCmBNKxn0jZVHvyfjhbBDDk3qS0VREUS7KzJslHqC1TSaQqrlqTMo6uCRXA4tI1YwJRbG0AUybOIEsWUOPnGN8edE8GeClcsBHzAWiVql9q3qastrx\/s1600\/Collectibles32.png\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"320\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiJBeDH5rdMkBTO4aj6VTeCmBNKxn0jZVHvyfjhbBDDk3qS0VREUS7KzJslHqC1TSaQqrlqTMo6uCRXA4tI1YwJRbG0AUybOIEsWUOPnGN8edE8GeClcsBHzAWiVql9q3qastrx\/s320\/Collectibles32.png\" width=\"264\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Ci style=\"mso-bidi-font-style: normal;\"\u003E\u003Cspan style=\"font-family: \u0026quot;cambria\u0026quot;; font-size: 10.0pt;\"\u003E\u003Cspan style=\"font-size: x-small;\"\u003EEarly electrum coins of the “Ionian-A” or\nEphesian type, in what is now Turkey, c. 625-575 BC. \u003C\/span\u003E\u003C\/span\u003E\u003C\/i\u003E\u003Cspan style=\"font-size: x-small;\"\u003E\u003Ca href=\"http:\/\/www.glebecoins.net\/electrum\/Early_Electrum\/Basic_Electrum_Types\/basic_electrum_types.html\" target=\"_blank\"\u003E\u003Cspan style=\"font-family: \u0026quot;cambria\u0026quot;;\"\u003E[Source]\u003C\/span\u003E\u003C\/a\u003E\u003C\/span\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\n\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n\u003C\/style\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\nOf the wide variety of artifacts that had no concrete use,\nbut which archaeologists tend to dub “ornamental” or “ceremonial”, most types\nwere idiosyncratic to particular cultures. But two types were widely spread in\ntime and space: beads of shell or bone were ubiquitous in Paleolithic and\nNeolithic cultures, while “ornamental” blades and points were widely popular in\nthe Neolithic and possibly much further back in time.\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\nIn both cases where coins were invented – along the coast of\nTurkey and in parts of China – many early coins resembled shell beads in\nprobable cases of authority resemblance. Prior to the invention of coinage many\nmetal beads had also been shaped in forms resembling shell beads. Before the\nwidespread use of coinage, the artifacts we now see as jewelry likely also\noften condensed a function similar to early coinage. \u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"mso-bidi-font-family: Helvetica;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjfNvCPdwhoOLhzmFUcPiQj8FGsiVw_SGRdO0sPdhlcLxG8N2fyyPI3eoZiEbOP_wUapQFwe06ODqIhalVAAk22up5tCsFcnIRQvhNyOd0C8xUQJ8PFp4GxQhrnuFR4metyF1OQ\/s1600\/Collectibles33.png\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"292\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjfNvCPdwhoOLhzmFUcPiQj8FGsiVw_SGRdO0sPdhlcLxG8N2fyyPI3eoZiEbOP_wUapQFwe06ODqIhalVAAk22up5tCsFcnIRQvhNyOd0C8xUQJ8PFp4GxQhrnuFR4metyF1OQ\/s320\/Collectibles33.png\" width=\"320\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Cspan style=\"font-size: x-small;\"\u003E\u003Ci\u003E\u003Cspan style=\"font-family: \u0026quot;cambria\u0026quot;;\"\u003EEarly electrum coins of the “Ionian-B” or\nMilesian type. in what is now Turkey, c. 625-575 BC \u003C\/span\u003E\u003C\/i\u003E\u003Ca href=\"http:\/\/www.glebecoins.net\/electrum\/Early_Electrum\/Basic_Electrum_Types\/basic_electrum_types.html\" target=\"_blank\"\u003E\u003Cspan style=\"font-family: \u0026quot;cambria\u0026quot;;\"\u003E[Source]\u003C\/span\u003E\u003C\/a\u003E\u003C\/span\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"mso-bidi-font-family: Helvetica;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"mso-bidi-font-family: Helvetica;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"mso-bidi-font-family: Helvetica;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"separator\" style=\"clear: both; text-align: center;\"\u003E\n\u003C\/div\u003E\n\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEghHln_5tE5TTGqFxqy_b3SuHxP2aa4yg0i7LcvVeVUIUMzpwJuq3tlbARj6lAUA7EN08Dnzw_SIn_xlxDoNZjXdVJt2VOvjSvR61Takehm3STwgAi8VStkV1LvIJ34Ri6fYEAr\/s1600\/Collectibles34.png\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"320\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEghHln_5tE5TTGqFxqy_b3SuHxP2aa4yg0i7LcvVeVUIUMzpwJuq3tlbARj6lAUA7EN08Dnzw_SIn_xlxDoNZjXdVJt2VOvjSvR61Takehm3STwgAi8VStkV1LvIJ34Ri6fYEAr\/s320\/Collectibles34.png\" width=\"220\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"Cambria Math\";\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1107305727 0 0 415 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n\u003C\/style\u003E\n\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cdiv style=\"text-align: center;\"\u003E\n\u003Cspan style=\"font-size: x-small;\"\u003E\u003Ci\u003E\u003Cspan style=\"font-family: \u0026quot;cambria\u0026quot;;\"\u003EEarly electrum coins of the “Ionian-B” or\nMilesian type. in what is now Turkey, c. 625-575 BC \u003C\/span\u003E\u003C\/i\u003E\u003Ca href=\"http:\/\/www.glebecoins.net\/electrum\/Early_Electrum\/Basic_Electrum_Types\/basic_electrum_types.html\" target=\"_blank\"\u003E\u003Cspan style=\"font-family: \u0026quot;cambria\u0026quot;;\"\u003E[Source]\u003C\/span\u003E\u003C\/a\u003E\u003C\/span\u003E\n\n\n\n\n\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\nBeads of shell and bone dominate the artifacts that look to\nus like ornaments in the archaeological record from its invention in the early\nyears of \u003Ci style=\"mso-bidi-font-style: normal;\"\u003Ehomo sapiens\u003C\/i\u003E to late\nNeolithic times, and were still very influential when coins were invented. Contrary\nto a currently popular archaeological theory, the main use of these shell beads\nwas not as “information technology” or the visual convenience of symbolic\ninformation via different combinations of shell beads. Other materials\navailable in forager environments and other techniques foragers could use were\nmuch better suited to cost-efficient symbolic communications. Instead what\ncoins and jewelry, at least as far back as the very conservative shell bead\ntraditions of the Upper Paleolithic, have in common, in sharp contrast to\ncost-efficient symbolic systems, is unforgeable costliness, which securely\nconstrained the supply curve of these goods.\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp;\n\u003C\/span\u003EThis economic security feature strongly suggests functions related to\nwealth and the fitness benefits of wealth. What these functions more\nspecifically were, in terms of genetic evolution and certain models from\neconomics applied to that evolutionary framework, will be the subject of\nsubsequent post(s) in this series.\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cstyle\u003E\n\u003C!--\n \/* Font Definitions *\/\n@font-face\n {font-family:Times;\n panose-1:2 0 5 0 0 0 0 0 0 0;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:3 0 0 0 1 0;}\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:\"ＭＳ 明朝\";\n mso-font-charset:78;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1791491579 18 0 131231 0;}\n@font-face\n {font-family:Cambria;\n panose-1:2 4 5 3 5 4 6 3 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-536870145 1073743103 0 0 415 0;}\n@font-face\n {font-family:\"Lucida Grande\";\n panose-1:2 11 6 0 4 5 2 2 2 4;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:-520090897 1342218751 0 0 447 0;}\n@font-face\n {font-family:\"Lantinghei TC Heavy\";\n panose-1:3 0 5 9 0 0 0 0 0 0;\n mso-font-charset:0;\n mso-generic-font-family:auto;\n mso-font-pitch:variable;\n mso-font-signature:3 135135232 0 0 1048577 0;}\n \/* Style Definitions *\/\np.MsoNormal, li.MsoNormal, div.MsoNormal\n {mso-style-unhide:no;\n mso-style-qformat:yes;\n mso-style-parent:\"\";\n margin:0in;\n margin-bottom:.0001pt;\n mso-pagination:widow-orphan;\n font-size:12.0pt;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\na:link, span.MsoHyperlink\n {mso-style-priority:99;\n color:blue;\n mso-themecolor:hyperlink;\n text-decoration:underline;\n text-underline:single;}\na:visited, span.MsoHyperlinkFollowed\n {mso-style-noshow:yes;\n mso-style-priority:99;\n color:purple;\n mso-themecolor:followedhyperlink;\n text-decoration:underline;\n text-underline:single;}\np\n {mso-style-priority:99;\n mso-margin-top-alt:auto;\n margin-right:0in;\n mso-margin-bottom-alt:auto;\n margin-left:0in;\n mso-pagination:widow-orphan;\n font-size:10.0pt;\n font-family:Times;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-bidi-font-family:\"Times New Roman\";}\n.MsoChpDefault\n {mso-style-type:export-only;\n mso-default-props:yes;\n font-family:Cambria;\n mso-ascii-font-family:Cambria;\n mso-ascii-theme-font:minor-latin;\n mso-fareast-font-family:\"ＭＳ 明朝\";\n mso-fareast-theme-font:minor-fareast;\n mso-hansi-font-family:Cambria;\n mso-hansi-theme-font:minor-latin;\n mso-bidi-font-family:\"Times New Roman\";\n mso-bidi-theme-font:minor-bidi;}\n@page WordSection1\n {size:8.5in 11.0in;\n margin:1.0in 1.25in 1.0in 1.25in;\n mso-header-margin:.5in;\n mso-footer-margin:.5in;\n mso-paper-source:0;}\ndiv.WordSection1\n {page:WordSection1;}\n\u003C\/style\u003E\n\u003C\/div\u003E\n\u003Cbr \/\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cb style=\"mso-bidi-font-weight: normal;\"\u003EAcknowledgements\u003C\/b\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\nMy thanks to Colin Hardwick and Elaine Ou, among others, for\ntheir help with research and\/or editing.\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cb style=\"mso-bidi-font-weight: normal;\"\u003EReferences\u003C\/b\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;\"\u003E\n\u003Cspan style=\"mso-bidi-font-family: Helvetica;\"\u003E[1] Szabo,\nNick (2002) “Shelling Out: The Origins of Money”, \u003Ca href=\"https:\/\/szabo.best.vwh.net\/shell.html\"\u003Ehttps:\/\/szabo.best.vwh.net\/shell.html\u003C\/a\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n[2] Ke Peng and Yanshi Zhu, “New Research on the Origin of\nCowries in Ancient China”, in \u003Ci style=\"mso-bidi-font-style: normal;\"\u003ESino-Platonic\nPapers #68 (May 1995)\u003Cb style=\"mso-bidi-font-weight: normal;\"\u003E \u003C\/b\u003E\u003C\/i\u003E– on the “Cowrie\nRoad” from the Red Sea across the Eurasian Steppes.\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n[3] Barry Cunliffe, \u003Ci style=\"mso-bidi-font-style: normal;\"\u003EThe\nOxford Illustrated History of Prehistoric Europe, \u003C\/i\u003Ep144\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n[4] Richard Dawkins, \u003Ci style=\"mso-bidi-font-style: normal;\"\u003EThe\nBlind Watchmaker\u003C\/i\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n[5] Elaine Ou, \u003Cspan style=\"color: black; mso-themecolor: text1;\"\u003E“\u003C\/span\u003E\u003Cspan style=\"color: black; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;; mso-themecolor: text1;\"\u003EChina and \u003C\/span\u003E\u003Cspan style=\"color: black; font-family: \u0026quot;lantinghei tc heavy\u0026quot;; mso-bidi-font-family: \u0026quot;Lantinghei TC Heavy\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;; mso-themecolor: text1;\"\u003E錢\u003C\/span\u003E\u003Cspan style=\"color: black; mso-themecolor: text1;\"\u003E“,\u003Cb style=\"mso-bidi-font-weight: normal;\"\u003E\n\u003C\/b\u003E\u003C\/span\u003E\u003Ca href=\"http:\/\/elaineou.com\/2016\/06\/28\/china-and-%E9%8C%A2\/\"\u003Ehttp:\/\/elaineou.com\/2016\/06\/28\/china-and-%E9%8C%A2\/\u003C\/a\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n[6] Mary C. Stiner, Steven L. Kuhn, Erksin G\u003Cspan style=\"font-variant: small-caps; mso-ascii-font-family: Cambria; mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;; mso-hansi-font-family: Cambria;\"\u003Eü\u003C\/span\u003Elec, “Early Upper Paleolithic shell beads at \u003Cspan style=\"mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003EÜçağızli\u003C\/span\u003E\nCave I (Turkey): Technology and the socioeconomic context of ornament life-histories,”\n\u003Ci style=\"mso-bidi-font-style: normal;\"\u003EJournal of Human Evolution 64 (2013)\n380-398\u003C\/i\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n[7] \u003Cspan style=\"font-family: \u0026quot;times\u0026quot;; font-size: 12.5pt;\"\u003ERandall White, “Technological and social dimensions of “Aurignacian age” body\nornaments across Europe.” In \u003Ci style=\"mso-bidi-font-style: normal;\"\u003EBefore\nLascaux: The Complex Record of the Early Upper Paleolithic\u003C\/i\u003E, H. Knecht, A.\nPike-Tay, and R. White (eds.) pp. 277–299. Boca Raton: CRC Press (1993)\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"font-family: \u0026quot;times\u0026quot;; font-size: 12.5pt;\"\u003E[8] \u003C\/span\u003E\u003Cspan style=\"mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003E\u003Ca href=\"http:\/\/www.tibetarchaeology.com\/may-2014\/\"\u003Ehttp:\/\/www.tibetarchaeology.com\/may-2014\/\u003C\/a\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003E[9] Randall White, \"From\nMaterials To Meaning\", Institute For Ice Age Studies\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cbr \/\u003E\u003C\/div\u003E\n\u003Cspan style=\"font-family: \u0026quot;cambria\u0026quot;; font-size: 12.0pt;\"\u003E[10] \u003C\/span\u003E\u003Cspan style=\"font-family: \u0026quot;cambria\u0026quot;; font-size: 12.0pt;\"\u003EJohn Wilford, \"Debate is\nFueled on When Humans Became Human\", New York Times, February 26th, 2002\n\u0026nbsp;\u003Ca href=\"http:\/\/nakamotoinstitute.org\/shelling-out\/#refW02\"\u003E\u003Cspan style=\"mso-bidi-font-family: \u0026quot;Lucida Grande\u0026quot;;\"\u003E↩\u003C\/span\u003E\u003C\/a\u003E\u003C\/span\u003E\u003Cbr \/\u003E\n\u003Cspan style=\"font-family: \u0026quot;cambria\u0026quot;; font-size: 12.0pt;\"\u003E\u003Cspan style=\"mso-bidi-font-family: \u0026quot;Lucida Grande\u0026quot;;\"\u003E\u0026nbsp;\u003C\/span\u003E \u003C\/span\u003E\u003Cbr \/\u003E\n\u003Cspan style=\"font-family: \u0026quot;cambria\u0026quot;; font-size: 12.0pt;\"\u003E[11] \u003C\/span\u003E\u003Ccite\u003E\u003Cspan style=\"font-family: \u0026quot;times\u0026quot;; font-size: 12.0pt; font-style: normal;\"\u003EVanhaereny, M.; d'Errico, F.; Stringer, C.;\nJames, S. L.; Todd, J. A.; Mienis, H. K. (2006). \"Middle Paleolithic Shell\nBeads in Israel and Algeria\". Science \u003Cb\u003E312\u003C\/b\u003E (5781): 1785–1788.\u003C\/span\u003E\u003C\/cite\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ccite\u003E\u003Cspan style=\"font-family: \u0026quot;times\u0026quot;; font-size: 12.0pt; font-style: normal;\"\u003E[12] Richard\nDawkins, \u003C\/span\u003E\u003C\/cite\u003E\u003Ccite\u003E\u003Cspan style=\"font-family: \u0026quot;times\u0026quot;; font-size: 12.0pt;\"\u003EThe Selfish Gene\u003C\/span\u003E\u003C\/cite\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ccite\u003E\u003Cspan style=\"font-family: \u0026quot;times\u0026quot;; font-size: 12.0pt; font-style: normal;\"\u003E[13] Peng\nXinwei, \u003C\/span\u003E\u003C\/cite\u003E\u003Ccite\u003E\u003Cspan style=\"font-family: \u0026quot;times\u0026quot;; font-size: 12.0pt;\"\u003EA Monetary History of China\u003C\/span\u003E\u003C\/cite\u003E\u003Ccite\u003E\u003Cspan style=\"font-family: \u0026quot;times\u0026quot;; font-size: 12.0pt; font-style: normal;\"\u003E (Edward H. Kaplan, tr.) Edition\n1.0 (1994)\u003C\/span\u003E\u003C\/cite\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"mso-bidi-font-family: Helvetica;\"\u003E[14] \u003C\/span\u003E\u003Cspan style=\"mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003EThomas\nC. Scott-Phillips, Thomas E. Dickins, and Stuart A. West, \u003C\/span\u003E\u003Cspan style=\"mso-bidi-font-family: Helvetica;\"\u003E\u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp;\u003C\/span\u003E“\u003C\/span\u003E\u003Cspan style=\"mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003EEvolutionary\nTheory and the Ultimate–Proximate Distinction in the Human Behavioral Sciences”\n\u003Ca href=\"http:\/\/www.zoo.ox.ac.uk\/group\/west\/pdf\/Scott-Phillips_etal_11.pdf\" target=\"_blank\"\u003E[Online]\u003C\/a\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003Cdiv class=\"MsoNormal\"\u003E\n\u003Cspan style=\"mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003E\u003C\/span\u003E\u003Cspan style=\"mso-bidi-font-family: Helvetica;\"\u003E\u003Cbr \/\u003E\u003C\/span\u003E\u003Cspan style=\"mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003E\u003C\/span\u003E\u003C\/div\u003E\n"},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/8042025871427528983\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/8042025871427528983","title":"10 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/8042025871427528983"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/8042025871427528983"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2016\/07\/artifacts-of-wealth-patterns-in_15.html","title":"Artifacts of wealth: patterns in the evolution of collectibles and money"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"media$thumbnail":{"xmlns$media":"http://search.yahoo.com/mrss/","url":"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhAYkX7ypp5IPZKQnlyjcSxLWconpiZSca9TNZ29HdMva-aq7WC4N0y3PEtpf3KPFcYqXTrlkJG1PRkfbWctjCgdzqYNjTlNCpI3Xko2Zgw977HhB9cCzVJUQW2lR0_Ec96A9hN\/s72-c\/Collectibles1.png","height":"72","width":"72"},"thr$total":{"$t":"10"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-6014578662341103751"},"published":{"$t":"2016-03-07T22:56:00.002-08:00"},"updated":{"$t":"2016-03-07T23:01:59.489-08:00"},"title":{"type":"text","$t":"The trouble with books"},"content":{"type":"html","$t":"The Chinese invented printing, but their writing system required a large number of typefaces, which made for very high up-front capital costs to print even a single short book.\u0026nbsp; Centuries after the slow dawn of Chinese printing Gutenberg in Germany, \ntaking advantage of a concise phonetic alphabet, requiring only a small \nnumber of typefaces, invented a printing method that required much less up-front capital than Chinese printers.\u0026nbsp; The Internet has even more radically lowered up-front capital costs to publish than did the Gutenberg revolution.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nChinese printed works were vast but rare. European books were smaller but still too long. Internet works are the actual length a reader needs, they are (or soon will be) available practically everywhere, and often readers can interact frequently with the author.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nMost readers don't want to spend most of their time reading verbose works by single author, when a greater variety of more relevant and thoughtfully concise works are available from a much larger pool of thinkers. Prior to the Internet they had much less choice: books were just the way educated people learned and taught.\u0026nbsp; (And many people still believe that reading and writing books is the \u003Ci\u003Esine quo non\u003C\/i\u003E of being educated, just as many Europeans in 1500 still lauded the superiority of scribal methods and scholastic thought).\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nMagazines and newspapers involve smaller form factors, but they still draw from a very small pool of authors.\u0026nbsp; These authors can only write in detail about a wider variety of subjects by pretending to know things that they don't: they take human institutions far more complicated than a single human can possibly comprehend and boil them down to a series of hypersimplified theories, what in less authoritative contexts we'd call ideologies or conspiracy theories.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nInstead of being forced to read a vast number of words each from a small number and variety of authors, already widely read by many other people (making your reading of them often quite intellectually redundant), on the Internet you can read much less per-author text (and thus, potentially at least, far more thought out per word) from a much greater number and variety of authors.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe Internet also can be more interactive with more select groups than the old face-to-face + snail-mail + books regime— providing much more opportunity for Socratic dialog, glossing, and other intellectual processes that were too often neglected after Gutenberg.\u0026nbsp; And while the Internet can produce far higher amounts of garbage,\u0026nbsp; mixing up thoughtlessly popular haystacks with thoughtfully rare needles, search engines and links often make wading through these vasty spaces much easier.\u0026nbsp; The Internet allows you to meet people who share your specialized interests and dialog with them, making possible specific interactions that rarely happened in the old regime.\u0026nbsp; However, without actually reading the content, i.e. while initially searching for it, it is hard to distinguish thoughtless (even though textual) content from the thoughtful content -- a big reason why at least for the moment book-literacy retains its aura of intellectual superiority over Internet literacy: scholarly publishers with their monetary incentives often take the time to select the most thoughtful works for our consideration.\u0026nbsp; Nevertheless, they lack the knowledge needed to select the most relevant works to match the wide variety of interests and knowledge of their readers, or to judge well among works outside their specialties.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nMuch as more efficient and speedier \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2014\/10\/transportation-divergence-and.html\" target=\"_blank\"\u003Etransportation networks\u003C\/a\u003E enabled labor and natural resources to be brought together in a much greater variety of ways, so does the Internet by providing more direct and speedy connections between minds enable a far greater \u003Ca href=\"http:\/\/www.econlib.org\/library\/Essays\/hykKnw1.html\" target=\"_blank\"\u003Edivision of knowledge\u003C\/a\u003E than was possible with in the face-to-face+snail-mail+books regime. However, in contrast to the economy of things, that division of knowledge is largely (so far, at least, and still mostly for the foreseeable future) unmonetized: the information economy is a vastly different beast than the economy of things.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThat said, there is a good book(!) that covers much of this (along with of course a bunch of introductory material redundant for most readers, as well as the typical trivial or thoughtless text added to pad it out to books size):\u0026nbsp; \u003Ca href=\"http:\/\/smarterthanyouthink.net\/\" target=\"_blank\"\u003ESmarter Than You Think\u003C\/a\u003E by Clive Thompson.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\ntl;dr if you thought this blog post was too long, why would you ever pick up a book? "},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/6014578662341103751\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/6014578662341103751","title":"13 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/6014578662341103751"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/6014578662341103751"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2016\/03\/the-trouble-with-books.html","title":"The trouble with books"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"13"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-7191533302467516327"},"published":{"$t":"2016-02-16T01:16:00.000-08:00"},"updated":{"$t":"2016-02-16T17:10:28.561-08:00"},"title":{"type":"text","$t":"Two Malthusian scares"},"content":{"type":"html","$t":"\u003Ctable cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"float: left; text-align: left;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhFOerIF1jjWUGXkZoooqlN1mTtb_PHUOxJ010QF7NPrdL_2_w1dytJYus7UzJ-TSX0-sIDE3mOdOrABuFOvGtJaJlcCpJK320HTcLHJVbsUa5qS1Y2XqvFhlagKWpCyGXEeomq\/s1600\/CarterSweater1978.png\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"217\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhFOerIF1jjWUGXkZoooqlN1mTtb_PHUOxJ010QF7NPrdL_2_w1dytJYus7UzJ-TSX0-sIDE3mOdOrABuFOvGtJaJlcCpJK320HTcLHJVbsUa5qS1Y2XqvFhlagKWpCyGXEeomq\/s320\/CarterSweater1978.png\" width=\"320\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Cbr \/\u003E\n\u003Ci\u003ECarter lectures the U.S.\u0026nbsp;\u003C\/i\u003E\u003Cbr \/\u003E\n\u003Ci\u003Eon energy, 1978\u003C\/i\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\nIn 1798. the Reverend Thomas Malthus wrote his influential \u003Ca href=\"https:\/\/en.wikipedia.org\/wiki\/An_Essay_on_the_Principle_of_Population\" target=\"_blank\"\u003Eessay on population\u003C\/a\u003E, arguing that population grows exponentially while the supply of food, energy, and other commodities only grows linearly.\u0026nbsp; As a result, the vast majority of humankind is doomed to be mired in poverty unless some even grimmer reapers than starvation (war, disease, etc.) are brought to bear, or births are moderated.\u0026nbsp; In 1978 U.S. president Jimmy Carter, reflecting a popular intellectual Malthusian sentiment of the time, sat by his fireplace in a comfy sweater and instructed Americans to turn down the thermostat lest we run out of oil.\u0026nbsp; (Here's a \u003Ca href=\"http:\/\/www.pbs.org\/wgbh\/americanexperience\/features\/primary-resources\/carter-energy\/%20%E2%80%A6\" target=\"_blank\"\u003Esimilar speech\u003C\/a\u003E he gave a year earlier).\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nMalthus' description of a general pattern of human history (and indeed of the history of all living things, an observation that inspired Charles Darwin) was by and large accurate.\u0026nbsp; But since the time of Malthus, writing during the early industrial revolution, developed \nand even most developing economies have managed to \u003Ca href=\"http:\/\/unenumerated.blogspot.ca\/2011\/06\/trotting-ahead-of-malthus.html\" target=\"_blank\"\u003Etrot\u003C\/a\u003E or even race \nahead of Malthus: per capita income has increased tremendously far beyond the near-starvation limits set by Malthusian theory.\u0026nbsp; Industrial productivity has pulled vastly increased amounts of commodities from the earth, using them to produce an unprecedented abundance of goods. Meanwhile population growth has radically declined until today many developing economies have below-replacement birthrates. Nevertheless, Malthus' observations and reasoning periodically stage an intellectual and popular comeback: industrial civilization can only cheat Malthus so long, thought leaders warn us; if we do not mend our unsustainable ways, and convert from gluttony to stringent conservation, Malthus' grim formula will soon return to wreak an awful revenge.\u003Cbr \/\u003E\n\u003Cdiv class=\"separator\" style=\"clear: both; text-align: center;\"\u003E\n\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhZm48-672_qiV3tjfh6WLy7g5JQPLVDMwV3OGjZSq52X8N3SB9b1d3CX1ec1lu02rEUYhd5zXOMdW6zeMeP47PedmqHc9ur7zAvnki9Y8cLlruoGY_UgEJBCZSrJF9d0JDGqn3\/s1600\/ElementalAbundance_BacteriaVsSeaWater.JPG\" imageanchor=\"1\" style=\"clear: right; float: right; margin-bottom: 1em; margin-left: 1em;\"\u003E\u003Cimg border=\"0\" height=\"311\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhZm48-672_qiV3tjfh6WLy7g5JQPLVDMwV3OGjZSq52X8N3SB9b1d3CX1ec1lu02rEUYhd5zXOMdW6zeMeP47PedmqHc9ur7zAvnki9Y8cLlruoGY_UgEJBCZSrJF9d0JDGqn3\/s320\/ElementalAbundance_BacteriaVsSeaWater.JPG\" width=\"320\" \/\u003E\u003C\/a\u003E\u003C\/div\u003E\n\u003Cbr \/\u003E\nWhat \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2010\/10\/elements-evolution-and-nitrogen-crisis.html\" target=\"_blank\"\u003Echemical inputs does life depend on most\u003C\/a\u003E?\u0026nbsp; Hydrogen and oxygen from water is plentiful. Plants obtain copious carbon by breathing in carbon dioxide (and animals from eating the carbohydrates, fats, and proteins in the plants or other animals). \nNitrogen-fixing bacteria (and legume plants that are symbiotic with them) \nobtain plenty of single-N nitrogen by splitting the plentiful but \nstrongly bonded N2 in our atmosphere.\u0026nbsp; Artificial means of nitrogen fixing depend primarily on natural gas or oil prices. Metals are plentiful in soil. The\n only significant remaining scarce ingredients for crops are potassium (K) and \nphosphorous (P) -- and of these on land phosphorous, which must be \navailable in the form of phosphate, is the most needed and most lacking of all.\u0026nbsp; No technology can substitute anything else for phosphate: it has to be phosphate in order to form DNA, the essential cell energy molecule ATP, and crucial parts of our bones and teeth. Phosphate is thus the most geopolitically important agricultural input and exhibit A in Malthusian warnings about limited resources and unsustainable practices.\u0026nbsp; This also makes phosphorous a favorite target of stockpilers and speculators during a Malthusian scare.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe most important commodity for mining, manufacturing, and especially transportation, for almost all the 20th century and through the present time, is petroleum oil. Internal combustion and other engines powered by fuels refined from petroleum have since the early decades of the 20th century increasingly dominated he transport of goods and people on air, sea, and land.\u0026nbsp; For much of the late 19th and 20th centuries heating was a major use \nof oil; in that use it is being eclipsed by its cousin carbon fuel, \nnatural gas. Oil is also the world's most important feedstock for the \nproduction of plastics, synthetic fibers, and a wide variety of other \nchemicals. While oil makes up a much larger price value of trade than phosphates, oil in the long run is potentially far more vulnerable to substitution innovation. And as we shall see, it also has been at least somewhat more amenable to technological improvements in supply.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEg9lY2fgkk2D2PmPB97FIBfmyW-6k_giQlTf7aDRNB_YxyNYLUvc_z2TWRnwN3LB4R-GWdRiaNNDi6II1GUD1fC-YKm21nZfkAFfSdzaU1NwI_nnb7F2TKyqI3S_Lfx_CQPik88\/s1600\/LimitsToGrowth.png\" style=\"clear: left; float: left; margin-bottom: 1em; margin-right: 1em;\"\u003E\u003Cimg border=\"0\" height=\"320\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEg9lY2fgkk2D2PmPB97FIBfmyW-6k_giQlTf7aDRNB_YxyNYLUvc_z2TWRnwN3LB4R-GWdRiaNNDi6II1GUD1fC-YKm21nZfkAFfSdzaU1NwI_nnb7F2TKyqI3S_Lfx_CQPik88\/s320\/LimitsToGrowth.png\" width=\"192\" \/\u003E\u003C\/a\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiJGKSB7NqhqWQzLMgAn1seyqwyMm93-KCeVrHSrQue8DVJxx4gcOsiXHTC54OleIgjoO7VsjoK_51VgdCW6l7OHmF3jiVgYOXhjiVMjHsSVht-HyZ5gewlooz0ChMPR3P87-JS\/s1600\/ErlichPopulationBomb.png\" style=\"clear: left; float: left; margin-bottom: 1em; margin-right: 1em;\"\u003E\u003C\/a\u003EBetween the mid-1800s, by which time the industrial revolution had transformed much of Europe, and the end of the Bretton Woods era, sentiments about the unsustainability of industrial civilization were usually on the intellectual fringe.\u0026nbsp; But since the late 1960s, cries of doom and sophisticated warnings that we must redesign our economy, our technology, and civilization itself to \"sustainable\" lifestyles have become mainstream.\u0026nbsp; Malthusian allegations that we face diminishing, or soon-to-be diminishing, supplies of raw materials such as oil, natural gas, metal ores and fertilizers,\u0026nbsp; have become \"common knowledge.\" \u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThis component of green ideology has been fueled by two Malthusian scares: two substantial periods, the first between about 1968-1980, the second c. 2004-14, during which nominal commodity prices (i.e. the prices you see posted) increased dramatically,\u0026nbsp; and \"real\" (adjusted for some measure of inflation, such as the consumer price index) commodity prices increased substantially.\u0026nbsp; These price rises led to prophecies of a coming great diminution in our abilities to feed, cloth, and transport ourselves, much less to enjoy all the other abundant goods we have become accustomed to in the developed world as a result of the industrial revolutions that have occurred during and since the time of Malthus.\u0026nbsp; We faced a miserable future unless we changed our ways.\u0026nbsp; Unless we stopped having babies and stringently conserved and recycle our resources (the general green movement), or invest in solar power and electric cars (the Silicon Valley green movement), our future was deemed to be doom.\u0026nbsp; This remains a predominant ideology in Western culture today.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nA big part of those scares and of the green movement has been environmental limits -- that we are damaging our environments, our planet, the one and only planet we can ever hope to naturally inhabit in the foreseeable future, far too much -- adding too much sulfur dioxide, ozone, or carbon dioxide to the atmosphere, too many fertilizers to our waterways, etc.\u0026nbsp; This essay does not address those concerns, which provide a far stronger argument for the sustainability movement than the topic of this essay -- the supply of commodities, especially of raw minerals from the earth such as oil, metal ores, and fertilizers, and the theories that have become popular since the late 1960s that historical rates of industrial growth cannot be sustained in the face of expected future diminution of those supplies.\u0026nbsp; Indeed, if you are already scared by our ability to pollute our planet, after you finish reading this essay you should be even more scared. Our planet places no material limits on our ability to consume and pollute it. If we are to have such limits we must put them in place, politically, ourselves.\u0026nbsp; (As for me, I'm scared both by the prospects for greater pollution \u003Ci\u003Eand\u003C\/i\u003E by the fact that political solutions and hoped-for advances in technology, not natural limits, will be the only ways to address the threats of pollution. The greatest source of domestic disputes is fighting over the thermostat; I expect this trend will carry over to international climate disputes of the future...)\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjVYbgJ2kcCbZv4KEOlTXacaSkeRYDsTeY5DJnC4KY2UKByfPKG2tqBnsC7FX0PPwxpUTVFivM1TT3H4_LYaM4d4_KIsN9fJI6xDZ2UPdZTQDiDbRm6PX42C1hotPLiIQXEUrk5\/s1600\/Newsweek1973RunningOutOfEverything.png\" style=\"clear: left; float: left; margin-bottom: 1em; margin-right: 1em;\"\u003E\u003Cimg border=\"0\" height=\"320\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjVYbgJ2kcCbZv4KEOlTXacaSkeRYDsTeY5DJnC4KY2UKByfPKG2tqBnsC7FX0PPwxpUTVFivM1TT3H4_LYaM4d4_KIsN9fJI6xDZ2UPdZTQDiDbRm6PX42C1hotPLiIQXEUrk5\/s320\/Newsweek1973RunningOutOfEverything.png\" width=\"221\" \/\u003E\u003C\/a\u003EFor many of us in the developed world, a future of higher prices for energy and other commodities does not seem like such big a deal as it once did: we already have more physical goods than we know what to do with, and \u003Ca href=\"http:\/\/www.theminimalists.com\/minimalism\/\" target=\"_blank\"\u003Ecutting back\u003C\/a\u003E to achieve more peace of mind now seems to take and be worth more effort than accumulation. While the better-off fractions of the developed world have by and large reached a level of satisfaction in their consumption of the abundance of goods made possible by the industrial revolutions, the poorer fractions and the developing world have not. \u003Cbr \/\u003E\n\u003Cbr \/\u003E\nNevertheless, during the Malthusian scares commodities did seem to grow much more expensive and scarcer -- and not just a few commodities but commodities in general.\u0026nbsp; Indeed, the prices of a broad range of industrial commodities went substantially higher, often much faster than the general inflation rate\u0026nbsp; -- a sure sign, according to traditional industrial economics, that industrial supply was being outstripped by consumer demand -- that we were getting approaching, often rapidly, Malthusian limits rather than moving further away from them as has been the general trend since Malthus.\u0026nbsp; During most of the years of the first and second scares raw material and food prices skyrocketed, practically across the board. Why was this happening, if not the predictions of Malthusians starting to come true?\u0026nbsp; Let's take a look at the scares, and the economic histories surrounding them, to find out.\u0026nbsp; \u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003EPrelude to the First Malthusian Scare\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nFrom ancient civilization to the late 1960s, civilization's money was generally defined by, and either consisted of or was convertible to, standard weights of precious metals. Even thousands of years before the invention of coinage, most fines in the \u003Ca href=\"https:\/\/en.wikipedia.org\/wiki\/Code_of_Ur-Nammu\" target=\"_blank\"\u003Eearliest recorded code of laws\u003C\/a\u003E were defined and paid in weights of silver.\u0026nbsp; While the role of precious metals in monetary affairs declined throughout the 20th century, with many episodes of fiat currencies untied to precious metals inflating and \u003Ca href=\"http:\/\/www.comparegoldandsilverprices.com\/news\/economics-101\/modern-hyperinflation-56-cases-around-the-world\/\" target=\"_blank\"\u003Ehyperinflating\u003C\/a\u003E, under the post-World War II Bretton Woods system United States and its allies up to 1968 had a \u003Ca href=\"https:\/\/en.wikipedia.org\/wiki\/London_Gold_Pool\" target=\"_blank\"\u003Egold window\u003C\/a\u003E whereby authorized high rollers (among them most other governments) could still cash in their dollars for gold at a promised official rate.\u0026nbsp; Under Bretton Woods most other free world currencies were pegged to the dollar.\u0026nbsp; So you could cash in your local currency for dollars, and (if you were an authorized high roller) your dollars for gold, all at committed official prices.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nBut Bretton Woods, depending on a single country to ultimately back the entire free world's money, was not financially sustainable.\u0026nbsp; It established the U.S. dollar as the free-world standard after World War II, when the the U.S. made half the world's industrial goods and held over half of its financial reserves. But the economies damaged by World War II quickly recovered, and agricultural and industrial revolutions spread to the developing world where economic growth greatly quickened.\u0026nbsp; While the U.S. economy in its own terms was thriving,\u0026nbsp; the relative U.S. role in the world economy declined as those of the rest of the world quickly rose from the ashes. By the mid-1960s the U.S. held only 16% of the world's financial reserves, and even less than that of its gold reserves.\u0026nbsp; Even though it promised to exchange dollars for gold on demand, the U.S. Federal Reserve issued more notes, and its banks more broadly issued more dollar credit, than could possibly be securely backed by its diminishing gold reserves.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nMeanwhile, most academic and government economists scoffed at the gold standard as a \"barbarous relic\" and held that world monetary conditions would be improved if the U.S. stopped pretending that the dollar was pegged to gold.\u0026nbsp; By 1968 the U.S. was no longer willing to honor its commitment to deliver an ounce of gold for $35.\u0026nbsp; The U.S., which since the time of Franklin Roosevelt had banned the domestic private gold trade, now tried with futility to halt overseas private trade by refusing to deal in gold with governments that allowed private gold trade.\u0026nbsp; (In reality, this was less a serious attempt to stifle overseas private gold trade than an attempt to close down the gold window in a face-saving way).\u0026nbsp; The U.S. government forced the London Gold Pool, the gold window mechanism operating between the major free world central banks, to declare a \"bank holiday\", i.e. shut down its operations.\u0026nbsp; But of course this didn't stop non-Americans from trading in gold; quite the opposite: it signaled that the U.S. dollar, and all the currencies pegged to the U.S. dollar, had radically changed in form, and might no longer be as reliable as a store of value. The free-market price of gold soon rose well above $35 official rate. The U.S. was by 1971 forced to officially float the dollar (it had already been floating de facto for up to three years), officially making the U.S. dollar a purely fiat currency.\u0026nbsp; The pegged currencies followed suit, and Bretton Woods was dead.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nAll this monetary obscurity matters for our Malthusian scares not just because all the aforesaid commodity prices from then until now are quoted in major fiat currencies, most usually in dollars, and these signals prices send about industrial supply and demand can only be as reliable as the currencies those prices are denominated in. Such a consideration could, with good statistics based on good records, be reasonably dealt with by computing the \"real\", inflation-adjusted prices of commodities.\u0026nbsp; But commodity prices proceeded to skyrocket even in general-inflation-adjusted terms The dawn of the pure fiat, floating currency regime caused far deeper forces to come into play.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nFor in reality, post-gold-standard prices for industrial commodities are not driven purely, or often even mostly, by industrial demand being met by appropriate changes in material supply.\u0026nbsp; Instead, both supply and demand curves have been warped by a new role for the major industrial commodities -- they are no longer purely commodities; the are in part also money.\u0026nbsp; In particular, they have since the late 1960s been increasingly used as a liquid store of value, easily tradeable for media of exchange (e.g. dollars), as an alternative to and hedge for the new regime of floating rate currencies.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cdiv class=\"separator\" style=\"clear: both; text-align: center;\"\u003E\n\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEj9CcFQz1fcZuu3F52SPPWpoAjt9xDJGdvouVQUjy0w8C75IniNfB6pExCKIH_XUB0W3NCiOqbxIexQyw_1_9WXo_cPDhx5t3aH4VE5fUmIea21bo54pFG_27lAwIWbOmNVtjXx\/s1600\/OilPriceChanges1947_2016.png\" imageanchor=\"1\" style=\"margin-left: 1em; margin-right: 1em;\"\u003E\u003Cimg border=\"0\" height=\"282\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEj9CcFQz1fcZuu3F52SPPWpoAjt9xDJGdvouVQUjy0w8C75IniNfB6pExCKIH_XUB0W3NCiOqbxIexQyw_1_9WXo_cPDhx5t3aH4VE5fUmIea21bo54pFG_27lAwIWbOmNVtjXx\/s400\/OilPriceChanges1947_2016.png\" width=\"400\" \/\u003E\u003C\/a\u003E\u003C\/div\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiHzSWQ5rvwCz_egPxGkx4zCUoOtngyBe-__GRmVIACiQpsAmn45ElTVyzOQca0Mf3Z_hy87WEJJyVHo93_3-SztFI0rhxD5qymCcExxiCUIaQzdjUMUbxMnrbFFohwhJXx-bF3\/s1600\/PhosphateVolatilityPrePostBrettonWoods.png\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"287\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiHzSWQ5rvwCz_egPxGkx4zCUoOtngyBe-__GRmVIACiQpsAmn45ElTVyzOQca0Mf3Z_hy87WEJJyVHo93_3-SztFI0rhxD5qymCcExxiCUIaQzdjUMUbxMnrbFFohwhJXx-bF3\/s400\/PhosphateVolatilityPrePostBrettonWoods.png\" width=\"400\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Ci\u003E\u0026nbsp;Noise in the signal: radical increase in volatility of two of the most\u0026nbsp;\u003C\/i\u003E\u003Cbr \/\u003E\n\u003Ci\u003Eimportant geopolitical minerals, crude oil and phosphate, between the\u0026nbsp;\u003C\/i\u003E\u003Cbr \/\u003E\n\u003Ci\u003EBretton Woods\u0026nbsp; (1947-70) and floating rate (1970-present) eras.\u003C\/i\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cbr \/\u003E\nWhat does it mean to say a commodity is part money?\u0026nbsp; For this we need to turn to economist \u003Ca href=\"http:\/\/is.muni.cz\/el\/1456\/podzim2009\/MPE_MOEK\/um\/8972262\/menger1892.pdf\" target=\"_blank\"\u003ECarl Menger's theory\u003C\/a\u003E of the origins of money.\u0026nbsp; \u003Ca href=\"https:\/\/en.wikipedia.org\/wiki\/Carl_Menger\" target=\"_blank\"\u003EMenger\u003C\/a\u003E's theory is less an accurate account of how money did historically originate among humans (which happened \u003Ca href=\"http:\/\/nakamotoinstitute.org\/shelling-out\/\" target=\"_blank\"\u003Elong before\u003C\/a\u003E the dawn of the efficient commodity markets postulated by Menger), as a good theory and reasonably accurate set of predictions about how a free barter market economy does behave whenever it does arise.\u0026nbsp; According to Menger, in a world of market-based barter, a very high cost (which economists would now call a transaction cost) comes from having to keep track of on the order of N^2 prices for the N goods, and the lack of coincidence of mutual wants between the holders of any two particular such commodities.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nFor this reason market participants start spontaneously treating some goods as \u003Ci\u003Eintermediate commodities.\u0026nbsp; \u003C\/i\u003EIntermediate commodities are held, not to consume them, but to store value until the next opportunity for exchange comes along.\u0026nbsp; The intermediate commodity's price increases substantially from what it was when it was just demanded for its consumption: it obtains a price premium for its use as a store of value immune from the changing values of currency or currency-denominated assets the holder of the intermediate commodity would have otherwise held.\u0026nbsp; This price premium waxes and wanes with the weighted changes in inflation expectations of the world's main traded currencies.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nMany commodities might be used this way: and every commodity that is used in this way becomes, in part, money.\u0026nbsp; It is no longer just an good whose supply is driven by purely by the costs of production (since producers may choose to withhold production rather than sell for a currency whose inflation expectations have just increased, or may choose to increase production beyond the needs of immediate demand when inflation expectations have decreased), or whose demand is driven purely by desires or needs for its consumption (since some of the demand -- the vast majority of the demand in the case of gold and silver -- is now for its use as a store of value). It is an intermediate commodity, \u003Ca href=\"http:\/\/unenumerated.blogspot.com.br\/2008\/03\/monetary-value-of-liquid-commodities.html\" target=\"_blank\"\u003Epartial money\u003C\/a\u003E.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nWhen the primary use of the commodity money is as a medium of exchange, for example the cigarettes used as money in some wartime prisons, strong network effects usually exist to cause the market to converge on one or a few standards -- historically, usually gold and silver.\u0026nbsp; These \u003Ca href=\"http:\/\/blogs.ft.com\/maverecon\/2009\/11\/gold-a-six-thousand-year-old-bubble\/\" target=\"_blank\"\u003Eundergo \u003C\/a\u003Ea \u003Ca href=\"http:\/\/unqualified-reservations.blogspot.com\/2009\/12\/gold-and-central-banks-game-theory.html\" target=\"_blank\"\u003E\"bubble that does not pop\"\u003C\/a\u003E. But the other intermediate commodities, the commodities don't make it all the way to being dominant and nearly pure money, are bubbles that can and do pop.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nWhen the primary use of commodity money is, however, a store of value, a store of value that can be readily exchanged when needed for the actual medium of exchange, there is almost no network effect.\u0026nbsp; Any commodity that can be stored and so traded can be used as store of value that will render the owner immune from the perceived or actual risks of holding a floating currency. This storage could occur in the form of a paper or digital future, or as the actual commodity in the warehouse, or even as a readily extractable mineral such as oil still in the ground.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nSince the end of Bretton Woods, the major industrial commodities, and especially the major geopolitical commodities such as oil and phosphates, have become Mengerian.\u0026nbsp; They are no longer purely industrial commodities.\u0026nbsp; They are also stores of value, places to put wealth in between obtaining money and spending it, that provide an alternative for those who wish to diversify away from, for various reasons, holding currency or assets such as bonds and derivatives that are defined by or correlated to the health of currencies.\u0026nbsp; In the face of increasing inflation expectations, stockpiling of commodities also decreases the risk that further economic growth that nations may be expecting or planning for in their economies could only come at the costs of even purchasing the needed inputs at even higher prices in the future (e.g. China in the 2000s). Stockpiling of commodities is also a general strategy whenever international trust erode and leaders start thinking of potential risks that trade will be slowed or embargoed.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThere are other securities that can store and even grow value -- stocks, bonds, real estate.\u0026nbsp; In many ways all these are better stores of value than commodities.\u0026nbsp; However for a major financial and political power, they have drawbacks.\u0026nbsp; First, they are trust-based -- you are trusting somebody (often a foreigner) to pay the coupons or dividends.\u0026nbsp; In the case of real estate, it depends on the vagaries of local economic activity and politics. Commodities, especially commodities a government can physically control, are far more trust-minimized.\u0026nbsp; The U.S. can sanction Russia by freezing the assets of its national held in paper or digital form in the U.S., but it cannot take the oil from Russia's wells or stop it from drilling, pumping, and selling it to e.g. Europe.\u0026nbsp; Finally, commodities in most of their forms, especially as futures, are readily exchanged for pure money such as dollars. Since the theme of this paper is Malthusian resources, we shall focus\n on the waxing and waning of the intermediateness of commodities, and in\n particular the geolitical commodities oil and phosphate rock.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThus industrial commodities, and especially minerals important to geopolitics like crude oil and phosphate, serve at least three major purposes in the post Bretton Woods world beyond just industrial or agricultural consumption:\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n(a) a hedge against increases in expected inflation in floating rate currencies, or greater uncertainties about same,\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n(b) for governments, protection against coercive economic sanctions by foreign governments, and\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n(c) for militarily strong countries, a form of wealth relatively immune from foreign attack in time of war\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nWe will see all these factors at play during the first and second Malthusian scares.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003EThe First Malthusian Scare\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ctable cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"float: right; text-align: left;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiS6_0tFnmloUqJrhS0byfXoJpqkkDBbpEtmLeYDDjkL0OX1GkbEbMQ1i9zVU3COk-9LlxVsHN-zUO_RtFmMZZ-ACDwmGd7bfSqOaI6CuGlEkMjguVUl69F_A0uJOAFet9KscsX\/s1600\/OilGold1970s_Hammes.png\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"204\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiS6_0tFnmloUqJrhS0byfXoJpqkkDBbpEtmLeYDDjkL0OX1GkbEbMQ1i9zVU3COk-9LlxVsHN-zUO_RtFmMZZ-ACDwmGd7bfSqOaI6CuGlEkMjguVUl69F_A0uJOAFet9KscsX\/s320\/OilGold1970s_Hammes.png\" width=\"320\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Cbr \/\u003E\n\u003Ci\u003EOil \"chasing the tail of gold\"\u0026nbsp;\u003C\/i\u003E\u003Cbr \/\u003E\n\u003Ci\u003Eduring the 1970s. (\u003Ca href=\"http:\/\/papers.ssrn.com\/sol3\/papers.cfm?abstract_id=388283\" target=\"_blank\"\u003ESource\u003C\/a\u003E)\u003C\/i\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\nAs described above, the Bretton Woods era ended between 1968 and 1971, leading to the purely floating rate regime that has prevailed from 1971 to today. Free trade in gold, which had been banned under Franklin Roosevelt, was returned to the U.S.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nShortly thereafter, in 1973-4, an event that many economists have deemed an \"exogenous shock\", and even a main cause of the dramatic oil price rises of the 1970s, occurred on the world stage: the Arab oil embargo of Britain and the U.S. in response to their intervention on behalf of Israel in the 1973 Yom Kippur War.\u0026nbsp; Around the same time OPEC more than doubled the dollar prices it charged for its oil.\u0026nbsp; It is common but highly inaccurate to call OPEC a \"monopoly cartel\" at that time -- it accounted for only about 3% of U.S. oil consumption in 1967 and still only 6.7% at the end of 1973.\u0026nbsp; It had increased its pricing power from negligible to slight; it could hardly have more than doubled the price of oil on its own had not other oil-producing companies and countries been of similar mind.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ctable cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"float: left; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjDiirr9oAq21HOC_S1X4JGP2kgZs0ieMzNcwFysudrwuEf0dS-J-BViTXXn6w2h7VwtdElDwEFmhNIBbmCx5rBgDuidpQz6m0RXq0f7N5l5CjhtGVvuu2AWsfT3bLAbJfZKXDv\/s1600\/OilPricesSuezVsArabOilCrisis.png\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"201\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjDiirr9oAq21HOC_S1X4JGP2kgZs0ieMzNcwFysudrwuEf0dS-J-BViTXXn6w2h7VwtdElDwEFmhNIBbmCx5rBgDuidpQz6m0RXq0f7N5l5CjhtGVvuu2AWsfT3bLAbJfZKXDv\/s320\/OilPricesSuezVsArabOilCrisis.png\" width=\"320\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Cbr \/\u003E\n\u003Ci\u003EOne dog didn't bark: oil prices around the times of the\u0026nbsp;\u003C\/i\u003E\u003Cbr \/\u003E\n\u003Ci\u003ESuez crisis (1956-7), in which Europe lost control of over\u0026nbsp;\u003C\/i\u003E\u003Cbr \/\u003E\n\u003Ci\u003Ehalf its oil supply, and the Arab Crisis (73-74), involving a\u0026nbsp;\u003C\/i\u003E\u003Cbr \/\u003E\n\u003Ci\u003Etemporary embargo that was easy to get around\u0026nbsp;\u003C\/i\u003E\u003Cbr \/\u003E\n\u003Ci\u003Eby trading through cutout countries.\u003C\/i\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\nBy sharp contrast, the Suez Crisis of 1956-7, which produced a much more dramatic and longer-lasting impact on the world's oil supply chains -- Europe suddenly lost military control over more than half of the oil it consumed to a recently independent and hostile Egypt, never to gain it back -- was followed by a far smaller and more ephemeral percentage increase in oil prices.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nDue to the increased inflation expectations, oil producers conserved on pumping, despite rising prices and oil consumers stockpiled despite the rising prices of funding those purchases. The reverse would happen throughout the decreases in inflation expectations and resulting long decline in commodity prices during most of the 1980s and 1990s.\u0026nbsp; Oil producers kept pumping beyond the needs of the industrial market to hasten the drawdown of their depreciating reservoirs.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ctable cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"float: right; text-align: right;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEijO9HTLkystGZYaOPYjlNGhnCVModJP3u9tz9zehNxdxkK2eGVTYMVPOU4mBXrDcoizHhfDBwSr28mLGsDGJg6sQhfBv6dBtDcWWCHUeCQZAJ2_EG2juyNVBAo_Ne_WiqNDpuA\/s1600\/Inflation1970s.png\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"190\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEijO9HTLkystGZYaOPYjlNGhnCVModJP3u9tz9zehNxdxkK2eGVTYMVPOU4mBXrDcoizHhfDBwSr28mLGsDGJg6sQhfBv6dBtDcWWCHUeCQZAJ2_EG2juyNVBAo_Ne_WiqNDpuA\/s320\/Inflation1970s.png\" width=\"320\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Cbr \/\u003E\n\u003Ci\u003EWhat the voter saw: U.S. consumer\u0026nbsp;\u003C\/i\u003E\u003Cbr \/\u003E\n\u003Ci\u003Eprice index 1973-81.\u003C\/i\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\nBut during the first Malthusian scare, U.S. and European entities began stockpiling oil and other strategic commodities. For example U.S. oil imports from the Middle East, which had been only about 3% of consumption in 1967 when relations were friendly, had increased to 6.7% by 1973 even though relations had become hostile. and nominal prices of that oil had risen. Meanwhile U.S. oil producers were pumping less oil, choosing to keep relatively more of it in the ground rather than sell it for cheapening dollars.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003EThe Second Malthusian Scare\u0026nbsp;\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cdiv class=\"MsoNormal\" style=\"mso-layout-grid-align: none; mso-pagination: none; tab-stops: .5in 1.0in 1.5in 2.0in 2.5in 3.0in 3.5in 4.0in 4.5in 5.0in 5.5in 6.0in; text-autospace: none;\"\u003E\n\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEi0lwd9wi4upyF9OOAwyi0VtpzHWaYqD4V9LLSutIOdjvrth5JYW1b_6ws3PTQSIRakzdP_oj74WYadxLcCmcBz5i0WyVGJI1Iq7fx1VSHazv6EhHDcWTG7k4rAgbmiBcI_B7Qc\/s1600\/WorldFertilizerPricesSoar2007.png\" imageanchor=\"1\" style=\"clear: left; float: left; margin-bottom: 1em; margin-right: 1em;\"\u003E\u003Cimg border=\"0\" height=\"232\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEi0lwd9wi4upyF9OOAwyi0VtpzHWaYqD4V9LLSutIOdjvrth5JYW1b_6ws3PTQSIRakzdP_oj74WYadxLcCmcBz5i0WyVGJI1Iq7fx1VSHazv6EhHDcWTG7k4rAgbmiBcI_B7Qc\/s320\/WorldFertilizerPricesSoar2007.png\" width=\"320\" \/\u003E\u003C\/a\u003E\u003Cspan style=\"mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003EAs in the 1970s, the\ncommodity rise during the second Malthusian scare of roughly 2004-14 was often sharp and concurrently effected the vast majority of commodities. After substantial advances in both real estate and commodity\nprices the previous several years, during 2007 central banks cut rates and\nraise money supplies to fight collapsing real estate prices. These efforts\nfueled sharp increases in \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2008\/07\/inflation-expectations-gold-and-oil.html\" target=\"_blank\"\u003Einflation expectations\u003C\/a\u003E. Nominal and CPI-adjusted prices\nof fossil fuels, precious metals, industrial metals, lumber, fibers,\nfertilizers, grains, oilseeds, dairy, and livestock all skyrocketed during\n2007, hitting \u003C\/span\u003E\u003Cspan style=\"mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003Erecord highs in nominal prices. \u003Cspan style=\"mso-spacerun: yes;\"\u003E\u0026nbsp;\u003C\/span\u003EThe market’s \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2008\/06\/commodity-hysteria-overview.html\" target=\"_blank\"\u003Eendless search \u003C\/a\u003Efor stores of\nvalue independent of the vagaries of fiat currencies had switched from real estate on which easy loans were defaulting to\ncommodities that could be held more securely.\u0026nbsp; This time the most (in)famous stockpiler was China, planning for the rapid economic growth it expected in the decades ahead.\u003C\/span\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cdiv class=\"separator\" style=\"clear: both; text-align: center;\"\u003E\n\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhzkxGttNGcT_okFeECgJquAuzLngvOX42S2zKo4d4Oel19CWftn0SF6IMcc_s3Y6zOK5fMjXHIh0wmDIReeB_Oxor19SFMQ_1EwVYctCYUwHvsYugq_Y9NUYjMX49Bwz0azfsi\/s1600\/FertilizerPrices1960_2009_Nominal.png\" style=\"clear: right; float: right; margin-bottom: 1em; margin-left: 1em;\"\u003E\u003Cimg border=\"0\" height=\"217\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhzkxGttNGcT_okFeECgJquAuzLngvOX42S2zKo4d4Oel19CWftn0SF6IMcc_s3Y6zOK5fMjXHIh0wmDIReeB_Oxor19SFMQ_1EwVYctCYUwHvsYugq_Y9NUYjMX49Bwz0azfsi\/s320\/FertilizerPrices1960_2009_Nominal.png\" width=\"320\" \/\u003E\u003C\/a\u003E\u003C\/div\u003E\n\u003Cspan style=\"mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003EAlso as in the 1970s, the individual components\nof this broad-range trend were attributed to a stupendous variety of\nidiosyncratic causes -- the co-occurrence of which all driving prices in the\nsame direction at the same time was astronomically improbable. The only reasonable attribution would be to related common causes – which, given that there\nhad been no sudden worldwide industrial boom, had to have been monetary causes.\u003C\/span\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cspan style=\"mso-bidi-font-family: \u0026quot;Times New Roman\u0026quot;; mso-fareast-font-family: \u0026quot;Times New Roman\u0026quot;;\"\u003EWarnings about peak oil, peak phosphorous, etc. issued from all the major media outlets and science journals.\u0026nbsp; In Silicon Valley, a boom in \"green technology\" startups and investments ensued -- resulting later in mostly bankrupt companies.\u0026nbsp; \u003C\/span\u003E\u003C\/div\u003E\n\u003Cbr \/\u003E\nAs I \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2008\/04\/hoarding-and-speculation-of-commodities.html\" target=\"_blank\"\u003Ewrote\u003C\/a\u003E at the time:\u003Cbr \/\u003E\n\u003Cblockquote class=\"tr_bq\"\u003E\n\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgr9HontwTk5l04Y5GPiwAsAIN7x7eXjU7BY09N6AoTr2D11qVxD8gJHnaETwfvZK3Wed5yzBvYDg2diPa_wu1GypVVn_71xTZYqfJblhfPrIv1e0hfIDR9KofEA9c7QdgCnEpQ\/s1600\/PhosphateFoodPrices1990_2013.png\" imageanchor=\"1\" style=\"clear: left; float: left; margin-bottom: 1em; margin-right: 1em;\"\u003E\u003Cimg border=\"0\" height=\"172\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgr9HontwTk5l04Y5GPiwAsAIN7x7eXjU7BY09N6AoTr2D11qVxD8gJHnaETwfvZK3Wed5yzBvYDg2diPa_wu1GypVVn_71xTZYqfJblhfPrIv1e0hfIDR9KofEA9c7QdgCnEpQ\/s320\/PhosphateFoodPrices1990_2013.png\" width=\"320\" \/\u003E\u003C\/a\u003EIt is a gross violation of Occam's Razor to attribute the recent very \nbroad-based run-up in dollar commodity prices primarily to the plethora \nof disparate causes to which they have been attributed: \"peak oil\", the \nwar in Iraq, ethanol subsidies displacing food, and so on. Rises in \nindustrial demand, increases in the costs of transporting commodities \ndue to high oil prices, and so on explain only a small fraction of the \nrise in other commodity prices, and do not explain at all why precious \nmetal prices have increased alongside those of other commodities. \nOccam's Razor points us, as it did to wise investors and economists in \nthe 1970s, to the one kind of commodity all these other commodities have\n in common: the currencies they are priced in...\u003C\/blockquote\u003E\n\u003Cblockquote class=\"tr_bq\"\u003E\n\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiUzhtvxmHWJ6PmGsJooyrDe5WkVfzU-i6yPc-nguC8JswLCK57gQe2rfMfHUvcE8AeZ0jnlKFkheskgpnbUlStZ0tg7iqOFEM1WNQQWEAOSq3Xlvn63f9DyfpqlObAniUR83Oc\/s1600\/SecondMalthusianScare_OilPhosphorousCrudePrices.png\" imageanchor=\"1\" style=\"clear: right; float: right; margin-bottom: 1em; margin-left: 1em;\"\u003E\u003Cimg border=\"0\" height=\"232\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiUzhtvxmHWJ6PmGsJooyrDe5WkVfzU-i6yPc-nguC8JswLCK57gQe2rfMfHUvcE8AeZ0jnlKFkheskgpnbUlStZ0tg7iqOFEM1WNQQWEAOSq3Xlvn63f9DyfpqlObAniUR83Oc\/s320\/SecondMalthusianScare_OilPhosphorousCrudePrices.png\" width=\"320\" \/\u003E\u003C\/a\u003E...demand for the oft-dreaded but ill-understood \"hoarding\" and \n\"speculation\", that is storing extra commodities (often off-the-books, \nor at least not in the officially measured warehouses) and the purchase \nof extra commodity futures and other commodity derivatives to hedge \ntransactions based on government currencies, will remain strong as long \nas the Federal Reserve continues to inflate the dollar supply, and as \nlong as many developing countries continue to link their currencies to \nthis dollar. Commodity prices in dollars will level off, and then move \nback down close to historical trends based largely on just industrial \nconsumption, if or when the Fed stops increasing the supply of dollars \nfaster than the demand for dollars. \u003C\/blockquote\u003E\nAs it transpired, neither the Malthusian worries nor, as of this writing, the inflation expectations proved justified.\u0026nbsp; The run-up in oil helped fund the fracking revolution, a technology which defied peak oil theory:\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjI9kIej-iB13C02CnzFtuFMVGhW-FLGxBunY9LeLXACDs4W_8PD8B94A0_zBtZ1Jk06UdfibhwG5amJwggLLUY_yIpvKbQnNdmwNPOfsVZTIDT7FJ85LxrEW8BPNUcE_2GAdHL\/s1600\/HubbertPeakOil_PermanentOilCrisis.png\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"185\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjI9kIej-iB13C02CnzFtuFMVGhW-FLGxBunY9LeLXACDs4W_8PD8B94A0_zBtZ1Jk06UdfibhwG5amJwggLLUY_yIpvKbQnNdmwNPOfsVZTIDT7FJ85LxrEW8BPNUcE_2GAdHL\/s320\/HubbertPeakOil_PermanentOilCrisis.png\" width=\"320\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Cbr \/\u003E\n\u003Ci\u003ETheory: peak oil diagram after Hubbert.\u0026nbsp; Alleged to\u0026nbsp;\u003C\/i\u003E\u003Cbr \/\u003E\n\u003Ci\u003Eapply at all scales not just to individual wells.\u003C\/i\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cbr \/\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiQ2XUHGEpaxmopRISZJ6XUyvHswazgGTw1XscXsyxxbR-Oim3ttXaSC4NtrrdIEb0COCGtEXNv8tw1gnLkcHgolqOW778KssalrTHhT3qbGDtSVPzuo7n5s8XmCFHzkNq1tq7t\/s1600\/USOilProduction1920_2015.jpg\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"213\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiQ2XUHGEpaxmopRISZJ6XUyvHswazgGTw1XscXsyxxbR-Oim3ttXaSC4NtrrdIEb0COCGtEXNv8tw1gnLkcHgolqOW778KssalrTHhT3qbGDtSVPzuo7n5s8XmCFHzkNq1tq7t\/s320\/USOilProduction1920_2015.jpg\" width=\"320\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Cbr \/\u003E\n\u003Ci\u003EReality: not as simple as theory\u003C\/i\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cbr \/\u003E\nOil thus demonstrated itself as a poorer monetary substitute than gold: being a much more novel commodity than gold, its production is subject to substantially more likelihood of technological invention and geological discovery.\u0026nbsp;\u003Ci\u003E \u003C\/i\u003E\u0026nbsp; \u003Cbr \/\u003E\n\u003Ctable cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"float: right; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhiWnIhjcXbV2HaqJvk6p_ZrYDLoy4_SnnUSpcE1Xsjur-ZvWbWU5SQn7WKeP2Ls9LUCTDzNfNwHUXrRl7YUaUBKZVXnuXEfubfY8d6Lp5YhlvBi3nHJ7MLA9PuhVUlsoc-YnBo\/s1600\/GoldOilRatio1865_2015.jpg_large.jpeg\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"171\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhiWnIhjcXbV2HaqJvk6p_ZrYDLoy4_SnnUSpcE1Xsjur-ZvWbWU5SQn7WKeP2Ls9LUCTDzNfNwHUXrRl7YUaUBKZVXnuXEfubfY8d6Lp5YhlvBi3nHJ7MLA9PuhVUlsoc-YnBo\/s320\/GoldOilRatio1865_2015.jpg_large.jpeg\" width=\"320\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Cbr \/\u003E\n\u003Ci\u003EFracking in one diagram\u003C\/i\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cbr \/\u003E\nThis possibility, which had not been sufficiently priced into oil before fracking, makes oil supply less reliably scarce than that of gold, rendering it less useful as a store of value, reducing the monetary premium of the oil price over oil as it would be priced if it were just an industrial commodity. Secondly, of course, is the direct effect of fracking on the supply curve in lowering oil prices.\u0026nbsp; The effects of the fracking revolution are amplified because more than just the Econ-101 supply curve shift is reducing oil prices due to fracking: oil's monetary premium is being eroded at the same time. Oil had been a monetary bubble which is now bursting.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nIf you are Saudi Arabia or Iraq sitting on large reservoirs of easily extracted oi, your alternative to treating oil as a store of value, if you still don't trust the Western powers, is to pump even more and trade the proceeds for gold (and also pay off some foolishly acquired debts) -- which is what we now see happening. Thus, paradoxically (to those who analyze oil as no more than an industrial commodity) oil producing countries pump \u003Ci\u003Emore\u003C\/i\u003E oil despite much lower oil prices. They are selling oil from their \"oil warehouse\" below the sands of the Middle East in exchange for gold, which due to the fracking revolution has reasserted its superiority as a trust-minimized currency over oil. If \"money is the bubble that doesn't pop\", partial money, i.e. Mengerian intermediate commodities, create bubbles that sometimes do pop, as the desirability of various commodities for their monetary properties, especially their value as a store of value relatively immune from political interdiction, waxes and wanes.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: left;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgLrwQfO0iHuV_2xYauJDHVJwAE-B7N9zXQuGmQiBJDa9jbYAA-XonUgBJ7N_Yhs5llbJowhc7e0hFxobiVGg77i9NxNkBqxr9wVwGXfCcJsTEoBa6Yfwpv9vxcnImPhuKe5Y3j\/s1600\/RealCRBCommodityIndex.png\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"186\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgLrwQfO0iHuV_2xYauJDHVJwAE-B7N9zXQuGmQiBJDa9jbYAA-XonUgBJ7N_Yhs5llbJowhc7e0hFxobiVGg77i9NxNkBqxr9wVwGXfCcJsTEoBa6Yfwpv9vxcnImPhuKe5Y3j\/s320\/RealCRBCommodityIndex.png\" width=\"320\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Cbr \/\u003E\n\u003Ci\u003EAs much good news as bad: the two Malthusian scares\u0026nbsp;\u003C\/i\u003E\u003Cbr \/\u003E\n\u003Ci\u003Esandwich an era when inflation-commodity prices fell by about the same\u0026nbsp;\u003C\/i\u003E\u003Cbr \/\u003E\n\u003Ci\u003Eamount that they rose during the two scares combined. (And they have\u0026nbsp;\u003C\/i\u003E\u003Cbr \/\u003E\n\u003Ci\u003Efallen further since 2010). The explanation of \"tight money\" vs. \"easy\u0026nbsp;\u003C\/i\u003E\u003Cbr \/\u003E\n\u003Ci\u003Emoney\" is pertinent but oversimplified, as one would expect an\u0026nbsp;\u003C\/i\u003E\u003Cbr \/\u003E\n\u003Ci\u003Eattempt to explain a theory in chart labels to be...\u003C\/i\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cbr \/\u003E\n\u003Cb\u003EConclusion\u003C\/b\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nDuring the Bretton Woods era the U.S. dollar, pegged to gold at $35 an ounce, served the entire free world as a common and reliable standard of value.\u0026nbsp; The transition from Bretton Woods to floating rates left the world with no common and reliable standard of value by which to guarantee future real returns on contracts or investments.\u0026nbsp; As a result the most commonly traded commodities, and especially geopolitical commodities such as oil and phosphates, became Mengerian intermediate commodities, with a price premium as a store of value that waxed and waned with the weighted expected inflation among the world's various floating currencies. As a result, the prices of these commodities are much more volatile since 1970 than they were during the Bretton Woods era. Epochs of increasing inflation expectations have led to rapid, broad-based commodity price rises, where the market gives out false signals of scarcity, leading to Malthusian anxieties and panics that we face a future of diminishing natural resources. This in turn has fueled a major and sustainable growth in green ideology since the 1960s.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nIt's no longer debatable that commodity supplies in general pose few limits to long-term industrial growth, nor, except in the special case of phosphates, any significant limits that cannot eventually be innovated past by substituting newer more abundant materials for scarcer older ones.\u0026nbsp; To obtain all the commodities we have consumed in history has involved barely scratching he surface of one planet. Scratching out somewhat more each upcoming decade and century into the foreseeable future is, in terms of that supply, by and large sustainable. A far more debatable proposition is to how much environmental impacts will or should limit industrial growth -- for example, what is or should be our ability to continue pumping more carbon dioxide into the atmosphere? That is a debate this paper shall leave for another day.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cbr \/\u003E"},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/7191533302467516327\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/7191533302467516327","title":"24 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/7191533302467516327"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/7191533302467516327"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2016\/02\/two-malthusian-scares.html","title":"Two Malthusian scares"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"media$thumbnail":{"xmlns$media":"http://search.yahoo.com/mrss/","url":"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhFOerIF1jjWUGXkZoooqlN1mTtb_PHUOxJ010QF7NPrdL_2_w1dytJYus7UzJ-TSX0-sIDE3mOdOrABuFOvGtJaJlcCpJK320HTcLHJVbsUa5qS1Y2XqvFhlagKWpCyGXEeomq\/s72-c\/CarterSweater1978.png","height":"72","width":"72"},"thr$total":{"$t":"24"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-202296730313944474"},"published":{"$t":"2015-10-08T13:40:00.000-07:00"},"updated":{"$t":"2015-10-08T13:41:35.973-07:00"},"title":{"type":"text","$t":"Estimating and minimizing consumer worry"},"content":{"type":"html","$t":"The process of selling in general, and web commerce in particular, is often described or charted as a funnel. Prospective customers are poured in at one end, and a fewer number of paying customers come out at the other. The other prospects spill out through other holes or over the side of the funnel and don't bring you any revenue. The fraction of customers left, converted from prospects to customers, is called the conversion rate. As prospects proceed from initial interest to final sale, from initial entry page to clicking the final \"I Agree\" button, more and more of them become discouraged by various worries which beset the consumer. They drop out. The remaining prospects, those who have not dropped off, have been converted into customers or into an audience for your advertisers.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThere are a variety of factors that cause drop-off, which vary from business to business. A common cause is forms.\u0026nbsp; Simplifying forms often greatly increases conversion rates.\u0026nbsp; For example, in one \u003Ca href=\"http:\/\/contentverve.com\/lead-form-optimization-case-study\/\" target=\"_blank\"\u003Estudy\u003C\/a\u003E cutting the number of lines on a form in half increase conversions by a third. As one web designer \u003Ca href=\"http:\/\/www.searchenginejournal.com\/7-things-you-can-do-when-your-conversion-funnel-sucks\/31150\/\" target=\"_blank\"\u003Eput it\u003C\/a\u003E: \"[i]s every field you're asking the visitor to submit absolutely necessary?\u0026nbsp; Can you trim the fat and make the process simpler?\"\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nBesides the sheer tediousness and time consumed in filling out forms, \nrational consumers also worry about the potentials for privacy violation\n and identity theft from the information most e-commerce sites currently\n require them to divulge: physical and e-mail addresses, phone numbers \nused for cross-site behavioral tracking, insecure credit card numbers, \nand more. \u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEi71G9pl5dDh2_EsKbZ2BNyDA4zc7zqsKQLl7lYIw_A0zFht9c_YYr6r2_vWd2iAr19nmj5XMWMctS3JntDs1JAMKreJ-wQsCNs5vbqMGPBR0Zw9PHbMkiSQXikRTKtgjB-uOr6\/s1600\/RF_Wallet2.jpg\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEi71G9pl5dDh2_EsKbZ2BNyDA4zc7zqsKQLl7lYIw_A0zFht9c_YYr6r2_vWd2iAr19nmj5XMWMctS3JntDs1JAMKreJ-wQsCNs5vbqMGPBR0Zw9PHbMkiSQXikRTKtgjB-uOr6\/s1600\/RF_Wallet2.jpg\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Ci\u003EThe tinfoil-wallet crowd is now mainstream\u003C\/i\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cbr \/\u003E\nInstances of regret that one has filled out a form, only to have one's\u003Ca href=\"https:\/\/twitter.com\/anjiecast\/status\/607038893393772545\" target=\"_blank\"\u003E trust violated \u003C\/a\u003E-- or \u003Ca href=\"https:\/\/twitter.com\/csoghoian\/status\/607057306430242816\" target=\"_blank\"\u003Epride\u003C\/a\u003E among the sophisticated that they refused to fill out such a form -- are on the rise.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe worst worry culprit is usually the step you most want your customers to complete -- paying you. \"[T]he credit card form likely has the highest abandonment rate of any other part of the sign-up process.\" [\u003Ca href=\"http:\/\/petovera.com\/17-examples-of-the-best-online-sales-funnels\/\" target=\"_blank\"\u003ESource\u003C\/a\u003E].\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nIf you don't require payments, you are probably funding your service through advertisements. Those also cause worries. Ads typically distract and delay from the content users are after, provide a low quality of entertainment or information, and are too often offensive. And sophisticated users are worried about the tracking that tends to go with ads. Ad blocking \u003Ca href=\"http:\/\/www.economist.com\/news\/business\/21653644-internet-users-are-increasingly-blocking-ads-including-their-mobiles-block-shock?fsrc=scn\/tw\/te\/pe\/ed\/blockshock\" target=\"_blank\"\u003Egrew\u003C\/a\u003E nearly tenfold between 2009 and 2014. \u003Cbr \/\u003E\n\u003Cbr \/\u003E\nReplacing ads and identity-based payments with payments that don't require identity, such as bitcoin, can greatly reduce these worries, lowering the barriers and hesitations that currently prevent consumers from paying for your service.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nBut there remains a big worry that no payment system can reduce.\u0026nbsp; Consumers worry about whether they are getting their money's worth -- the \u003Ca href=\"http:\/\/szabo.best.vwh.net\/micropayments.html\" target=\"_blank\"\u003Emental transaction cost \u003C\/a\u003Eproblem (see also\u003Ca href=\"http:\/\/nakamotoinstitute.org\/static\/docs\/micropayments-and-mental-transaction-costs.pdf\" target=\"_blank\"\u003E this paper\u003C\/a\u003E). If e-commerce were as worry-free as some of it could be, your customers would neither have to fill out forms, nor be bothered by ads, nor have to worry about repeated charges for content or services of variable value. They would be able to just insert a few digital coins into your online vending machine and then not have to worry about losing your service for another year. Eliminate forms \u003Ci\u003Eand\u003C\/i\u003E eliminate repeated payments -- both are key to worry-minimized e-commerce.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nMany bitcoin startups are making the grave mistake of replacing one set of worries with another. The ability of cryptocurrency systems to facilitate small payments tempts many companies to nickel-and-dime their customers with pay-per-click micropayments and other such excruciating schemes. Don't follow the many lemmings who have already jumped off that cliff. Stick to long-term subscriptions for content (or other services of variable value) and pay-per-unit for fungible units of consistent value (as in phone minutes).\u0026nbsp; That way customers aren't saddled with having to constantly re-evaluate the amount and worthiness of recurring charges. The costs to your customers of having to finance a years' worth of low-cost subscription to a reputable brand is almost always far less than the mental transaction costs of recurring charges for content or services of variable value. The ideal worry-free commerce is to \"stick the coin into the machine\" once, and then never have to pay again for an entire year. A vending machine for subscriptions. Reduce your customers' worries across the board: eliminate forms \u003Ci\u003Eand\u003C\/i\u003E eliminate recurring charges.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nIdeal worry-minimization can only be closely approached in some purely online forms of commerce, such as video streaming, remote storage, privacy services, and the like. The more physical and offline contract performances are -- a common example being physical delivery -- the more location, various kinds of identity (legal, social network, etc.) may need to come into play, adding, often greatly and necessarily, to the worry overhead, the mental transaction costs, of your relationship with your consumers.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nI have previously called this worry-minimized commerce by a narrower label, \"form-minimized commerce.\"\u0026nbsp; The complexity of the forms you make your users fill is indicative of the worries you are causing them, and thus the barriers you are putting up between your prospects and their decisions to purchase your services.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nWhen you are a consumer, the tediousness of the forms you are filling\n out is not only a direct cost of your time, and your ability to enjoy \nthat time, it is on top of that a decent proxy measure of the odds of \nyour identity being stolen and of your privacy otherwise being violated.\n The fewer forms you fill out, the more the tediousness, worries, and \nrisks in your life caused by interacting with the world's institutions \nwill drop in proportion.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nWhile such a proxy measure does not account in particular for the wide variety of information that can be disclosed, nor that some kinds of information (social security numbers) are more risky to divulge than others (throw-away email addresses),  nor for the wide variety of risks in identity theft and privacy violation that are consequent, nevertheless consumers necessarily must bring to bear such sweeping rules-of-thumb in order to satisfactorily navigate the bizarre complexities of the digital world.\u0026nbsp; And when your users are using, whether consciously or implicitly, such estimates, you the service provider and the product designer must use them too.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nAdd to the forms your customers must fill out the repeated charges you make your customers make, and we get a rough proxy measure of the worry that you are causing your consumers:\u003Cbr \/\u003E\n\u003Cblockquote class=\"tr_bq\"\u003E\nIndex of worry = number of lines of forms +\u0026nbsp; number of repeated charges for content or services of variable value\u003C\/blockquote\u003E\nIf you are funded through ads rather than consumer payments, you can substitute for the repeated charges the proportion of screen space covered by your ads, or any other reasonable estimate of the delay and distraction the ads on your pages cause.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe index of worry allows you to estimate and minimize the worries you are causing your users, and as a result to minimize the drop-off in your sales funnel and maximize the number of users coming back for more -- and willing to view your ads or pay for the privilege.\u003Cbr \/\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Cbr \/\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n"},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/202296730313944474\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/202296730313944474","title":"10 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/202296730313944474"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/202296730313944474"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2015\/10\/minimizing-consumer-worry.html","title":"Estimating and minimizing consumer worry"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"media$thumbnail":{"xmlns$media":"http://search.yahoo.com/mrss/","url":"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEi71G9pl5dDh2_EsKbZ2BNyDA4zc7zqsKQLl7lYIw_A0zFht9c_YYr6r2_vWd2iAr19nmj5XMWMctS3JntDs1JAMKreJ-wQsCNs5vbqMGPBR0Zw9PHbMkiSQXikRTKtgjB-uOr6\/s72-c\/RF_Wallet2.jpg","height":"72","width":"72"},"thr$total":{"$t":"10"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-6216506728382908250"},"published":{"$t":"2015-07-03T19:53:00.001-07:00"},"updated":{"$t":"2015-07-04T09:48:34.724-07:00"},"title":{"type":"text","$t":"The Greek financial mess; and some ways Bitcoin might help"},"content":{"type":"html","$t":"\u003Cdiv class=\"separator\" style=\"clear: both; text-align: center;\"\u003E\n\u003C\/div\u003E\nMany years of government debt buildup in Greece has ultimately resulted, in the last few days, in a political and financial maelstrom.\u0026nbsp; The political maelstrom includes demonstrations in the run up to a referendum on obscure debt-restructuring provisions to be held this Sunday (July 5th). This article focuses on\u0026nbsp; financial problems and some potential practical steps that can be taken to mitigate them. The imposition of capital controls is a disaster for a modern trade-driven economy, a catastrophe which however digital technology, and in particular the digital currency bitcoin (which given the Greek environment usually must involve direct use of the Bitcoin blockchain), has the potential to mitigate.\u0026nbsp; This article will explore some of the severe practical problems that capital controls are causing Greek individuals and businesses, and suggest some potential bitcoin solutions, many of which could also be applied to other countries with some similar financial problems and controls such as Argentina and Venezuela.\u0026nbsp; These aren't solutions that can be applied in time to help with the current 6 days of capital controls, but could substantially help some Greeks and some aspects of the Greek economy if some version of these controls is continued for months or years.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nAt root the Greek financial problem is that the Greek government has spent more, compared to the GDP generated by its economy, than the vast majority of other governments.\u0026nbsp; It has borrowed copious sums to do so, falling ever deeper into debt.\u0026nbsp; Here is its payment schedule:\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgRs9AYt8Ngt7iToOFp-aZFS96pd5b6yT3tLFNsHoH36WV4lgfB24kpB4eQb-FKVXyR_TtvbREuErrFNqnBE7GSgzePZ0B1id9GQosu6d7GgdefrYME34p7glCeu67t-Pb5flyB\/s1600\/GreekCrisisDebtSchedule.jpg\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"640\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgRs9AYt8Ngt7iToOFp-aZFS96pd5b6yT3tLFNsHoH36WV4lgfB24kpB4eQb-FKVXyR_TtvbREuErrFNqnBE7GSgzePZ0B1id9GQosu6d7GgdefrYME34p7glCeu67t-Pb5flyB\/s640\/GreekCrisisDebtSchedule.jpg\" width=\"352\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Ci\u003EAnd you thought your student loan debt was bad\u003C\/i\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe only place the Greek government has left to go for money to fund its ongoing expenditures and pay these debts is Greek banks.\u0026nbsp; Fearing capital controls and \"haircuts\" (government confiscation of certain fractions of bank deposits), many Greeks in recent months have, quite rationally, started withdrawing money out of their banks and sending it overseas.\u0026nbsp; More trusting Greeks kept their savings in their banks, with the result that, with the imposition of capital controls last Monday, they have been locked out of their savings, and plans for \"haircuts\" of 30% or more have been reported (If somebody lopped off 30% of your head, you’d have more than a haircut).\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nWhen capital controls were first rumored and then announced on Sunday, vast lines formed at ATMs as Greeks rushed to rescue what little of their life savings that they could:\u003Cbr \/\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Cbr \/\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Cbr \/\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjvdl8Ulzgl67xsFlINKGjEuO6u36E9TNeufGPTju0lENOERIiTcLfXTBCCoqrrC5Il4z2T-OaVFkz_soinpMM0lsyr300bA9PcLxeaX0LQ2Ya-SF4lIWQvpjAGyHi_U4knjee-\/s1600\/GreeceATMLineThessaloniki.jpg\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"240\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjvdl8Ulzgl67xsFlINKGjEuO6u36E9TNeufGPTju0lENOERIiTcLfXTBCCoqrrC5Il4z2T-OaVFkz_soinpMM0lsyr300bA9PcLxeaX0LQ2Ya-SF4lIWQvpjAGyHi_U4knjee-\/s320\/GreeceATMLineThessaloniki.jpg\" width=\"320\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Ci\u003EATM line, Thessaloniki\u003C\/i\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjhzcffnxSAGn9QbrwMRjISfmVt5uy9NHbc_2mqjV5Qdqik4proWp8ErpxDr7qixBC_2sc_Ryt76KGPNHRAFVDJUrL1mxuVl7ZNWSLNECjOgWGC7K6MEZOnczpjRVypooNr-GTm\/s1600\/GreekCrisisATMLineLarissaCity.jpg\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"213\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjhzcffnxSAGn9QbrwMRjISfmVt5uy9NHbc_2mqjV5Qdqik4proWp8ErpxDr7qixBC_2sc_Ryt76KGPNHRAFVDJUrL1mxuVl7ZNWSLNECjOgWGC7K6MEZOnczpjRVypooNr-GTm\/s320\/GreekCrisisATMLineLarissaCity.jpg\" width=\"320\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Ci\u003EATM line, Larissa City\u003C\/i\u003E\u003C\/td\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Cbr \/\u003E\u003C\/td\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Cbr \/\u003E\u003C\/td\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Cbr \/\u003E\u003C\/td\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Cbr \/\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cdiv class=\"separator\" style=\"clear: both; text-align: center;\"\u003E\n\u003C\/div\u003E\n\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nOn Tuesday, the Greek government defaulted on its scheduled debt payment to the International Monetary Fund (IMF).\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nUnder capital controls, ATM withdrawals from Greek bank accounts are now limited to 60 euros a day.\u0026nbsp; Debit cards can still be used for payments within the country, but the money simply gets transferred from one frozen bank account to another.\u0026nbsp; As a result many businesses no longer accept debit cards, and many more are demanding a substantial premium price (in\u0026nbsp; at least one business, double) for debit cards (transferred bank balances) versus hard cash.\u0026nbsp; There is a growing shortage of such cash; as a result some stores are paying their suppliers in private \"scrip\", which can be used by the supplier's workers to purchase goods from the issuing store. (more on this below).\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nUse of credit and debit cards to pay out of the country is banned and effectively blocked, resulting in a near-complete freeze-out of Greeks from Internet commerce. This restriction, along with the controls resulting in Greeks being excluded from the pan-European money settlement system, means that Greek businesses can't pay for imports.\u0026nbsp; Many shipments into the country have been halted as a result. (The government plan is to create a whitelist of politically approved cases in which such payments for imports will be unblocked).\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nA crucial feature of store-issued scrip is that it literally circulates through a complete closed cycle: store --\u0026gt; supplier --\u0026gt; workers --\u0026gt; store.\u0026nbsp; Such specific cycles are a pattern that is commonly found when currencies are primitive or newly emerging, and every Bitcoin marketer and evangelist should be familiar with them. \u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"margin-left: auto; margin-right: auto; text-align: center;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjgmVNGHFcYNj7K_ABw4uHCJQAwQvkDvqK20FKAUjrz-oN34RbN6EywITHePcdLrvqkQ1DLobh-DkxYMo58AeO6MytQdD3MIfIfwJMgMSdpEchqilfe26U8TDjH4gsN9OtCqyuX\/s1600\/KulaRing.gif\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" height=\"320\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjgmVNGHFcYNj7K_ABw4uHCJQAwQvkDvqK20FKAUjrz-oN34RbN6EywITHePcdLrvqkQ1DLobh-DkxYMo58AeO6MytQdD3MIfIfwJMgMSdpEchqilfe26U8TDjH4gsN9OtCqyuX\/s320\/KulaRing.gif\" width=\"269\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Ci\u003EThe \u003Ca href=\"http:\/\/szabo.best.vwh.net\/kula.html\" target=\"_blank\"\u003Ekula ring\u003C\/a\u003E, two specific cycles (counter-circulating cycles of shell money) allowing exchange of seasonal goods in the precolonial South Pacific\u003C\/i\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cbr \/\u003E\nIt doesn’t help much to sell bitcoin to isolated individuals: as a mere store of value its volatility is much greater than most existing currencies; as an investment it only makes sense as a tiny high-risk fraction of one's portfolio.\u0026nbsp; Bitcoin does have some political-affinity and status value in developed countries; by contrast in many developing countries and in countries under financial crisis such as Greece, there are urgent needs bitcoin potentially can address.\u0026nbsp; In terms of these needs Bitcoin is mainly useful as a way to send money across borders for investment in more stable assets overseas, and to substitute for cash or other substitute currencies in a money-starved environment.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nTo have value as a medium of exchange, bitcoin must be taken up by a community of people who already frequently trade with each other,\u0026nbsp; and who have a strong need to use it in these trades. It is especially important to market to the links in the cycle \nthat have the strongest negotiating leverage with the others (in the case of Greek the Greek store scrip cycle, the store\n and its larger suppliers).\u0026nbsp; The link in the cycle with the greatest incentives to switch to bitcoin here are likely the store's suppliers, because they don’t fully trust the store, nor the \nunderlying currency, euro or post-euro, that is the “O” in an IOU, but \nare participating in the scrip because, sans bitcoin, they have no other\n choice.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nIn bitcoin specific cycles create other cost savings.\u0026nbsp; Almost everywhere they economize on the increasingly high KYC\/AML (know your customer\/anti-money-laundering) costs of going through a fiat-bitcoin exchange.\u0026nbsp; What's more, in a capital controls environment like Greece specific cycles avoid the capital controls that would be imposed on a Greek-based fiat-bitcoin exchange, and avoid the need nearly all Greek customers using out-of-country exchanges would have to futilely try to tap into their frozen bank accounts in order to purchase bitcoin. Bitcoin will not, contrary to some feverish news reporting, help Greeks get money out of their frozen bank accounts.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nBut bitcoin does have great potential to help in less obvious ways: for one thing, as a superior (not vulnerable to trust in an issuing store, and in any currency underlying an IOU) substitute for the emerging store scrips.\u0026nbsp; For another, it could help greatly with the severe cross-border commerce issues that are emerging.\u0026nbsp; Exporters, including freelancers working over the Internet, can bring bitcoin into the country, thereby avoiding earning wages that get deposited to frozen bank accounts (per Greek lore, be wary of a cave with many tracks coming in but few coming out). Importers can pay for goods with bitcoin while other electronic payment channels (European money settlements, Paypal, and credit \u0026amp; debit cards when paying foreign businesses, etc.) remain frozen. Again specific cycles must be set up: isolated marketing to just exporters or importers will be far less effective than organizing existing supply chains that involve both.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThere are likely many other, mostly highly non-obvious, niches in which bitcoin, and other cryptocurrencies, and smart contract platforms could play a quite valuable role in capital-controlled and other financially handicapped countries.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nBitcoin is not easy to learn, either conceptually or in setting up businesses and individuals with the software (and preferably also the secure hardware) to accept it. This is especially the case in a capital controls climate where the traditional bitcoin exchanges and retail payment companies, with their consumer-friendly front ends, as they normally operate in developed countries, likely can't effectively operate. To take advantage of bitcoin many Greeks will have to use the Bitcoin blockchain directly. So it's too late for bitcoin to help much with the current 6 days of bank closure,\u0026nbsp; but once the learning curves have been surmounted, the participants in specific cycles educated, bitcoin has great potential to address likely many ongoing problems with capital control, in Greece as long as they continue in various forms, and in many other parts of the world where such financial restrictions designed for a pre-digital era have been imposed.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n[Update: various minor edits: the first version was rather rough, sorry :-)] "},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/6216506728382908250\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/6216506728382908250","title":"23 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/6216506728382908250"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/6216506728382908250"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2015\/07\/the-greek-financial-mess-and-some-ways.html","title":"The Greek financial mess; and some ways Bitcoin might help"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"media$thumbnail":{"xmlns$media":"http://search.yahoo.com/mrss/","url":"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgRs9AYt8Ngt7iToOFp-aZFS96pd5b6yT3tLFNsHoH36WV4lgfB24kpB4eQb-FKVXyR_TtvbREuErrFNqnBE7GSgzePZ0B1id9GQosu6d7GgdefrYME34p7glCeu67t-Pb5flyB\/s72-c\/GreekCrisisDebtSchedule.jpg","height":"72","width":"72"},"thr$total":{"$t":"23"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-6477623700217194629"},"published":{"$t":"2015-05-25T21:36:00.003-07:00"},"updated":{"$t":"2015-05-25T21:40:36.294-07:00"},"title":{"type":"text","$t":"Small-game fallacies"},"content":{"type":"html","$t":"A small-game fallacy occurs when game theorists, economists, or others trying to apply game-theoretic or microeconomic techniques to real-world problems, posit a simple, and thus cognizable, interaction, under a very limited and precise set of rules, whereas real-world analogous situations take place within longer-term and vastly more complicated games with many more players: \"the games of life\".\u0026nbsp; Interactions between small games and large games infect most works of game theory, and much of microeconomics, often rendering such analyses useless or worse than useless as a guide for how the \"players\" will behave in real circumstances. These fallacies tend to be particularly egregious when \"economic imperialists\" try to apply the techniques of economics to domains beyond the traditional efficient-markets domain of economics, attempting to bring economic theory to bear to describe law, politics, security protocols, or a wide variety of other institutions that behave very differently from efficient markets. However as we shall see, small-game fallacies can sometimes arise even in the analysis of some very market-like institutions, such as \"prediction markets.\"\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nMost studies in experimental economics suffer from small-game\/large-game effects. Unless these experiments are very securely anonymized, in a way the players actually trust, and in a way the players have learned to adapt to, overriding their moral instincts -- an extremely rare circumstance, despite many efforts to achieve this -- large-game effects quickly creep in, rendering the results often very misleading, sometimes practically the opposite of the actual behavior of people in analogous real-life situations. A common example: it may be narrowly rational and in accord with theory to \"cheat\", \"betray\", or otherwise play a narrowly selfish game, but if the players may be interacting with each other after the experimenters' game is over, the perceived or actual reputational effects in the larger \"games of life\", ongoing between the players in subsequent weeks or years, may easily exceed the meager rewards doled out by the experimenters to act selfishly in the small game. Even if the players can somehow be convinced that they will remain complete strangers to each other indefinitely into the future, our moral instincts generally evolved to play larger \"games of life\", not one-off games, nor anonymous games, nor games with pseudonyms of strictly limited duration, with the result that behaving according to theory must be learned: our default behavior is very different. (This explains, why, for example, economics students typically play in a more narrowly self-interested way, i.e. more according to the simple theories of economics, than other kinds of students).\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nSmall-game\/large-game effects are not limited to reputational incentives to play nicer: moral instincts and motivations learned in larger games also include tribal unity against perceived opponents, revenge, implied or actual threats of future coercion, and other effects causing much behavior to be worse than selfish, and these too can spill over between the larger and smaller games (when, for example, teams from rival schools or nations are pitted against each other in economic experiments). Moral instincts, though quite real, should not be construed as necessarily or even usually being actually morally superior to various kinds of learned morals, whether learned in economics class or in the schools of religion or philosophy.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nSmall-game\/large-game problems can also occur in auditing, when audits look at a particular system and fail to take into account interactions that can occur outside their system of financial controls, rendering the net interactions very different from what simply auditing the particular system would suggest. A common fraud is for trades to be made outside the scope of the audit, \"off the books\", rendering the books themselves very misleading as to the overall net state of affairs.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nSimilarly, small-game\/large-game problems often arise when software or security architects focus on an economics methodology, focusing on the interactions occurring within the defined architecture and failing to properly take into account (often because it is prohibitively difficult to do so) the wide variety of possible acts occurring outside the system and the resulting changes, often radical, to incentives within the system. For example, the incentive compatibility of certain interactions within an architecture can quickly disappear or reverse when opposite trades can be made outside the system (such as hedging or even more-than-offsetting a position that by itself would otherwise create a very different incentive within the system), or when larger political or otherwise coercive motivations and threats occur outside the analyzed incentive system, changing the incentives of players acting within the system in unpredictable ways. Security protocols always consist of at least two layers: a \"dry layer\" that can be analyzed by the objective mathematics of computer science, and a \"wet layer\" that consists of the often unpredictable net large-game motivations of the protocols' users.\u0026nbsp; These should not be confused, nor should the false precision of mathematical economic theories be confused with the objective accuracy of computer science theories, which are based on the mathematics of computer architecture and algorithms and hold regardless of users' incentives and motivations.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nA related error is the pure-information fallacy: treating an economic institution purely as an information system, accounting only for market-proximate incentives to contribute information via trading decisions, while neglecting how that market necessarily also changes players' incentives to act outside of that market. For example, a currently popular view of proposition bets, the \"prediction markets\" view, often treats prop bets or idea futures as purely information-distribution mechanisms, with the only incentives supposed as the benign incentive to profit by adding useful information to the market. This fails to take into account the incentives such markets create to act differently \u003Ci\u003Eoutside\u003C\/i\u003E the market.\u0026nbsp; A \"prediction market\" is always also one that changes incentives outside that market: a prediction market automatically creates parallel incentives to bring about the predicted event. For example a prediction market on a certain person's death is also an assassination market. Which is why a pre-Gulf-War-II DARPA-sponsored experimental \"prediction market\" included a prop bet on Saddam Hussein's death, but excluded such trading on any other, more politically correct world leaders. A sufficiently large market predicting an individual's death is also, necessarily, an assassination market, and similarly other \"prediction\" markets are also \u003Ci\u003Eact \u003C\/i\u003Emarkets, changing incentives to act outside that market to bring about the predicted events."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/6477623700217194629\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/6477623700217194629","title":"15 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/6477623700217194629"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/6477623700217194629"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2015\/05\/small-game-fallacies.html","title":"Small-game fallacies"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"15"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-4319656270164814457"},"published":{"$t":"2014-12-11T10:16:00.001-08:00"},"updated":{"$t":"2014-12-11T11:28:26.977-08:00"},"title":{"type":"text","$t":"The dawn of trustworthy computing"},"content":{"type":"html","$t":"When we currently use a smart phone or a laptop on a cell network or the Internet, the other end of these interactions typically run on other solo computers, such as web servers. Practically all of these machines have architectures that were designed to be controlled by a single person or a hierarchy of people who know and trust each other. From the point of view of a remote web or app user, these architectures are based on full trust in an unknown \"root\" administrator, who can control everything that happens on the server: they can read, alter, delete, or block any data on that computer at will.\u0026nbsp; Even data sent encrypted over a network is eventually unencrypted and ends up on a computer controlled in this total way. With current web services we are fully trusting, in other words we are fully vulnerable to, the computer, or more specifically the people who have access to that computer, both insiders and hackers, to faithfully execute our orders, secure our payments, and so on. If somebody on the other end wants to ignore or falsify what you've instructed the web server to do, no strong security is stopping them, only fallible and expensive human institutions which often stop at national borders. \u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe high vulnerability we have to web servers stands in sharp contrast to traditional commercial protocols, such as ticket-selling at a movie theater, that distribute a transaction so that no employee can steal money or resources undetected. There is no \"root administrator\" at a movie theater who can pocket your cash undetected.\u0026nbsp; Because, unlike a web server, these traditional protocols, called financial controls, can securely handle cash, you didn't have to fill out a form\u0026nbsp; to see a movie, shop for groceries, or conduct most other kinds of every-day commerce. You just plunked down some coin and took your stuff or your seat. Imperfect and slow as these processes often are (or were), these analog or paper-based institutions often provided security, financial control, and\/or verifiability of fiduciary transactions in many ways far superior to what is possible on web servers, at much less hassle and privacy loss to customers. On the Internet, instead of securely and reliably handing over cash and getting our goods or services, or at least a ticket, we have to fill out forms and make ourselves vulnerable to identity theft in order to participate in e-commerce, and it often is very difficult to prohibitive to conduct many kinds of commerce, even purely online kinds, across borders and other trust boundaries. Today's computers are not very trustworthy, but they are so astronomically faster than humans at so many important tasks that we use them heavily anyway. We reap the tremendous benefits of computers and public networks at large costs of identity fraud and other increasingly disastrous attacks.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nRecently developed and developing technology, often called \"the block chain\", is starting to change this. A block chain computer is a virtual computer, a computer in the cloud, shared across many traditional computers and protected by cryptography and consensus technology. A Turing-complete block chain with large state gives us this shared computer. Earlier efforts included state-machine replication (see list of papers linked below).\u0026nbsp; QuixCoin is a recent and Ethereum is a current project that has implemented such a scheme. These block chain computers will allow us to put the most crucial parts of our online protocols on a far more reliable and secure footing, and make possible fiduciary interactions that we previously dared not do on a global network\u0026nbsp; \u003Cbr \/\u003E\n\u003Cbr \/\u003E\nMuch as pocket calculators pioneered an early era of limited personal computing before the dawn of the general-purpose personal computer, Bitcoin has pioneered the field of trustworthy computing with a partial block chain computer. Bitcoin has implemented a currency in which someone in Zimbabwe can pay somebody in Albania without any dependence on local institutions, and can do a number of other interesting trust-minimized operations, including multiple signature authority. But the limits of Bitcoin's language and its tiny memory mean it can't be used for most other fiduciary applications, the most obvious example being risk pools that share collateral across a pool of financial instruments.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nA block-chain computer, in sharp contrast to a web server, is shared across many such traditional computers controlled by dozens to thousands of people. By its very design each computer checks each other's work, and thus a block chain computer reliably and securely executes our instructions up to the security limits of block chain technology, which is known formally as anonymous and probabilistic Byzantine consensus (sometimes also called Nakamoto\u0026nbsp; consensus).\u0026nbsp; The most famous security limit is the much-discussed \"51% attack\".\u0026nbsp; We won't discuss this limit the underlying technology further here, other than saying that the oft-used word \"trustless\" is exaggerated shorthand for the more accurate mouthful \"trust-minimized\", which I will use here.\u0026nbsp; \"Trust\" used in this context means the need to trust remote strangers, and thus be vulnerable to them.\u0026nbsp; \u003Cbr \/\u003E\n\u003Cbr \/\u003E\nTrust-minimized code means you can trust the code without trusting the owners of any particular remote computer. A smart phone user in Albania can use the block chain to interact with a computer controlled by somebody in Zimbabwe, and they don't have to know or trust each other in any way, nor do they need to depend on the institutions of either's countries, for the underlying block chain computer to run its code securely and reliably. Regardless of where any of the computers or their owners are, the block chain computer they share will execute as reliably and securely as consensus technology allows, up to the aforementioned limits. This is an extremely high level of reliability, and a very high level of security, compared to web server technology.\u0026nbsp; \u003Cbr \/\u003E\n\u003Cbr \/\u003E\nInstead of the cashier and ticket-ripper of the movie theater, the block chain consists of thousands of computers that can process digital tickets, money, and many other fiduciary objects in digital form.\u0026nbsp; Think of thousands of robots wearing green eye shades, all checking each other's accounting. Individually the robots (or their owners) are not very trustworthy, but collectively, coordinated by mathematics, they produce results of high reliability and security.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nOften block chain proponents talk about the \"decentralized\" block chain versus the \"centralized\" web or centralized institutions. It's actually the protocol (Nakamoto consensus, which is highly distributed) combined with strong cryptography, rather than just decentralization \u003Ci\u003Eper se\u003C\/i\u003E, that is the source of the far higher reliability and and much lower vulnerability of block chains. The cryptography provides an unforgeable chain of evidence for all transactions and other data uploaded to the block chain. Many other decentralized or peer-to-peer (P2P) technologies do not provide anything close to the security and reliability provided by a block chain protected by full Byzantine or Nakamoto consensus and cryptographic hash chains, but deceptively style themselves as block chains or cryptocurrency.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nA big drawback is that our online and distributed block chain computer is much slower and more costly than a web server: by one very rough estimate, about 10,000 times slower and more costly, or about the same as it cost to run a program on a normal computer in 1985. For this reason, we only run on the block chain that portion of an application that needs to be the most reliable and secure: what I call fiduciary code. Since the costs of human (\"wet\") problems caused by the unreliability and insecurity of web servers running fiduciary code are often far higher than the extra hardware needed to run block chain code, when web server reliability and security falls short, as it often does for fiduciary computations such as payments and financial contracts, it will often make more sense\u0026nbsp; to run that code on the block chain than to run it less reliably and securely on a web server. Even better, the block chain makes possible new fiduciary-intensive applications, such as posting raw money itself to the Internet, securely and reliably accessible anywhere on the globe -\u0026nbsp; apps that we would never dare do with a web server.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nWhat kinds of fiduciary code can we run?\u0026nbsp; We are still thinking up new applications and the categories will be in flux, but a very productive approach is to think of fiduciary applications by analogy to traditional legal code that governs traditional fiduciary institutions. Fiduciary code will often execute some of the functions traditionally thought of as the role of commercial law or security, but with software that securely and reliably spans the global regardless of traditional jurisdiction. Thus:\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n* Property titles (registered assets), where the on-chain registry is either the legally official registry for off-chain assets or controls on-chain ones, thus providing reliable and secure custody of them. One can think of a cryptocurrency such as Bitcoin as property titles (or at least custody enforced by the block chain consensus protocol) to bits recognized as being a fixed portion of a currency, or as controlling unforgeably costly bits, or both. Block chains could also control hardware which controls the function of and access to physical property.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n* Smart contracts: here users (typically two of them) agree via user interface to execute block chain code, which may include transfer of money and other chain-titled assets at various times or under various conditions, transfer and verification of other kinds of information, and other combinations of wet or traditional (off-chain) and dry (on-chain) performance. A block chain can hold cryptocurrency as collateral (like an escrow) which incentivizes off-chain performance that can be verified on-chain, by the parties or by third parties. A full block chain computer can pool on-chain assets into a single chain-controlled risk pool spread among many similar financial contracts, reducing the amount of collateral that needs to be stored on-chain while minimizing the need for off-chain collateral calls. The block chain can also make the search, negotiation, and verification phases of contracting more reliable and secure. With on-chain smart contracts we will be able to buy and sell many online services and financial instruments by button and slider instead of by laboriously filling out forms that disclose our private information.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n* On-chain treasuries, trusts, and similar, where money lives on the block chain and is controlled by multiple signature (\"multisig\") authority.\u0026nbsp; Putting a treasury with signature authority on a block chain computer is low-hanging fruit, but is often tied to more speculative efforts under the label \"distributed autonomous organization (DAO)\", which may include voting shares and other mechanisms to control the treasury like a corporation or other kind of of organization.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nI hope to discuss these block chain applications, especially smart contracts, in future posts. While there is much futurism in many block chain discussions, including many trying to solve problems that aren't actually solved by the block chain, I will generally stick to low-hanging fruit that could be usefully implemented on Quixcoin, Ethereum, or similar technology in the near future, often interfacing to still necessary parts of traditional protocols and institutions rather than trying to reinvent and replace them in whole.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ch3\u003E\nReferences \u003C\/h3\u003E\n\u003Ca href=\"http:\/\/bitstein.org\/blog\/nick-szabo-the-computer-science-of-crypto-currency\/\"\u003EHere\u003C\/a\u003E is a list of basic computer science papers describing the technology of block chains (including cryptocurrencies).\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2006\/11\/wet-code-and-dry.html\"\u003EWet vs. dry code\u003C\/a\u003E"},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/4319656270164814457\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/4319656270164814457","title":"26 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/4319656270164814457"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/4319656270164814457"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2014\/12\/the-dawn-of-trustworthy-computing.html","title":"The dawn of trustworthy computing"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"26"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-6515038781271400293"},"published":{"$t":"2014-10-16T14:00:00.002-07:00"},"updated":{"$t":"2014-10-16T14:57:06.651-07:00"},"title":{"type":"text","$t":"Transportation, divergence, and the industrial revolution"},"content":{"type":"html","$t":"After about 1000 AD northwestern Europe started a gradual switch from using oxen to using horses for farm traction and transportation.\u0026nbsp; This trend culminated in an \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2011\/06\/trotting-ahead-of-malthus.html\" target=\"_blank\"\u003Eeighteenth-century explosion\u003C\/a\u003E in roads carrying horse-drawn carriages and wagons, as well as in canals, and works greatly extending the navigability of rivers, both carrying horse-drawn barges. This reflected a great rise in the use of cultivated fodder, a hallmark of the novel agricultural system that was evolving in northwestern Europe from the start of the second millennium: \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2011\/05\/lactase-persistence-and-quasi.html\" target=\"_blank\"\u003Estationary pastoralism\u003C\/a\u003E.\u0026nbsp; During the same period, and especially in the seventeenth through nineteenth centuries, most of civilized East Asia, and in particular Chinese civilization along its coast, navigable rivers, and canals, faced increasing Malthusian pressures and evolved in the opposite direction: from oxen towards far more costly and limited human porters. Through the early middle ages China had been far ahead, in terms of division of labor and technology, of the roving bandits of northern Europe, but after the latter region's transition to stationary pastoralism that gap closed and Europe surged ahead, a \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2013\/11\/european-asian-divergence-predates.html\" target=\"_blank\"\u003Egrowth divergence\u003C\/a\u003E that culminated in the industrial revolution.\u0026nbsp; In the eighteenth century Europe, and thus in the early industrial revolution, muscle power was the engine of land transportation, and hay was its gasoline.\u0026nbsp; \u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Metcalfe%27s_law\" target=\"_blank\"\u003EMetcalfe's Law\u003C\/a\u003E states that a value of a network is proportional to the square of the number of its nodes.\u0026nbsp; In an area where good soils, mines, and forests are randomly distributed, the number of nodes valuable to an industrial economy is proportional to the area encompassed.\u0026nbsp; The number of such nodes that can be economically accessed is an inverse square of the cost per mile of \ntransportation.\u0026nbsp; Combine this\u0026nbsp; with Metcalfe's Law and we reach a \ndramatic but solid mathematical conclusion: the potential value of a land transportation network is the inverse fourth power of the cost of that transportation. A reduction in transportation costs in a trade network by a factor of two increases the potential value of that network by a factor of sixteen. While a power of exactly 4.0 will usually be too high, due to redundancies, this does show how the cost of transportation can have a radical nonlinear impact on the value of the trade networks it enables.\u0026nbsp; This formalizes Adam Smith's observations: the division of labor (and thus value of an economy) increases with the extent of the market, and the extent of the market is heavily influenced by transportation costs (as he extensively discussed in his \u003Ci\u003EWealth of Nations\u003C\/i\u003E).\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe early industrial revolution was highly dependent on bringing together bulk goods such as coal and iron ore.\u0026nbsp; Land transportation of such materials more than a dozen miles in most parts of the world was prohibitively costly, and they were only rarely located a shorter distance from navigable water (the costs per mile of water transport were generally orders of magnitude cheaper than the costs per mile of of land transport).\u0026nbsp; As a result, the early industrial revolution, and the potential for a region to be the first to industrialize, was very sensitive to small changes in land transportation costs.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nFurthermore, land and sea-borne transportation were far more complements than substitutes.\u0026nbsp; Cheaper land transportation was a \"force multiplier\" for water transportation.\u0026nbsp; Decreasing the costs of getting to port from field or mine by a factor of two increased the number of fields and mines accessible by a factor of four, and increased the number of possible ways to divide labor, and thus the value, by an even greater factor via Metcalfe's law.\u0026nbsp; This in turn incentived greater investment in sea-borne transport. It's thus not surprising that, even before the industrial revolution, the leaders in global trade and colonization were European countries that could access the Atlantic.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nBy the dawn of the industrial revolution in northwest Europe the effects of horse haulage had already been dramatic: drop by a factor of two in the costs, and increase in speed by about the same factor, of transporting goods by land, the corresponding increase in commercial crop area and in area that could be economically lumbered and coal and metals that could be mined.\u0026nbsp;\u0026nbsp; Multiply that factor of four by much more when we factor in (1) innovations in wheels, tires, shock absorption, and road building that followed on the heels, as is were, of the great increase in horse haulage, and (2) the great increase in mileage and inland penetration of navigable rivers and canals, especially in the 18th century, the barges again hauled by horses.\u0026nbsp; And as Metcalfe's Law suggests, the number of combinations, and thus the value, increased by a far greater factor still. Not only did northwestern European ports have access to far more land, but there were far more ports far more \"inland\" along rivers and canals, thanks again chiefly to the draft horses and the nutrient-rich cultivated fodder that fed them.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nTo enable the industrial revolution, mines and nutrient-dense fodder had to be colocated within efficient bulk transport distance of each other — which in the case of horses hauling coal or wood by rural road, was typically less than twenty miles, and for oxen and human porters far less still — to produce the low-cost bulk transportation networks needed to make industrial revolution scale use of most commercial crops and mines. Efficient bulk transportation is needed _all the way_ between the iron mine, the coal mine, and the smelter.\u0026nbsp; Because the cost per mile of water transport was so much smaller than the costs of land transport, this “last few miles to the mine” problem usually played a dominant role in transportation economics, somewhat analogous to the “last mile” problem in modern cable networks. That’s why stationary pastoralism with its efficient markets for nutrient-dense (because cultivated) fodder was such a huge win — it allowed horses to be housed at the mines, canals, roads, and factories where they worked, which no place in the world outside Europe could during that era do.\u0026nbsp; Nutrient-dense fodder created a virtuous recursion, enabling itself to be harvested (via horse-drawn mows and rakes) and transported to mine, factory, and stable at increasingly lower costs.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nIndustrialization came in many phases. Very roughly speaking, the first phase, in the latter half of the eighteenth century, involved the culmination and optimization of the use of horses, by northwestern Europe, and especially England, greatly expanding its horse wagon and carriage roads and horse-drawn barge canal networks.\u0026nbsp; Horses brought coke or charcoal and iron ore to the smelters. Horse-powered capstans performed some arduous farm tasks such as threshing. Along with primitive Newcomen steam engines they pumped coal mines. Horse gins also powered most of the early versions of innovative textile machinery (they switched to more power-efficient water mills when they later scaled up).\u0026nbsp; That classic carnival ride, the merry-go-round, was inspired by these perpetually circling horses.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nAgain roughly speaking, the second phase of industrial growth, after about 1830, was more scientific and far easier to copy than northwestern Europe's unique biology: steam engines came to replace horse gins and water mills for running industrial machinery, and the steam-powered railroad radically lowered transportation costs between major mines, factories, and urban centers. When non-European countries industrialized, such as Japan after the 1870s, they did it in a \"leap-frog\" style: they skipped over the long-evolved improvement in draft animals and went straight to mature steam engines and, soon thereafter, electrical motors.\u0026nbsp; Much as countries installing phone networks for the first time over the last few decades have leap-frogged over the land line era, going straight to cell phones. Starting early in the 20th century industrializing countries could replace all the remaining important functions of the horse with internal combustion engines.\u0026nbsp; England, which made the longest and most thorough use of the horse, and thereby had the transportation economies allowing it to pioneer the industrial revolution, had a less pressing need to use the internal combustion engine and thus lagged enough in that technology so that second-generation\u0026nbsp; industrializers like Japan, Germany, and the United States became leaders in internal combustion engine products.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nGiven the scientific nature of the second phase of the industrial revolution, which could be discovered by any culture full of \u003Ca href=\"http:\/\/szabo.best.vwh.net\/bookconsciousness.html\" target=\"_blank\"\u003Eliterate craftsmen\u003C\/a\u003E, this second phase was more technologically inevitable and didn't ultimately depend on northwestern Europe's unique biology.\u0026nbsp; At the same time, during the long evolution that culminate in the industrial revolution, and during its first phase, land transportation the world over was muscle powered and the unique system of stationary pastoralism, by breeding draft horses that ran on cultivated, nutrient-dense fodder, substantially lowered transportation costs. This allowed the value of northwestern Europe's bulk transportation networks to radically increase and made it very nearly as inevitable that that region would be the pioneers of the industrial revolution.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nHat tips and references: Edward Wright and Raymond Crotty among many other authors have explored some of these issues.\u003Cbr \/\u003E\n\u003Cdiv id=\"stcpDiv\" style=\"left: -1988px; position: absolute; top: -1999px;\"\u003E\nRaymond Crotty\u003C\/div\u003E\n\u003Cdiv id=\"stcpDiv\" style=\"left: -1988px; position: absolute; top: -1999px;\"\u003E\nRaymond Crottyamong many other authors have explored some of the issues.\u003C\/div\u003E\n"},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/6515038781271400293\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/6515038781271400293","title":"10 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/6515038781271400293"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/6515038781271400293"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2014\/10\/transportation-divergence-and.html","title":"Transportation, divergence, and the industrial revolution"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"10"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-1409590125298819162"},"published":{"$t":"2014-07-02T20:26:00.001-07:00"},"updated":{"$t":"2014-07-02T20:26:47.255-07:00"},"title":{"type":"text","$t":"Tweeting"},"content":{"type":"html","$t":"https:\/\/twitter.com\/NickSzabo4"},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/1409590125298819162\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/1409590125298819162","title":"1 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/1409590125298819162"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/1409590125298819162"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2014\/07\/tweeting.html","title":"Tweeting"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"1"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-3156615438018660301"},"published":{"$t":"2013-11-18T19:17:00.000-08:00"},"updated":{"$t":"2013-11-18T19:21:20.479-08:00"},"title":{"type":"text","$t":"European-Asian divergence predates the industrial revolution"},"content":{"type":"html","$t":"\u003Cb style=\"-webkit-text-stroke-width: 0px; background-color: #fafafa; background-position: initial initial; background-repeat: initial initial; border: 0px; color: black; font-family: Arial, Verdana, Arial, Helvetica, sans-serif; font-size: 14px; font-style: normal; font-variant: normal; letter-spacing: normal; line-height: 21.265625px; margin: 0px; orphans: auto; padding: 0px; text-align: start; text-indent: 0px; text-transform: none; vertical-align: baseline; white-space: normal; widows: auto; word-spacing: 0px;\"\u003E\u003C\/b\u003EStephen Broadberry describes new \u003Ca href=\"http:\/\/www.voxeu.org\/article\/accounting-great-divergence\" target=\"_blank\"\u003Eestimates\u003C\/a\u003E of per capita GDP which say that the economic divergence between Western Europe and other civilized parts of the world predates the industrial revolution.\u0026nbsp; (H\/T \u003Ca href=\"http:\/\/marginalrevolution.com\/marginalrevolution\/2013\/11\/assorted-links-974.html\" target=\"_blank\"\u003EMarginal Revolution\u003C\/a\u003E).\u0026nbsp; This is more consistent with my own theories (linked below) than the idea that the Great Divergence magically appears from nowhere around the year 1800.\u0026nbsp; Nevertheless I feel compelled to point out shortcomings in these kinds of estimates, on any side of such debates.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThere are the usual correctable, but sadly seldom corrected, problems with datasets comparing European economies over historical periods, for example using \"Holland\", and leaving out, presumably not only the rest of the modern Netherlands, but the entire area of the exceptional Low Country late medieval industry and wealth (Flanders, Brabant, Hainault, etc.), most of which migrated (along with most of the skilled craftsmen and merchants) to the Netherlands during the 16th century wars there.\u0026nbsp; The southern Low Countries, until those wars, were the leading centers of European textile manufacture and probably also had the most labor-productive agriculture.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nWorse are these and all other attempts to compared historical European \"wealth\" or \"income\" to those of non-European cultures before the era of cheap global precious metals flows (initiated by \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2012\/10\/dead-reckoning-and-exploration-explosion.html\" target=\"_blank\"\u003Ethe exploration explosion\u003C\/a\u003E) allows comparison of prices.\u0026nbsp; How do you compare the “wealth” or “income” of rice-eating and cotton-wearing Chinese farmer to a milk-drinking, oat-eating, and wool-clad Scottish peasant? It it is neither very useful nor very reliable to try to reduce such cultural and even genetic differences to mere numerical estimates.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nSo it's no surprise to see such conjectural and subjective estimates subject to major revisions, and I'm sure we'll see many more such revisions, in both directions, in the future. That said, many of the economically important innovations in northwestern Europe long predate not only the industrial revolution, but also the Black Death (Broadberry's new date for the start of the Great Divergence), including the following biological bundle:\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n(1) heavy dairying\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n(2) Co-evolution of human lactase persistence and cow milk proteins\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n(2) \u003Ca href=\"https:\/\/en.wikipedia.org\/wiki\/Hajnal_line\" target=\"_blank\"\u003Edelayed marriage\u003C\/a\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n(3) hay\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n(4) greater use of draft animals\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ca href=\"http:\/\/upload.wikimedia.org\/wikipedia\/commons\/0\/0d\/ShireDraftHorse.jpg\" imageanchor=\"1\" style=\"clear: left; float: left; margin-bottom: 1em; margin-right: 1em;\"\u003E\u003Cimg border=\"0\" height=\"213\" src=\"http:\/\/upload.wikimedia.org\/wikipedia\/commons\/0\/0d\/ShireDraftHorse.jpg\" width=\"320\" \/\u003E\u003C\/a\u003EThese innovations all long predate the \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2011\/06\/agricultural-consequences-of-black.html\" target=\"_blank\"\u003EBlack Death\u003C\/a\u003E, except that thereafter this biological divergence, especially in the \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2011\/06\/trotting-ahead-of-malthus.html\" target=\"_blank\"\u003Euse of draft animals, accelerated\u003C\/a\u003E.\u0026nbsp; After a brief interruption the \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2011\/05\/lactase-persistence-and-quasi.html\" target=\"_blank\"\u003Elactase persistent core\u003C\/a\u003E resumed its thousand-year conversion of draft power from humans and oxen to horses, including super-horses bred to benefit from good fodder crops -- the \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Shire_horse\" target=\"_blank\"\u003EShire Horse\u003C\/a\u003E, \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Percheron\" target=\"_blank\"\u003EPercheron,\u003C\/a\u003E \u003Ca href=\"http:\/\/.wikipedia.org\/wiki\/Belgian_horse\" target=\"_blank\"\u003EBelgian\u003C\/a\u003E, etc., and of course the famous \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Clydesdale_(horse)\" target=\"_blank\"\u003EClydesdale\u003C\/a\u003E of the beer ads.\u0026nbsp; Draft horses figured prominently in the great expansion of the English coal mines from the 14th to 18th centuries. They both pumped the mines and transported the coal to navigable water.\u0026nbsp; Due to lack of horsepower for pumping and transport, the Chinese use of coal, though already well established by the 13th century visit of Marco Polo, where both mine and consumer were within short human-porter distance to navigable water, failed to grow beyond that limit until the coming of the railroad.\u0026nbsp; Similarly draft horses, alongside the more famous water-mills, played a key role in the early (pre-steam) exponential growth of the English textile industry, the economically dominant feature of the early industrial revolution.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nGreater use of draft animals led to higher labor productivity and larger markets for agricultural output, and thus to greater agricultural specialization. Higher labor productivity implies higher per capita income, even if it can’t be measured. For civilizations outside Western Europe by contrast, much less use was made of draft animals with the result that these effects were confined to within a dozen or less miles of navigable water.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nContrariwise, northern Europe has always been at a severe ecological disadvantage to warmer climates when it comes to growing rice, cotton, sugar, and most other economically important crops.\u0026nbsp; However these seem not to have had an anti-Malthusian effect in increasing labor productivity -- the increased efficiency of rice in converting solar power to consumable calories, for example, simply led to a greater population rather than a sustained increase in per capita income."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/3156615438018660301\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/3156615438018660301","title":"6 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/3156615438018660301"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/3156615438018660301"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2013\/11\/european-asian-divergence-predates.html","title":"European-Asian divergence predates the industrial revolution"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"6"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-1866638587108143813"},"published":{"$t":"2013-08-04T18:50:00.000-07:00"},"updated":{"$t":"2013-08-04T19:19:29.871-07:00"},"title":{"type":"text","$t":"Political relationships"},"content":{"type":"html","$t":"In most political theories and ideologies, there is a preposterous oversimplification about what kinds of political relationships are desirable, common, or even possible. Given the \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2006\/02\/irreducible-complexity-of-society.html\" target=\"_blank\"\u003Eirreduceable complexity of society\u003C\/a\u003E, any summary of real-world political relationships is by necessity going to be greatly oversimplified, but most such movements neglect even very broad and common kinds of political relationships.\u0026nbsp; So herein, based on my extensive study of the legal relationships between political players that have existed in a very wide variety of polities, is a classification scheme:\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nLet's define a \"polity\" as any entity with some coercive powers. Polities can range in scale from the United Nations to the jail cell at the back of your local shopping mall.\u0026nbsp; By studying polities over many years, and borrowing from previous work on law and political science, I have identified three basic kinds of legal relationships between polities. The basic legal structure, or constitution, of a polity can also be characterized by how much and in what ways it is composed of each kind of relationship. The three basic kinds of political relationships are:\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n(1) Delegation: This includes any kind of delegation from a principal to an agent.\u0026nbsp; The principal authorizes the agent to act for him, e.g. by making a contract or treaty with a third party to which the principal will be bound. A principal can be a boss, a contractee, or voter; the corresponding agents being employee, contractor, or representative.\u0026nbsp; We can characterize principal\/agent relationships by \u003Ca href=\"http:\/\/papers.ssrn.com\/sol3\/papers.cfm?abstract_id=1156482\" target=\"_blank\"\u003Erepresentation distance\u003C\/a\u003E, with each extreme common:\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n(A) at a very short representation distance is the master\/servant (in modern parlance, employer\/employee) relationship. The master gives orders to the servant who is delegated to carry them out and closely supervised. A military dictatorship, for example the Roman Empire, is or was dominated by commander-subordinate relationships.\u0026nbsp; In such a system, to paraphrase the legal code compiled for the Emperor Justinian, the emperor's will is law. \u003Cbr \/\u003E\n\u003Cbr \/\u003E\n(B) at the other extreme, an extremely long representation distance, is the relationship between millions of voters and the representatives they vote for in most modern governments.\u0026nbsp; Voters do not give orders, but rather are treated as having delegated most their coercive powers to their representatives.\u0026nbsp; Representatives in modern governments usually further delegate political and legal power to unelected bureaucracies themselves dominated by type A (boss\/employee) relationships.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n(2) Subsidiarity: for example the relationship in the United States between counties and states, or between the states and the federal government. Often these combine supremacy clauses (when in conflict the law of the encompassing jurisdiction trumps that of its subsidiaries) with typically enumerated powers (the subject matters of the encompassing power is typically limited relative to that of the subsidiary). We can characterize subsidiarity relationships by how much and what kinds of coercive power can be exercised by the encompassing jurisdiction.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nIn medieval England, the subject matter of the encompassing jurisdiction was very small, the Crown essentially having jurisdiction only regarding procedural laws for interactions between subsidiarity jurisdictions (which like the encompassing Crown were held as property by individuals or corporations), as well as some war-making powers. Substantive law was almost entirely in the hands of the encompassed jurisdictions, including the specialized merchant courts as peers enforced an international standard of business law, the \u003Ci\u003Elex mercatoria\u003C\/i\u003E.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nBy contrast in the modern U.S., the substantive legal jurisdiction of the encompassing power has become vast in scope.\u0026nbsp; Nevertheless one can still find many examples of fine-grained subsidiarity, down to \"stand your ground\" laws, citizen's arrest, and those shopping mall jail cells.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nIn property law (which once was also procedural law and essential to defining political relationships), the landlord\/tenant relationship is a subsidiarity relationship. The landlord is generally not the master of the tenant, and cannot issue the tenant arbitrary commands, but rather their relationship is governed on both sides by the constraints imposed by the tenancy.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n(3) Peer-to-peer: these include any agreements made between polities where neither is a subsidiary of the other, or a standard law arrived at in parallel, either through parallel development of precedent (as in the \u003Ci\u003E\u003Ca href=\"http:\/\/szabo.best.vwh.net\/lex.html\" target=\"_blank\"\u003Elex mercatoria\u003C\/a\u003E\u003C\/i\u003E and many other bodies of law) or codification of a standard law (e.g. the Uniform Commercial Code, which is not federal or national law, but a standard set of laws separately enacted by 50 separate jurisdictions, the states of the United States, as peers).\u0026nbsp; Peer-to-peer relationships most commonly involve maintaining distinct sets of laws adapted to local conditions along with agreements or mutually evolved practices for resolving conflicts of laws. Conflict-of-laws law itself was primarily developed through parallel development of judicial precedent, through courts respecting each other in order to maintain their reputations for enforcing the rule of law. On a larger scale wars and treaties between nations are peer-to-peer relationships. In medieval Italy, a wide variety city-states that were often at war with each other nevertheless also developed through this process most of the body of modern conflict-of-laws law.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nSince political theory developed in universities out of the study of Roman imperial law, it has been dominated by imputing to polities only one of the above kinds of relationships -- namely master\/servant or commander\/subordinate relationships, or at best delegation in general.\u0026nbsp; This is especially apparent in the quixotic search for a \"locus of sovereignty\", a search that typically amounts to conspiracy theory in search of a hidden commander-of-all when in fact far more sophisticated combinations of the above kinds of relationships are at play.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nFor further reading:\u003Cbr \/\u003E\n\u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Conflict_of_laws\" target=\"_blank\"\u003EConflict-of-laws law\u003C\/a\u003E\u003Cbr \/\u003E\n\u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2010\/02\/basics-procedural-vs-substantive-law.html\" target=\"_blank\"\u003ESubstantive vs. procedural law\u003C\/a\u003E\u003Cbr \/\u003E\n\u003Ca href=\"http:\/\/papers.ssrn.com\/sol3\/papers.cfm?abstract_id=936314\" target=\"_blank\"\u003EJurisdiction as property\u003C\/a\u003E (subsidiarity and peer-to-peer relationships via property law)\u003Cbr \/\u003E\n\u003Ca href=\"http:\/\/papers.ssrn.com\/sol3\/papers.cfm?abstract_id=1156482\" target=\"_blank\"\u003ERepresentation distance\u003C\/a\u003E\u003Cbr \/\u003E\n\u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2006\/09\/semaynes-case-liberty-of-house.html\" target=\"_blank\"\u003ELiberty of house\u003C\/a\u003E (common law origins of stand-your-ground laws)"},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/1866638587108143813\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/1866638587108143813","title":"3 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/1866638587108143813"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/1866638587108143813"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2013\/08\/political-relationships.html","title":"Political relationships"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"3"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-4888060970695425383"},"published":{"$t":"2013-07-20T13:12:00.000-07:00"},"updated":{"$t":"2013-08-04T19:23:53.677-07:00"},"title":{"type":"text","$t":"A very underrated invention"},"content":{"type":"html","$t":"Perhaps the most underrated invention in history is the humble hourglass.\u0026nbsp; Invented in Europe during the late 13th or early 14th century, the sand glass complemented a nearly simultaneous invention, the mechanical clock.\u0026nbsp; The mechanical clock with its bell was a centralized way of broadcasting the hours day and night; the sand glass was a portable way of measuring shorter periods of time.\u0026nbsp; These clocks were made using very different and independent techniques, but their complementarity function led to their emergence at the same time and place in history, late medieval Europe.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe sandglass was more portable than a water clock. Since its rate of flow is independent of the depth of the upper reservoir, it was also more accurate.\u0026nbsp; And, important in northern Europe, it didn't freeze in winter.\u003Cbr \/\u003E\n\u003Cblockquote\u003E\nAn advancing technology in 13th century western Europe very different from mechanics was glass-blowing.    The origin of the sandglass is quite obscure, but its accuracy relies on a precise ratio between the neck width and the grain diameter. It thus required extensive trial and error for glass-blowers to arrive at hour glasses for sand, ground marble, eggshell, and other sized grains, and techniques for mass producing these precisely sized works of glass, besides a ready of market of users, which Europe turned out to be.\n\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ca href=\"http:\/\/szabo.best.vwh.net\/SandglassOld.jpg\" imageanchor=\"1\" style=\"clear: left; float: left; margin-bottom: 1em; margin-right: 1em;\"\u003E\u003Cimg border=\"0\" height=\"320\" src=\"http:\/\/szabo.best.vwh.net\/SandglassOld.jpg\" width=\"140\" \/\u003E\u003C\/a\u003EThere are no demonstrated cases of sandglasses before the 14th century. Manufacture \u003Cspan id=\"goog_861003392\"\u003E\u003C\/span\u003E\u003Cspan id=\"goog_861003393\"\u003E\u003C\/span\u003Eand use of the sand-glass was widespread in western Europe by the middle of the 14th century. In 1339 Ambrosio Lorenzetti painted a fresco in Siena, one of the commercial cities of northern Italy, which shows a sandglass as an allegory for temperance (self-control).   Mariners in the Mediterranean were likely using sandglasses to measure time and velocity by 1313. By 1394 French housewives were using recipes to make, along with food, glue, ink, and so on, marble grains for an hour-glass:\n\u003Cbr \/\u003E\n\u003Cblockquote\u003E\n\"Take the grease which comes from the sawdust of marble when those great tombs of black marble be sawn, then boil it well in wine like a piece of meat and skim it, and then set it out to dry in the sun; and boil, skim and dry nine times; and thus it will be good.\" \u003C\/blockquote\u003E\nSuch a recipe presumably creates grains of a size in a precise ratio to a standard hour-glass neck size, thus producing an accurate time.\n\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe sandglass, not the mechanical clock, became between the 13th and 16th centuries the main European timekeeper in activities as diverse as public meetings, sermons, and academic lectures.  It was also the main navigational and scientific clock during that period. [\u003Ca href=\"http:\/\/szabo.best.vwh.net\/synch.html\" target=\"_blank\"\u003E*\u003C\/a\u003E]\u003C\/blockquote\u003E\nFrom the point of view of later engineers, the mechanical clock was the more important invention -- they were on the cutting edge of technology from the time of their invention until the industrial revolution.\u0026nbsp; However,\u003Cbr \/\u003E\n\u003Cblockquote class=\"tr_bq\"\u003E\nFor contemporaries....the sandglass was equally or more important.\u0026nbsp;\u0026nbsp; Until the widespread use of small table-top mechanical clocks, the sandglass was the primary means of fair timekeeping.\u0026nbsp;\u0026nbsp;\u0026nbsp; The sand glass was visible to all in a room, and it could only be dramatically and obviously “reset”, it couldn’t be fudged like a mechanical clock. \u0026nbsp; [\u003Ca href=\"http:\/\/szabo.best.vwh.net\/synch.html\" target=\"_blank\"\u003E*\u003C\/a\u003E]\u003C\/blockquote\u003E\nAs I detail \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2012\/10\/dead-reckoning-and-exploration-explosion.html\" target=\"_blank\"\u003Ehere\u003C\/a\u003E,\u0026nbsp; the sand glass also played an essential role in the technique of dead reckoning for ocean navigation, also developed in late medieval Europe.\u0026nbsp; A strict regimen of turning the glasses was kept non-stop throughout a voyage:\u003Cbr \/\u003E\n\u003Cblockquote class=\"tr_bq\"\u003E\nDuring the voyage of Ferdinand Magellan around the globe, his vessels kept 18 hourglasses per ship. It was the job of a ship's page to turn the hourglasses and thus provide the times for the ship's log. Noon was the reference time for navigation, which did not depend on the glass, as the sun would be at its zenith.[8] More than one hourglass was sometimes fixed in a frame, each with a different running time, for example 1 hour, 45 minutes, 30 minutes, and 15 minutes. [\u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Hourglass\" target=\"_blank\"\u003E*\u003C\/a\u003E]\u003C\/blockquote\u003E\nArab and Chinese navigators lacked this crucial piece, and thus by the time of the exploration explosion had not developed navigation techniques that could rival those of Western Europe.\u003Cbr \/\u003E\n\u003Cbr \/\u003E"},"link":[{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/4888060970695425383"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/4888060970695425383"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2013\/07\/a-very-underrated-invention.html","title":"A very underrated invention"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}]},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-6888128875858487172"},"published":{"$t":"2012-10-28T18:23:00.001-07:00"},"updated":{"$t":"2012-10-29T13:45:22.626-07:00"},"title":{"type":"text","$t":"Dead reckoning, maps, and errors"},"content":{"type":"html","$t":"In my last post I introduced \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2012\/10\/dead-reckoning-and-exploration-explosion.html\" target=\"_blank\"\u003Edead reckoning as used during the exploration explosion.\u003C\/a\u003E In this post I will describe the errors these explorers (Dias, Columbus, da Gama, etc.) typically encountered in dead reckoning (DR) when sailing on the oceans, and why dead reckoning could be usefully accurate despite the fact that trying to map those dead reckoning directions onto a normal map would be very inaccurate.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nTo get a taste of the issue, first consider\u0026nbsp;the following abstract\u0026nbsp;navigation problem -- hiking in foggy hills:\u003Cbr \/\u003E\n\u003Col\u003E\n\u003Cli\u003EThere are only two useful landmarks,\u0026nbsp;1F (the origin or \"first fix\") and 2F (the destination or \"second fix\").\u003C\/li\u003E\n\u003Cli\u003EIt’s very foggy, so you have no way to use the hills as recognizable features. But the dead reckoning directions are of sufficient accuracy to get you within sight of landmark 2F.  (For simplicity assume 100% accuracy).\u003C\/li\u003E\n\u003Cli\u003EYou don’t know and can’t measure hill slope angles.  Indeed there are only two things the hikers can measure: (a) magnetic compass direction, and (b) distance actually walked. Observe that this is \u003Ci\u003Enot\u003C\/i\u003E distance as the crow flies, nor is it distance projected onto the horizontal plane. If a hill happens to be a pyramid, and you happen to be walking straight up it (and thus walking up the hypotenuse of a triangle), the distance measured is the length of the hypotenuse, not the length of the horizontal leg of that triangle. \u003C\/li\u003E\n\u003Cli\u003EThe first person who discovered 2F, starting from 1F, recorded dead reckoning directions to there and back as a sequence of tuples { direction, speed, time }.\u003C\/li\u003E\n\u003C\/ol\u003E\nWe can draw a useful head-to-tail diagram of these directions on a piece of paper.  But we can’t use these directions to figure out the distance as the crow flies between\u0026nbsp;1F and 2F, because we don’t know the slopes of the hills traversed.  And for the purposes of our loose analogy to long-distance ocean navigation, our hikes are short and could be in all steep terrain or all flat, so that over the course of our hike the slopes don’t converge on a knowable average. \u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cspan style=\"font-size: small;\"\u003ESince we have insufficient information to determine \"crow flight\" distances, we don’t have enough information to accurately draw our dead reckoning itinerary on maps as we know them (i.e. Ptolemaic maps).   Yet such faithfully recorded directions are sufficient to get any hiker  (who can also exactly measure bearings and distances) from\u0026nbsp;1F to\u0026nbsp;2F and back.\u003Cbr \/\u003E\n\n\u003Cbr \/\u003E\nMost maps as we know them – Ptolemaic maps -- are projections from a sphere to a Euclidean plane based on lines of latitude and longitude where lines of longitude converge at the celestial poles.   Latitude is determined by measuring the altitude of a celestial object, and latitude is also ultimately defined by what navigators call the celestial sphere (although by \"Ptolemaic map\" I will refer to any map that shows actual earth surface distances proportionately on the map, i.e. \"to scale\"). There are also non-Ptolemaic maps, for example subway maps, which show\u0026nbsp;the topological relationships between entities but not proportional distances. This chart of the kind \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2006\/10\/how-to-succeed-or-fail-on-frontier.html\" target=\"_blank\"\u003EZheng He\u003C\/a\u003E\u0026nbsp;may have used, or was drawn\u0026nbsp;using information from those or similar voyages,\u0026nbsp;was of such a topological nature (the west coast of India is along the top and the east coast of Africa is along the bottom):\u003C\/span\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cdiv class=\"separator\" style=\"clear: both; text-align: center;\"\u003E\n\u003Cimg border=\"0\" height=\"456\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhd1eaM56BL6ZZtL8ooltVppONNgGlyhK7xA6hcjWmM9ypGbVgja3W9DLvG4oJk7vja0gNjk5QF7fCv0SDhJbKtMorWWu73jYImkCIGLyftMHDjqwAjhQk3TLWwYSaT4DordJ5c\/s640\/Zhenghe-sailing-chart-800px.gif\" width=\"640\" \/\u003E\u003C\/div\u003E\n\u003Cdiv class=\"separator\" style=\"clear: both; text-align: center;\"\u003E\n\u0026nbsp;\u003C\/div\u003E\n\u003Cspan style=\"font-size: small;\"\u003EA set of dead reckoning directions can be diagrammed.\u0026nbsp; But although it contains more information than a subway map, it doesn’t contain enough information to plot on a Ptolemaic map.  Thus like a subway map this dead reckoning \"space\" cannot be accurately projected, or \"mapped\" in mathematical terminology, onto a normal (Ptolemaic) map without further information. \u003C\/span\u003E\u003Cbr \/\u003E\n\u003Cspan style=\"font-size: small;\"\u003E\u003C\/span\u003E\u003Cbr \/\u003E\n\u003Cspan style=\"font-size: small;\"\u003EA\u0026nbsp;subway map is in no way \"to scale\": the distances on\u0026nbsp;are not proportional to any measured values.\u0026nbsp; By contrast\u0026nbsp;a dead reckoning map can be drawn \"to scale\" in its own distinct Euclidan plane.\u0026nbsp; But not only cannot this\u0026nbsp;dead reckoning space without further information be accurately projected (i.e. projected with proportions intact or \"to scale\") onto a Ptolemaic map, but two different dead reckoning itineraries drawn on a \u0026nbsp;Euclidean plane will also generally be in error relative to each other, as I will describe below.\u0026nbsp; And now to the central point I want to get across in this article: these two kinds of errors --\u0026nbsp;from\u0026nbsp;trying to Ptolemaically map a dead reckoning itinerary on the one hand and\u0026nbsp;between two dead reckoning itineraries on the other hand --\u0026nbsp;are \u003Cem\u003Every different.\u0026nbsp; \u003C\/em\u003EThey are quite distinct in kind and usually produce errors of very different magnitudes.\u003C\/span\u003E\u003Cbr \/\u003E\n\u003Cspan style=\"font-size: small;\"\u003E\u003Cbr \/\u003E\n\u003Cspan style=\"font-size: small;\"\u003EThe unknown values ignored in a dead reckoning itinerary, analogous to the hill slopes in the scenario above, can be any spatially variable but temporally constant distances, directions, or vectors that are unknown to the navigators writing and following the directions.  The three most\u0026nbsp;important spatially variable but temporally constant sets of vectors\u0026nbsp;generally unknown to or ignored by\u0026nbsp;dead reckoners on ocean and sea voyages from the 13\u003Csup\u003Eth\u003C\/sup\u003E century through the era of the exploration explosion\u0026nbsp;were were magnetic variation (shown below as green arrows), current (red arrows), and curvature of the earth\u0026nbsp;(ignored in this post, but the same argument applies).  Since these\u0026nbsp;temporally constant but spatially variable factors (analogous to the slopes of our foggy hills) were unknown or ignored, they had no way to map such pure dead reckoning directions onto a Ptolemaic map.  The information\u0026nbsp;they\u0026nbsp;rigorously measured and recorded for the purposes of dead reckoning\u0026nbsp;was insufficient for that purpose.  Yet that information was sufficient to enable navigators to retrace their steps (to get back on course if blown off course) or follow a previously recorded dead reckoning itinerary (or a nearby course, as I'll show below) \u003C\/span\u003E\u003C\/span\u003Ewith\u0026nbsp;usefully small error.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cdiv class=\"separator\" style=\"clear: both; text-align: center;\"\u003E\n\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhPMju3dHq4OK4cabMCddf8uePEP39KDS_PiFZbAyLj_FVVTot1f666nd4kiZXkDGIM-Wcmgcy8NZ7AYoLRU0U8Lcg_pX6aqJ_-H9xSXwvyX7NhNHka3SfVVUizcFBXXz2oqMfG\/s1600\/DeadReckoningCurrentMagneticVariation.jpg\" imageanchor=\"1\" style=\"margin-left: 1em; margin-right: 1em;\"\u003E\u003Cimg border=\"0\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhPMju3dHq4OK4cabMCddf8uePEP39KDS_PiFZbAyLj_FVVTot1f666nd4kiZXkDGIM-Wcmgcy8NZ7AYoLRU0U8Lcg_pX6aqJ_-H9xSXwvyX7NhNHka3SfVVUizcFBXXz2oqMfG\/s1600\/DeadReckoningCurrentMagneticVariation.jpg\" \/\u003E\u003C\/a\u003E\u003C\/div\u003E\n\u003Cem\u003ETemporally constant but spatially variable vectors shown on a \u003Cspan style=\"font-family: inherit;\"\u003Ediagram.\u0026nbsp; Only\u003C\/span\u003E\u0026nbsp;the dead reckoning (DR) vectors are shown added head-to-tail, since these are all the dead reckoning navigator\u0026nbsp; in the exploration explosion era usually measured.  The vectors shown here are magnetic variation (green) and current (red).  Since these vectors were unknown, dead reckoning directions could not be accurately plotted on a Ptolemaic map. Curvature of the earth, not shown here, is also temporally constant and can thus also be ignored for the purposes of dead reckoning.\u003C\/em\u003E\n\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nHowever some kinds of dead reckoning errors were due to unknowns variables that changed over time. These produced small but cumulative errors in dead reckoning even for the purposes of specifying repeatable directions. Errors in measuring bearing, speed, and time were of this nature. Externally, different winds required different tacking angles, creating \"leeway\", where the boat moves not straight forward but at an angle. If the directions don’t account for this, or account for it imperfectly, there will necessarily be a cumulative error. It was thus important to \"fix\" on landmarks or soundings. The more accuracy needed (such as when approaching shorelines,\u0026nbsp;much more\u0026nbsp;hazardous\u0026nbsp;than open-ocean sailing), the more often fixes had to be taken. I hope to say more about fixes and temporally variable errors in future posts. This post is about dead reckoning between two fixes and errors that vary spatially but can be reasonably treated as constant in time.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cdiv class=\"separator\" style=\"clear: both; text-align: center;\"\u003E\n\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhNjqkxQ5tYsMPE7DQF1bwEZNM67a2otPVAZhUBp7to1OS9Z8IA4t7Q6lt1Dsrf3Frhf-1MHAL2c8TziRGUhD0icjZQrLrDCPHCyxMxQegiMr_3XAuA1T_9xrtPvz7mwkhkA6DB\/s1600\/DeadReckoningWithFix.jpg\" imageanchor=\"1\" style=\"margin-left: 1em; margin-right: 1em;\"\u003E\u003Cimg border=\"0\" height=\"129\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhNjqkxQ5tYsMPE7DQF1bwEZNM67a2otPVAZhUBp7to1OS9Z8IA4t7Q6lt1Dsrf3Frhf-1MHAL2c8TziRGUhD0icjZQrLrDCPHCyxMxQegiMr_3XAuA1T_9xrtPvz7mwkhkA6DB\/s320\/DeadReckoningWithFix.jpg\" width=\"320\" \/\u003E\u003C\/a\u003E\u003C\/div\u003E\n\u003Cem\u003EA dead reckoning diagram made on a chart, with \"fixes\" or adjustments (dashed line)s\u0026nbsp;to a landmark or sounding (yellow \"X\") diagrammed on the chart. The start and end of points of the voyage are also landmarks, so there is also a fix for the final landmark.  Note that the chart still does not have to be Ptolemaic for this purpose -- the fixes need not be shown with proportionally correct distances to each other. Indeed the Zheng He era\u0026nbsp;chart above is roughly in this form, with only one crude dead reckoning vector between each fix: it labels each arc with a crude time or distance estimate along with a (much more accurate) bearing estimate, but like a subway map it doesn't care about showing distances as proportional. \u003C\/em\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nWhen sailing over continental shelves, European mariners (and sometimes Chinese mariners) of that era took \"soundings\" that measured depth and sampled the bottom soil, creating a unique signature of { depth, soil type} that functioned like landmarks but on open ocean.  Soundings could be taken when sailing over the relatively shallow areas of continental shelves.  As you can \u003Ca href=\"http:\/\/upload.wikimedia.org\/wikipedia\/commons\/9\/93\/Elevation.jpg\" target=\"_blank\"\u003Esee\u003C\/a\u003E, most parts of the oceans are too deep for this, but most shorelines are fronted by at least a few miles of soundable shelf, and sometimes hundreds of miles.  Soundings were very useful for navigating in clouds, fog, and at night far enough away from the shore to avoid the hazards of very shallow water, yet close enough for the water to be shallow enough to sound.  Pilots that used soundings thus had a set of \"landmarks\" for fixing their dead reckoning directions that allowed them to avoid hazardous navigation too close to land.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nNotice that these kinds of fixes \u003Cem\u003Estill\u003C\/em\u003E do not give Ptolemaic coordinates -- they simply map or \"fix\" a particular point in our dead reckoning \"space\" to a particular point on the earth's surface of unknown Ptolemaic (celestial) coordinates, and indeed of unknown distances\u0026nbsp;\u003Cem\u003Erelative to other fixes.\u003C\/em\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n(Side note --\u0026nbsp;explorers\u0026nbsp;between Cao\u0026nbsp;and Magellan usually could not get a celestial \"fix\" on a rolling deck of sufficient accuracy to be useful, i.e. more accurate than their dead reckoning -- and even in the case of Magellan this was only useful because there\u0026nbsp;was nothing better, dead reckoning errors having accumulated to\u0026nbsp;very high\u0026nbsp;levels by the time they were in the mid-Pacific.\u0026nbsp; So like them we will have to ignore\u0026nbsp;this way, both more ancient and more modern, but generally unused during the exploration explosion,\u0026nbsp;of correcting DR errors at sea).\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nIt's all fine and good for\u0026nbsp;dead reckoning to provide, as shown above, repeatable directions to a destination, despite being\u0026nbsp;Ptolemaically unmappable, when the same itinerary is exactly repeated.\u0026nbsp; But the best itinerary over the oceans depends on the wind.\u0026nbsp; These winds vary, and the early explorers of new oceans searched for the best courses\u0026nbsp;and seasons\u0026nbsp;in order to catch the best winds.\u0026nbsp; So the early explorers\u0026nbsp;usually did not exactly repeat dead reckonings recorded on prior voyages.\u0026nbsp; They\u0026nbsp;usually took courses a few hundred miles away from the prior voyages' itinerary\u0026nbsp;in order to catch more favorable winds.\u0026nbsp; So the question arises: if the navigator adjusts his course by a few hundred miles,\u0026nbsp;roughly what amount\u0026nbsp;of\u0026nbsp;resulting error should the navigator generally expect.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n(BTW, it us \u0026nbsp;important to note that dead reckoning directions, while they did not have to account for currents, magnetic variation, and the curvature of the earth, for the reasons given in this article, \u003Cem\u003Edid \u003C\/em\u003Ehave to account for variations in winds and the related leeway from tacking, since\u0026nbsp;these reasons do\u0026nbsp;not apply to vectors with substantial temporal variability.\u0026nbsp; So we assume, as the navigators themselves probably did in some fashion, that the velocity vectors in our dead reckoning itineraries aren't strictly those measured, but are those measurements adjusted for variations in wind).\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nTo reiterate the most\u0026nbsp;important point: this is a \u003Cem\u003Edifferent question \u003C\/em\u003Ethan the question of what the error is when plotted on a normal map.\u0026nbsp; Historians trying to recreate these voyages, in order to figure out where their landfalls were, or plot them on maps, or to estimate what navigational acccuracy of European navigators achieved in that era, usually haven't understood this crucial distinction. Indeed, because currents and magnetic variation don't in most places in the open ocean change in extreme or sudden ways, the resulting errors in dead reckoning navigation tended to be much smaller than the errors when plotting the dead reckoning directions\u0026nbsp;on a Ptolemaic map. If you can\u0026nbsp;scrutinize some more complicated diagrams I can\u0026nbsp;demonstrate\u0026nbsp;this by example\u0026nbsp;here. First consider two dead reckoning itineraries, unadjusted for current and magnetic variation and thus plotted non-Ptolemaically:\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cdiv class=\"separator\" style=\"clear: both; text-align: center;\"\u003E\n\u003Cimg border=\"0\" height=\"190\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEh1cGOnT4c5QGkWTfyUnvhyphenhyphen_rQjoCV93xP3PVgYnGYltrtjq30_O7GP49E3BYNMs12LOSKp_p3-WXlb0sUFWz2aDkMhfWBZmfQo5Zp_2d20XKM6_r9qCaffwSsSqlKIS5MZj2Kr\/s320\/DeadReckoningTwoItineraries.png\" width=\"320\" \/\u003E\u003C\/div\u003E\n\u003Cdiv style=\"direction: ltr; language: en-US; margin-bottom: 0pt; margin-left: 0in; margin-top: 0pt; mso-line-break-override: none; punctuation-wrap: hanging; text-align: left; unicode-bidi: embed; word-break: normal;\"\u003E\n\u003Cbr \/\u003E\n\u003Ci\u003EBlack = DR velocity in given time period\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nRed = average current velocity in given time period\u003Cbr \/\u003E\n\n\u003Cbr \/\u003E\nGreen = average magnetic variation in given time period\u003Cbr \/\u003E\n\n\u003Cbr \/\u003E\nA, B = Two different DR itineraries as recorded (i.e. not adjusted for unknown magnetic variation and current). B has different first and third leg plus different currents on last two legs (only DR measurements added head-to-tail) – navigator would not actually plot these on a chart of geographic location, or at least would not consider such plotting accurate.\u003Cbr \/\u003E\n\n\u003Cbr \/\u003E\n1F, 2F = first fix, next fix (same in each case, but their geographical location doesn’t need to be known)\u003C\/i\u003E\u003C\/div\u003E\n\u003Cbr \/\u003E\nFor simplicity I am treating magnetic variation as uniform and spatially varying only the current, but the same argument I make here applies even more strongly to magnetic variation (and even more strongly to curvature of the earth, which can be treated as another set of vectors).\u0026nbsp; The second fix (2F) has a question mark in front of it to indicate that the second itinerary (B) won't actually arrive at the same spot as A arrives at -- due to the different currents it encounters, it will arrive at a different spot.\u0026nbsp; We assume, as was usually the case out of sight of shore, that our early explorer doesn't know the current.\u0026nbsp; But the explorer did want to know, as historians want to know: roughly how large can such errors in typical oceans be expected to be?\u0026nbsp; To demonstrate the mathematics of this, I've created a\u0026nbsp;Ptolemaic map of the itineraries (dashed lines)\u0026nbsp;by adding in the currents and magnetic variations head-to-tail.\u0026nbsp; I've also superimposed the original non-Ptolemaic diagram (just the dead reckoning vectors added up) to show the much larger error that occurs when trying to project that onto a Ptolemaic map.\n\n\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cdiv class=\"separator\" style=\"clear: both; text-align: center;\"\u003E\n\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjUgUxnztgJhjWIJTpgUKa95zI-bZEd4QheYSk6nq1Lh8mwFAUMM7lPJovAjdkV4121IrM-dn8qd62wv2B8giC_wEE0xFvAUSJO3vUlL0oO2E6cSTzdqGFQLIoja2uM_KXDWHhp\/s1600\/DeadReckoningOnPtolemaicMap.png\" imageanchor=\"1\" style=\"margin-left: 1em; margin-right: 1em;\"\u003E\u003Cimg border=\"0\" height=\"236\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjUgUxnztgJhjWIJTpgUKa95zI-bZEd4QheYSk6nq1Lh8mwFAUMM7lPJovAjdkV4121IrM-dn8qd62wv2B8giC_wEE0xFvAUSJO3vUlL0oO2E6cSTzdqGFQLIoja2uM_KXDWHhp\/s400\/DeadReckoningOnPtolemaicMap.png\" width=\"400\" \/\u003E\u003C\/a\u003E\u003C\/div\u003E\n\u003Ci\u003E\nA‘, B’ = A and B adjusted to show difference in geographic location (all vectors added head-to-tail). The navigator in Columbus’ day could not usally compute these, since he typically did not know the current and magnetic variation values. \u003Cbr \/\u003E\n\n\u003Cbr \/\u003E\nNA, NB = net effect of spatially variable but temporally constant current on geographic (i.e. Ptolemaic or celestial) location. Error if unadjusted itineraries Ptolemaically mapped. Separate red arrow diagram shows the same net effect of the two separate sets of currents.\u003Cbr \/\u003E\n\n\u003Cbr \/\u003E\nDashed blue line next to 2F = actual navigator’s error of two DR itineraries against each other when neither set of itineraries adjusts for current or magnetic variation. The next fix lies somewhere on this line, assuming no other errors.\n\u003C\/i\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n(BTW if you can copy and paste arrows it's easy to make your own examples).\n\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nAs you can see, the errors\u0026nbsp;(solid blue lines labeled NA and NB)\u0026nbsp;from trying to superimpose the non-Ptolemaic dead reckoning itineraries (solid lines) on the Ptolemaic map are much larger than the actual error\u0026nbsp;(dashed blue line\u0026nbsp;labeled 2F) that\u0026nbsp;occurs from following itinerary A instead of B or vice versa\u0026nbsp;(shown on dashed lines when adjusted for current.\u0026nbsp; The magnetic variation is held constant, but the same argument applies to that, and to the curvature of the earth.\n\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nNote that the error in locating our second fix 2F is simply the same as the difference between the two separately added sets of current vectors:\n\u003Cbr \/\u003E\n\u003Cdiv class=\"separator\" style=\"clear: both; text-align: center;\"\u003E\n\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEi3H9-py1WbH9j3Gui0nIhvC1f37dMIH-i5v49mzSw8-I3wIzASM_p1OVZzhQ1p76h39HFlUI9G9WgKA3Dws3TjYc8IDBn9_9dBiMNZ6WiRivKjoe1Ac7Qf8cmzNIagJTjtmLmL\/s1600\/DeadReckoningCurrentVectorsAndError.png\" imageanchor=\"1\" style=\"margin-left: 1em; margin-right: 1em;\"\u003E\u003Cimg border=\"0\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEi3H9-py1WbH9j3Gui0nIhvC1f37dMIH-i5v49mzSw8-I3wIzASM_p1OVZzhQ1p76h39HFlUI9G9WgKA3Dws3TjYc8IDBn9_9dBiMNZ6WiRivKjoe1Ac7Qf8cmzNIagJTjtmLmL\/s1600\/DeadReckoningCurrentVectorsAndError.png\" \/\u003E\u003C\/a\u003E\u003C\/div\u003E\n\u003Cbr \/\u003E\nIt would be instructive to create a computer simulation of this which plugs in\u0026nbsp;actual\u0026nbsp;values (which we now know in excrutiating detail) for current, magnetic\u0026nbsp;variation, and curvature of the earth."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/6888128875858487172\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/6888128875858487172","title":"4 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/6888128875858487172"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/6888128875858487172"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2012\/10\/dead-reckoning-maps-and-errors.html","title":"Dead reckoning, maps, and errors"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"media$thumbnail":{"xmlns$media":"http://search.yahoo.com/mrss/","url":"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhd1eaM56BL6ZZtL8ooltVppONNgGlyhK7xA6hcjWmM9ypGbVgja3W9DLvG4oJk7vja0gNjk5QF7fCv0SDhJbKtMorWWu73jYImkCIGLyftMHDjqwAjhQk3TLWwYSaT4DordJ5c\/s72-c\/Zhenghe-sailing-chart-800px.gif","height":"72","width":"72"},"thr$total":{"$t":"4"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-674940749077683234"},"published":{"$t":"2012-10-18T02:18:00.001-07:00"},"updated":{"$t":"2012-10-18T03:08:46.216-07:00"},"title":{"type":"text","$t":"Dead reckoning and the exploration explosion"},"content":{"type":"html","$t":"\u003Cspan style=\"font-family: inherit;\"\u003ENavigation is the art or science of combining information\nand reducing error to \u003Ci style=\"mso-bidi-font-style: normal;\"\u003Ekeep oneself on, or return oneself\nto, a route\u003C\/i\u003E that will get you where you want to go. Note what I did \u003Cem\u003Enot\u003C\/em\u003E say\nhere. Navigation is \u003Cem\u003Enot necessarily \u003C\/em\u003Ethe art or science of \u003Cem\u003Elocating where\nyou are.\u003C\/em\u003E While answering\nthe latter question – i.e. locating oneself in a Euclidean space, or a space\nreasonably projectable onto a Euclidean space – can usefully solve the\nnavigation problem, figuring out such a location often requires different, and often\nmore, information than you need to answer the questions of how to stay on or\nreturn to your desired route. And indeed this is what dead reckoning does – it gets\nyou where you want to go with different information than what you would need to\ndraw or find yourself on a normal map. I hope to explain more about this important incompatibility between the pilots’ and cosmographers’ systems during most of the age of exploration in a future post, but for now I will give an overview of the\nhistorical development of dead reckoning.\u003C\/span\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nBetween Italy of the late 13\u003Csup\u003E\u003Cspan style=\"font-size: x-small;\"\u003Eth\u003C\/span\u003E\u003C\/sup\u003E century and the advent of GPS, dead reckoning formed the basis of most modern navigation. Dead reckoning was in particular the primary method of navigation used during the exploration explosion of the late 15\u003Csup\u003E\u003Cspan style=\"font-size: x-small;\"\u003Eth\u003C\/span\u003E\u003C\/sup\u003E and early 16\u003Csup\u003E\u003Cspan style=\"font-size: x-small;\"\u003Eth\u003C\/span\u003E\u003C\/sup\u003E centuries – the startlingly unprecedented voyages across unknown oceans of Dias, da Gama, Columbus, Magellan, and so on.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003EDead reckoning is based on a sequence of vectors. Each vector consists of two essential pieces\nof information: direction and distance. Distance is typically calculated from time and speed, so each vector\ntypically consists of the tuple {direction, time, speed}. With only speed and\ntime, we have only a scalar distance value – it could be in any direction. With time but not speed, or speed but not\ntime, we don’t have enough information to determine the distance covered.\u003C\/span\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003EFrom the start of a voyage to the last docking at the home\nport, dead reckoning was a strict regimen that never stopped: day and night, in\ncalm and in storm, its measurement, recording, and diagramming protocols were\nrigorously followed.\u003C\/span\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003EMeasuring or estimating the speed of a ship was a craft\nmystery the nature of which is still debated today, so I’ll skip over that and\nfocus on the two more straightforward innovations in measurement, both of which\noccurred in or reached Italy and were first combined there in the 13\u003Csup\u003E\u003Cspan style=\"font-size: x-small;\"\u003Eth\u003C\/span\u003E\u003C\/sup\u003E\ncentury: in measuring direction and in measuring time.\u003C\/span\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003EFor measuring time mariners used the \u003Cem\u003Esand glass,\u003C\/em\u003E invented in Western Europe during that\nsame century. I have discussed this\ninvention\u003C\/span\u003E \u003Ca href=\"http:\/\/szabo.best.vwh.net\/synch.html\"\u003E\u003Cspan style=\"font-family: inherit;\"\u003Ehere\u003C\/span\u003E\u003C\/a\u003E\u003Cspan style=\"font-family: inherit;\"\u003E. A strict regimen of turning the glasses was\nkept non-stop throughout a voyage.\u003C\/span\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003EFor measuring direction, the ships of the exploration\nexplosion typically had at least two \u003Cem\u003Emagnetic\ncompasses\u003C\/em\u003E, usually built into the ship to maintain a fixed orientation with\nthe ship. Typically one compass was used\nby the helmsman, in charge of steering the ship, and the other by the pilot, in\ncharge of ordering both the sail rigging and the general direction for the\nhelmsman to keep.\u003C\/span\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003EThe magnetic compass was probably first invented in China, used\nfirst for \u003Cem\u003Efeng shui\u003C\/em\u003E and then for navigation by the early 12\u003Csup\u003E\u003Cspan style=\"font-size: x-small;\"\u003Eth\u003C\/span\u003E\u003C\/sup\u003E\ncentury. Somehow, without any recorded intermediaries, it appears in the writings\nof authors in the region of the English Channel in the late 12\u003Csup\u003E\u003Cspan style=\"font-size: x-small;\"\u003Eth\u003C\/span\u003E\u003C\/sup\u003E\ncentury where it was quite likely being used for navigation in that often cloudy region. Its first use in Italy was associated with the then-thriving port city\nof Amalfi. As both Amalfi and the\nEnglish Channel were at the time controlled by the Normans, this suggests to me\neither a Norman innovation, or arrival via Norse trade connections to the\nOrient via Russia combined with now unknown Chinese trade routes. This is conjectural. Neither the Norse sagas\nnor writings about the Normans during earlier periods mention a magnetic\ncompass, nor do Arab sources mention it until the late 13\u003Csup\u003E\u003Cspan style=\"font-size: x-small;\"\u003Eth\u003C\/span\u003E\u003C\/sup\u003E century\nin the Mediterranean. In any case, it is\nthe Italians who made the magnetic compass part of a rigorous system of dead\nreckoning.\u003C\/span\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ctable align=\"center\" cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"float: left; margin-right: 1em; text-align: left;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgGtF3mD7CP-tm2jgzve3aLv0Uwdmb54H-AiCg5c4n03zPs-sNdRWwvBFULPRBCZff2zimeNz8umlsV_9IOXYh252LC9LFlHw378g8K5G5CLRhywOKzAkvO5jcD8YbKATXwzNTA\/s1600\/CompassMentions12thAndEarly13thCenturies_NormanHoldings1130.jpg\" imageanchor=\"1\" style=\"margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgGtF3mD7CP-tm2jgzve3aLv0Uwdmb54H-AiCg5c4n03zPs-sNdRWwvBFULPRBCZff2zimeNz8umlsV_9IOXYh252LC9LFlHw378g8K5G5CLRhywOKzAkvO5jcD8YbKATXwzNTA\/s1600\/CompassMentions12thAndEarly13thCenturies_NormanHoldings1130.jpg\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Cdiv align=\"left\"\u003E\n\u003Cem\u003E\u003Cspan style=\"font-size: small;\"\u003EGreen dots indicate, in the case of northern Europe, the location of authors who mention use of the magnetic compass for navigation in the late 12th and 13th centuries, and for Italy, the traditional Italian association of the invention of the compass with Amalfi in the 13th century. Red indicates areas controlled by the Normans.\u003C\/span\u003E\u003C\/em\u003E\u003C\/div\u003E\n\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003EA dead reckoning itinerary can be specified as a sequence of\ntuples { direction, speed, time }. It\ncan be drawn as a diagram of vectors laid down head-to-tail. However, as mentioned above, this diagram by\nitself, for nontrivial sea and ocean voyages, contains insufficient information\nto map the arrows accurately onto a Ptolemaic map (i.e. maps as we commonly\nunderstand them, based on celestial latitudes and longitudes), yet sufficient at least in theory to guide a pilot following such directions to their destination.\u003C\/span\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cdiv class=\"separator\" style=\"clear: both; margin: 0in 0in 10pt; text-align: center;\"\u003E\n\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgWBIo7XxuQdxV5M1kTi2w_a4lk7_wPR1-tqviwKisQJ7KGwFdmSGzRwNv3yxTlFnTeN1zvqhCL5A_7bLFpR07v6oi-9iGLTH9JLxo8NI4PlpzLC3-890ndYRwZMpvExvV2JyYa\/s1600\/DeadReckoningBasic.png\" imageanchor=\"1\" style=\"margin-left: 1em; margin-right: 1em;\"\u003E\u003Cimg border=\"0\" height=\"108\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgWBIo7XxuQdxV5M1kTi2w_a4lk7_wPR1-tqviwKisQJ7KGwFdmSGzRwNv3yxTlFnTeN1zvqhCL5A_7bLFpR07v6oi-9iGLTH9JLxo8NI4PlpzLC3-890ndYRwZMpvExvV2JyYa\/s320\/DeadReckoningBasic.png\" width=\"320\" \/\u003E\u003C\/a\u003E\u003C\/div\u003E\n\u003Cspan style=\"font-family: inherit;\"\u003EFor recording speed and direction for each sand glass time\ninterval (e.g. half hour), pilots used some variation of the \u003Cem\u003Etraverse board\u003C\/em\u003E, in\nwhich these values were specified by the locations of pegs in the board.\u003C\/span\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ctable cellpadding=\"0\" cellspacing=\"0\" class=\"tr-caption-container\" style=\"float: left; margin-right: 1em; text-align: left;\"\u003E\u003Ctbody\u003E\n\u003Ctr\u003E\u003Ctd style=\"text-align: center;\"\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgkj4PDeiffWCTvET1PW9CYcP4si_gZlkzXPhFwRu4cWNUBPIwnGvyEuKFyNrFDM3rhrU4rHKjk0Oj2RgMM306KSv9fWaTF4sR3qNrMzXl8LPVE_PDqc5Bt4F34KPME3koPZBxV\/s1600\/Traverse_Board.jpg\" imageanchor=\"1\" style=\"clear: right; margin-bottom: 1em; margin-left: auto; margin-right: auto;\"\u003E\u003Cimg border=\"0\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgkj4PDeiffWCTvET1PW9CYcP4si_gZlkzXPhFwRu4cWNUBPIwnGvyEuKFyNrFDM3rhrU4rHKjk0Oj2RgMM306KSv9fWaTF4sR3qNrMzXl8LPVE_PDqc5Bt4F34KPME3koPZBxV\/s1600\/Traverse_Board.jpg\" \/\u003E\u003C\/a\u003E\u003C\/td\u003E\u003C\/tr\u003E\n\u003Ctr\u003E\u003Ctd class=\"tr-caption\" style=\"text-align: center;\"\u003E\u003Cdiv align=\"left\"\u003E\n\u003Cspan style=\"font-size: small;\"\u003E\n\u003C\/span\u003E\u003Cspan style=\"font-size: small;\"\u003E\u003Cem\u003E\u003Cspan style=\"font-family: inherit;\"\u003ETraverse\nboard. Pins on the upper (circular) portion\nindicate compass heading and (via distance from the center) for each half hour. Pins on the lower (rectangular) portion\nindicate estimated speed during each hour. The board thus allows an a pilot on\na wet deck unsuitable for a paper log to record an equivalent of a sequence of\ntuples { direction, speed, time } over four hours, after which time this\ninformation is transferred to the ship’s written log(normally kept indoors), the progress is\nplotted as a head-to-tail diagram on a chart (also kept indoors), and the\ntraverse board is reset. Note that the direction\nis read directly off the magnetic compass: thus north (the fleur-de-lis) is magnetic north, not geographic (celestial)\nnorth.\u003C\/span\u003E\u003C\/em\u003E\u003C\/span\u003E\u003C\/div\u003E\n\u003C\/td\u003E\u003C\/tr\u003E\n\u003C\/tbody\u003E\u003C\/table\u003E\n\u003Co:p\u003E\u003Cspan style=\"font-family: inherit;\"\u003EIn a future post I hope to discuss more about dead reckoning\ndirections and explain how the errors that can accumulate in such directions over\nlong distances were corrected. I will\nalso explain why neither the directions nor even the corrections could be\naccurately drawn on a normal (Ptolemaic or celestial coordinate) map, and yet\nsuch dead reckoning directions are sufficient at least in theory for the pilot\nto guide his ship from the starting port to the intended destination port. In practice, pilots \"fixed\" errors in their dead reckoning using landmarks and sounding, which I will also describe. And I hope to describe how this resulted in\ntwo incompatible systems of “navigation” (broadly speaking) during exploration explosion -- the pilot’s dead reckoning methods versus the cosmographers’ maps and globes\nbased on latitude and longitude. \u003C\/span\u003E\u003C\/o:p\u003E\u003Cbr \/\u003E\n\u003Co:p\u003E\u003C\/o:p\u003E\u003Cbr \/\u003E\n\u003Co:p\u003E\u003C\/o:p\u003E\u003Cspan style=\"font-family: inherit;\"\u003EI also hope to someday figure out just why the exploration\nexplosion occurred when it did. The\nadvent of rigorous dead reckoning -- combining the compass, the sand glass, and decent estimates of speed with\nrigorous log-keeping -- did not occur in Asia (where the Chinese, lacking the\nsand glass at least, made a less systematic use of the compass), nor with the\nArabs (who seldom used either sand glass or compass), which along with naval superiority explains why the exploration\nexplosion occurred from western Europe. The\npuzzle of why the explosion started specifically in the 1480s, and not sooner\nor later, however, remains a mystery to be solved.\u003C\/span\u003E"},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/674940749077683234\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/674940749077683234","title":"2 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/674940749077683234"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/674940749077683234"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2012\/10\/dead-reckoning-and-exploration-explosion.html","title":"Dead reckoning and the exploration explosion"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"media$thumbnail":{"xmlns$media":"http://search.yahoo.com/mrss/","url":"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgGtF3mD7CP-tm2jgzve3aLv0Uwdmb54H-AiCg5c4n03zPs-sNdRWwvBFULPRBCZff2zimeNz8umlsV_9IOXYh252LC9LFlHw378g8K5G5CLRhywOKzAkvO5jcD8YbKATXwzNTA\/s72-c\/CompassMentions12thAndEarly13thCenturies_NormanHoldings1130.jpg","height":"72","width":"72"},"thr$total":{"$t":"2"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-5585968815020769877"},"published":{"$t":"2012-08-15T00:35:00.000-07:00"},"updated":{"$t":"2012-08-15T00:35:15.902-07:00"},"title":{"type":"text","$t":"Authority and ad hominem"},"content":{"type":"html","$t":"Argument from authority (\"I'm the expert\") goes hand-in-hand with the \u003Ci\u003Ead hominem\u003C\/i\u003E (\"you're not\"). Each may be rebutted by the other, and the average quality as evidence of arguments from authority are about the same as the average quality as evidence of \u003Ci\u003Ead hominem\u003C\/i\u003E. By necessity, these two kinds of evidence are the dominant forms of evidence that lead each of us as individuals to believe what we believe, since little important of what you believe comes from your own direct observation. Authority's \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2012\/08\/proxy-measures-sunk-costs-and.html\"\u003Einvestment costs\u003C\/a\u003E are one good proxy measure for evaluating the\u0026nbsp;value of such evidence. But contrast \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2006\/09\/law-of-dominant-paradigm.html\"\u003Ethe law of the dominant paradigm\u003C\/a\u003E. Perhaps the latter is superior for judging claims about the objective world, whereas investment costs are superior for judging the \u003Ca href=\"http:\/\/szabo.best.vwh.net\/tradition.html\"\u003Eintersubjective\u003C\/a\u003E."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/5585968815020769877\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/5585968815020769877","title":"2 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/5585968815020769877"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/5585968815020769877"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2012\/08\/authority-and-ad-hominem.html","title":"Authority and \u003Ci\u003Ead hominem\u003C\/i\u003E"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"2"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-7166515804900152333"},"published":{"$t":"2012-08-07T23:58:00.000-07:00"},"updated":{"$t":"2012-08-07T23:58:00.400-07:00"},"title":{"type":"text","$t":"Proxy measures, sunk costs, and Chesterton's fence"},"content":{"type":"html","$t":"G.K. Chesterton ponders a fence:\u003Cbr \/\u003E\n\u003Cblockquote class=\"tr_bq\"\u003E\nIn the matter of reforming things, as distinct from deforming them, there is one plain and simple principle; a principle which will probably be called a paradox. There exists in such a case a certain institution or law; let us say, for the sake of simplicity, a fence or gate erected across a road. The more modern type of reformer goes gaily up to it and says, \"I don't see the use of this; let us clear it away.\" To which the more intelligent type of reformer will do well to answer: \"If you don't see the use of it, I certainly won't let you clear it away. Go away and think. Then, when you can come back and tell me that you do see the use of it, I may allow you to destroy it.\"\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThis paradox rests on the most elementary common sense. The gate or fence did not grow there. It was not set up by somnambulists who built it in their sleep. It is highly improbable that it was put there by escaped lunatics who were for some reason loose in the street. Some person had some reason for thinking it would be a good thing for somebody. And until we know what the reason was, we really cannot judge whether the reason was reasonable. It is extremely probable that we have overlooked some whole aspect of the question, if something set up by human beings like ourselves seems to be entirely meaningless and mysterious. There are reformers who get over this difficulty by assuming that all their fathers were fools; but if that be so, we can only say that folly appears to be a hereditary disease. But the truth is that nobody has any business to destroy a social institution until he has really seen it as an historical institution. If he knows how it arose, and what purposes it was supposed to serve, he may really be able to say that they were bad purposes, that they have since become bad purposes, or that they are purposes which are no longer served. But if he simply stares at the thing as a senseless monstrosity that has somehow sprung up in his path, it is he and not the traditionalist who is suffering from an illusion.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\u003C\/blockquote\u003E\nContrast the sunk cost fallacy, according to one account: \n\u003Cblockquote class=\"tr_bq\"\u003E\nWhen one makes a hopeless investment, one sometimes reasons: I can’t stop now, otherwise what I’ve invested so far will be lost. This is true, of course, but irrelevant to whether one should continue to invest in the project. Everything one has invested is lost regardless. If there is no hope for success in the future from the investment, then the fact that one has already lost a bundle should lead one to the conclusion that the rational thing to do is to withdraw from the project.\u003C\/blockquote\u003E\nThe sunk cost fallacy, according to another account:\u003Cbr \/\u003E\n\u003Cblockquote class=\"tr_bq\"\u003E\nPicture this: It's the evening of the Lady Gaga concert\/Yankees game\/yoga bootcamp. You bought the tickets months ago, saving up and looking forward to it. But tonight, it's blizzarding and you've had the worst week and are exhausted. Nothing would make you happier than a hot chocolate and pajamas, not even 16-inch pink hair\/watching Jeter\/nailing the dhanurasana.\u003C\/blockquote\u003E\n\u003Cblockquote class=\"tr_bq\"\u003E\nBut you should go, anyway, right? Because otherwise you'd be \"wasting your money\"?\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThink again. Economically speaking, you shouldn't go.\u003C\/blockquote\u003E\nHas Chesterton committed the sunk cost fallacy? Consider the concept of proxy measures:\u003Cbr \/\u003E\n\u003Cblockquote class=\"tr_bq\"\u003E\nThe process of determining the value of a product from observations is necessarily incomplete and costly. For example, a shopper can see that an apple is shiny red. This has some correlation to its tastiness (the quality a typical shopper actually wants from an apple), but it's hardly perfect. The apple's appearance is not a complete indicator -- an apple sometimes has a rotten spot down inside even if the surface is perfectly shiny and red. We call an indirect measure of value -- for example the shininess, redness, or weight of the apple -- a proxy measure. In fact, all measures of value, besides prices in an ideal market, are proxy measures -- real value is subjective and largely tacit.\u003C\/blockquote\u003E\n\u003Cblockquote class=\"tr_bq\"\u003E\nCost can usually be measured far more objectively than value. As a result, the most common proxy measures are various kinds of costs. Examples include:\u003C\/blockquote\u003E\n\u003Cblockquote class=\"tr_bq\"\u003E\n(a) paying for employment in terms of time worked, rather than by quantity produced (piece rates) or other possible measures. Time measures sacrifice, i.e. the cost of opportunities foregone by the employee\u003C\/blockquote\u003E\n\u003Cblockquote class=\"tr_bq\"\u003E\n(b) most numbers recorded and reported by accountants for assets are costs rather than market prices expected to be recovered by the sale of assets. \u003C\/blockquote\u003E\n\u003Cblockquote class=\"tr_bq\"\u003E\n(c) non-fiat money and collectibles obtain their value primarily from their scarcity, i.e. their cost of replacement.\u003C\/blockquote\u003E\nProxy measures are important because we\u0026nbsp;usually can't measure value directly, much less forecast future value with high confidence. And often we know little of the evidence and preferences that went into an investment decision. You may have forgotten or (if the original decision maker was somebody else) never learned the reason. In which case, the original decision-maker may have had more knowledge than you do -- especially if that decision-maker was somebody else, but sometimes even if that decision-maker was you. In which case it can make a great deal of sense to use the sunk cost as a proxy measure of value.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nIn the first account of sunk cost, there seems to be no uncertainty: by definition we know that our investment is \"hopeless.\" In such a case, valuing our sunk costs is clearly erroneous. But the second, real-world example, is far less clear: \"you've had the worst week and are exhausted..\" Does this mean you won't enjoy the concert, as you originally envisioned? Or does it mean that in your exhaustion you've forgotten why you wanted to go to the concert? If it's more likely to mean the latter, then my\u0026nbsp;generalization of Chesterton's fence, using the idea of proxy measures,\u0026nbsp;suggests that you should use your sunk costs as a proxy measure of value, and weigh that value against the costs of the blizzard and the benefits of hot chocolate and pajamas, to decide whether you still will be made happier by going to the concert. \u003Cbr \/\u003E\n\u003Cbr \/\u003E\nIf your evidence may be substantially incomplete you shouldn't just ignore sunk costs -- they contain valuable information about decisions you or others made in the past, perhaps after much greater thought or access to evidence than that of which you are currently capable. Even more generally, you should be loss averse -- you should tend to prefer avoiding losses over acquiring seemingly equivalent gains, and you should be divestiture averse (i.e. exhibit endowment effects) -- you should tend to prefer what you already have to what you might trade it for -- in both cases to the extent your ability to measure the value of the two items is incomplete. Since usually in the real world, and to an even greater degree in our ancestors'\u0026nbsp;evolutionary environments, our ability to measure value is and was\u0026nbsp;woefully incomplete, it should come as no surprise that people often value sunk costs, are loss averse, and exhibit endowment effects -- and indeed under such circumstances of incomplete value measurement\u0026nbsp;it hardly constitutes \"fallacy\" or \"bias\" to do so.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nIn short, Chesterton's fence and\u0026nbsp;proxy measures suggest\u0026nbsp;that taking into account sunk costs, or more generally being averse to loss or divestiture, rather than always being a fallacy or irrational bias, may often lead to better decisions: indeed if it is done in just those cases where substantial evidence or shared preferences that motivated the original investment decision have been forgotten or have not been communicated, or otherwise where the quality of evidence that led to that decision may outweigh the quality of evidence that is motivating one to change one's mind.. We generally have far more information about our past than about our future. Decisions that have already been made, by ourselves and others, are an informative part of that past, especially when their original motivations have been forgotten.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cem\u003EReferences:\u003C\/em\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ca href=\"http:\/\/www.cse.dmu.ac.uk\/~mward\/gkc\/books\/The_Thing.txt\"\u003EChesterton's Fence\u003C\/a\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nSunk Cost Fallacy\u0026nbsp;\u003Ca href=\"http:\/\/www.skepdic.com\/sunkcost.html\"\u003E (1)\u003C\/a\u003E, \u003Ca href=\"http:\/\/www.huffingtonpost.com\/maria-lin\/financial-advice-sunk-cost-fallacy_b_1128482.html\"\u003E(2)\u003C\/a\u003E \u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ca href=\"https:\/\/en.wikipedia.org\/wiki\/Endowment_effect\"\u003EEndowment Effects\/Divestiture Aversion:\u003C\/a\u003E\u0026nbsp; \u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ca href=\"https:\/\/en.wikipedia.org\/wiki\/Loss_aversion\"\u003ELoss Aversion:\u003C\/a\u003E \u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2011\/06\/of-wages-and-money-cost-as-proxy.html\"\u003ECost as a Proxy Measure of Value\u003C\/a\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cspan style=\"background-color: silver;\"\u003E\u003C\/span\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n\u003Cbr \/\u003E"},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/7166515804900152333\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/7166515804900152333","title":"8 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/7166515804900152333"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/7166515804900152333"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2012\/08\/proxy-measures-sunk-costs-and.html","title":"Proxy measures, sunk costs, and Chesterton's fence"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"8"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-7359343972903109875"},"published":{"$t":"2012-07-25T23:33:00.001-07:00"},"updated":{"$t":"2012-07-25T23:35:52.689-07:00"},"title":{"type":"text","$t":"Three philosophical essays"},"content":{"type":"html","$t":"From \u003Ca href=\"http:\/\/szabo.best.vwh.net\/kolmogorov.html\"\u003EAlgorithmic Information Theory: \u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003ECharles Bennett has discovered an objective measurement for sophistication. An example of sophistication is the structure of an airplane. We couldn't just throw parts together into a vat, shake them up, and hope thereby to assemble a flying airplane. A flying structure is vastly improbable; it is far outnumbered by the wide variety of non-flying structures. The same would be true if we tried to design a flying plane by throwing a bunch of part templates down on a table and making a blueprint out of the resulting overlays. \u003Cbr \/\u003E\u003Cbr \/\u003EOn the other hand, an object can be considered superficial when it is not very difficult to recreate another object to perform its function. For example, a garbage pit can be created by a wide variety of random sequences of truckfulls of garbage; it doesn't matter much in which order the trucks come. \u003Cbr \/\u003E\u003Cbr \/\u003EMore examples of sophistication are provided by the highly evolved structures of living things, such as wings, eyes, brains, and so on. These could not have been thrown together by chance; they must be the result of an adaptive algorithm such as Darwin's algorithm of variation and selection. If we lost the genetic code for vertebrate eyes in a mass extinction, it would take nature a vast number of animal lifetimes to re-evolve them. A sophisticated structure has a high replacement cost. \u003Cbr \/\u003E\u003Cbr \/\u003EBennett calls the computational replacement cost of an object its logical depth. Loosely speaking, depth is the necessary number of steps in the causal path linking an object with its plausible origin. Formally, it is the time required by the universal Turing machine to compute an object from its compressed original description.\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EFrom \u003Ca href=\"http:\/\/szabo.best.vwh.net\/tradition.html\"\u003EObjective versus Intersubjective Truth\u003C\/a\u003E:\u003Cbr \/\u003E\u003Cbr \/\u003EPost-Hayek and algorithmic information theory, we recognize that information-bearing codes can be computed (and in particular, ideas evolved from the interaction of people with each other over many lifetimes), which are \u003Cbr \/\u003E\u003Cbr \/\u003E(a) not feasibly rederivable from first principles,\u003Cbr \/\u003E\u003Cbr \/\u003E(b) not feasibly and accurately refutable\u0026nbsp; (given the existence of the code to be refuted)\u003Cbr \/\u003E\u003Cbr \/\u003E(c) not even feasibly and accurately justifiable (given the existence of the code to justify)\u003Cbr \/\u003E\u003Cbr \/\u003E(\"Feasibility\" is a measure of cost, especially the costs of computation and empircal experiment. \"Not feasibly\" means \"cost not within the order of magnitude of being economically efficient\": for example, not solvable within a single human lifetime. Usually the constraints are empirical rather than merely computational). \u003Cbr \/\u003E\u003Cbr \/\u003E(a) and (b) are ubiqitous among highly evolved systems of interactions among richly encoded entities (whether that information is genetic or memetic). (c) is rarer, since many of these interpersonal games are likely no more diffult than NP-complete: solutions cannot be feasibly derived from scratch, but known solutions can be verified in feasible time. However, there are many problems, especially empirical problems requiring a \"medical trial\" over one or more full lifetimes, that don't even meet (c): it's infeasible to create a scientifically repeatable experiment. For the same reason a scientific experiment cannot refute _any_ tradition dealing with interpersonal problems (b), because it may not have run over enough lifetimes, and we don't know which computational or empirical class the interpersonal problem solved by the tradition falls into. One can scientifically refute traditional claims of a non-interpersonal nature, e.g. \"God created the world in 4004 B.C.\", but one cannot accurately refute metaphorical interpretations or imperative statements which apply to interpersonal relationships. \u003Cbr \/\u003E\u003Cbr \/\u003EAs Dawkins has observed, death is vastly more probable than life. Cultural parts randomly thrown together, or thrown together by some computationally shallow line of reasoning, most likely result in a big mess rather than well functioning relationships between people. The cultural beliefs which give rise to civilization are, like the genes which specify an organism, a highly improbable structure, surrounded in \"meme space\" primarily by structures which are far more dysfunctional. Most small deviations, and practically all \"radical\" deviations, result in the equivalent of death for the organism: a mass breakdown of civilization which can include genocide, mass poverty, starvation, plagues, and, perhaps most commonly and importantly, highly unsatisying, painful, or self-destructive individual life choices. \u003Cbr \/\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EFrom \u003Ca href=\"http:\/\/szabo.best.vwh.net\/hermeneutics.html\"\u003EHermeneutics: An Introduction to the Interpretation of Tradition: \u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EHermeneutics derives from the Greek \u003Cem\u003Ehermeneutika\u003C\/em\u003E, \"message analysis\", or \"things for interpreting\": the interpretation of tradition, the messages we receive from the past... Natural law theorists are trying to do a Heideggerean deconstruction when they try to find the original meaning and intent of the documents deemed to express natural law, such as codifications of English common law, the U.S. Bill of Rights, etc. For example, the question \"would the Founding Fathers have intended the 1st Amendment to cover cyberspace?\" is a paradigmatic hermeneutical question...[Hans-Georg] Gadamer saw the value of his teacher [Martin] Heidegger's dynamic analysis, and put it in the service of studying living traditions, that is to say traditions with useful applications, such as the \u003Ca href=\"http:\/\/szabo.best.vwh.net\/hermeneutics.html#law\"\u003Elaw \u003C\/a\u003E. Gadamer discussed the classical as a broad normative concept denoting that which is the basis of a liberal eduction. He discussed his historical process of \u003Cem\u003EBehwahrung\u003C\/em\u003E, cumulative preservation, that, through constantly improving itself, allows something true to come into being. In the terms of \u003Ca href=\"http:\/\/szabo.best.vwh.net\/hermeneutics.html#evo\"\u003Eevolutionary hermeneutics\u003C\/a\u003E, it is used and propagated because of its useful \u003Ca href=\"http:\/\/szabo.best.vwh.net\/hermeneutics.html#app\"\u003Eapplication, \u003C\/a\u003Eand its useful application constitutes its truth. Gadamer also discusses value in terms of the duration of a work's power to speak directly. \u003Cbr \/\u003E\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Cbr \/\u003E"},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/7359343972903109875\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/7359343972903109875","title":"2 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/7359343972903109875"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/7359343972903109875"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2012\/07\/three-philosophical-essays.html","title":"Three philosophical essays"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"2"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-1384112437084995240"},"published":{"$t":"2012-07-23T02:26:00.002-07:00"},"updated":{"$t":"2012-07-23T02:51:03.197-07:00"},"title":{"type":"text","$t":"Pascal's scams (ii)"},"content":{"type":"html","$t":"Besides the robot apocalypse, there are many other, and often more important, examples of \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2012\/07\/pascals-scams.html\"\u003EPascal scams.\u003C\/a\u003E\u0026nbsp; The following may be or may have been such poorly evidenced but widely feared or hoped-for extreme consequences (these days the fears seem to predominate):\u003Cbr \/\u003E\n\u003Col\u003E\n\u003Cli\u003EThat we are currently headed for another financial industry disaster even worse than 2008 (overwrought expectations often take the form of \"much like the surprise we most recently experienced, only even more extreme\").\u003C\/li\u003E\u003Cbr \/\u003E\n\u003Cli\u003EThat global warming has caused or will cause disaster X (droughts, floods, hurricanes, tornadoes, ...)\u003C\/li\u003E\u003Cbr \/\u003E\n\u003Cli\u003EA whole witch's brew of \"much like what just happened\" fears were the many terrorist disaster fears that sprouted like the plague in the years after 9\/11: suitcase nukes, the \"ticking-time bomb\" excuse for legalizing torture, envelopes filled with mysterious white powders, and on and on.\u003Cbr \/\u003E\u003C\/li\u003E\u003Cbr \/\u003E\n\u003Cli\u003EOn the positive daydream side, Eric Drexler's \"molecular nanotechnology\" predictions of the 1980s: self-replicating robots, assemblers that could make almost anything, etc. -- a whole new industrial revolution that would make everything cheap. (Instead, it was outsourcing and a high-tech version of t-shirt printing that made many things cheap, and \"nanotechnology\" became just a cool buzzword to use when talking about chemistry).\u003C\/li\u003E\u003Cbr \/\u003E\n\u003Cli\u003EA big hope of\u0026nbsp;some naive young engineers\u0026nbsp;during the previous high oil price era of the late 1970s: solar power satellites made from lunar materials, with O'Neill space colonies to house the workers. Indeed, a whole slew of astronaut voyages and industries in space were supposed to follow after the spectacular (and spectacularly expensive) Apollo moon landings -- a \"much like recently experienced, only more so\" daydream.\u003C\/li\u003E\u003Cbr \/\u003E\n\u003Cli\u003EThe \"Internet commerce will replace bricks-and-mortar and make all the money those companies were making\" ideas that drove the Internet bubble in the late 1990s. Indeed, most or all of the bubbles and depressions in financial markets may be caused by optimistic and pessimistic Pascal fads respectively.\u003C\/li\u003E\u003Cbr \/\u003E\n\u003C\/ol\u003E\nHistory is\u0026nbsp;replete with many, many more such manias and scares, whether among small groups of otherwise smart people, or among\u0026nbsp;the vast majority of a\u0026nbsp;society.\u0026nbsp; Sometimes\u0026nbsp;poorly evidenced consequences do happen to occur, just in\u0026nbsp;way(s) very different from expected -- for example Columbus, following the\u0026nbsp;advice of well respected authorities\u0026nbsp;like\u0026nbsp;\u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2012\/07\/exploration-explosion.html\"\u003EStrabo and\u0026nbsp;Toscanelli\u003C\/a\u003E and\u0026nbsp;heading west for India\u0026nbsp;-- ending up instead in America.\u0026nbsp; And sometimes a \u003Ca href=\"http:\/\/articles.latimes.com\/1988-07-25\/local\/me-4586_1_lucky-penny\"\u003Elucky penny\u003C\/a\u003E prophecy of a wonderful or terrible but very unlikely event comes true -- although\u0026nbsp;hardly any of us ever\u0026nbsp;seem to learn about these sage predictions until after the event.\u0026nbsp;Then they only make us\u0026nbsp;believe enough in prophecy that we fall for the next scam."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/1384112437084995240\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/1384112437084995240","title":"11 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/1384112437084995240"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/1384112437084995240"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2012\/07\/pascals-scams-ii.html","title":"Pascal's scams (ii)"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"11"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-4410296457945154984"},"published":{"$t":"2012-07-14T00:16:00.000-07:00"},"updated":{"$t":"2012-07-14T00:16:29.316-07:00"},"title":{"type":"text","$t":"Pascal's scams"},"content":{"type":"html","$t":"Beware of what I call Pascal's scams: movements or belief systems that ask you to hope for or worry about very improbable outcomes that could have very large positive or negative consequences. (The name comes of course from the infinite-reward Wager proposed by Pascal: these days the\u0026nbsp;large-but-finite\u0026nbsp;versions are far more pernicious).\u0026nbsp; Naive expected value reasoning implies that they are worth the effort: if the odds are 1 in 1,000 that I could win $1 billion, and I am risk and time neutral, then I should expend up to nearly $1 million dollars worth of effort to gain this boon. The problems with these beliefs tend to be at least threefold, all stemming from the general uncertainty, i.e. the poor information or lack of information, from which we abstracted the low probability estimate in the first place: because in the messy real world the low probability estimate is almost always due to low or poor evidence rather than being a lottery with well-defined odds:\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n(1) there is usually no feasible way to distinguish between the very improbable (say, 1 in 1,000) and the extremely improbable (e.g., one in a billion). Poor evidence leads to what\u003Ca href=\"http:\/\/lpr.oxfordjournals.org\/content\/5\/2\/159.full?keytype=ref\u0026amp;ijkey=ny8A8TF7Lp8kezF\"\u003E James Franklin\u003C\/a\u003E calls \"low-weight probabilities\", which lack robustness to new evidence. When the evidence is poor, and thus robustness of probabilities is lacking, then it is likely that \"a small amount of further evidence would substantially change the probability. \"\u0026nbsp;\u0026nbsp;This new\u0026nbsp;evidence is\u0026nbsp;as likely to decrease\u0026nbsp;the probability\u0026nbsp;by a factor of X as increase it by a factor of X, and the poorer the original evidence, the greater X is.\u0026nbsp; (Indeed, given\u0026nbsp;the nature of human imagination and bias,\u0026nbsp;it is more likely to decrease it, for reasons\u0026nbsp;described below).\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n(2) the uncertainties about the diversity and magnitudes of possible consequences, not just their probabilities, are also likely to be extremely high. Indeed, due to the overall poor information, it's easy to overlook negative consequences and recognize only positive ones, or vice-versa. The very acts you take to make it into utopia or avoid dystopia could easily send you to dystopia or make the dystopia worse.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n(3) The \"unknown unknown\" nature of the most uncertainty leads to unfalsifiablity: proponents of the proposition can't propose a clear experiment that would\u0026nbsp;greatly lower the probability or magnitude of consequences of\u0026nbsp;their proposition: or at least, such an experiment would be far too expensive to actually be run, or cannot be conducted until after the time which the believers have already decided that the long-odds bet is rational. So not only is there poor information in a Pascal scam, but in the more pernicious beliefs there is little ability to improve the information.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nThe biggest problem with these schemes is that, the closer to infinitesimal probability, and thus usually to infinitesimal quality or quantity of evidence, one gets, the closer to infinity the possible extreme-consequence\u0026nbsp;schemes one can dream up,\u0026nbsp; Once some enterprising memetic innovator dreams up a Pascal's scam, the probabilities or consequences of these possible futures can be greatly exaggerated yet still seem plausible. \"Yes, but \u003Cem\u003Ewhat if\u003C\/em\u003E?\" the carrier of such a mind-virus incessantly demands.\u0026nbsp; Furthermore, since more than a few disasters are indeed low probability events (e.g. 9\/11), the plausibility and importance of dealing with such risks seems to grow in importance after they occur -- the occurrence of one improbable disaster leads to paranoia about a large number of others, and similarly for fortuitous windfalls and hopes. Humanity can dream up a near-infinity of Pascal's scams, or spend a near-infinity of time fruitlessly worrying about them or hoping for them. There are however far better ways to spend one's time -- for example in thinking about what has actually happened in the real world, rather than the vast number of things that might happen in the future but quite probably won't, or will likely cause consequences very differently than you expect. \u003Cbr \/\u003E\n\u003Cbr \/\u003E\nSo how should we approach low probability hypotheses with potential high value (negative or positive) outcomes?\u0026nbsp; Franklin et. al. \u003Ca href=\"http:\/\/web.maths.unsw.edu.au\/~jim\/advocacydivdist.pdf\"\u003Esuggest\u003C\/a\u003E that \"[t]he strongly quantitative style of education in statistics, valuable as it is, can lead to a neglect of the more qualitative, logical, legal and causal perspectives needed to understand data intelligently. That is especially so in extreme risk analysis, where there is a lack of large data sets to ground solidly quantitative conclusions, and correspondingly a need to supplement the data with outside information and with argument on individual data points.\"\u003Cbr \/\u003E\n\u003Cbr \/\u003E\nOn the above quoted points I agree with Franklin, and add a more blunt suggestion:\u0026nbsp;stop throwing around long odds and dreaming of big consequences as if you are onto something profound.\u0026nbsp;\u0026nbsp;If you can't gather the information needed to reduce the uncertainties, and if you can't suggest experiments to make the hope or worry falsifiable, stop nightmaring or daydreaming\u0026nbsp;already. Also, shut up and stop trying to convince the rest of us to join you in wasting our time\u0026nbsp;hoping or worrying about these fantasies.\u0026nbsp; Try spending more time learning about what has actually happened in the real world.\u0026nbsp; That study, too, has its uncertainties, but they are up to infinitely smaller.\u003Cbr \/\u003E\n\u003Cbr \/\u003E"},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/4410296457945154984\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/4410296457945154984","title":"40 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/4410296457945154984"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/4410296457945154984"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2012\/07\/pascals-scams.html","title":"Pascal's scams"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"40"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-6552743475138028663"},"published":{"$t":"2012-07-01T22:47:00.001-07:00"},"updated":{"$t":"2012-07-01T22:47:25.001-07:00"},"title":{"type":"text","$t":"More short takes"},"content":{"type":"html","$t":"Perhaps I should take up Twitter, but I already have this blog, and even my short takes tend to go a bit over 140 characters. So here goes: \u003Cbr \/\u003E\n\u003Cbr \/\u003E\n* The most important professions in the modern world may be the most reviled: advertiser, salesperson,\u0026nbsp;lawyer, and financial trader.\u0026nbsp;What these professions have in common is extending useful social interactions far beyond the tribe-sized groups we were evolved to inhabit (most often characterized by the Dunbar number). This commonly involves activities that fly in the face of our tribal moral instincts.\u003Cbr \/\u003E\n\u003Cbr \/\u003E\n* On a related note, much mistaken thinking about society could be eliminated by the most straightforward application of the pigeonhole principle: you can't fit more pigeons into your pigeon coop than you have holes to put them in. Even if you were telepathic, you could not learn all of what is going on in everybody's head because there is no room to fit all that information in yours. If I could completely scan 1,000 brains and had some machine to copy the contents of those into mine, I could only learn at most about a thousandth of the information stored in those brains, and then only at the cost of forgetting all else I had known. That's a theoretical optimum; any such real-world transfer process, such as reading and writing an e-mail or a book, or tutoring, or using or influencing a market price, will pick up only a small fraction of even the theoretically acquirable knowledge or preferences in the mind(s) at the other end of said process, or if you prefer of the information stored by those brain(s).\u0026nbsp;Of course, one can argue that some kinds of knowledge -- like the kinds you and I know?\u0026nbsp;--\u0026nbsp;are vastly more important than others, but such a claim is usually\u0026nbsp;more\u0026nbsp;snobbery than fact. Furthermore, a society with more such computational and mental\u0026nbsp;diversity is more productive, because specialized algorithms, mental processes, and skills are generally far more\u0026nbsp;productive than generalized ones.\u0026nbsp;As Friedrich Hayek pointed out, our mutual inability to understand a very high fraction of what others know has profound implications for our economic and political institutions. \u003Cbr \/\u003E\n\u003Cbr \/\u003E\n* A big problem in the last few years has been the poor recording of transfers of ownership of mortgages (i.e. of the debt not the house). The issue of recording transfers of contractual rights is very interesting. I have a proposal for this, \u003Ca href=\"http:\/\/szabo.best.vwh.net\/securetitle.html\"\u003Esecure property titles\u003C\/a\u003E. This should work just as well for mortgage securities and other kinds of transferable contractual rights as it does for the real estate itself or other kinds of property. Anytime you transfer rights to a contract it should be registered in such a secure and reliable public database in order to avoid the risk of not being able to prove ownership in court. \u003Cbr \/\u003E\n\u003Cbr \/\u003E\n* Not only should you disagree with others, but you should disagree with yourself. Totalitarian thought asks us to consider, much less accept, only one hypothesis at a time. By contrast quantum thought, as I call it -- although it already has a traditional name less recognizable to the modern ear, scholastic thought -- demands that we simultaneoulsy consider often mutually contradictory possibilities.\u0026nbsp;Thinking about and presenting\u0026nbsp;only one side's arguments gives one's\u0026nbsp;thought\u0026nbsp;and prose\u0026nbsp;a false patina of consistency: a fallacy of thought and communications similar to \u003Ca href=\"https:\/\/en.wikipedia.org\/wiki\/False_precision\"\u003Efalse precision\u003C\/a\u003E, but much more common and imporant. Like false precision, it can be a mental mistake or a misleading rhetorical habit. In quantum reality, by contrast,\u0026nbsp;I can be both for and against a proposition because I am entertaining at least two significantly possible but inconsistent hypotheses, or because I favor some parts of a set of ideas and not others. If you are unable or unwilling to think in\u0026nbsp;such a quantum or scholastic\u0026nbsp;manner, it is much less likely that your thoughts are worthy of others' consideration. \u003Cbr \/\u003E"},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/6552743475138028663\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/6552743475138028663","title":"11 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/6552743475138028663"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/6552743475138028663"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2012\/07\/more-short-takes.html","title":"More short takes"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"11"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-7197153597401220206"},"published":{"$t":"2011-12-10T13:07:00.000-08:00"},"updated":{"$t":"2011-12-10T14:17:08.274-08:00"},"title":{"type":"text","$t":"Short takes"},"content":{"type":"html","$t":"During my blog absence, I've been studying, designing, and implementing a style of programming I call \u003Cem\u003Etemporal programming\u003C\/em\u003E.   It is useful for, among other things, implementing \u003Ca href=\"http:\/\/www.firstmonday.org\/htbin\/cgiwrap\/bin\/ojs\/index.php\/fm\/article\/view\/548\/469\"\u003Esmart contracts\u003C\/a\u003E.  Meanwhile, I encourage readers interested in programming to check out \u003Ca href=\"http:\/\/nodejs.org\/\"\u003ENode.js\u003C\/a\u003E.  Temporal programming starts with event-oriented programming and takes it further.  Temporal programming will give us control over \u003Cem\u003Ewhen\u003C\/em\u003E our instructions get executed: the plodding do this, then that, then the other, as if machine activities are only supposed to happen in one big long sequence and merely output some big long tape, will be relegated to secondary status.  More to come.\u003Cbr \/\u003E\u003Cbr \/\u003E--------\u003Cbr \/\u003E\u003Cbr \/\u003EIs Netflix management really stupid?   To summarize \u003Ca href=\"http:\/\/www.theatlantic.com\/business\/archive\/2011\/12\/if-everyone-else-is-such-an-idiot-how-come-youre-not-rich\/249430\/\"\u003EMegan McCardle\u003C\/a\u003E, no: under copyright law, DVDs are covered by the first sale rule -- once you buy a DVD, you can't make a copy, but you can sell, rent or give away the DVD itself.  Streaming, on the other hand, essentially involves making a copy, and you can't do it legally without the copyright owner's permission. So to stream the most demanded content, you usually need the permission of owners, and thus have to pay what they demand.\u003Cbr \/\u003E\u003Cbr \/\u003EIt thus makes complete sense that Netflix has to charge high prices for streaming -- because for the kind of content they want to stream (i.e. the copyrights that are so valuable that their owners bother to prevent the content from being distributed on YouTube), content owners are demanding revenues similar to what they are accustomed to via cable.  \u003Cbr \/\u003E\u003Cbr \/\u003EI'd add that the first sale rule also explains why Netflix, contrary to its name, originally succeeded in out-competing a gaggle of Internet video streaming companies by the stone-age method of shipping DVDs by mail. The main thing Netflix may have done wrong was, after succeeding in pivoting from Internet streaming to mailing DVDs, going back to their original goal in a way that set false expectations about prices (i.e. that streaming prices would be closer to DVD rental prices than to cable TV).  Probably what happened is that Netflix CEO Reed Hastings thought he could use his mail-order rental business as leverage to negotiate lower prices with copyright owners, but this strategy did not succeed.\u003Cbr \/\u003E\u003Cbr \/\u003EIt also makes sense that Netflix (and their streaming competitors) lack licensed content due to copyright owners' long-standing aversion to Internet streaming.   All this was happening to Netflix's video-streaming competitors long before Netflix's much more recent emphasis on that business.   Netflix apparently hasn't, after all, solved the institutional problem that their DVD-shipping model worked around.\u003Cbr \/\u003E\u003Cbr \/\u003E---------\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2008\/04\/bit-gold-markets.html\"\u003EBit gold\u003C\/a\u003E and I make brief appearances in Wired's \u003Ca href=\"http:\/\/www.wired.com\/magazine\/2011\/11\/mf_bitcoin\/all\/1\"\u003EBitcoin article\u003C\/a\u003E.\u003Cbr \/\u003E\u003Cbr \/\u003E---------\u003Cbr \/\u003E\u003Cbr \/\u003EWater remains fun.  Digital fountains show how precisely drops can be located and timed:\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ciframe width=\"560\" height=\"349\" src=\"http:\/\/www.youtube.com\/embed\/ZSCXXJNaDU4\" frameborder=\"0\" allowfullscreen\u003E\u003C\/iframe\u003E\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ciframe width=\"560\" height=\"349\" src=\"http:\/\/www.youtube.com\/embed\/XZki5lGhHII\" frameborder=\"0\" allowfullscreen\u003E\u003C\/iframe\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EThis one is a bit different, drops fall with uniform regularity but are used to display light: \u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ciframe width=\"425\" height=\"349\" src=\"http:\/\/www.youtube.com\/embed\/L0i-uTa4kv4\" frameborder=\"0\" allowfullscreen\u003E\u003C\/iframe\u003E"},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/7197153597401220206\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/7197153597401220206","title":"6 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/7197153597401220206"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/7197153597401220206"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2011\/12\/short-takes.html","title":"Short takes"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"media$thumbnail":{"xmlns$media":"http://search.yahoo.com/mrss/","url":"https:\/\/img.youtube.com\/vi\/ZSCXXJNaDU4\/default.jpg","height":"72","width":"72"},"thr$total":{"$t":"6"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-3486291904431325404"},"published":{"$t":"2011-07-05T02:57:00.000-07:00"},"updated":{"$t":"2011-07-05T16:22:15.442-07:00"},"title":{"type":"text","$t":"Of wages and money:  cost as a proxy measure of value"},"content":{"type":"html","$t":"The subjective theory of value, used by the Salamanca school in Renaissance Spain and most recently in neoclassical and Austrian economics,  is undoubtedly the correct one,  despite the fact that figures ranging from Smith to Ricardo to Marx used labor as a fundamental measure of value.  This labor theory of value is profoundly wrong.  If I spend hours digging a hole in your back yard, that doesn't provide you any value unless you wanted a hole in your back yard.   \u003Cbr \/\u003E\u003Cbr \/\u003ENevertheless, as we shall see, using labor, or more generally cost, as a measure of value is a common strategy of our institutions and in itself often quite valuable thing to do.   How does this come about?   The key to the puzzle is Yoram Barzel's idea of a proxy measure, which I have described as follows:\u003Cbr \/\u003E\u003Cblockquote\u003EThe process of determining the value of a product from observations is necessarily incomplete and costly. For example, a shopper can see that an apple is shiny red. This has some correlation to its tastiness (the quality a typical shopper actually wants from an apple), but it's hardly perfect. The apple's appearance is not a complete indicator -- an apple sometimes has a rotten spot down inside even if the surface is perfectly shiny and red.  We call an indirect measure of value -- for example the shininess, redness, or weight of the apple -- a proxy measure. In fact, all measures of value, besides prices in an ideal market, are proxy measures -- real value is subjective and largely tacit.   \u003Cbr \/\u003E\u003Cbr \/\u003ESuch observations also come at a cost. It may take some time to sort through apples to find the shiniest and reddest ones, and meanwhile the shopper bruises the other apples. It costs the vendor to put on a fake shiny gloss of wax, and it costs the shopper because he may be fooled by the wax, and because he has to eat wax with his apple. Sometimes these measurement costs comes about just from the imperfection of honest communication. In other cases, such as waxing the apple, the cost occurs because rationally self-interested parties play games with the observable...\u003Cbr \/\u003E\u003Cbr \/\u003ECost can usually be measured far more objectively than value. As a result, the most common proxy measures are various kinds of costs. Examples include: \u003Cbr \/\u003E\u003Cbr \/\u003E(a) paying for employment in terms of time worked, rather than by quantity produced (piece rates) or other possible measures. Time measures sacrifice, i.e. the cost of opportunities foregone by the employee.\u003Cbr \/\u003E\u003Cbr \/\u003E(b) most numbers recorded and reported by accountants for assets are costs rather than market prices expected to be recovered by the sale of assets. \u003Cbr \/\u003E\u003Cbr \/\u003E(c) non-fiat money and collectibles obtain their value primarily from their scarcity, i.e. their cost of replacement.\u003C\/blockquote\u003E \u003Cbr \/\u003E(From \u003Ca href=\"http:\/\/szabo.best.vwh.net\/measuringvalue.html\"\u003E\"Measuring Value\"\u003C\/a\u003E).\u003Cbr \/\u003E\u003Cbr \/\u003EThe proxy measure that dominates most of our lives is the time wage:\u003Cbr \/\u003E\u003Cblockquote\u003ETo create anything of value requires some sacrifice. To successfully contract we must measure value. Since we can’t, absent a perfect exchange market, directly measure the economic value of something, we may be able to estimate it indirectly by measuring something else. This something else anchors the performance – it gives the performer an incentive to optimize the measured value. Which measures are the most appropriate anchors of performance? Starting in Europe by the 13th century, that measure was increasingly a measure of the sacrifice needed to create the desired economic value. \u003Cbr \/\u003E\u003Cbr \/\u003EThis is hardly automatic – labor is not value. A bad artist can spend years doodling, or a worker can dig a hole where nobody wants a hole. Arbitrary amounts of time could be spent on activities that do not have value for anybody except, perhaps, the worker himself. To improve the productivity of the time rate contract required two breakthroughs: the first, creating the conditions under which sacrifice is a better estimate of value than piece rate or other measurement alternatives, and second, the ability to measure, with accuracy and integrity, the sacrifice.\u003Cbr \/\u003E\u003Cbr \/\u003EPiece rates measure directly some attribute of a good or service that is important to its value – its quantity, weight, volume, or the like -- and then fix a price for it. Guild regulations which fixed prices often amounted to creating piece rates. Piece rates seem the ideal alternative for liberating workers, but they suffer for two reasons. First, the outputs of labor depend not only on effort, skills, etc. (things under control of the employee), but things out of control of the employee.  The employee wants something like insurance against these vagaries of the work environment. The employer, who has more wealth and knowledge of market conditions, takes on these risks in exchange for profit.\u003Cbr \/\u003E\u003Ca href=\"http:\/\/szabo.best.vwh.net\/Sandglass2.jpg\"\u003E\u003Cimg style=\"float:right; margin:0 0 10px 10px;cursor:pointer; cursor:hand;width: 180px; height: 258px;\" src=\"http:\/\/szabo.best.vwh.net\/Sandglass2.jpg\" border=\"0\" alt=\"\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003EIn an unregulated commodity market, buyers can reject or negotiate downwards the price of poor quality goods. Sellers can negotiate upwards or decline to sell. With piece rate contracts, on the other hand, there is a fixed payment for a unit of output. Thus second main drawback to piece rates is that they motivate the worker to put out more quantity at the expense of quality. This can be devastating. The tendency of communist countries to pay piece rates, rather than hourly rates, is one reason that, while the Soviet bloc’s quantity (and thus the most straightforward measurements of economic growth) was able to keep up with the West, quality did not (thus the contrast, for example, between the notoriously ugly and unreliable Trabant of East Germany and the BMWs, Mercedes, Audi and Volkswagens of West Germany).\u003Cbr \/\u003E\u003Cbr \/\u003EThus with the time-rate wage the employee is insured against vagaries of production beyond his control, including selling price fluctuations (in the case of a market exchange), or variation in the price or availability of factors of production (in the case of both market exchange or piece rates). The employer takes on these risks, while at the same time through promotion, raises, demotions, wage cuts or firing retaining incentives for quality employee output. \u003Cbr \/\u003E\u003Cbr \/\u003EBesides lacking implicit insurance for the employee, another limit to market purchase of each worker’s output is that it can be made prohibitively costly by relationship-specific investments. These investments occur when workers engage in interdependent production -- as the workers learn the equipment or adapt to each other. Relationship-specific investments can also occur between firms, for example building a cannon foundry next to an iron mine. These investments, when combine with the inability to write long-term contracts that account for all eventualities, motivate firms to integrate. Dealing with unspecified eventualities then becomes the right of the single owner. This incentive to integrate is opposed by the diseconomies of scale in a bureaucracy, caused by the distribution of knowledge, which market exchange handles much better.  These economic tradeoffs produce observed distributions of firm sizes in a market, i.e. the number of workers involved in an employment relationship instead of selling their wares directly on a market.\u003Cbr \/\u003E\u003Cbr \/\u003EThe main alternative to market exchange of output, piece rate, or coerced labor (serfdom or slavery) consists of the employers paying by sacrifice -- by some measure of the desirable things the employee forgoes to pursue the employer’s objectives. An hour spent at work is an hour not spent partying, playing with the children, etc. For labor, this “opportunity cost” is most easily denominated in time – a day spent working for the employer is a day not spent doing things the employee would, if not for the pay, desire to do. \u003Cbr \/\u003E\u003Cbr \/\u003ETime doesn’t specify costs such as effort and danger. These have to be taken into account by an employee or his union when evaluating a job offer. Worker choice, through the ability to switch jobs at much lower costs than with serfdom, allows this crucial quality control to occur.\u003Cbr \/\u003E\u003Cbr \/\u003EIt’s usually hard to specify customer preferences, or quality, in a production contract. It’s easy to specify sacrifice, if we can measure it. Time is immediately observed; quality is eventually observed. With employment via a time-wage, the costly giving up of other opportunities, measured in time, can be directly motivated (via daily or hourly wages), while quality is motivated in a delayed, discontinuous manner (by firing if employers and\/or peers judge that quality of the work is too often bad). Third parties, say the guy who owned the shop across the street, could observe the workers arriving and leaving, and tell when they did so by the time. Common synchronization greatly reduced the opportunities for fraud involving that most basic contractual promise, the promise of time. \u003Cbr \/\u003E\u003Cbr \/\u003EOnce pay for time is in place, the basic incentives are in place – the employee is, verifiably, on the job for a specific portion of the day – so he might as well work. He might as well do the work, both quantity and quality, that the employer requires. With incentives more closely aligned by the calendar and the city bells measuring the opportunity costs of employment, to be compensated by the employer, the employer can focus observations on verifying the specific quantity and qualities desired, and the employee (to gain raises and avoid getting fired) focuses on satisfying them. So with the time-wage contract, perfected by northern and western Europeans in the late Middle Ages, we have two levels of the protocol in this relationship: (1) the employee trades away other opportunities to commit his time to the employer – this time is measured and compensated, (2) the employee is motivated, by (positively) opportunities for promotions and wage rate hikes and (negatively) by the threat of firing, to use that time, otherwise worthless to both employer and employee, to achieve the quantity and\/or quality goals desired by the employer.\u003Cbr \/\u003E\u003C\/blockquote\u003E\u003Cbr \/\u003E(from From \u003Ca href=\"http:\/\/szabo.best.vwh.net\/synch.html\"\u003E\"A Measure of Sacrifice\"\u003C\/a\u003E)\u003Cbr \/\u003E\u003Cbr \/\u003EProxy measures also explain how money can depend on standards of nature instead of a singular trusted third party:\u003Cbr \/\u003E\u003Cblockquote\u003EAlthough anatomically modern humans surely had conscious thought, language, and some ability to plan, it would have required little conscious thought or language, and very little planning, to generate trades. It was not necessary that tribe members reasoned out the benefits of anything but a single trade. To create this institution it would have sufficed that people follow their instincts to make obtain collectibles with the characteristics outlined below. (as indicated by proxy observations that make approximate estimations for these characteristics).\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"http:\/\/szabo.best.vwh.net\/coilcash.jpg\"\u003E\u003Cimg style=\"float:right; margin:0 0 10px 10px;cursor:pointer; cursor:hand;width: 180px; height: 258px;\" src=\"http:\/\/szabo.best.vwh.net\/coilcash.jpg\" border=\"0\" alt=\"\" \/\u003E\u003C\/a\u003E\u003Ci\u003EUtilitarian jewelry: silver shekels from Sumeria.  The recipient of a payment would weigh the segment of coil used as payment and could cut it at an arbitrary spot to test its purity.   A wide variety of other cultures, from the Hebrews and the famously commercial Phoenicians to the ancient Celtic and Germanic tribes, used such forms of precious metal money long before coinage.\u003C\/i\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EAt first, the production of a commodity simply because it is costly seems quite wasteful. However, the unforgeably costly commodity repeatedly adds value by enabling beneficial wealth transfers. More of the cost is recouped every time a transaction is made possible or made less expensive.  The cost, initially a complete waste, is amortized over many transactions.  The monetary value of precious metals is based on this principle. It also applies to collectibles, which are more prized the rarer they are and the less forgeable this rarity is. It also applies where provably skilled or unique human labor is added to the product, as with art. \u003C\/blockquote\u003E\u003Cbr \/\u003E(from \u003Ca href=\"szabo.best.vwh.net\/shell.html\"\u003E\"Shelling Out: The Origins of Money\"\u003C\/a\u003E)\u003Cbr \/\u003E\u003Cbr \/\u003EThe rational price of such a monetary commodity will be, ignoring more minor effects (e.g. the destruction of monetary units) the lesser of:\u003Cbr \/\u003E\u003Cbr \/\u003E(1) the value a monetary unit is expected to add to future transactions, i.e. what it will save in transaction costs\u003Cbr \/\u003E\u003Cbr \/\u003E(2) the cost of creating a new monetary unit\u003Cbr \/\u003E\u003Cbr \/\u003ESince (1) cannot be objectively measured, but at best can only be intuitively estimated, as long as one is confident that (1)\u003E(2) the cost of creating a monetary unit becomes a good proxy measure of the value of the monetary unit.  If monetary units are not fungible, but their costs are comparable, their relative value can be well approximated by their relative costs even if (2)\u003E=(1).   If the expected value of a monetary unit drops below the replacement cost, gold miners (for example) stop creating new monetary units (in the case of gold miners, if their production costs exceed this expected value they stop mining gold), holding the money supply steady which minimizes inflation.  If it goes above replacement costs more gold mines can be affordably worked, increasing the money supply as the economy grows without inflation.  This all depends on having a secure floor to replacement costs, which is well approximated by gold and silver but violated by fiat currencies (as can be seen by for example comparing the rampant inflations of many 20th century fiat currencies against the quite mild, by comparison, inflations that followed discoveries such as Potosi silver in the 16th century and California gold in the 19th).\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"http:\/\/szabo.best.vwh.net\/SumerianShellMoney.jpg\"\u003E\u003Cimg style=\"float:right; margin:0 0 10px 10px;cursor:pointer; cursor:hand;width: 180px; height: 129px;\" src=\"http:\/\/szabo.best.vwh.net\/SumerianShellMoney.jpg\" border=\"0\" alt=\"\" \/\u003E\u003C\/a\u003E\u003Ci\u003ESumerian shell money.\u003C\/i\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EWe often adapt institutions from prior similar institutions, and often by accident.  So, for example, money can evolve from utilitarian commodities that have the best characteristics of money (securely storable, etc.) in a particular environment (e.g. cigarettes in a prison).  But humans also have foresight and can reason by analogy, and so can design an exchange to trade new kinds of securities, a new kind of insurance service, or a new kind of currency.  \u003Cbr \/\u003E\u003Cbr \/\u003ENaturally such designs are still subject to a large degree of trial and error, of the creative destruction of the market.   And they are subject to network externalities: to, roughly speaking, Metcalfe's law, which states the value of a network is proportional to the square of the number of its members, and that a network of one is useless.    A telephone is useless unless somebody else you want to talk to also has a telephone.  Likewise, currency is useless unless one has somebody to buy from or sell to who will take or give that currency.   Indeed, with money the situation is even worse than most networks, because unless that person wants to do a corresponding sell or buy back to you at a later date, the money will get \"stuck.\"  It will have zero velocity.  One needs either specific cycles to keep money circulating (as with the ancient \u003Ca href=\"http:\/\/szabo.best.vwh.net\/kula.html\"\u003Ekula ring\u003C\/a\u003E), or a second currency with such cycles that can be exchanged for the first.  Thus, the marketing problem of starting a new currency is formidable.   Although Paypal was implementing just a payment system in dollars, not a new currency, it hit on a great strategy of general applicability: target specific communities of people that trade with each other (in Paypal's case, the popular eBay auction site).\u003Cbr \/\u003E\u003Cbr \/\u003EBut insisting that gold, silver, shells, online payment systems or currencies, etc. must be useful for some other purpose, such as decoration, before they can be used as money, is a terrible confusion, akin to insisting that an insurance service must start out as useful for something else, perhaps for stabling horses, before one can write the insurance contracts.   Indeed many of us value precious metals and shells for decoration more for a reverse reason, which I explain in the above-linked essay on the origins of money.\u003Cbr \/\u003E\u003Ch3\u003EConclusion\u003C\/h3\u003EThe labor theory of value is wrong.   Value is fundamentally a matter of subjective preferences.  Nevertheless. Yoram Barzel's crucial idea of proxy measures allows us to understand why measures of labor and more generally measures of cost are so often and so usefully applied as measures of value in institutions, including wage contracts and non-fiat money."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/3486291904431325404\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/3486291904431325404","title":"5 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/3486291904431325404"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/3486291904431325404"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2011\/06\/of-wages-and-money-cost-as-proxy.html","title":"Of wages and money:  cost as a proxy measure of value"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"5"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-113818682864541367"},"published":{"$t":"2011-06-24T14:10:00.000-07:00"},"updated":{"$t":"2011-06-24T14:58:00.004-07:00"},"title":{"type":"text","$t":"Agricultural consequences of the Black Death"},"content":{"type":"html","$t":"The Black Death, caused (as DNA testing of victims has recently confirmed)  by the bubonic plague, \u003Cspan style=\"font-style:italic;\"\u003EYersina pestis\u003C\/span\u003E, swept through Europe primarily in the years 1347-1351,  with some recurring outbreaks thereafter.  This plague not only brought great demographic changes to Europe, killing off probably about half of the population, but substantial changes to the economy and especially to the dominant sector of the economy then, agriculture.   The Black Death provides a great empirical test of \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2010\/09\/malthusian-mystery.html\"\u003EMalthusian\u003C\/a\u003E theories of agricultural economies and it is very informative to look at what happened.\u003Cbr \/\u003E\u003Cbr \/\u003EUnder a naive reading of Malthusian theory, yield (the amount of food or fodder produced per unit area) should have improved after the Black Death: a lower population abandoned marginally productive lands and kept the better yielding ones.   Furthermore, the increased ratio of livestock to arable acres should have improved fertilization of the fields, as more nutrients and especially \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2010\/10\/elements-evolution-and-nitrogen-crisis.html\"\u003Enitrogen\u003C\/a\u003E moved from wastes (wild lands) and pastures to the arable.\u003Cbr \/\u003E\u003Cbr \/\u003EBut while marginal lands were indeed abandoned (or at least converted from arable to pasture), and the livestock\/arable ratio indeed increased, it's not the case that yield improved after the Black Death.  In fact, the overall (average) yield of all arable probably declined slightly, and the yields of particular plots of land that were retained as arable usually declined quite substantially.  Yields declined and for the most part stayed low for several centuries thereafter.   Other factors must have been work, factors stronger than the abandonment of marginally productive lands and the influence of more livestock on nutrient movement.\u003Cbr \/\u003E\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgZ1DATssONBBtHA3hwQMlLMOjYC7alICl2iXCzUm9zyV3scnWZ9VK2NvY33-Y4_VIdKaXF2vK5Kkq0oZTIb5gVgR7cUsGgx5MkrCl6LFnXSjYyaaIEtRudHlw3InE274h3jIv9\/s1600\/MalthusianIsocline_England1260_1849.JPG\"\u003E\u003Cimg style=\"float:right; margin:0 0 10px 10px;cursor:pointer; cursor:hand;width: 600px; height: 384px;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgZ1DATssONBBtHA3hwQMlLMOjYC7alICl2iXCzUm9zyV3scnWZ9VK2NvY33-Y4_VIdKaXF2vK5Kkq0oZTIb5gVgR7cUsGgx5MkrCl6LFnXSjYyaaIEtRudHlw3InE274h3jIv9\/s400\/MalthusianIsocline_England1260_1849.JPG\" border=\"0\" alt=\"\"id=\"BLOGGER_PHOTO_ID_5610180434904674402\" \/\u003E\u003C\/a\u003E\u003Ci\u003EPer capita agricultural output (vertical axis) vs. population density (horizontal axis) in England before, during, and after the Black Death and through the agricultural revolutions of the succeeding centuries.\u003C\/i\u003E\u003Cbr\u003E\u003Cbr \/\u003EThe main such factor is that increasing yield without great technological improvement requires more intensive labor: extra weeding, extra transport of manures and soil conditioners, etc.    Contrariwise, a less intensive use of land readily leads to falling yield.   After the Black Death, labor was more expensive relative to land, so it made sense to engage in a far less intensive agriculture.   The increase of pasture and livestock at the expense of the arable was a part of this.   But letting the yield decline was another.   What increased quite dramatically in the century after the Black Death was labor productivity and per capita standard of living (see first three points on the diagram, each covering an 80-year period from 1260 to 1499).\u003Cbr \/\u003E\u003Cbr \/\u003EIndeed, the whole focus in the literature on improvements in \"productivity\" as  yield in the agricultural revolution has been very misleading.  The crucial part of the revolution, and the direct cause of the release of labor from the agricultural to the industrial and transport sectors, was an increase in farm labor productivity: more food grown with less labor.   Over short timescales, that is without dramatic technological or institutional progress,  farm labor productivity was inversely correlated with yield for the reasons stated.   Higher labor productivity, certainly not higher yield, is what distinguished most of Europe for example from East and Southeast Asia, where under intensive rice cultivation, and abundant rain during warm summers, yield had long been far higher than in Europe.  Per Malthus, however, population growth in these regions had kept pace with yield, resulting in a highly labor-intensive, low labor productivity style of agriculture, including much less use of draft animals for farm work and transport.\u003Cbr \/\u003E\u003Cbr \/\u003EThe bubonic plague was spread by rodents, who in turn fed primarily on grain stores.   This also had a significant impact on agriculture, because grain-growing farmers and grain-eating populations were disproportionately killed and people fled areas that grew or stored grain for regions specializing in other kinds of agriculture.    In coastal regions like Portugal there was a large move from grain farming to fishing.   In Northern Europe there was a great move to pasture and livestock, and in particular a relative expansion of the unique \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2011\/05\/lactase-persistence-and-quasi.html\"\u003Estationary pastoralism\u003C\/a\u003E that had started to develop there in the previous centuries, both due to the relative protection of pastoralists from the plague and the less labor-intensive nature of pastoralism after land had become cheaper relative to labor.\u003Cbr \/\u003E\u003Cbr \/\u003EA final interesting effect is that the long trend from about the 11th to the 19th century in England of conversion of draft animals from oxen to \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2011\/06\/trotting-ahead-of-malthus.html\"\u003Ehorses\u003C\/a\u003E halted temporarily in the century after the Black Death.  The main reason for this was undoubtedly the reversion of arable to pasture or waste (wild lands).    Oxen are, to use horse culture terminology, very \"easy keepers\".   As ruminants they can convert cellulose to glucose for energy and horses can't.  Oxen, therefore, became relatively cheaper than horses in an era with more wastes and less (or at least much less intensive use of) arable for growing fodder.  This kind of effect occurred again much later on the American frontiers where there was a temporary, partial reversion from horses to oxen as draft animals given the abundance of wild lands relative to groomed pasture and arable for growing fodder.   For example the famous wagon trains to California and Oregon were pulled primarily by oxen, which could be fed much better than horses in the wild grasslands and arid wastes encountered.   However in England itself, the trend towards horses replacing oxen, fueled by the increasing growth of fodder crops, had resumed by 1500 and indeed accelerated in the 16th century, playing a central role in the transportation revolutions of the 15th through 19th centuries."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/113818682864541367\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/113818682864541367","title":"2 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/113818682864541367"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/113818682864541367"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2011\/06\/agricultural-consequences-of-black.html","title":"Agricultural consequences of the Black Death"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"media$thumbnail":{"xmlns$media":"http://search.yahoo.com/mrss/","url":"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgZ1DATssONBBtHA3hwQMlLMOjYC7alICl2iXCzUm9zyV3scnWZ9VK2NvY33-Y4_VIdKaXF2vK5Kkq0oZTIb5gVgR7cUsGgx5MkrCl6LFnXSjYyaaIEtRudHlw3InE274h3jIv9\/s72-c\/MalthusianIsocline_England1260_1849.JPG","height":"72","width":"72"},"thr$total":{"$t":"2"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-5718581305501434751"},"published":{"$t":"2011-06-11T13:43:00.001-07:00"},"updated":{"$t":"2011-06-11T17:01:06.902-07:00"},"title":{"type":"text","$t":"Trotting ahead of Malthus"},"content":{"type":"html","$t":"\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjaM0fMahm3PtjWN49rN87MGBtvtTqysrR4I4wd4Zm-oDVj0NI07aUMZyPsfOwJIATTyH469olgmsd05o6yLBEBuGjSp10lFPKOTg_fENUHZDc8uHfe4J0vTf_qnjOVRWflgfoa\/s1600\/EnglishWagesVsPopulation1260-1849.JPG\"\u003E\u003Cimg style=\"float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;width: 400px; height: 254px;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjaM0fMahm3PtjWN49rN87MGBtvtTqysrR4I4wd4Zm-oDVj0NI07aUMZyPsfOwJIATTyH469olgmsd05o6yLBEBuGjSp10lFPKOTg_fENUHZDc8uHfe4J0vTf_qnjOVRWflgfoa\/s400\/EnglishWagesVsPopulation1260-1849.JPG\" border=\"0\" alt=\"\"id=\"BLOGGER_PHOTO_ID_5513927457516270050\" \/\u003E\u003C\/a\u003E\u003Ci\u003EProgress in the Malthusian isocline in England from the 13th through 19th centuries, as, among many other factors, horses slowly replaced oxen for farm work and transport, the ratio of draft animals to people increased, and more arable land was devoted to fodder relative to food.(click to enlarge)\u003C\/i\u003E\u003Cbr \/\u003E\u003CP\u003E\u003Cbr \/\u003EI have previously discussed \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2010\/10\/malthus-and-capital.html\"\u003EGreat Britain's unprecedented escape from the Malthusian trap\u003C\/a\u003E.   Such escapes require virtuous cycles, i.e. positive feedback loops that allow productive capital to accumulate faster than it is destroyed.   There are a number of these in Britain in the era of escape from the Black Plague to the 19th century, but two of the biggest involved transportation.   \u003Cbr \/\u003E\u003Cbr \/\u003EOne of these that I've identified was the fodder\/horse\/coal\/lime cycle.  More and better fodder led to more and stronger horses, which hauled (among other things) coal from the mines, initially little more than quarries, that had started opening up in northeastern England by the 13th century.  Coal, like wood, was very costly to transport by land, but relatively cheap to ship by sea or navigable river.  As fodder improved, horses came to replace oxen in the expensive step transporting goods, including coal, from mine, farm, or workshop to port and from port to site of consumption.   Many other regions (e.g. in Belgium and China) had readily accessible coal, but none developed this virtuous cycle so extensively and early.\u003Cbr \/\u003E\u003Cbr \/\u003EAmong the early uses of coal was for heating, fuel for certain industrial processes that required heat (e.g. in brewing beer), and, most interestingly, for burning lime.   Burned lime, slaked with water, could unlike the limestone it came from be easily ground into a fine powder.  This great increase in the surface area of this chemical base, which let it de-acidify the soils on which it was applied.   The soils of Britain tend to be rather acidic, which allows poisonous minerals, such as aluminum, to absorb into plants and blocks the absorption of needed nutrients (especially NPK -- \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2010\/10\/elements-evolution-and-nitrogen-crisis.html\"\u003Enitrogen\u003C\/a\u003E, phosphorous, and potassium).   The application of lime thus increased the productivity of fields for growing both food and fodder, completing the virtuous cycle.   This cycle operated most strongly during the period of the consistent progress in the English Malthusian isocline from the 15th through 19th centuries.\u003Cbr \/\u003E\u003Cbr \/\u003EAnother, related, but even more important cycle was the horse\/transport and institutions\/markets\/specialization cycle.  More and better horses improved the transport of goods generally, including agricultural goods.   John Langdon [1] estimates that a team of horses could transport a wagon of goods twice as fast as a team of oxen, which suggests a factor of four increase in market area.   Add to this the Western European innovations in sailing during the 15th century (especially the trading vessels and colliers that added lateen sails(s) to the traditional square sails, allowing them to sail closer into the wind), and market regions in much of Western Europe and especially Great Britain were greatly expanded in the 15th and 16th centuries.  \u003Cbr \/\u003E\u003Cbr \/\u003EExpanded markets in turn allowed a great elaboration of the division of labor.  Adam Smith famously described how division of labor and specialization greatly improved the productivity of industry, but to some extent this also operated in British agriculture.   Eric Kerridge [2] eloquently described the agricultural regions of Britain, each specializing in different crops and breeds of livestock.  Some were even named after their most famous specializations: \"Butter Country\", \"Cheese Country\", \"Cheshire Cheese Country\", \"Saltings Country\", etc.  These undoubtedly emerged during the 15th through 19th centuries, as prior to that time European agriculture had been dominated by largely self-sufficient manors.   And closing the cycle, there emerged several localities that specialized in breeding a variety of horses.   Most spectacularly different British regions during this period bred no less than three kinds of large draft horses: the Shire Horse, the Suffolk Punch (in that eastern English county) and the Clydesdale (in that Scottish county). \u003Cbr \/\u003E\u003Cbr \/\u003EInstitutions such as advertising and commercial law emerged or evolved to allow lower transaction cost dealings between strangers.   This was probably by far the most non-obvious and difficult aspect of the problem of expanding markets.   Greatly aiding in this evolution was the \u003Ca href=\"http:\/\/szabo.best.vwh.net\/bookconsciousness.html\"\u003Egrowth of literacy\u003C\/a\u003E due to spread in Europe of the inexpensive books produced by printing especially in the 16th and later centuries.  Where in the Middle Ages literacy had been the privilege of a religious elite, with very few on a manor literate beyond the steward, after the 15th century an ever increasing population could read advertisements, order goods remotely, read and even draft contracts.  \u003Cbr \/\u003E\u003Cbr \/\u003EAnother effect of longer-distance transportation was to open up more remote lands, which had been too marginal to support self-sufficient agricultural, to reclamation for use in specialized, trade-dependent agriculture.   The ability to lime soils that were otherwise too acidic also often contributed to reclamation.\u003Cbr \/\u003E\u003Cbr \/\u003EThere were many other improvements to English agriculture and transportation during these crucial centuries, but the above cycles were probably the most important up to the 19th century.  Here I'll mention three important transportation improvements later in this period that in many ways show the culmination of the underlying trend: the development of the turnpike (private toll) roads in the 18th century and the associated development of scheduled transportation services, (2) a great expansion in the use of horse-drawn rail cars in coal and other mines, and (3) the development of river navigations largely in the 17th and 18th centuries, and canals largely in the 18th and early 19th centuries, again almost entirely through private investment and ownership.\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ci\u003EAs coal mines were dug deeper, they were increasingly flooded with water.  Long before the steam engine, these mines were pumped by horse-powered gins.   Here horses on a gin power an axle (bent through a Hooke universal joint) and belt, in this case powering an 18th century farmyard innovation, the threshing machine.  The horses know to not step on the rapidly spinning axle.  I'm going to guess that the horse gin was the inspiration for the merry-go-round:\u003C\/i\u003E\u003Cbr \/\u003E\u003Cp\u003E\u003Cbr \/\u003E\u003Cobject height=\"385\" width=\"480\"\u003E\u003Cparam name=\"movie\" value=\"http:\/\/www.youtube.com\/v\/FW65z0elWb4?fs=1\u0026amp;hl=en_US\"\u003E\u003Cparam name=\"allowFullScreen\" value=\"true\"\u003E\u003Cparam name=\"allowscriptaccess\" value=\"always\"\u003E\u003Cembed src=\"http:\/\/www.youtube.com\/v\/FW65z0elWb4?fs=1\u0026amp;hl=en_US\" type=\"application\/x-shockwave-flash\" allowscriptaccess=\"always\" allowfullscreen=\"true\" height=\"385\" width=\"480\"\u003E\u003C\/embed\u003E\u003C\/object\u003E\u003Cbr \/\u003E\u003Cbr\u003E\u003Cbr \/\u003E\u003Ci\u003EHorse-drawn wagons on rails took coal from mines to docks on navigable rivers and (no small matter) pulled the empty wagons back uphill.  Coal and other ores were hauled by horses over these wagonways over distances of a few kilometers.   They were almost exclusively used for mines, quarries, clay pits, and the like, running from mine mouth to navigable water.  Here's a horse pulling coal on a wagonway:\u003C\/i\u003E\u003Cbr \/\u003E\u003Cp\u003E\u003Cbr \/\u003E\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEioP8Te5TOEwi4lLgbO4KQ5Dw4vULykbpPCF-9TPBSDlB97FF9wuXFN46SF2pFL1TBA44JbKld1kB59zKDRGq1x61dmH3jgn4xV7QDXSgZ8Fs_Y5zRzJt7pV94WgvV7BB05KE94\/s1600\/wagonway_painting.jpg\"\u003E\u003Cimg style=\"margin: 0pt 10px 10px 0pt; float: left; cursor: pointer; width: 320px; height: 240px;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEioP8Te5TOEwi4lLgbO4KQ5Dw4vULykbpPCF-9TPBSDlB97FF9wuXFN46SF2pFL1TBA44JbKld1kB59zKDRGq1x61dmH3jgn4xV7QDXSgZ8Fs_Y5zRzJt7pV94WgvV7BB05KE94\/s400\/wagonway_painting.jpg\" alt=\"\" id=\"BLOGGER_PHOTO_ID_5499210710086050114\" border=\"0\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr\u003E\u003Cbr\u003E\u003Cbr\u003E\u003Cbr\u003E\u003Cbr\u003E\u003Cbr \/\u003E\u003Cbr\u003E\u003Cbr\u003E\u003Cbr\u003E\u003Cbr\u003E\u003Cbr\u003E\u003Cbr \/\u003E\u003Ci\u003EMore horses pulling coal on rails:\u003C\/i\u003E\u003Cbr \/\u003E\u003Cp\u003E\u003Cbr \/\u003E\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjbwdXi90aKnF4IabziOx8XaS6qAM4XlGHctOBo0WJpQ-8KmReIRthIAck8VFAe4NnaYntFOuzua2buSjq_av9hzgJ90NbKV2uvxUeuRLbr9Fpwl8lsW3thOjpW8VoOSAhRRH_y\/s1600\/Wagonway.jpg\"\u003E\u003Cimg style=\"margin: 0pt 10px 10px 0pt; float: left; cursor: pointer; width: 400px; height: 288px;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjbwdXi90aKnF4IabziOx8XaS6qAM4XlGHctOBo0WJpQ-8KmReIRthIAck8VFAe4NnaYntFOuzua2buSjq_av9hzgJ90NbKV2uvxUeuRLbr9Fpwl8lsW3thOjpW8VoOSAhRRH_y\/s400\/Wagonway.jpg\" alt=\"\" id=\"BLOGGER_PHOTO_ID_5506235594069541122\" border=\"0\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr\u003E\u003Cbr\u003E\u003Cbr\u003E\u003Cbr\u003E\u003Cbr\u003E\u003Cbr\u003E\u003Cbr\u003E\u003Cbr \/\u003E\u003Cbr\u003E\u003Cbr\u003E\u003Cbr\u003E\u003Cbr\u003E\u003Cbr\u003E\u003Cbr\u003E\u003Cbr \/\u003E\u003Ci\u003ENow the only thing left of horse-drawn rail are tourist relics:\u003C\/i\u003E\u003Cbr \/\u003E\u003Cp\u003E\u003Cbr \/\u003E\u003Cobject height=\"385\" width=\"480\"\u003E\u003Cparam name=\"movie\" value=\"http:\/\/www.youtube.com\/v\/_e5HI7EfsJU?fs=1\u0026amp;hl=en_US\"\u003E\u003Cparam name=\"allowFullScreen\" value=\"true\"\u003E\u003Cparam name=\"allowscriptaccess\" value=\"always\"\u003E\u003Cembed src=\"http:\/\/www.youtube.com\/v\/_e5HI7EfsJU?fs=1\u0026amp;hl=en_US\" type=\"application\/x-shockwave-flash\" allowscriptaccess=\"always\" allowfullscreen=\"true\" height=\"385\" width=\"480\"\u003E\u003C\/embed\u003E\u003C\/object\u003E\u003Cbr \/\u003E\u003Cbr\u003E\u003Cbr \/\u003E\u003Ci\u003EEven in 1903 the London streets were still powered by horses (see if you can spot the two still-rare horseless carriages):\u003C\/i\u003E\u003Cbr \/\u003E\u003Cp\u003E\u003Cbr \/\u003E\u003Cobject height=\"385\" width=\"480\"\u003E\u003Cparam name=\"movie\" value=\"http:\/\/www.youtube.com\/v\/v-5Ts_i164c?fs=1\u0026amp;hl=en_US\"\u003E\u003Cparam name=\"allowFullScreen\" value=\"true\"\u003E\u003Cparam name=\"allowscriptaccess\" value=\"always\"\u003E\u003Cembed src=\"http:\/\/www.youtube.com\/v\/v-5Ts_i164c?fs=1\u0026amp;hl=en_US\" type=\"application\/x-shockwave-flash\" allowscriptaccess=\"always\" allowfullscreen=\"true\" height=\"385\" width=\"480\"\u003E\u003C\/embed\u003E\u003C\/object\u003E\u003Cbr \/\u003E\u003Cbr\u003E\u003Cbr \/\u003E\u003Ci\u003EAnd now for a taste of the British river navigations and canals:\u003C\/i\u003E\u003Cbr \/\u003E\u003Cp\u003E\u003Cbr \/\u003E\u003Cobject height=\"385\" width=\"480\"\u003E\u003Cparam name=\"movie\" value=\"http:\/\/www.youtube.com\/v\/7MXidB7V9Ik?fs=1\u0026amp;hl=en_US\"\u003E\u003Cparam name=\"allowFullScreen\" value=\"true\"\u003E\u003Cparam name=\"allowscriptaccess\" value=\"always\"\u003E\u003Cembed src=\"http:\/\/www.youtube.com\/v\/7MXidB7V9Ik?fs=1\u0026amp;hl=en_US\" type=\"application\/x-shockwave-flash\" allowscriptaccess=\"always\" allowfullscreen=\"true\" height=\"385\" width=\"480\"\u003E\u003C\/embed\u003E\u003C\/object\u003E\u003Cbr \/\u003E\u003Cbr\u003E\u003Cbr \/\u003E\u003Ci\u003EThe Trent and Mersey canal, built in the late 18th century, could take you from one side of England to the other: \u003C\/i\u003E\u003Cbr \/\u003E\u003Cp\u003E\u003Cbr \/\u003E\u003Cobject height=\"385\" width=\"480\"\u003E\u003Cparam name=\"movie\" value=\"http:\/\/www.youtube.com\/v\/JFHy7O_KhV8?fs=1\u0026amp;hl=en_US\"\u003E\u003Cparam name=\"allowFullScreen\" value=\"true\"\u003E\u003Cparam name=\"allowscriptaccess\" value=\"always\"\u003E\u003Cembed src=\"http:\/\/www.youtube.com\/v\/JFHy7O_KhV8?fs=1\u0026amp;hl=en_US\" type=\"application\/x-shockwave-flash\" allowscriptaccess=\"always\" allowfullscreen=\"true\" height=\"385\" width=\"480\"\u003E\u003C\/embed\u003E\u003C\/object\u003E\u003Cbr \/\u003E\u003Cbr\u003E\u003Cbr \/\u003E\u003Ci\u003EWhere Romans had used aqueducts to move water, the British used them in their canal system to move goods where their canals needed to span valleys.  A large number of aqueducts were built from stone in Britain during its canal boom in the 18th century.  This was the original Barton Aqueduct on the Bridgewater Canal (1760s): \u003C\/i\u003E\u003Cbr \/\u003E\u003Cp\u003E\u003Cbr \/\u003E\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEixTlznsqjj_mDDS9mpbLwM1JIU4kt1pxlmuO1OGcR-50J2XVH0f7uDzrd7ffUvJK_-SpICebGTWmuBcVDbzzLkGxDHaH6eIVIMYHFvUxD9gak9pkwHfl3jxYqMd_1L8HOwzPMN\/s1600\/Canals_BridgewaterCanal_BartonAquedctOld.jpg\"\u003E\u003Cimg style=\"float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;width: 400px; height: 284px;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEixTlznsqjj_mDDS9mpbLwM1JIU4kt1pxlmuO1OGcR-50J2XVH0f7uDzrd7ffUvJK_-SpICebGTWmuBcVDbzzLkGxDHaH6eIVIMYHFvUxD9gak9pkwHfl3jxYqMd_1L8HOwzPMN\/s400\/Canals_BridgewaterCanal_BartonAquedctOld.jpg\" border=\"0\" alt=\"\"id=\"BLOGGER_PHOTO_ID_5499205225853888610\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr\u003E\u003Cbr\u003E\u003Cbr\u003E\u003Cbr\u003E\u003Cbr\u003E\u003Cbr\u003E\u003Cbr \/\u003E\u003Cbr\u003E\u003Cbr\u003E\u003Cbr\u003E\u003Cbr\u003E\u003Cbr\u003E\u003Cbr\u003E\u003Cbr \/\u003E\u003Ci\u003EIn the late 18th century the \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2006\/01\/letter-from-industrial-revolution.html\"\u003Esmelting of iron using coal\u003C\/a\u003E instead of wood was perfected.  Soon thereafter iron became cheap enough to use for constructing bridges and aqueducts.   One result was the spectacular Pontcysyllte Aqueduct in Wales.  What in the early 19th century was a towpath for horses is now a sidewalk for tourists.   Careful, it's a long way down!\u003C\/i\u003E\u003Cbr \/\u003E\u003Cp\u003E\u003Cbr \/\u003E\u003Cobject height=\"385\" width=\"640\"\u003E\u003Cparam name=\"movie\" value=\"http:\/\/www.youtube.com\/v\/t0au-2tbAJI?fs=1\u0026amp;hl=en_US\"\u003E\u003Cparam name=\"allowFullScreen\" value=\"true\"\u003E\u003Cparam name=\"allowscriptaccess\" value=\"always\"\u003E\u003Cembed src=\"http:\/\/www.youtube.com\/v\/t0au-2tbAJI?fs=1\u0026amp;hl=en_US\" type=\"application\/x-shockwave-flash\" allowscriptaccess=\"always\" allowfullscreen=\"true\" height=\"385\" width=\"640\"\u003E\u003C\/embed\u003E\u003C\/object\u003E\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Cspan style=\"font-weight:bold;\"\u003EReferences\u003C\/span\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EEric Kerridge, \u003Cspan style=\"font-style:italic;\"\u003EThe Farmers of Old England\u003C\/span\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EJohn Langdon, \u003Cspan style=\"font-style:italic;\"\u003EHorses, Oxen, and Technological Innovation\u003Cbr \/\u003E\u003C\/span\u003E"},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/5718581305501434751\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/5718581305501434751","title":"0 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/5718581305501434751"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/5718581305501434751"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2011\/06\/trotting-ahead-of-malthus.html","title":"Trotting ahead of Malthus"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"media$thumbnail":{"xmlns$media":"http://search.yahoo.com/mrss/","url":"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjaM0fMahm3PtjWN49rN87MGBtvtTqysrR4I4wd4Zm-oDVj0NI07aUMZyPsfOwJIATTyH469olgmsd05o6yLBEBuGjSp10lFPKOTg_fENUHZDc8uHfe4J0vTf_qnjOVRWflgfoa\/s72-c\/EnglishWagesVsPopulation1260-1849.JPG","height":"72","width":"72"},"thr$total":{"$t":"0"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-2436033396110339515"},"published":{"$t":"2011-05-28T16:35:00.001-07:00"},"updated":{"$t":"2011-05-28T18:50:28.210-07:00"},"title":{"type":"text","$t":"Bitcoin, what took ye so long?"},"content":{"type":"html","$t":"So asks \u003Ca href=\"http:\/\/www.bitcoinweekly.com\/articles\/bitcoin-is-worse-is-better\"\u003Egwern\u003C\/a\u003E in a spectacular display of hindsight.\u003Cbr \/\u003E\u003Cbr \/\u003EThe short answer about why it took so long is that the bit gold\/Bitcoin ideas were nowhere remotely close to being as obvious gwern suggests.   They required a very substantial amount of unconventional thought, not just about the security technologies gwern lists  (and I'm afraid the list misses one of the biggest ones, Byzantine-resilient peer-to-peer replication), but about how to choose and put together these protocols and why.    Bitcoin is not a list of cryptographic features, it's a very complex system of interacting mathematics and protocols in pursuit of what was a very unpopular goal. \u003Cbr \/\u003E\u003Cbr \/\u003EWhile the security technology is very far from trivial, the \"why\" was by far the biggest stumbling block -- nearly everybody who heard the general idea thought it was a very bad idea.   Myself, Wei Dai, and Hal Finney were the only people I know of who liked the idea (or in Dai's case his related idea) enough to pursue it to any significant extent until Nakamoto (assuming Nakamoto is not really Finney or Dai).   Only Finney (\u003Ca href=\"http:\/\/classic-web.archive.org\/web\/20071222072154\/http:\/\/rpow.net\/\"\u003ERPOW\u003C\/a\u003E) and Nakamoto were motivated enough to actually implement such a scheme.\u003Cbr \/\u003E\u003Cbr \/\u003EThe \"why\" requires coming to an accurate understanding of the nature of two difficult and almost always misunderstood topics, namely \u003Ca href=\"http:\/\/szabo.best.vwh.net\/ttps.html\"\u003Etrust\u003C\/a\u003E and the nature of money.  The overlap between cryptographic experts and libertarians who might sympathize with such a \"gold bug\" idea is already rather small, since most cryptographic experts earn their living in academia and share its political biases.   Even among this uncommon intersection as stated very few people thought it was a good idea.  Even \u003Ca href=\"http:\/\/www.poorandstupid.com\/2008_04_13_chronArchive.asp#3079142232624095259\"\u003Egold bugs\u003C\/a\u003E didn't care for it because we already have real gold rather than mere bits and we can pay online simply by issuing digital certificates based on real gold stored in real vaults, a la the formerly popular \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/E-gold\"\u003Ee-gold\u003C\/a\u003E.  On top of the plethora of these misguided reactions and criticisms, there remain many open questions and arguable points about these kinds of technologies and currencies, many of which can only be settled by actually fielding them and seeing how they work in practice, both in economic and security terms.  \u003Cbr \/\u003E\u003Cbr \/\u003EHere are some more specific reasons why the ideas behind Bitcoin were very far from obvious:\u003Cbr \/\u003E\u003Cbr \/\u003E(1) only a few people had read of the bit gold ideas, which although I came up with them in 1998  (at the same time and on the same private mailing list where Dai was coming up with b-money -- it's a long story) were mostly not described in public until \u003Ca href=\"http:\/\/classic-web.archive.org\/web\/20060329122942\/http:\/\/unenumerated.blogspot.com\/2005\/12\/bit-gold.html\"\u003E2005\u003C\/a\u003E, although various pieces of it I described earlier, for example the crucial Byzantine-replicated chain-of-signed-transactions part of it which I generalized into what I call \u003Ca href=\"http:\/\/szabo.best.vwh.net\/securetitle.html\"\u003Esecure property titles\u003C\/a\u003E.\u003Cbr \/\u003E\u003Cbr \/\u003E(2) Hardly anybody actually understands money.  Money just doesn't work like that, I was told fervently and often.  Gold couldn't work as money until it was already shiny or useful for electronics or something else besides money, they told me.  (Do insurance services also have to start out useful for something else, maybe as power plants?)  This common argument coming ironically from libertarians who misinterpreted Menger's account of the origin of money as being the only way it could arise (rather than an account of how it could arise) and, in the same way misapplying Mises' regression theorem.   Even though I had rebutted these arguments in my study of the \u003Ca href=\"http:\/\/szabo.best.vwh.net\/shell.html\"\u003Eorigins of money\u003C\/a\u003E, which  I humbly suggest should be should be required reading for anybody debating the economics of Bitcoin.\u003Cbr \/\u003E\u003Cbr \/\u003EThere's nothing like Nakamoto's incentive-to-market scheme to change minds about these issues.  :-)   Thanks to RAMs full of coin with \"scheduled deflation\", there are now no shortage of people willing to argue in its favor.\u003Cbr \/\u003E\u003Cbr \/\u003E(3) Nakamoto improved a significant security shortcoming that my design had, namely by requiring a proof-of-work to be a node in the Byzantine-resilient peer-to-peer system to lessen the threat of an untrustworthy party controlling the majority of nodes and thus corrupting a number of important security features.   Yet another feature obvious in hindsight, quite non-obvious in foresight.\u003Cbr \/\u003E\u003Cbr \/\u003E(4)  Instead of my automated \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2008\/04\/bit-gold-markets.html\"\u003Emarket\u003C\/a\u003E to account for the fact that the difficulty of puzzles can often radically change based on hardware improvements and cryptographic breakthroughs (i.e. discovering algorithms that can solve proofs-of-work faster), and the unpredictability of demand, Nakamoto designed a Byzantine-agreed algorithm adjusting the difficulty of puzzles.   I can't decide whether this aspect of Bitcoin is more feature or more bug, but it does make it simpler."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/2436033396110339515\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/2436033396110339515","title":"50 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/2436033396110339515"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/2436033396110339515"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2011\/05\/bitcoin-what-took-ye-so-long.html","title":"Bitcoin, what took ye so long?"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"50"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-644205452579542092"},"published":{"$t":"2011-05-23T23:12:00.000-07:00"},"updated":{"$t":"2011-05-24T14:20:29.387-07:00"},"title":{"type":"text","$t":"Lactase persistence and quasi-pastoralism"},"content":{"type":"html","$t":"One of the more interesting and well-documented events of recent human evolution is the rise of adult lactase persistence, which allows some of us to fully digest milk as adults.  All mammalian young, including human, can digest the sugar lactose found in their mother's milk.  Essential to this digestion is the enzyme lactase.   However, mammals typically lose this ability after being weaned, as a regulatory genes turns off expression of the lactase gene.   This loss of lactase production, and thus of lactose digestion, also occurs in most humans: most adults who consume milk don't digest most of the lactose due to insufficient lactase enzymes, and often develop digestive discomfort, a condition called lactose intolerance.   However, at least once in Africa, once in Europe, and possibly in Arabia arose alleles in the regulatory gene that kept the lactase in production in adulthood.  The spread of these new alleles probably occurred in cultures that already had domesticated milk-producing herds, the milk from which played a crucial role in their childrens' diets and indirectly in adult diets via fermentation (which, at some cost, convert some but not all of the lactose to molecules more readily digested by adults).\u003Cbr \/\u003E\u003Cbr \/\u003EThe lactase regulation mutation that spread most dramatically was in Europe, until by now it occurs in nearly the entire population of northwest European countries.\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjgFboQB0v6BPMUTkC5i6MmL16i6MUHIBLe_3V9D25jlpnFArvAKyt_BjTHgdqukaa_uxi9fq3gDU2e2lhwYARcnVTrN5bllbU4ZM7OdIC7Sop1WzqGiNYfDiKwWp2r3NAbLkuf\/s1600\/Lactase+map_PercentLactoseIntolerant.png\"\u003E\u003Cimg style=\"float:left; margin:0 0 10px 10px;cursor:pointer; cursor:hand;width: 400px; height: 350px;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjgFboQB0v6BPMUTkC5i6MmL16i6MUHIBLe_3V9D25jlpnFArvAKyt_BjTHgdqukaa_uxi9fq3gDU2e2lhwYARcnVTrN5bllbU4ZM7OdIC7Sop1WzqGiNYfDiKwWp2r3NAbLkuf\/s400\/Lactase+map_PercentLactoseIntolerant.png\" border=\"0\" alt=\"\"id=\"BLOGGER_PHOTO_ID_5610144891832961666\" \/\u003E\u003C\/a\u003E\u003Ci\u003EModern frequency of lactase non-persistence as percent of the population in Europe.\u003C\/i\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EThis European lactase persistence allele soon came to be most concentrated along the Baltic and North Seas, what I call the core area of lactase persistence.  Due to the heavy use of cattle in the core region, lactase persistence spread rapidly there, surpassing half the population by about 1500 BC.\u003Cbr \/\u003E\u003Cbr \/\u003EThe European lactase persistent populations played a substantial role in world history.  The Baltic and North Sea coasts were the source of most of the cultures that conquered and divvied up the Western Roman Empire in the fourth through seventh centuries:  Angles and Saxons (founded England), Ostrogoths and Lombards (Italy), Visigoths (Spain), Vandals (conquered north Africa), Frisians (the Low Countries) and Franks (France) among others.   Later the lactase persistence core would produce the Vikings, who explored and conquered from Russia to North America and as far south as the Mediterranean, and the Normans, who invaded England, Sicly, and southern Italy led the Crusades among other exploits.   Still later mostly lactase persistent populations would found the worldwide Portuguese, Spanish, French, Dutch and British empires and originate the agricultural and industrial revolutions.  \u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEh7FbpnG39x-MuKmE5YyiFAAGurknpmL9xqWm5qOuaK_lptu4RaUho6Ya-uv5Ssn9ZMylAmSK5GXSsr-2VsC4ejD2_zPnCQKYWVkwVrq072llJQgXM2MZ9SR3B4wwKrNAli7nks\/s1600\/LactasePersistenceSelectionOverTime.JPG\"\u003E\u003Cimg style=\"float:right; margin:0 0 10px 10px;cursor:pointer; cursor:hand;width: 400px; height: 239px;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEh7FbpnG39x-MuKmE5YyiFAAGurknpmL9xqWm5qOuaK_lptu4RaUho6Ya-uv5Ssn9ZMylAmSK5GXSsr-2VsC4ejD2_zPnCQKYWVkwVrq072llJQgXM2MZ9SR3B4wwKrNAli7nks\/s400\/LactasePersistenceSelectionOverTime.JPG\" border=\"0\" alt=\"\"id=\"BLOGGER_PHOTO_ID_5610145183159605506\" \/\u003E\u003C\/a\u003E\u003Ci\u003EEstimated spread of the European lactase persistence allele in the core region in northern Europe over time.\u003C\/i\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EThis was by no means the only gene evolving in the core.  Indeed, the same cattle-heavy agriculture of northern Europe, probably originating in and migrating from central Europe, also gave rise to a great diversity of genes encoding cow milk proteins. \u003Cbr \/\u003E\u003Cbr \/\u003E\u003Cblockquote\u003EWe found substantial geographic coincidence between high diversity in cattle milk genes, locations of the European Neolithic cattle farming sites (\u003E5,000 years ago) and present-day lactose tolerance in Europeans.  This suggests a gene-culture  coevolution between cattle and humans. \u003Ca href=\"http:\/\/web.unife.it\/progetti\/genetica\/Giorgio\/PDFfiles\/ng2003.pdf\"\u003E[ref]\u003C\/a\u003E\u003C\/blockquote\u003E\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhmrXEAq9bO_HhtAA14lbKP4MQXxb26tczVVfV5aSeO17F2eUwb13O7HqC2kYu7hyXvs6JJMvK4oB5bjJHH_jZex_jH4PlS2Qu3Dka5MZfYJRcOS-B4XaNoAtaxbnr7lUj9N1aN\/s1600\/CowMilkProteinGenesB_HumanLactoseToleranceGenesC.PNG\"\u003E\u003Cimg style=\"float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;width: 305px; height: 400px;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhmrXEAq9bO_HhtAA14lbKP4MQXxb26tczVVfV5aSeO17F2eUwb13O7HqC2kYu7hyXvs6JJMvK4oB5bjJHH_jZex_jH4PlS2Qu3Dka5MZfYJRcOS-B4XaNoAtaxbnr7lUj9N1aN\/s400\/CowMilkProteinGenesB_HumanLactoseToleranceGenesC.PNG\" border=\"0\" alt=\"\"id=\"BLOGGER_PHOTO_ID_5610143286335938930\" \/\u003E\u003C\/a\u003E\u003Ci\u003E(b) diversity of cow milk protein alleles, (c) frequency of human lactase persistence.\u003C\/i\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EAssociated with the lactase persistence core was a unique system of agriculture I call quasi-pastoralism.   It can be distinguished from the normal agriculture that was standard to civilization in southern Europe, the Middle East, and South and East Asia, in having more land given up to pasture and arable fodder crops than to arable food crops.   Nearly all agriculture combined livestock with food crops, due to the crucial role of livestock in transporting otherwise rapidly depleted nutrients, especially nitrogen, from the hinterlands to the arable.   However, as arable produces far more calories, and about as much protein, per acre, civilizations typically maximized their populations by converting as much of their land as possible to arable and putting almost all the arable to food crops instead of fodder, leaving only enough livestock for plowing and the occasional meat meal for the elite.  Quasi-pastoral societies, on the other hand, devoted far more land to livestock and worked well where the adults could directly consume the milk.\u003Cbr \/\u003E \u003Cbr \/\u003EQuasi-pastoralism can be distinguished from normal, i.e. nomadic, pastoralism in being stationary and having a substantial amount of land given over to arable crops, both food (for the people) and fodder (for the livestock).    A precondition for quasi-pastoralism was the stationary bandit politics of civilization rather than the far more wasteful roving bandit politics of nomads. \u003Cbr \/\u003E\u003Cbr \/\u003ECompared to the normal arable agriculture of the ancient civilizations, quasi-pastoralism lowered the costs of transporting food -- both food on hoof and, in more advanced quasi-pastoral societies such as late medieval England, food being transported by the greater proportion of draft animals.   This increased the geographical extent of markets and thus the \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2009\/04\/polynesians-vs-adam-smith.html\"\u003Edivision of labor.\u003C\/a\u003E   England and the Low Countries, among other core areas, gave rise to regions that specialized in cheese, butter, wool, and meat of various kinds (fresh milk itself remained hard to transport until refrigeration).  A greater population of draft animals also made grain and wood (for fuel and construction) cheaper to transport.  With secure property rights, investments in \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2010\/10\/malthus-and-capital.html\"\u003Eagricultural capital\u003C\/a\u003E could meet or exceed those in a normal arable society.    The population of livestock had been mainly limited, especially in northern climates, by the poor pasture available in the winter and early spring.  While hay -- the growth of fodder crops in the summer for storage and use in winter and spring -- is reported in the Roman Empire, the first known use of a substantial fraction of arable land for hay occurred in the cattle-heavy core in northern Europe.  \u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgZ1DATssONBBtHA3hwQMlLMOjYC7alICl2iXCzUm9zyV3scnWZ9VK2NvY33-Y4_VIdKaXF2vK5Kkq0oZTIb5gVgR7cUsGgx5MkrCl6LFnXSjYyaaIEtRudHlw3InE274h3jIv9\/s1600\/MalthusianIsocline_England1260_1849.JPG\"\u003E\u003Cimg style=\"float:right; margin:0 0 10px 10px;cursor:pointer; cursor:hand;width: 600px; height: 384px;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgZ1DATssONBBtHA3hwQMlLMOjYC7alICl2iXCzUm9zyV3scnWZ9VK2NvY33-Y4_VIdKaXF2vK5Kkq0oZTIb5gVgR7cUsGgx5MkrCl6LFnXSjYyaaIEtRudHlw3InE274h3jIv9\/s400\/MalthusianIsocline_England1260_1849.JPG\" border=\"0\" alt=\"\"id=\"BLOGGER_PHOTO_ID_5610180434904674402\" \/\u003E\u003C\/a\u003E\u003Ci\u003EEngland's unprecedented escape from the Malthusian trap (click to enlarge).\u003C\/i\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EHay, especially hay containing large proportions of nitrogen-rich vetch and clover, allowed livestock populations in the north to greatly increase.   The heavy use of livestock made for a greater substitution of animal for human labor on the farm as well as for transport and war, leading to more labor available for non-agricultural pursuits such as industry and war.  The great population of livestock in turn provided more transport of \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2010\/10\/elements-evolution-and-nitrogen-crisis.html\"\u003Enitrogen\u003C\/a\u003E and other otherwise rapidly depleted nutrients from hinterlands and creek-flooded meadows to arable than in normal arable societies, leading to greater productivity of the arable that could as much as offset the substantial proportion of arable devoted to fodder.     The result was that agricultural productivity by the 19th century was growing so rapidly that it outstripped even a rapidly growing population and Great Britain became the first country to escape from the Malthusian trap.\u003Cbr \/\u003E\u003Cbr \/\u003EThere are thus, in summary, deep connections between the co-evolution of milk protein in cows and lactase persistence in humans, the flow of nitrogen and other crucial nutrients from their sources to the fields, quasi-pastoralism with its stationary banditry and secure property rights, and the eventual agricultural and industrial revolutions of Britain, which we have just begun to explore."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/644205452579542092\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/644205452579542092","title":"13 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/644205452579542092"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/644205452579542092"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2011\/05\/lactase-persistence-and-quasi.html","title":"Lactase persistence and quasi-pastoralism"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"media$thumbnail":{"xmlns$media":"http://search.yahoo.com/mrss/","url":"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjgFboQB0v6BPMUTkC5i6MmL16i6MUHIBLe_3V9D25jlpnFArvAKyt_BjTHgdqukaa_uxi9fq3gDU2e2lhwYARcnVTrN5bllbU4ZM7OdIC7Sop1WzqGiNYfDiKwWp2r3NAbLkuf\/s72-c\/Lactase+map_PercentLactoseIntolerant.png","height":"72","width":"72"},"thr$total":{"$t":"13"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-2233147428775172532"},"published":{"$t":"2011-02-15T21:02:00.000-08:00"},"updated":{"$t":"2011-02-16T00:17:23.703-08:00"},"title":{"type":"text","$t":"Some speculations on the frontier below our feet"},"content":{"type":"html","$t":"The biggest problem we face with the frontier below that we're literally in the dark.   We have a number of crude geophysical techniques (seismology, gravity field, electromagnetic, etc.) but none of them allow creating a detailed map like we can make of the surface of a distant moon of Saturn or even of a cloud-covered planet like Venus.   So in some important ways we are more ignorant of the ground a few hundred meters down in most places on our own planet than we are of the surface of most of the other planets and moons in our solar system.   We know less about the distribution of the common molecules below the earth's crust, only 35 kilometers below our feet, than we do of the distribution of those molecules on the surfaces of dust clouds in distant galaxies.  \u003Cbr \/\u003E\u003Cbr \/\u003EOne possible fix to this earth-blindness is the \u003Ca href=\"http:\/\/www.phys.hawaii.edu\/~sdye\/hnsc.html\"\u003Eneutrino\u003C\/a\u003E, and more speculatively and generally, dark matter.  We can detect neutrinos and anti-neutrinos by (I'm greatly oversimplifying here, physicists please don't cringe) setting up big vats of clear water in complete darkness and lining them with ultra-sensitive cameras.  The feature of neutrinos is that they rarely interact with normal matter, so that most of them can fly from their source (nuclear reactions in the earth or sun) through the earth and still be detected.  The bug is that almost all of them fly through the detector, too.   Only a tiny fraction hit a nucleus in the water and interact, giving off a telltale photon (a particle of light) which is picked up by one of the cameras.   It is common now to detect neutrinos from nuclear reactors and the sun, and more recently we have started using some crude instruments to detect \u003Ca href=\"http:\/\/geoscience.lngs.infn.it\/Program.htm\"\u003Egeo-neutrinos\u003C\/a\u003E (i.e. neutrinos or anti-neutrinos generated by the earth not the sun).  With enough vats and cameras we may be able to detect enough of these (anti-)neutrinos from nuclear reactions (typically radioactive decays) in the earth's crust to make a detailed radioisotope map (and thus go a long way towards a detailed chemical map) of the earth's interior.  For the first time we'd have detailed pictures of the earth's interior instead of very indirect and often questionable inferences.   A 3D Google Earth.    These observatories may also be a valuable intelligence tool, detecting secret nuclear detonations and reactors being used to construct nuclear bomb making material, via the tell-tale neutrinos these activities give off. \u003Cbr \/\u003E\u003Cbr \/\u003EOther forms of weakly interacting particles, the kind that probably make up dark matter, may be much more abundant but interact even more weakly than neutrinos.  So weakly we haven't even detected them yet.  They're just the best theory we have to explain why galaxies hang together: if they consisted only of the visible matter they should fly apart.   Nevertheless, depending on what kinds of dark particles we discover, and on what ways they weakly interact with normal matter, we may find more ways of taking pictures of the earth's interior. \u003Cbr \/\u003E\u003Cbr \/\u003EWhat might we find there?  One possibility: an abundance of hydrogen created by a variety of geological reactions and sustained by the lack of oxygen.  Scientists have discovered that the predominant kinds of rocks in the earth's crust contain quite a bit of hydrogen  trapped inside them: on average about \u003Ca href=\"http:\/\/www.astrobio.net\/exclusive\/2774\/deep-hydrogen\"\u003Efive liters of hydrogen per cubic meter of rock. \u003C\/a\u003E   This probably holds at least to the bottom of the lithosphere.   If so that region contains about 150 million trillion liters of hydrogen.  \u003Cbr \/\u003E\u003Cbr \/\u003ESufficiently advanced neutrino detectors might be able to see this hydrogen via its tritium, which when it decays gives off a neutrino.  Tritium with its half-life of about 12 years is very rare, but is created when a more common hydrogen isotope, deuterium, captures a neutrino from a more common nuclear event (the decay of radioisotopes that are common in the earth's crust).  About one-millionth of the deuterium in the heavy water moderating a nuclear reactor is converted into tritium in a year.  This rate will be far less in the earth's interior but still may be significant enough compared to tritium's half-life that a sufficiently sensitive and calibrated (with respect to the much greater stream of such neutrinos coming from the sun) neutrino detector of the future may detect hydrogen via such geotritium-generated neutrinos.   However, the conversion of deuterium to tritium in the earth's core may be so rare that we will be forced to infer the abundance of hydrogen from the abundance of other elements.  Almost all elements have radioisotopes that give off neutrinos when they decay, and most of these are probably much more common in the earth's core than tritium.\u003Cbr \/\u003E\u003Cbr \/\u003EAnother possibility for detecting hydrogen is, instead of looking for geo-neutrinos, to look at how the slice of earth one wants to study absorbs solar neutrinos.   This would require at least two detectors, one to look at the (varying) unobstructed level of solar neutrinos and the other lined up so that the geology being studied is between that detector and the sun.   This differential technique may work even better if we have a larger menagerie of weakly interacting particles (\"dark matter\") to work with, assuming that variations in nuclear structure can still influence how these particles interact with matter.\u003Cbr \/\u003E\u003Cbr \/\u003EIt's possible that a significant portion the hydrogen known to be locked into the earth's rocks has been freed or can be freed merely by the process of drilling through that rock, exposing the highly pressurized hydrogen in deep rocks to the far lower pressures above.   This is suggested by the \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Kola_Well\"\u003EKola Superdeep Borehole\u003C\/a\u003E, one of those abandoned Cold War super-projects.  In this case instead of flying rockets farther than the other guy, the goal was to drill deeper than the other guy, and the Soviets won this particular contest: over twelve kilometers straight down, still the world record.  They encountered something rarely encountered in shallower wells: a \"large quantity of hydrogen gas, with the mud flowing out of the hole described as 'boiling' with hydrogen.\"\u003Cbr \/\u003E\u003Cbr \/\u003EThe consequences of abundant geologic hydrogen could be two-fold.  First, since a variety of geological and biological processes \u003Ca href=\"http:\/\/plato.acadiau.ca\/isme\/Symposium11\/pedersen.PDF\"\u003Econvert hydrogen to methane \u003C\/a\u003E(and the biological conversion, by bacteria appropriately named \"methanogens\", is the main energy source for the deep biosphere, which probably substantially outweighs the surface biosphere), it suggests that our planet's supply of methane (natural gas) is far greater than of oil or currently proven natural gas reserves, so that (modulo worries about carbon dioxide in the atmosphere) our energy use can continue to grow for many decades to come courtesy of this methane.     \u003Cbr \/\u003E\u003Cbr \/\u003ESecond, the Kola well suggests the possibility that geologic hydrogen itself may become an energy source, and one that frees us from having to put more carbon dioxide in the atmosphere.  The \"hydrogen economy\" some futurists go one about, consisting of fuel-cell-driven machinery, depends on \u003Ci\u003Emaking\u003C\/i\u003E hydrogen which in turn requires a cheap source of electricity.  This is highly unlikely unless we figure out a way to make nuclear power much cheaper.  But by contrast geologic hydrogen doesn't have to be made, it only has to be extracted and purified. If just ten percent of the hydrogen in the lithosphere turns out to be recoverable over the next 275 years, that's enough by my calculations to enable a mild exponential growth in energy usage of 1.5%\/year over that entire period (starting with the energy equivalent usage of natural gas today).  During most of that period human population is expected to be flat or falling, so practically that entire increase would be in per capita usage.  To put this exponential growth in perspective, at the end of that period a person would be consuming, directly or indirectly, about 330 times as much hydrogen energy as they consume in natural gas energy today.   And since it's hydrogen, not hydrocarbon, burning it would not add any more carbon to the atmosphere, just a small amount of water.\u003Cbr \/\u003E\u003Cbr \/\u003ELuckily our drilling technology is improving: the Kola well took nearly two decades to drill at a leisurely pace of about 2 meters per day.   Modern oil drilling often proceeds at 200 meters\/day or higher, albeit not to such great depths.  Synthetic diamond, used to coat the tips of the toughest drills, is much cheaper than during the Cold War and continues to fall in price, and we have better materials for withstanding the high temperatures and pressures encountered when we get to the bottom of the earth's crust and proceeding into the upper mantle (where the Kola project got stymied: their goal was 15 kilometers down).\u003Cp\u003E\u003Cbr \/\u003E\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEixUqDHAmHC_MDYLmLzLfanIDwmandH77j29qKz5kXPZgZZb64rWdgHI2twRpXW2K8uUPDKUkob8Pgdf-mZ1DJwrNHEqkRKmqWImctGPjW86yMF2OXrj6zKlpZXcos0AqFGDHfZ\/s1600\/PolycrystallineDiamondCompact_DrillBit.gif\"\u003E\u003Cimg style=\"float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;width: 209px; height: 211px;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEixUqDHAmHC_MDYLmLzLfanIDwmandH77j29qKz5kXPZgZZb64rWdgHI2twRpXW2K8uUPDKUkob8Pgdf-mZ1DJwrNHEqkRKmqWImctGPjW86yMF2OXrj6zKlpZXcos0AqFGDHfZ\/s400\/PolycrystallineDiamondCompact_DrillBit.gif\" border=\"0\" alt=\"\"id=\"BLOGGER_PHOTO_ID_5574188873400675634\" \/\u003E\u003C\/a\u003E\u003Ci\u003EA modern drill bit studded with polycrystalline diamond\u003C\/i\u003E\u003Cp\u003E\u003Cbr \/\u003EOf course, I must stress that the futuristic projections given above are quite speculative.  We may not figure out how to affordably build a network of neutrino detecting vats massive enough or of high enough precision to create detailed chemical maps of the earth's interior.  And even if we create such maps, we may discover not so much hydrogen, or that the hydrogen is hopelessly locked up in the rocks and that the Kola experience was a fluke or misinterpretation.   Nevertheless, if nothing else this exercise shows, despite all the marvelous stargazing science that we have done, how much mysterious ground we have below our shoes."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/2233147428775172532\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/2233147428775172532","title":"1 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/2233147428775172532"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/2233147428775172532"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2011\/02\/some-speculations-on-frontier-below-our.html","title":"Some speculations on the frontier below our feet"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"media$thumbnail":{"xmlns$media":"http://search.yahoo.com/mrss/","url":"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEixUqDHAmHC_MDYLmLzLfanIDwmandH77j29qKz5kXPZgZZb64rWdgHI2twRpXW2K8uUPDKUkob8Pgdf-mZ1DJwrNHEqkRKmqWImctGPjW86yMF2OXrj6zKlpZXcos0AqFGDHfZ\/s72-c\/PolycrystallineDiamondCompact_DrillBit.gif","height":"72","width":"72"},"thr$total":{"$t":"1"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-8395672756688321356"},"published":{"$t":"2011-02-09T16:57:00.000-08:00"},"updated":{"$t":"2011-02-09T18:25:37.527-08:00"},"title":{"type":"text","$t":"Great stagnation or external growth?"},"content":{"type":"html","$t":"Tyler Cowen posits that we are going through a \u003Ca href=\"http:\/\/blog.american.com\/?p=26283\"\u003EGreat Stagnation\u003C\/a\u003E.   Civilization has harvested the low hanging fruit of the internal combustion engine, electricity, and so on that drove great increases in value and productivity from the end of the nineteenth century.  But we have made so few similarly productive discoveries in recent decades that as a result progress is slowing down.  Markets have thus overestimated economic growth, resulting in the dot-com bubble and crash and the more recent market problems as real estate prices failed to keep pace with expectations.  This thesis echoes much that Peter Thiel and others have been saying, that the financial industry has, in its expectations about financial returns, been counting on 20th century levels of economic growth in the developed world but instead has hit the reality of lower growth rates here, resulting in market volatility and drops.\u003Cbr \/\u003E\u003Cbr \/\u003EThese pessimistic observations of long-term economic growth are in many ways a much needed splash of cold water in the face for the Kurzweilian \"\u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2011\/01\/singularity.html\"\u003EThe Singularity is Near\u003C\/a\u003E\" crowd, the people who think nearly everything important has been growing exponentially.  And it is understandable for an economist to observe a great stagnation because there has indeed been a great stagnation in real wages as economists measure them: real wages in the developed world grew spectacularly during most of the 20th century but have failed to grow during the last thirty years.  \u003Cbr \/\u003E\u003Cbr \/\u003ENevertheless Cowen et. al. are being too pessimistic, reacting too much to the recent market problems.  (Indeed the growing popularity of pessimistic observations of great stagnations, peak oil, and the like strongly suggest it's a good time to be long the stock markets!)    These melancholy stories fail to take into account the great recent increases in value that are subjectively obvious to almost all good observers who have lived through the last twenty years but that economists have been unable to measure. \u003Cbr \/\u003E\u003Cbr \/\u003EIn many traditional industries, such as transportation and real estate, the pessimistic thesis is largely true.  The real costs of commuting, buying real estate near where my friends are and where I want to work, of getting a traditional college education, and a number of other important things have risen significantly over the past twenty years.   These industries are going backwards, becoming less efficient, delivering less value at higher cost: if we could measure their productivity it would be falling.\u003Cbr \/\u003E\u003Cbr \/\u003EOn the other hand, the costs of manufacturing goods whose costs primarily reflect manufacturing rather than raw materials has fallen substantially over the least twenty years, at about the same rate as in prior decades.  Of course, most of these gains have been in the developing and BRICs countries, for a variety of reasons, such as the higher costs of regulation in the developed world and the greater access to cheaper labor elsewhere, but those of us in the U.S., Europe and Japan still benefit via cheap imports that allow us to save more of our money for other things.  But perhaps even more importantly, outside of traditional education and mass media we have seen a knowledge and entertainment sharing revolution of unprecedented value.    I argue that what looks like a Great Stagnation in the traditional market economy is to a significant extent a product of a vast growth in economic value that has occurred on the Internet and largely outside of the traditional market economy, and a corresponding cannibalization of and brain drain from traditional market businesses.\u003Cbr \/\u003E\u003Cbr \/\u003EMost of the economic growth during the Internet era has been largely unmonetized, i.e. external to the measurable market.   This is most obvious for completely free services like Craig's List, Wikipedia, many blogs, open source software, and many other services based on content input by users.   But ad-funded Internet services also usually create a much greater value than is captured by the advertising revenues.  These include search, social networking, many online games, broadcast messaging, and many other services.    Only a small fraction of the Internet's overall value has been monetized.   In other words, the vast majority of the Internet's value is what economists call an externality: it is external to the measurable prices of the market.  Of course, since this value is unmeasured, this thesis is extremely hard to prove or disprove, and can hardly be called scientific; mainly it just strikes me as subjectively obvious.   \"Social science\" can't explain most things about society and this is one of them.\u003Cbr \/\u003E\u003Cbr \/\u003EWhat's worse for the traditional market (as opposed to this recent tsunami of unmonetized voluntary information exchange), this tidal wave of value has greatly reduced the revenues of certain industries.   The direct connection the Internet provides between authors and the readers put out of business many bookstores.  Online classifieds and free news sources have cannibalized newspapers and magazines.   Wikipedia is destroying demand for the traditional encyclopedia.    Free and cut-price music has caused a substantial decline in music industry revenues.  So the overall effect is a great increase in value combined with a perhaps small, but I'd guess significant reduction in what GDP growth would have been without the Internet.\u003Cbr \/\u003E\u003Cbr \/\u003EWhat are some of the practical consequences?  Twenty years ago most smart people did not have an encyclopedia in the home or at the office.   Now the vast majority in the developed and even hundreds of millions in the BRICs countries do, and many even have it in the car or on the train.  Twenty years ago it was very inconvenient and cost money to place a tiny classified ad that could only be seen in the local newspaper; now it is very easy and free to place an ad of proper length that can be seen all over the world.   Search engines combined with mass voluntary and generally free submission of content to the Internet has increased the potential knowledge we have ready access to thousands-fold.   Social networking allows us to easily reconnect with old friends we'd long lost contact with.   Each of us has access to much larger libraries of music and written works.   We have access to a vast \"long tail\" of specialized content that the traditional mass media never provided us.     The barriers to a smart person with worthwhile thoughts getting fellow humans to attend to those thoughts are far lower than what they were twenty years ago.   And almost none of this can be measured in market prices, so almost none of it shows up in the economic figures on which economists focus.\u003Cbr \/\u003E\u003Cbr \/\u003ECowen suggests that external gains of similar magnitude occurred in prior productivity revolutions, but I'm skeptical of this claim.  A physical widget can be far more completely monetized than a piece of information, because it is excludable: if you don't pay, you don't get the widget.   As opposed to information that computers readily copy.   (The most underappreciated function of computers is that they are far better copy machines than the paper copiers).   It's true that competition drove down prices.   But the result was still largely monetized as greater value caused increased demand, whereas growth in the use of search engines, Twitter, Wikipedia, Facebook etc. largely just requires adding a few more computers that now cost far less than the value they convey.   (Yes, I'm well aware of scaling issues in software engineering, but they typically don't require much more than a handful of smart computer scientists to solve).  Due to Moore's Law the computers that drive the Internet have radically increased in functionality per dollar since the dawn of the Internet.   Twitter's total capital equipment purchases, R\u0026D, and user acquisition expenditures are less than fifty cents per registered user and these capital investment costs per user continue to drop at a ferocious rate for Internet businesses and non-profits.\u003Cbr \/\u003E\u003Cbr \/\u003EThe brain drain from traditional industries can be seen in, for example, the great increase in the proportion of books on computer programming, HTML, and the like on bookstore shelves to traditional engineering and technical disciplines from mechanical engineering to plumbing.   It is not so blatant in the relative growth of computer science and electrical engineering relative to other engineering disciplines, but that's just the tip of the iceberg and vast numbers of non-computer scientists, including many with engineering degrees or technical training in other areas, have ended up as computer programmers.  \u003Cbr \/\u003E\u003Cbr \/\u003EFortunately, the Internet is giving a vast new generation of smart people access to knowledge who never had it before.    The number of smart people who can learn an engineering discipline has probably increased by nearly a factor of ten over the last twenty years (again largely in the BRICs and developing world of course).    The number who can actually get a degree of course has not -- which gives rise to a great economic challenge -- what are good ways for this vast new population of educated smart people to prove their intelligence and knowledge when traditional education with its degrees of varying prestige is essentially a zero-sum status game that excludes them?   How do we get them in regular social contact with more traditionally credentialed smart people?  The Internet may solve much of the problem of finding fellow smart people who share our interests and skills, but we still emotionally bond with people over dinner not over Facebook.  \u003Cbr \/\u003E\u003Cbr \/\u003EAs for the great stagnation in real wages in particular, the biggest reason is probably the extraordinarily rapid pace at which the BRICs and developing world has become educated and accessible to the developed world since the Cold War.  In other words, outsourcing has in a temporary post-Cold-War spree outraced the ability of most of us in the developed world to retrain to the more advanced industries.  The most unappreciated reason, and the biggest reason retraining for newer industries has been so difficult, is that unmonetized value provides no paying jobs, but may destroy such jobs when it causes the decline of some traditionally monetized industries.   On the Internet the developed world is providing vast value to the BRICs and developing world, but that value is largely unmonetized and thus produces relatively few jobs in the developed world.   The focus of the developed world on largely unmonetized, though extremely valuable, activities has been a significant cause of wage stagnation in the developed world \u003Ci\u003Eand\u003C\/i\u003E of skill and thus wage increases in the developing world.    Whereas before they were buying our movies, music, books, and news services, increasingly they are just getting our free stuff on the Internet.   The most important new industry of the last twenty years has been mostly unmonetized and thus hasn't provide very many jobs to retrain for, relative to the value it has produced.\u003Cbr \/\u003E\u003Cbr \/\u003EAnd of course there are the challenges of the traditional industries that gave us the industrial revolution and 20th century economic growth in the first place.   Starting with the most basic and essential: agriculture, extraction, and mass manufacturing.   By no means should these be taken for granted; they are the edifice on which all the remainder rests.    Gains in agriculture and extraction may be diminishing as the easy pickings (given sufficiently industrial technology and a sufficiently elaborated division of labor) of providing scarce nutrients and killing pests in agriculture and the geologically concentrated ores are becoming history. Can the great knowledge gains from the Internet be fed back to improve the productivities of our most basic industries, especially in the face of Malthusian depletion of the low hanging fruit of soil productivity and geological wealth?   That remains to be seen, but despite all the market troubles and run-up in commodity prices, \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2008\/06\/commodity-hysteria-overview.html\"\u003Ewhich have far more to do with financial policies\u003C\/a\u003E than with the real costs of extracting commodities, I remain optimistic.   \u003Ca href=\"http:\/\/szabo.best.vwh.net\/miningthevastydeep.html\"\u003EWe still have very large and untapped physical frontiers. \u003C\/a\u003E   These tend to be, for the near future, below us rather than above us, which flies in the face of our spiritual yearnings (although for space fans \u003Ca href=\"http:\/\/server-sky.com\/\"\u003Ehere\u003C\/a\u003E is the most promising possible exception to this rule I have encountered).    The developing world may win these new physical frontiers due to the high political value the developed world places on environmental cleanliness, which has forced many dirty but crucial businesses overseas.  Industries that involve far more complex things, like medicine and the future of the Internet itself, are far more difficult to predict. But the simple physical frontiers as well as the complex medical and social frontiers are all there, waiting for our new generations with their much larger number of much more knowledgeable people to tap them."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/8395672756688321356\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/8395672756688321356","title":"20 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/8395672756688321356"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/8395672756688321356"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2011\/02\/great-stagnation-or-external-growth.html","title":"Great stagnation or external growth?"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"20"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-8510569678943855079"},"published":{"$t":"2011-01-26T17:25:00.000-08:00"},"updated":{"$t":"2011-01-26T17:43:54.304-08:00"},"title":{"type":"text","$t":"Some hard things are easy if explained well"},"content":{"type":"html","$t":"Proof of the Pythagorean theorem:\u003Cbr \/\u003E\u003Ciframe title=\"YouTube video player\" class=\"youtube-player\" type=\"text\/html\" width=\"480\" height=\"390\" src=\"http:\/\/www.youtube.com\/embed\/e4LuX48rD_k\" frameborder=\"0\" allowFullScreen\u003E\u003C\/iframe\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EDark matter:\u003Cbr \/\u003E\u003Ciframe title=\"YouTube video player\" class=\"youtube-player\" type=\"text\/html\" width=\"640\" height=\"390\" src=\"http:\/\/www.youtube.com\/embed\/wxm-suP-U64\" frameborder=\"0\" allowFullScreen\u003E\u003C\/iframe\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EChemical reactions, fire, and photosynthesis:\u003Cbr \/\u003E\u003Ciframe title=\"YouTube video player\" class=\"youtube-player\" type=\"text\/html\" width=\"480\" height=\"390\" src=\"http:\/\/www.youtube.com\/embed\/ITpDrdtGAmo\" frameborder=\"0\" allowFullScreen\u003E\u003C\/iframe\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EHow trains stay on their tracks and go through turns:\u003Cbr \/\u003E\u003Ciframe title=\"YouTube video player\" class=\"youtube-player\" type=\"text\/html\" width=\"480\" height=\"390\" src=\"http:\/\/www.youtube.com\/embed\/y7h4OtFDnYE\" frameborder=\"0\" allowFullScreen\u003E\u003C\/iframe\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EAnd just for fun, the broken window fallacy:\u003Cbr \/\u003E\u003Ciframe title=\"YouTube video player\" class=\"youtube-player\" type=\"text\/html\" width=\"640\" height=\"390\" src=\"http:\/\/www.youtube.com\/embed\/sKmvkIVZ5Ls\" frameborder=\"0\" allowFullScreen\u003E\u003C\/iframe\u003E"},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/8510569678943855079\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/8510569678943855079","title":"3 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/8510569678943855079"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/8510569678943855079"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2011\/01\/some-hard-things-are-easy-if-explained.html","title":"Some hard things are easy if explained well"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"media$thumbnail":{"xmlns$media":"http://search.yahoo.com/mrss/","url":"https:\/\/img.youtube.com\/vi\/e4LuX48rD_k\/default.jpg","height":"72","width":"72"},"thr$total":{"$t":"3"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-2918600841879224272"},"published":{"$t":"2011-01-22T13:54:00.000-08:00"},"updated":{"$t":"2011-01-22T13:54:00.531-08:00"},"title":{"type":"text","$t":"Tech roundup 01\/22\/11"},"content":{"type":"html","$t":"\u003Ca href=\"http:\/\/www.eetimes.com\/electronics-news\/4212176\/Chip-scale-atomic-clock-approaches-performance-of-modules-2\"\u003EAtomic clock on a chip\u003C\/a\u003E for about $1,500.  Accurate and independent clocks improve \u003Ca href=\"http:\/\/szabo.best.vwh.net\/distributed.html\"\u003Esecure synchronous protocols\u003C\/a\u003E, in other words can help securely determine the order in which events occur on the Internet, wireless, and other networks while minimizing dependence on trusted third parties like GPS.   The technology nicely complements secure timestamping (see e.g. \u003Ca href=\"http:\/\/alexis.bonnecaze.perso.esil.univmed.fr\/articles\/sitis.pdf\"\u003Ehere\u003C\/a\u003E, \u003Ca href=\"http:\/\/citeseerx.ist.psu.edu\/viewdoc\/summary?doi=10.1.1.4.8897\"\u003Ehere\u003C\/a\u003E, and \u003Ca href=\"http:\/\/citeseerx.ist.psu.edu\/viewdoc\/summary?doi=10.1.1.16.1870\"\u003Ehere\u003C\/a\u003E) which can leave an unforgeable record of the ordering of events and the times at which specific data or documents existed.\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"http:\/\/www.bitcoin.org\/\"\u003EBitcoin\u003C\/a\u003E, an implementation of the \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2005\/12\/bit-gold.html\"\u003Ebit gold\u003C\/a\u003E idea (and another example of where the order of events is important), continues to be popular.\u003Cbr \/\u003E\u003Cbr \/\u003EIt is finally being increasingly realized that there are many \"squishy\" areas where \u003Ca href=\"http:\/\/www.newyorker.com\/reporting\/2010\/12\/13\/101213fa_fact_lehrer?currentPa\"\u003Escientific methods don't work as well\u003C\/a\u003E as they do in hard sciences like physics and chemistry.  Including psychology, significant portions of medicine, ecology, and I'd add the social sciences, climate, and nutrition.  These areas are often hopelessly infected with subjective judgments about results, so it's not too surprising that when the the collective judgments change about what constitutes, for example, the \"health\" of a mind, body, society, or ecosystem, that the \"results\" of experiments as defined in terms of these judgments change as well.  See also \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2007\/03\/trouble-with-science.html\"\u003E\"The Trouble With Science\".\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"http:\/\/server-sky.com\/ServerSatV3\"\u003EFlat sats\u003C\/a\u003E (as I like to call them) may help expand our mobility in the decades ahead.  Keith Lofstrom proposes fabricating an entire portion of a phased array communications satellite -- solar cells, radios, electronics, computation, etc. -- on a single silicon wafer.   Tens of thousands or more of these, each nearly a foot wide, may be launched on a single small rocket.  If they're thin enough, orientation and orbit can be maintained using light pressure (like a solar sail).  Medium-term application: phased array broadcast of TV or data allows much smaller ground antennas, perhaps even satellite TV and (mostly downlink) Internet in your phone, iPad, or laptop.  Long-term: lack of need for structure to hold together an array of flat sats may bring down the cost of solar power in space to the point that we can put the power-hungry server farms of Internet companies like Google, Amazon, Facebook, etc. in orbit.  Biggest potential problem: large numbers of these satellites may both create and be vulnerable to micrometeors and other space debris. \u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"http:\/\/aerique.blogspot.com\/2011\/01\/baby-steps-into-genetic-programming.html\"\u003EIntroduction to genetic programming\u003C\/a\u003E, a powerful evolutionary machine learning technique that can invent new electronic circuits, rediscover Kepler's laws from orbital data in seconds, and much more, as long as it has fairly complete and efficient simulations of the environment it is inventing or discovering in.\u003Cbr \/\u003E\u003Cbr \/\u003EExploration for \u003Ca href=\"http:\/\/www.businessday.co.za\/articles\/Content.aspx?id=128305\"\u003Eunderwater gold mining\u003C\/a\u003E is underway.  See also \u003Ca href=\"http:\/\/szabo.best.vwh.net\/miningthevastydeep.html\"\u003E\"Mining the Vast Deep.\"\u003C\/a\u003E"},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/2918600841879224272\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/2918600841879224272","title":"5 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/2918600841879224272"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/2918600841879224272"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2011\/01\/tech-roundup-012211.html","title":"Tech roundup 01\/22\/11"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"5"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-1032494009776231943"},"published":{"$t":"2011-01-17T21:32:00.000-08:00"},"updated":{"$t":"2011-01-17T22:09:13.484-08:00"},"title":{"type":"text","$t":"\"The Singularity\""},"content":{"type":"html","$t":"A number of my friends have gotten wrapped up in a movement dubbed \"The Singularity.\"   We now have a \"Singularity Institute\", a NASA-sponsored \"Singularity University\", and so on as leading futurist organizations.  I tend to let my disagreements on these kinds of esoteric futurist visions slide, but I've been thinking about my agreements and disagreements with this movement for long enough that I shall now share them.\u003Cbr \/\u003E\u003Cbr \/\u003EOne of the basic ideas behind this movement, that computers can help make themselves smarter, and that growth that for a time looks exponential, or even super-exponential in some dimensions and may end up much faster than today may result, is by no means off the wall.  Indeed computers have been helping improve future versions of themselves at least since the first compiler and circuit design software was invented.  But \"the Singularity\" itself is an incoherent and, as the capitalization suggests, basically a religious idea.   As well as a nifty concept for marketing AI research to investors who like very high risk and reward bets.\u003Cbr \/\u003E\u003Cbr \/\u003EThe \"for a time\" bit is crucial.  There is as Feynman said \"plenty of room at the bottom\" but it is by no means infinite given actually demonstrated physics.   That means all growth curves that look exponential or more in the short run turn over and become S-curves or similar in the long run, unless we discover physics that we do not now know, as information and data processing under physics as we know it are limited by the number of particles we have access to, and that in turn can only increase in the long run by at most a cubic polynomial (and probably much less than that, since space is mostly empty).\u003Cbr \/\u003E\u003Cbr \/\u003ERodney Brooks thus calls the Singularity \"a period\" rather than a single point in time, but if so then why call it a singularity?\u003Cbr \/\u003E\u003Cbr \/\u003EAs for \"the Singularity\" as a point past which we cannot predict, the stock market is by this definition an ongoing, rolling singularity, as are most aspects of the weather, and many quantum events, and many other aspects of our world and society.   And futurists are notoriously bad at predicting the future anyway, so just what is supposed to be novel about an unpredictable future?\u003Cbr \/\u003E\u003Cbr \/\u003EThe Singularitarian notion of an all-encompassing or \"general\" intelligence flies in the face of how our modern economy, with its \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2009\/04\/polynesians-vs-adam-smith.html\"\u003Eextreme specialization\u003C\/a\u003E, works.  We have been implementing human intelligence in computers little bits and pieces at a time, and this has been going on for centuries.   First arithmetic (first with mechanical calculators), then bitwise Boolean logic (from the early parts of the 20th century with vacuum tubes), then accounting formulae and linear algebra (big mainframes of the 1950s and 60s), typesetting (Xerox PARC, Apple, Adobe, etc.), etc. etc. have each gone through their own periods of exponential and even super-exponential growth.  But it's these particular operations, not intelligence in general, that exhibits such growth.\u003Cbr \/\u003E\u003Cbr \/\u003EAt the start of the 20th century, doing arithmetic in one's head was one of the main signs of intelligence.  Today machines do quadrillions of additions and subtractions for each one done in a human brain, and this rarely bothers or even occurs to us.   And the same extreme division of labor that gives us modern technology also means that AI has and will take the form of these hyper-idiot, hyper-savant, and hyper-specialized machine capabilities.  Even if there was such a thing as a \"general intelligence\" the specialized machines would soundly beat it in the marketplace.  It would be very far from a close contest.\u003Cbr \/\u003E\u003Cbr \/\u003EAnother way to look at the limits of this hypothetical general AI is to look at the limits of machine learning.  I've worked extensively with evolutionary algorithms and other machine learning techniques.  These are very promising but are also extremely limited without accurate and complete simulations of an environment in which to learn.  So for example in evolutionary techniques the \"fitness function\" involves, critically, a simulation of electric circuits (if evolving electric circuits), of some mechanical physics (if evolving simple mechanical devices or discovering mechanical laws), and so on.\u003Cbr \/\u003E\u003Cbr \/\u003EThese techniques only can learn things about the real world to the extent such simulations accurately simulate the real world, but except for extremely simple situations (e.g. rediscovering the formulae for Kepler's laws based on orbital data, which a modern computer with the appropriate learning algorithm can now do in seconds) the simulations are usually very woefully incomplete, rendering the results usually useless.   For example John Koza after about 20 years of working on genetic programming has discovered about that many useful inventions with it, largely involving easily simulable aspects of electronic circults.  And \"meta GP\", genetic programming that is supposed to evolve its own GP-implementing code, is useless because we can't simulate future runs of GP without actually running them.   So these evolutionary techniques, and other machine learning techniques, are often interesting and useful, but the severely limited ability of computers to simulate most real-world phenomena means that no runaway is in store, just potentially much more incremental improvements which will be much greater in simulable arenas and much smaller in others, and will slowly improve as the accuracy and completeness of our simulations slowly improves.\u003Cbr \/\u003E\u003Cbr \/\u003EThe other problem with tapping into computer intelligence -- and there is indeed after a century of computers quite a bit of very useful but very alien intelligence there to tap into -- is the problem of getting information from human minds to computers and vice versa.  Despite all the sensory inputs we can attach to computers these days, and vast stores of human knowledge like Wikipedia that one can feed to them, almost all such data is to a computer nearly meaningless.  Think Helen Keller but with most of her sense of touch removed on top of all her other tragedies.   Similarly humans have an extremely tough time deciphering the output of most software unless it is extremely massaged.  We humans have huge informational bottlenecks between each other, but these hardly compare to the bottlenecks between ourselves and the hyperidiot\/hypersavant aliens in our midst, our computers.  As a result he vast majority of programmer time is spent working on user interfaces and munging data rather than on the internal workings of programs.\u003Cbr \/\u003E\u003Cbr \/\u003ENor does the human mind, as flexible as it is, exhibit much in the way of some universal general intelligence.  Many machines and many other creatures are capable of sensory, information-processing, and output feats that the human mind is quite incapable of.  So even if we in some sense had a full understanding of the human mind (and it is information theoretically impossible for one human mind to fully understand even one other human mind), or could somehow faithfully \"upload\" a human mind to a computer (another entirely conjectural operation, which may require infeasible simulations of chemistry), we would still not have \"general\" intelligence, again if such a thing even exists.\u003Cbr \/\u003E\u003Cbr \/\u003EThat's not to say that many of the wide variety of techniques that go under the rubric \"AI\" are not or will not be highly useful, and may even lead to accelerated economic growth as computers help make themselves smarter.  But these will turn into S-curves as they approach physical limits and the idea that this growth or these many and varied intelligences are in any nontrivial way \"singular\" is very wrong."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/1032494009776231943\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/1032494009776231943","title":"67 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/1032494009776231943"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/1032494009776231943"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2011\/01\/singularity.html","title":"\"The Singularity\""}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"67"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-6350047709520330459"},"published":{"$t":"2011-01-16T12:24:00.000-08:00"},"updated":{"$t":"2011-01-16T12:24:00.519-08:00"},"title":{"type":"text","$t":"Making a toaster the hard way"},"content":{"type":"html","$t":"\u003Cobject width=\"446\" height=\"326\"\u003E\u003Cparam name=\"movie\" value=\"http:\/\/video.ted.com\/assets\/player\/swf\/EmbedPlayer.swf\"\u003E\u003C\/param\u003E\u003Cparam name=\"allowFullScreen\" value=\"true\" \/\u003E\u003Cparam name=\"allowScriptAccess\" value=\"always\"\/\u003E\u003Cparam name=\"wmode\" value=\"transparent\"\u003E\u003C\/param\u003E\u003Cparam name=\"bgColor\" value=\"#ffffff\"\u003E\u003C\/param\u003E \u003Cparam name=\"flashvars\" value=\"vu=http:\/\/video.ted.com\/talks\/dynamic\/ThomasThwaites_2010S-medium.flv\u0026su=http:\/\/images.ted.com\/images\/ted\/tedindex\/embed-posters\/ThomasThwaites-2010S.embed_thumbnail.jpg\u0026vw=432\u0026vh=240\u0026ap=0\u0026ti=1051\u0026introDuration=15330\u0026adDuration=4000\u0026postAdDuration=830\u0026adKeys=talk=thomas_thwaites_how_i_built_a_toaster_from_scratch;year=2010;theme=tales_of_invention;theme=the_creative_spark;theme=new_on_ted_com;event=TEDSalon+London+2010;\u0026preAdTag=tconf.ted\/embed;tile=1;sz=512x288;\" \/\u003E\u003Cembed src=\"http:\/\/video.ted.com\/assets\/player\/swf\/EmbedPlayer.swf\" pluginspace=\"http:\/\/www.macromedia.com\/go\/getflashplayer\" type=\"application\/x-shockwave-flash\" wmode=\"transparent\" bgColor=\"#ffffff\" width=\"446\" height=\"326\" allowFullScreen=\"true\" allowScriptAccess=\"always\" flashvars=\"vu=http:\/\/video.ted.com\/talks\/dynamic\/ThomasThwaites_2010S-medium.flv\u0026su=http:\/\/images.ted.com\/images\/ted\/tedindex\/embed-posters\/ThomasThwaites-2010S.embed_thumbnail.jpg\u0026vw=432\u0026vh=240\u0026ap=0\u0026ti=1051\u0026introDuration=15330\u0026adDuration=4000\u0026postAdDuration=830\u0026adKeys=talk=thomas_thwaites_how_i_built_a_toaster_from_scratch;year=2010;theme=tales_of_invention;theme=the_creative_spark;theme=new_on_ted_com;event=TEDSalon+London+2010;\"\u003E\u003C\/embed\u003E\u003C\/object\u003E\u003Cbr \/\u003E\u003Cbr \/\u003E(h\/t Andrew Chamberlain)\u003Cbr \/\u003E\u003Cbr \/\u003EFor more on the economics at work here, see my essay \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2009\/04\/polynesians-vs-adam-smith.html\"\u003EPolynesians vs. Adam Smith\u003C\/a\u003E."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/6350047709520330459\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/6350047709520330459","title":"2 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/6350047709520330459"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/6350047709520330459"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2011\/01\/making-toaster-hard-way.html","title":"Making a toaster the hard way"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"2"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-5181793992692847753"},"published":{"$t":"2010-12-04T16:11:00.000-08:00"},"updated":{"$t":"2010-12-04T18:22:23.233-08:00"},"title":{"type":"text","$t":"Some conjectures and facts regarding the Malthusian isocline and the industrial revolution"},"content":{"type":"html","$t":"\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjG3a6rgcULfpqE_-12dP70iko6J9Ir5fvEYh2fD6iUtbT4ndSpWMDAUEE9NidFDlh5oEJ3xnMzUlMW8BGUjr2qIW7cKkw6ZmGm4ZsMd0NvqKVgUwG4sXoVuVoZBl74RZNo9Vh3\/s1600\/MalthusianIsocline_SocietiesOn.JPG\"\u003E\u003Cimg style=\"float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;width: 600px; height: 434px;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjG3a6rgcULfpqE_-12dP70iko6J9Ir5fvEYh2fD6iUtbT4ndSpWMDAUEE9NidFDlh5oEJ3xnMzUlMW8BGUjr2qIW7cKkw6ZmGm4ZsMd0NvqKVgUwG4sXoVuVoZBl74RZNo9Vh3\/s400\/MalthusianIsocline_SocietiesOn.JPG\" border=\"0\" alt=\"\"id=\"BLOGGER_PHOTO_ID_5546992621110537058\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EReader Matt comments on the \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2010\/10\/malthus-and-capital.html\"\u003EMalthusian isocline\u003C\/a\u003E  \u003Ca href=\"http:\/\/isteve.blogspot.com\/2010\/12\/africas-lack-of-malthusian-trap.html?showComment=1291366964515#c2702857107278771211\"\u003Ehere,\u003C\/a\u003E, observing that I placed 17th century Britain a bit \"higher\" (presumably meaning more advanced, i.e. more \"northeast\") on the graph than 17th century China.\u003Cbr \/\u003E\u003Cbr \/\u003EMy placement in this case of one absolutely more advanced than the other is highly conjectural.  It's worse than comparing apples to oranges.   I had to put them somewhere on the graph and I used my best judgment.   Britain was semi-pastoral (yet still stationary) while China had a much more productive climate for grain agriculture (much wetter in the summer and drier in the winter than Britain) and thus could support a far higher population density per hectare.  But whether the Chinese population density per hectare adjusted for these natural advantages (presumably leaving technological and institutional differences, what I call denstiy per natural global hectare), which is what I'm trying to graph on my x-axis, was still much higher is far more conjectural.  If we draw the x-axis as just population density per hectare (rather than \"natural hectare\", i.e. adjusted for natural advantages) the Chinese point is far higher, not just somewhat higher as I drew it, and thus China's isocline was clearly more advanced, but I argue due to natural advantages rather than technology or institutions.  In terms of technology and institutions, it's worse than apples to oranges not only because of the radical difference between their basic agricultural strategy (labor-intensive grain-and-bean vs. semi-pastoral and heavy use of draft animals) but each had a number of advanced agricultural techniques the other rarely or never used. \u003Cbr \/\u003E\u003Cbr \/\u003ESee \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2010\/09\/malthusian-mystery.html\"\u003Ehere\u003C\/a\u003E and \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2010\/10\/malthus-and-capital.html\"\u003Ehere\u003C\/a\u003E for the background to these theories and the graph in question, as well as a very interesting film of street scenes that allow us to compare the Chinese and British street transportation in the early 20th century (largely before the IC engine replaced horses and rickshaws).\u003Cbr \/\u003E\u003Cbr \/\u003ENote that in contrast to the above graph which is schematic and partially conjectural, the following, showing the relentless advanced of the isocline in England from the Late Middle Ages, is based on actual statistics of population and real agricultural labor wage income based on a food-dominated commodity basket:\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjKNbB0acHBP2TbFRIgAbOsLVuCjkHhtX-YfJ_ZjO2opXWWBL0cqaV0koEnf_6MSd3fxevrYbT-IJ1aDrLQm1VOJMTSjX0AAJY6jUckehllceIL9eXESpVkpiHRlWW8WmYWcPUl\/s1600\/MalthusianIsocline_England1260_1849.JPG\"\u003E\u003Cimg style=\"float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;width: 600px; height: 384px;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjKNbB0acHBP2TbFRIgAbOsLVuCjkHhtX-YfJ_ZjO2opXWWBL0cqaV0koEnf_6MSd3fxevrYbT-IJ1aDrLQm1VOJMTSjX0AAJY6jUckehllceIL9eXESpVkpiHRlWW8WmYWcPUl\/s400\/MalthusianIsocline_England1260_1849.JPG\" border=\"0\" alt=\"\"id=\"BLOGGER_PHOTO_ID_5546992164088077826\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EThis differs from the \"noisy until 1800\" graph of Clark because I've graphed 80-year averages rather than decadal averages to smooth out the noise of pests and short-term climate variations on the quality of harvests which dominated the position of the isocline before the 19th century.   The points are from the data but the slope of the isoclines I drew threw them are still conjectural.\u003Cbr \/\u003E\u003Cbr \/\u003EMuch less conjectural than the relative levels of European and Asian 17th century isoclines and probably more important for the issue of how Britain escaped from the Malthusian trap is that the British laborer and peasant per capita nutrition (roughly corresponding to real income in an era where food dominated the peasant and laborer budget) was much higher than the Chinese.  Britain had more and higher quality protein in the diet (partly from more dairy, which has genetic causes, but mainly from more meat, the British having a stationary yet semi-pastoral agriculture).  China, having far fewer draft animals per capita, used laborers for arduous and repetitive tasks the Brits considered fit only for draft animals. \u003Cbr \/\u003E\u003Cbr \/\u003EPart of Britain's better marginal standard of living can be put to disease, especially the Black Death, but by the 18th century I'd agree that Britain was as healthy as China.   What we see after the Black Death is that the Brits greatly increased their meat-eating and use of draft animals, and, what is more important and seemingly unprecedented, were largely able to keep up this intensive use of livestock after their population recovered and even boomed beyond pre-Plague levels, whereas in (AFAIK all) prior agricultural eras and areas increasing human populations in recovery from plagues replaced draft animal with human labor and moved the diet towards grains and away from meat: sliding \"souteast\" down a static isocline.   Also frequent periods of war and excess taxation had often led to the loss of draft animals and their replacement by human labor, in these cases with a regressing (moving \"southwest\") isocline.  In both cases the capital accumulated in draft animals and meat livestock was destroyed.  As Steve Sailer correctly points out, in Great Britain there has not been a major famine since before the Black Death while in China they were common until very recently.  After the Black Death British agriculture went through a very long period of capital accumulation, in the form of soil conditioners (especially lime), commercial seeds and breeding, engineered water meadows that replaced phosphates and other scarce nutrients, drainage (important in the wet British winters), crops and rotations that fixed more nitrogen (at first growing beans for fodder, then replacing beans with the even better nitrogen fixer clover), and many other improvements besides the tremendous accumulation of livestock.  Indeed \"improvement\" was the watchword of British agriculture as soon as works about it started being published.\u003Cbr \/\u003E\u003Cbr \/\u003ESo the Chinese peasant and laborer worked harder on a worse diet and lived much closer to starvation, whereas in hard times British peasants could go back to eating the foods that after the Black Death they considered animal fodder (beans, oats, etc.) whereas the analogous soybean was a protein staple of the Chinese peasant as much as it was animal fodder. Again this doesn't tell us whether China's isocline adjusted for its natural advantages was more or less advanced, it tells us that Britain was operating with a higher marginal and mean per capita standard of living and lower population density relative to its natural advantages than China, i.e. further \"northwest\" on its isocline.\u003Cbr \/\u003E\u003Cbr \/\u003EBesides the Columbian Exchange, and even more important, there may have been an even greater but far less heralded exchange going on between Europe and East Asia in the centuries after Europe established regular oceanic contact between the two.  Not so much in species, but in techniques and institutions, aided by cheap paper, the printing press, and the resulting expansion of literacy.   As this contact increases we see both the East Asian and Western European isoclines advancing rapidly.  But the British isocline was advancing faster than Asia's (regardless of which was more advanced absolutely), and probably more importantly in Britain and at least early on the Netherlands were largely maintaining the higher peasant\/laborer standard of living despite population growth, whereas in East Asia until the 20th century the isocline started at an already low per-capita income yet the advance was still directly entirely rightward towards higher population growth rather than in catching up to British marginal standards of living.  So Britain kept its big lead in per-capita standard of living and farm labor productivity, and thus presumably in the proportion of surplus labor that could be put to work on non-agricultural tasks.  And since Britain did not need as large an army as a Continental power, nor as high taxes to support it, more of this labor could go into industry.\u003Cbr \/\u003E\u003Cbr \/\u003EAnother major factor in industrialization was urbanization, that is the proportion of this surplus labor that could be relocated where other industry or industrial resources were available rather than to where the food was grown.  Urbanization (and presumably the general proportion of non-agricultural population) during the 17th-19th centuries was growing rapidly in both Western Europe, especially Britain, and Tokugawa Japan but less so in China, a phenomenon I have yet to see explained (draft animals can't explain the Japanese case as they resembled China in being relatively bereft of them).  As far as agriculture and urbanization goes, contrary to myth Tokugawa Japan saw great progress, almost as much as Britain during the same period, albeit much less technological progress in industry than Britain.  Urbanization depended most on water transport, i.e. the ability to transport grain to remote regions (the same thing that made ancient Rome a very large city, in her case grain imports across the Mediterranean from Sicily and Egypt).  Without good water transport labor beyond that needed for agriculture had to stay in the rural areas near where the grain was grown.   Japan, Britain, and the Netherlands had good water transport with many farmers near navigable water due to geography and engineering to extend the navigability of rivers and especially in the Netherlands to build canals which served a triple role of defense barrier, water control for reclamation of formerly submerged areas, and transport.  Britain and the Netherlands also had an advantage in that their preferred and available source of protein, beef, could be transported over long distances over land on the hoof, whereas the pigs, fowl, and soybeans of the Chinese required water transport.  Urbanization and industrialization also required transport for fuel (wood and coal: forests near navigable water were soon denuded and forests far from navigable water were generally useless.  The Brits could use far more forest area per capita because their draft animals could transport more timber and fuel farther.  Both the Brits and Chinese had ample and easy-to-mine coal but only in Britain were there mines within ox- or horse-transport distances of navigable water combined with a plentiful supply of these draft animals, which explains why Britain was possibly mining more coal than the rest of the world combined by the 17th century.  Horse gin powered pumps also drained the British coal mines before the dawn of the Savery and Newcomen steam engines).\u003Cbr \/\u003E\u003Cbr \/\u003EChina had for many centuries also had good water transport due to the Grand Canal and its tributaries, but perhaps because of its artificial and inland nature it was far more bureaucratically controlled and subject to excess taxation and other institutional problems than the coastal transport in Japan and Britain.  Japan, with its long and thin coastline, probably had the greatest amount of farmland next to coastline controlled by peoples speaking a single language and thus able to trade food with low transaction costs.   But Britain's advantage in draft animals more than made up for having a fatter island, as their horses probably made four or more times as much farmland accessible to the navigable water than the mostly human-powered Japanese transport, and its horses also increased the efficiency of river navigations and (eventually) canals.   After the railroad, and even moreso the IC engine, reached Japan it quickly caught up to and leapfrogged ahead of Britain (something Clark's theory can't explain)."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/5181793992692847753\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/5181793992692847753","title":"2 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/5181793992692847753"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/5181793992692847753"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2010\/12\/some-conjectures-and-facts-regarding.html","title":"Some conjectures and facts regarding the Malthusian isocline and the industrial revolution"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"media$thumbnail":{"xmlns$media":"http://search.yahoo.com/mrss/","url":"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjG3a6rgcULfpqE_-12dP70iko6J9Ir5fvEYh2fD6iUtbT4ndSpWMDAUEE9NidFDlh5oEJ3xnMzUlMW8BGUjr2qIW7cKkw6ZmGm4ZsMd0NvqKVgUwG4sXoVuVoZBl74RZNo9Vh3\/s72-c\/MalthusianIsocline_SocietiesOn.JPG","height":"72","width":"72"},"thr$total":{"$t":"2"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-3215897984550238991"},"published":{"$t":"2010-10-24T15:33:00.000-07:00"},"updated":{"$t":"2010-10-24T19:21:40.127-07:00"},"title":{"type":"text","$t":"Malthus and capital"},"content":{"type":"html","$t":"Why did agricultural civilization remain mired in the \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2010\/09\/malthusian-mystery.html\"\u003EMalthusian trap\u003C\/a\u003E for over 5,000 years?   And how was it possible to eventually escape from it?  Recall the Malthusian isoclines and how various kinds of societies can be situated along them (click to enlarge all graphs):\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiTNOzAHCvB4ODe9iLc_Ndx70oNplvIIPAd2l7mlaOImv5JsUM3ZVm6YS8q9DOK85u_CbpKgAl-1_Ekhx3WJ7CLeh-RMrVjSTXKr-tZ0o2AqWH53ghjyqocXbhhEo-H3ZyZil7X\/s1600\/MalthusianIsocline_SocietiesOn.JPG\"\u003E\u003Cimg style=\"float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;width: 600px; height: 434px;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiTNOzAHCvB4ODe9iLc_Ndx70oNplvIIPAd2l7mlaOImv5JsUM3ZVm6YS8q9DOK85u_CbpKgAl-1_Ekhx3WJ7CLeh-RMrVjSTXKr-tZ0o2AqWH53ghjyqocXbhhEo-H3ZyZil7X\/s400\/MalthusianIsocline_SocietiesOn.JPG\" border=\"0\" alt=\"\"id=\"BLOGGER_PHOTO_ID_5531747448267352914\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EPlagues move the economy “northwest” along the isoclines, as more marginal lands are abandoned leaving the fewer people to work and share the more productive lands.   Births beyond replacement by contrast move the economy “southeast” towards higher population, the use of more marginal lands, and thus a lower standard of living.   Here, for example, is a graph using actual statistics for English real farm labor wage income from 1260 to 1849.  Even though England during this period was slowly escaping from the Malthusian trap -- note that each 80 years has advanced farther \"northeast\" than the previous 80 -- it still followed the basic Malthusian pattern of births and deaths.  Observe how the real wage greatly increased after the Black Plague in the mid-14th century, then slowly declines thereafter:\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhqoJZMWfDUbGSXeMcwrg1zlpY48rjU42og2W2ri6KFlOCfBxhobPyhbF92IfAZuwIFBZJJurhlKGEgdFxk3_Un65PL3wiN67QCEysxQ9iW4emFPyp5V0-Cqafo8JttUSgq8Qwf\/s1600\/MalthusianIsocline_England1260_1849.JPG\"\u003E\u003Cimg style=\"float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;width: 600px; height: 384px;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhqoJZMWfDUbGSXeMcwrg1zlpY48rjU42og2W2ri6KFlOCfBxhobPyhbF92IfAZuwIFBZJJurhlKGEgdFxk3_Un65PL3wiN67QCEysxQ9iW4emFPyp5V0-Cqafo8JttUSgq8Qwf\/s400\/MalthusianIsocline_England1260_1849.JPG\" border=\"0\" alt=\"\"id=\"BLOGGER_PHOTO_ID_5531751893914083618\" \/\u003E\u003C\/a\u003E \u003Cbr \/\u003E\u003Cbr \/\u003EMuch less well appreciated than the effects of births and plagues with respect to the Malthusian isocline are creation and destruction of productive capital.  Every act of plowing, sowing, weeding, and so on was a seasonal capital investment, and the resulting harvest (and thus the short-term isocline) depended on the qualities and quantities of these short-term investments, as well as on vagaries of pests, weather, etc.  Longer-term capital investment could include conditioning, fertilizing, and draining soil, buying livestock, breeding crops and livestock, watering meadows, and so on.   Long term progress towards the \"northeast\" depended on long-term accumulation of capital.   It was exceedingly rare to maintain such progress over long periods of time, and the British capital accumulation over such a long period, leading to the breakout from the Malthusian trap, was unprecedented.\u003Cbr \/\u003E\u003Cbr \/\u003EGood harvests caused progress that was temporary unless the food was stored and long-term capital investment was substituted for investment in next year’s harvest as well as other pursuits such as luxury and military buildup.   Productive innovation, whether institutional or technological, also led to moving the isoclines “northeast”, as they made capital more secure or productive.\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjMt8C7mwtcqrdlyJ7Z50aUzRFgez8jQN2kgu1UBnMsQwBqtjLSSSh_Gx82eHgghCe-Gtdoil4Cvl4055VVo5qgMc9B_aatdOSr5Jen9Jr5_Lc1x1XA5_UjPxfnVRJpBQwBPnrW\/s1600\/MalthusianIsocline_CapitalInvestmentDestruction.JPG\"\u003E\u003Cimg style=\"float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;width: 600px; height: 455px;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjMt8C7mwtcqrdlyJ7Z50aUzRFgez8jQN2kgu1UBnMsQwBqtjLSSSh_Gx82eHgghCe-Gtdoil4Cvl4055VVo5qgMc9B_aatdOSr5Jen9Jr5_Lc1x1XA5_UjPxfnVRJpBQwBPnrW\/s400\/MalthusianIsocline_CapitalInvestmentDestruction.JPG\" border=\"0\" alt=\"\"id=\"BLOGGER_PHOTO_ID_5531747302120671666\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EPoor harvests (from pests, poor weather, etc.) caused a setback that was temporary as long as it didn’t lead to the destruction of capital.   If it resulted in starvation, the deaths boosted the economy up the isocline, so that the standard of living of the remaining population in subsequent years of better harvests was higher than with prior better harvests at higher populations.\u003Cbr \/\u003E\u003Cbr \/\u003EDestruction of productive capital was for most of agricultural history as common as creation of capital.   Causes included  high rents and taxes that forced  a choice between going hungry and consuming capital.  War (quartering and foraging of troops, destruction of enemy crops and livestock, etc.) was a frequent cause of capital destruction.    Some kinds of capital, e.g. livestock and the fertility of the soil, could be destroyed simply by being neglected.  \u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2008\/07\/hampton-sides-sheds-light-on-mancur.html \"\u003EMancur Olson\u003C\/a\u003E distinguished between societies of “roving bandits”, where nomadic rulers stole the surpluses of foragers or farmers wherever they went, and “stationary bandits”, who controlled a specific area and simply taxed that area.   Rational stationary bandits taxed only to the Laffer maximum, because any further taxation actually reduced their revenues.   Indeed, because over-taxation resulted in the destruction of capital, a secure rational stationary bandit reduced taxes below the short-term Laffer maximum to prevent lower tax revenues in future years.  Roving bandits, on the other hand, stole nearly all, resulting in destruction of nearly all capital, because anything insecure that one roving bandit didsn't steal was stolen by another. \u003Cbr \/\u003E\u003Cbr \/\u003EStationary bandits did not always confine themselves to taxation that resulted in no destruction of capital.  Uncertainty over future power could cause a leader to get greedy and tax at capital-destroying levels while they were still in power.  Threats of assasination, coup, or conquest could move stationary bandits closer to roving bandits, since the bandits lost their future revenues if they lost power or territory: in such cases they rationally taxed far higher than the Laffer maximum, usually destroying much capital in the process.\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEj8t94iQh2q4oIyn1Dw8wsaaRX8RTjEkxEZJe5ZkuDhl-rvwH461FLrTHwU702BWiP4rckGeyN7_4QGn9USurSxnSkurupsc1ZQtFCyOOf3R3hEQitBZrrJxMOU5T9XdNA1h6D-\/s1600\/MalthusianIsocline_Bandits.JPG\"\u003E\u003Cimg style=\"float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;width: 600px; height: 413px;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEj8t94iQh2q4oIyn1Dw8wsaaRX8RTjEkxEZJe5ZkuDhl-rvwH461FLrTHwU702BWiP4rckGeyN7_4QGn9USurSxnSkurupsc1ZQtFCyOOf3R3hEQitBZrrJxMOU5T9XdNA1h6D-\/s400\/MalthusianIsocline_Bandits.JPG\" border=\"0\" alt=\"\"id=\"BLOGGER_PHOTO_ID_5531747200407717394\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EAs a result, we can characterize societies and locate their isoclines based on their mode of banditry.  This often gets confused with the mobility of production, and the two usually coincided, but they could and often were distinct.   Thus most pastoral societies, based on moving livestock from pasture to pasture, also featured roving banditry.    And societies based on fixed arable agriculture were generally controlled by stationary bandits.  But early modern Britain was a semi-pastoral society but with stationary bandits.   And Dark Ages Europe featured roving bandits from pastoral societies frequently conquering arable societies, and being conquered in turn, resulting in a move to a lower-capital society with a mix of roving and stationary banditry.\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ch4\u003EThe Problem of Edible Capital\u003C\/h4\u003E\u003Cbr \/\u003EOf all the ways in which capital can be destroyed, the hardest to avoid, in a hard year, was eating it.   Eating your milk cow or your draft animal was like eating your seed corn: very unwise but very likely if your alternative was imminent starvation.\u003Cbr \/\u003E\u003Cbr \/\u003EThe temptation to eat your capital created vicious cycles of capital destruction.   Capital destruction lowered labor productivity, which meant that people produced less calories per calories consumed.   This moved the Malthusian isoclines “southwest”, which meant even more people starved during the next equally bad year.  War and excessive taxation could trigger or extend the vicious cycle by killing livestock, poisoning farmland, etc.– and rendering future returns insecure, rendering further destruction of capital more probable.   The vicious cycle of capital consumption during times of famine may be the main factor that kept ancient agricultural civilizations mired in the Malthusian trap.\u003Cbr \/\u003E\u003Cbr \/\u003EWho owned the capital mattered.   Edible capital was much more likely to survive (and in the short term the starving people less likely to) if the capital was owned by people who were not themselves starving.   Thus, societies living under the feudal hierarchy of long-term tenancy, where livestock was often owned by the local lord rather than a peasant, many have maintained themselves farther above subsistence levels than societies where peasants completely controlled their own livestock.  \u003Cbr \/\u003E\u003Cbr \/\u003ECulture was filled with warnings against “eating your seed corn.”   Thus, as one example of many, Aesop’s stories of  “The Goose That Laid the Golden Egg.”   It was also filled with warnings about the importance of saving up for bad times, e.g. “The Ant and the Grasshopper.”\u003Cbr \/\u003E\u003Cbr \/\u003EConversely, capital creation that increased labor productivity increased the calories produced per calories consumed, moving the Malthusian isocline up and right.  With storage of food it also freed labor for further capital creation, which in future equally good years in turn freed further labor for ancillary or non-agricultural capital investment (transportation, manufacturing, financial services, etc.).   However, for nearly all of agricultural history the vast majority of this surplus went to population growth, military expenditure, and luxury display rather than capital investment.   \u003Cbr \/\u003E\u003Cbr \/\u003EThus, until the British breakout, agricultural societies remained in the Malthusian trap.   Prior agricultural socieities lacked an institutional ratchet that could incentivize capital creation in good harvests, but prevent too much capital destruction in bad harvests.   And they generally lacked low-cost protection from foreign wars, so that stationary bandits often started to act more like roving bandits when faced with threats of conquest.  To escape the trap, capital creation must exceed capital destruction to such an extent that farm labor productivity grows faster than population.  How Britain did this I hope to explore in future posts."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/3215897984550238991\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/3215897984550238991","title":"15 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/3215897984550238991"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/3215897984550238991"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2010\/10\/malthus-and-capital.html","title":"Malthus and capital"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"media$thumbnail":{"xmlns$media":"http://search.yahoo.com/mrss/","url":"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiTNOzAHCvB4ODe9iLc_Ndx70oNplvIIPAd2l7mlaOImv5JsUM3ZVm6YS8q9DOK85u_CbpKgAl-1_Ekhx3WJ7CLeh-RMrVjSTXKr-tZ0o2AqWH53ghjyqocXbhhEo-H3ZyZil7X\/s72-c\/MalthusianIsocline_SocietiesOn.JPG","height":"72","width":"72"},"thr$total":{"$t":"15"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-1532996656292844622"},"published":{"$t":"2010-10-10T00:42:00.000-07:00"},"updated":{"$t":"2010-10-11T11:25:08.383-07:00"},"title":{"type":"text","$t":"Elements, evolution, and the nitrogen crisis"},"content":{"type":"html","$t":"The oxygen crisis in the history of life is well known.   When photosynthesis arose, cyanobacteria and later plants started dumping large amounts of oxygen into earth’s atmosphere.   At first this oxygen, dissolved in the oceans, combined with metals in the oceans and “rusted out.”   Eventually, however, the free metals in the oceans were largely depleted and oxygen levels increased in the atmosphere.   At first this proved very poisonous, but eventually life not only adapted but took advantage of the oxygen, with some organisms evolving new high-energy respiration pathways that reacted oxygen with carbohydrates from eaten plants.  Respiration fueled the Cambrian explosion of sophisticated lifeforms which in turn led to us.\u003Cbr \/\u003E\u003Cbr \/\u003EMuch less well known, but of similar importance, was the much earlier nitrogen crisis.   This was not an overabundance of nitrogen, but the depletion of nitrogen in the readily usable forms that early life had evolved to consume. One might think that life would evolve to reflect at least roughly the same distribution of elements as are available in its environment.   Let’s see if this true relative to abundance in our planet’s present oceans:\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Cspan style=\"font-style:italic;\"\u003EElemental abundance in bacteria vs. in seawater (\u003Ca href=\"http:\/\/www.mso.anu.edu.au\/~charley%20\/papers\/ChopraLineweaver8assc%20proceedings.pdf\"\u003Eref\u003C\/a\u003E):\u003C\/span\u003E\u003Cbr \/\u003E\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhIlIzUuUxmA0GFNlAyZa169uc8h9BZiw8UB9WyHV8FDgX4ItzJBa2hdOjhGG-0FE3pjfVx7iNAmOEmHHLK94ThiKkLLz4W92lJ8XQUki5ygseNpHhkTFh9HWTTHpC_Cux1SdPF\/s1600\/ElementalAbundance_BacteriaVsSeaWater.JPG\"\u003E\u003Cimg style=\"float:right; margin:10px 20px 20px 10px;cursor:pointer; cursor:hand;width: 567px; height: 552px;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhIlIzUuUxmA0GFNlAyZa169uc8h9BZiw8UB9WyHV8FDgX4ItzJBa2hdOjhGG-0FE3pjfVx7iNAmOEmHHLK94ThiKkLLz4W92lJ8XQUki5ygseNpHhkTFh9HWTTHpC_Cux1SdPF\/s400\/ElementalAbundance_BacteriaVsSeaWater.JPG\" border=\"0\" alt=\"\"id=\"BLOGGER_PHOTO_ID_5526327836241042402\" \/\u003E\u003C\/a\u003E\u003Cp\u003E\u003Cbr \/\u003EThis is misleading for the metals before the oxygen crisis (i.e. for most of the history of life), when they were far more abundant in the oceans than the present levels shown.   But for elements that did not “rust out” of oxygenated seawater, such as oxygen, hydrogen, carbon, nitrogen, phosphorous, and potassium, the above graph is illuminating.\u003Cbr \/\u003E\u003Cbr \/\u003EThere is a great deal of correlation here to be sure, but there are also outliers, elements that life must concentrate by several orders of magnitude: particularly carbon, nitrogen, and phosphorous, and to a lesser extent potassium.   A reasonable guess is that this reflects contingency: life \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2009\/10\/our-greatgrandmother-was-proton-powered.html\"\u003Eoriginated\u003C\/a\u003E in a certain unusual environment, an environment disproportionately rich in certain chemicals, and its core functions cannot evolve to be based on any other molecules.  Every known living thing requires, in its core functions, nucleic acids (which make up RNA and DNA), amino acids (which make up proteins, including the crucial proteins that catalyze chemical reactions called enzymes), and the “energy currency” though which all metabolisms consume and produce energy, the adenosine phosphates.   Let’s briefly scan some core biological molecules to see how elements are distributed in them:\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ctable\u003E\u003Cbr \/\u003E\u003Ctr\u003E\u003Cbr \/\u003E\u003Cspan style=\"font-style:italic;\"\u003EAdenosine phosphates:\u003C\/span\u003E\u003Cbr \/\u003E\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjEjA3uvmi9u9_7dexR_3lSt2XpSuhMlyrX1siaAjzp_EidpsxQMRio_zkgCWs1s8KSR19P6-kA36SQgNV8-CmNdXJVHdylNsAsX26stlS-PLZLcrHH29fhh8EPpUEdb2Nf1seQ\/s1600\/AdenosinePhosphates.jpg\"\u003E\u003Cimg style=\"float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;width: 600px; height: 444px;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjEjA3uvmi9u9_7dexR_3lSt2XpSuhMlyrX1siaAjzp_EidpsxQMRio_zkgCWs1s8KSR19P6-kA36SQgNV8-CmNdXJVHdylNsAsX26stlS-PLZLcrHH29fhh8EPpUEdb2Nf1seQ\/s400\/AdenosinePhosphates.jpg\" border=\"0\" alt=\"\"id=\"BLOGGER_PHOTO_ID_5526329430522511474\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003E\u003C\/tr\u003E\u003Ctr\u003E\u003Cbr \/\u003E\u003Cspan style=\"font-style:italic;\"\u003ENucleic acid:\u003C\/span\u003E\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjhTMT6bal1WGxpjeul2Oc_iWIOoEwiUrI4AeopD4g_0Bm7HjT4gpeCMsEJNaxJ3OjcVQ3BgQJIiK8eotgFbQ0B-0Ybj7G_59hu1TXWM6unv6xiae2MrGxbdn5-kTL19Vsvtxo4\/s1600\/Nucleosides.jpg\"\u003E\u003Cimg style=\"float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;width: 600px; height: 450px;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjhTMT6bal1WGxpjeul2Oc_iWIOoEwiUrI4AeopD4g_0Bm7HjT4gpeCMsEJNaxJ3OjcVQ3BgQJIiK8eotgFbQ0B-0Ybj7G_59hu1TXWM6unv6xiae2MrGxbdn5-kTL19Vsvtxo4\/s400\/Nucleosides.jpg\" border=\"0\" alt=\"\"id=\"BLOGGER_PHOTO_ID_5526329817904403426\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003E\u003C\/tr\u003E\u003Ctr\u003E\u003Cbr \/\u003E\u003Cspan style=\"font-style:italic;\"\u003EAmino acids:\u003C\/span\u003E\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiaKPC0qTpwYYDjukfoTcesFcbZ48A2vHoF0WCxVHFMwMoat30KV8da-mrNi0IyYFGr4oykE77LHjYKo_WDsobeLyJHEvVvIrdEvc-eYbJ_t9xQLnDX6Dy_UdL9UiRjqF9-BJKx\/s1600\/AminoAcids.gif\"\u003E\u003Cimg style=\"float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;width: 600px; height: 538px;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiaKPC0qTpwYYDjukfoTcesFcbZ48A2vHoF0WCxVHFMwMoat30KV8da-mrNi0IyYFGr4oykE77LHjYKo_WDsobeLyJHEvVvIrdEvc-eYbJ_t9xQLnDX6Dy_UdL9UiRjqF9-BJKx\/s400\/AminoAcids.gif\" border=\"0\" alt=\"\"id=\"BLOGGER_PHOTO_ID_5526329615074534898\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003E\u003C\/tr\u003E\u003Cbr \/\u003E\u003C\/table\u003ELots of hydrogen and oxygen in these molecules, to be sure, but those are the elements in water.   So short of a drought or desert, organisms generally have plenty of readily accessible hydrogen and oxygen.   Carbon, nitrogen, phosphorous – those are the elements most used by the core molecules of life out of proportion to their existence in the environment.\u003Cbr \/\u003E\u003Cbr \/\u003ECarbon, as carbon dioxide, is abundant in the atmosphere (and earlier in earth’s history was far more abundant still).    Through the process of photosynthesis, the two double bonds in carbon dioxide can be readily cleaved in order to form other bonds with the carbon in biological molecules.  Indeed, instead of storing energy directly as ATP, life can and does take advantage of the relative accessibility of carbon, hydrogen, and oxygen to store energy as carbohydrates and fats, and then through respiration convert them to ATP only when needed.\u003Cbr \/\u003E\u003Cbr \/\u003ENitrogen is also abundant in earth’s atmosphere, but in the form of dinitrogen – two nitrogens superglued together with an ultra-strong triple bond.   To form nucleic acids, amino acids, and ATP, something must crack apart the nitrogen.  Phosphorous, to the extent it is available in the natural environment, comes in the readily incorporated form of phosphates.   The trouble is, phosphorous in any form is just plain uncommon.   Nevertheless, all life still relies on it at the center of the genetic code (DNA, RNA) and every metabolism (ATP).\u003Cbr \/\u003E\u003Cbr \/\u003EGenerally speaking, the result of the chemical contingencies of known life – which for its core functions uses molecules rich in hard-to-obtain nitrogen and phosphorous -- is that in known natural environments ecosystems are either nitrogen-limited or phosphorous-limited.    In other worse, the biomass of the ecosystem is usually limited by the amount of nitrogen or phosphorous available.   Liebig’s principle states that in any given environment, there is generally one nutrient that limits the growth of an organism or ecosystem.  In earth environments that nutrient is usually nitrogen (as ammonia or nitrate) or phosphorous (as phosphate).\u003Cbr \/\u003E\u003Cbr \/\u003EThe eukaryotes (basically, complicated multi-celled life including all plants, animals and fungi) seem to lack the ability to evolve metabolisms that go beyond a certain point.   Instead it’s the simpler prokaryotes -- archae and bacteria -- that have a far wider range of energy chemistry: a dizzying variety of chemosynthetic and photosynthetic metabolisms and ecosystems. \u003Cbr \/\u003E\u003Cbr \/\u003EFor certain crucial chemicals, the eukaryotes rely on archae and bacteria in their ecosystem.   Exhibit A is nitrogen fixation.  Life doubtless originated in an environment rich in ammonia and\/or nitrates, molecules with only single nitrogens and thus no need to split the superglued dinitrogen bond.   But these early organisms would have soon depleted the levels of nitrates and ammonia in the local environment to very low levels.    Call it the nitrogen crisis.\u003Cbr \/\u003E\u003Cbr \/\u003EDinitrogen, N2, is the most abundant molecule in our atmosphere.  But  few things are powerful or precise enough to crack dinitrogen.   Lightning can do it, converting dinitrogen and dioxygen in the earth’s atmosphere into nitrates.   Lightning thus can, albeit very slowly, put usable nitrates back into sea and soil where they have been depleted by life.   Trouble is (a) the resulting equilibrium level is far below the concentrations of nitrogen in organisms, and far below levels for optimum growth, and (b) the process requires an atmosphere rich in oxygen, which the earth until less than a billion years ago did not possess.  (Alternatively, lightning might have made significant nitrates from reacting carbon dioxide with nitrogen, a possibility explored \u003Ca href=\"http:\/\/www.nature.com\/nature\/journal\/v412\/n6842\/abs\/412061a0.html\"\u003Ehere\u003C\/a\u003E.  However, early life probably evolved in water so hot that it \u003Ca href=\" http:\/\/www.huliq.com\/3054\/microbe-fixes-nitrogen-at-a-blistering-92-c-evolution-of-nitrogen-fixation\"\u003Edestroyed\u003C\/a\u003E these nitrates).\u003Cbr \/\u003E\u003Cbr \/\u003EProkaryotes came to the rescue – probably very early in the history of life, when local nitrates and ammonia had been exhausted – by evolving perhaps the most important enzyme in biology, nitrogenase, “the nitrogen-splitting anvil.”   Nitrogenase’s metal-sulfur core makes it precise enough a catalyst to crack the triple bond of dinitrogen.  \u003Cbr \/\u003E\u003Cbr \/\u003E\u003Cspan style=\"font-style: italic;\"\u003ENitrogenase:\u003C\/span\u003E\u003Cbr \/\u003E\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEh5GozmI1mXJAZ9tskO2TO4kYIKlIZPkVaiNFYXOXi6SUCnl1xdfbFlNZR4qamnENKloGasS6A6yPMat2FJqNywiGGVWxh7rqYu0qmFpe-KjxlvSVw_QhvTUJx5PWRP0Hg6sFO8\/s1600\/Nitrogenase.gif\"\u003E\u003Cimg style=\"margin: 0pt 10px 10px 0pt; float: left; cursor: pointer; width: 313px; height: 400px;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEh5GozmI1mXJAZ9tskO2TO4kYIKlIZPkVaiNFYXOXi6SUCnl1xdfbFlNZR4qamnENKloGasS6A6yPMat2FJqNywiGGVWxh7rqYu0qmFpe-KjxlvSVw_QhvTUJx5PWRP0Hg6sFO8\/s400\/Nitrogenase.gif\" alt=\"\" id=\"BLOGGER_PHOTO_ID_5526321849933250882\" border=\"0\" \/\u003E\u003C\/a\u003EThe general  reaction fixing dinitrogen to ammonia, whether with nitrogenase or artificially, is as follows:\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Cblockquote\u003EN2 + 6 H + energy → 2 NH3\u003C\/blockquote\u003E\u003Cbr \/\u003EThe dinitrogen is split and combined with hydrogen to form ammonia.  Ammonia can then be readily used as an ingredient that ends up, via the sophisticated metabolism that exists in all life, as amino acids, nucleic acids, and adenosine phosphates.  When nitrogenase fixes nitrogen it consumes a prodigious amount of energy in the form of ATP.  In particular for each atom of nitrogen it consumes the energy of 8 phosphate bonds:\u003Cbr \/\u003E\u003Cbr \/\u003E \u003Cblockquote\u003EN2 + 8 H+ + 8 e− + 16 ATP → 2 NH3 + H2 + 16 ADP + 16 P\u003C\/blockquote\u003E\u003Cbr \/\u003ENitrogenase is extremely similar all organisms known to contain it.   It thus probably only ever evolved once.   Given its crucial function of supplying a limiting nutrient, despite its high energy cost it proved to be so useful that it spread to many phyla of archae and bacteria.  Either it evolved very early in the history of life (before the “LCA”, the Last Common Ancestor of all known life) or it spread through horizontal gene transmission:\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Cspan style=\"font-style:italic;\"\u003EAlternative origins and evolution of nitrogenase (click to enlarge)\u003C\/span\u003E (\u003Ca href=\"http:\/\/www.stat.rice.edu\/%7Esiefert\/Raymondetsl2004.pdf\"\u003E \u003Cspan style=\"font-style: italic;\"\u003Eref\u003C\/span\u003E\u003C\/a\u003E):\u003Cbr \/\u003E\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhGhEejPxydQcdzzn9793BbvUXIk4zUzBLuKrInr074AYf2LLaYZn3fmSrUNyi0FFuNdEBvsqvGIkok7Q3qG7imF_cEZohu6oeTaZPAnGPvTilwS-5WdZvmJx0CIOJzfVzUthmv\/s1600\/NitrogenaseOrigin.JPG\"\u003E\u003Cimg style=\"float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;width: 400px; height: 202px;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhGhEejPxydQcdzzn9793BbvUXIk4zUzBLuKrInr074AYf2LLaYZn3fmSrUNyi0FFuNdEBvsqvGIkok7Q3qG7imF_cEZohu6oeTaZPAnGPvTilwS-5WdZvmJx0CIOJzfVzUthmv\/s400\/NitrogenaseOrigin.JPG\" border=\"0\" alt=\"\"id=\"BLOGGER_PHOTO_ID_5526325337194829074\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003EThe archae and bacteria that contain nitrogenase, and can thus fix nitrogen, are called diazotrophs.  One of the earliest diazotrophs may have been a critter that, like \u003Ca href=\"http:\/\/www.huliq.com\/3054\/microbe-fixes-nitrogen-at-a-blistering-92-c-evolution-of-nitrogen-fixation\"\u003Ethis one\u003C\/a\u003E, lived in high pressure hot water in an undersea vent.  In today’s ocean, the most common diazotroph is the phytoplankton \u003Ca href=\"http:\/\/www.usc.edu\/uscnews\/stories\/11493.html\"\u003ETrichodesmium\u003C\/a\u003E.  \u003Cbr \/\u003E\u003Cbr \/\u003E\u003Cspan style=\"font-style: italic;\"\u003EColonies of Trichodesmium:\u003C\/span\u003E\u003Cbr \/\u003E\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiADLPei9B_koeTP_JSvCXIc06o8BcY5iVWitYAyONN5maaWz502Gm-igYShfxMLAbYhCX8XKz4JaSGbjwKo3V4F_JWEp-dv55TTtG341wyGgvzVqr2nBZixh8gbPd3mz6_rm4d\/s1600\/TrichodesmiumColonies.jpg\"\u003E\u003Cimg style=\"margin: 0pt 10px 10px 0pt; float: left; cursor: pointer; width: 385px; height: 400px;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiADLPei9B_koeTP_JSvCXIc06o8BcY5iVWitYAyONN5maaWz502Gm-igYShfxMLAbYhCX8XKz4JaSGbjwKo3V4F_JWEp-dv55TTtG341wyGgvzVqr2nBZixh8gbPd3mz6_rm4d\/s400\/TrichodesmiumColonies.jpg\" alt=\"\" id=\"BLOGGER_PHOTO_ID_5526321524117217298\" border=\"0\" \/\u003E\u003C\/a\u003EThe biomass earth's oceans is probably limited by the population of such diazotrophs.  Supplying the iron they use to make nitrogenase would increase the amount of nitrogen fixation and thus the biomass in the oceans.    A larger ocean ecosystem would draw out more carbon dioxide from the atmosphere, and so is of great interest.   This process in the ocean seems to have its limits, however: too much ocean biomass in a particular area can, when it decomposes, deplete oxygen from the ocean, suffocating animals.   Oxygen replacement from the atmosphere appears to be too slow to prevent this effect when nitrogen concentrations are high enough, but nitrogen concentrations in almost all ocean areas are far lower than this and would remain lower even while drawing out substantial amounts of carbon dioxide.   (Here is a nice Flash animation of the \u003Ca href=\"http:\/\/www.whoi.edu\/oceanus\/viewFlash.do?fileid=46925\u0026amp;id=32332\u0026amp;aid=53946\"\u003Enitrogen cycle\u003C\/a\u003E in the oceans).\u003Cbr \/\u003E\u003Cbr \/\u003EOn land, certain plants, especially legumes, are symbiotic with certain diazotrophs.   The bugs grow in root nodules in which the legume supplies them large amounts of sugar to power the energy-greedy nitrogenase.  In turn, the diazotrophs supply their legume hosts with fixed nitrogen allowing the legumes to generate more protein more quickly than other plants: but at the expense of more photosynthesis needed to feed the energy-hungry bugs."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/1532996656292844622\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/1532996656292844622","title":"10 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/1532996656292844622"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/1532996656292844622"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2010\/10\/elements-evolution-and-nitrogen-crisis.html","title":"Elements, evolution, and the nitrogen crisis"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"media$thumbnail":{"xmlns$media":"http://search.yahoo.com/mrss/","url":"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhIlIzUuUxmA0GFNlAyZa169uc8h9BZiw8UB9WyHV8FDgX4ItzJBa2hdOjhGG-0FE3pjfVx7iNAmOEmHHLK94ThiKkLLz4W92lJ8XQUki5ygseNpHhkTFh9HWTTHpC_Cux1SdPF\/s72-c\/ElementalAbundance_BacteriaVsSeaWater.JPG","height":"72","width":"72"},"thr$total":{"$t":"10"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-5880089053884755731"},"published":{"$t":"2010-10-08T20:28:00.000-07:00"},"updated":{"$t":"2010-10-08T21:18:46.615-07:00"},"title":{"type":"text","$t":"Petrus Sabbatius comes to power"},"content":{"type":"html","$t":"The Roman Empire was a military dictatorship.  Its emperors came and went in a relentless spree of assassinations and civil wars (\u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2009\/11\/auction-and-sword.html\"\u003Eexample\u003C\/a\u003E) that lasted for nearly 1500 years.   One and one-half millennia of violent government extended across history from the victories of Octavian (a.k.a. Caesar Augustus) over his rivals in decades before Christ to the fall of Constantinople to the Turks in 1453.   Despite the violence, or perhaps because of it, Roman elites accumulated vast surpluses and left spectacular monuments unmatched until much later in European history.\u003Cbr \/\u003E\u003Cbr \/\u003EBy the opening of the 6th century the city of Rome itself was no longer a part of the Empire.  Instead Italy was ruled by the Goths and the capital city of the remaining empire, “Romania”,  was Constantinople.  This city (in modern times called Istanbul) controlled the strategic straights linking the Black Sea and the Mediterranean.  \u003Cbr \/\u003E\u003Cbr \/\u003ENo topics dominated the culture of Constantinople so much as (1) the horse races, and (2) the debate over the relative contributions of the divine and the human to the nature of Christ.\u003Cbr \/\u003E\u003Cbr \/\u003EThe debate over the nature of Christ divided Christians into numerous sects: Orthodox Catholics, Monophysites, Arians, Manicheans, Nestorians, and many others.   The Orthodox Catholics believed that Christ was both God and man, Monophysites divine only, Arians human only, and there were a dizzying number of variations on and nuances to these dogmas.    Theology was the hottest topic of debate and biggest motivation for political division and persecution in Constantinople.   Constantinople was dominated by Orthodox Catholics and Monophysites, while the Arian heresy held by the Goths and Vandals that had taken over the Western part of the Empire was considered a heresy beyond the pale.   Other positions, such as Manicheaism, were sometimes tolerated and sometimes not.\u003Cbr \/\u003E\u003Cbr \/\u003EWith the coming to power of Christianity the brutal gladiatorial fights had been suppressed and horse racing was now the dominant spectator sport.   The Hippodrome in Constantinople was the main place of public gathering.    Spectators  shouted political opinions at the emperor, who in turn used the crowd to gauge public opinion.   Indeed, for the normal citizen, this was the only form of political participation.   \u003Cbr \/\u003E\u003Cbr \/\u003EThe racing teams and their colors – Red, White, Blue, Green – dated far back to the early Empire.  By the 6th century, the two dominant teams were the Blues and the Greens.     The political nature of the Hippodrome had converted their fans into political factions.    The Blues tended to be government types, land owners, and Orthodox Catholics (or, during the frequent schisms with Rome, Chalcedonians).  Greens tended to be merchants and Monophysites.\u003Cbr \/\u003E\u003Cbr \/\u003EDuring the reign of Anastasius, in a village in Illyria (probably in modern Macedonia just north of modern Greece), where the natives still spoke a passable Latin, lived a young peasant bachelor.   Instead of taking up farming he left the village and came to Constantinople to join the army.    Dropping his humble family name and styling himself “Justin” – “just man” -- he fought in several wars and was promoted through the ranks of the palace guards.   Eventually he was promoted to Count (head) of the Excubitors, one of the two palace guard groups.  \u003Cbr \/\u003E\u003Cbr \/\u003EJustin then adopted his nephew, one Petrus Sabbatius, and brought him to Constantinople.   Sabbatius too dropped his humble name and, aspiring to the achievements of his uncle and benefactor, restyled himself “Justinian”.   \u003Cbr \/\u003E\u003Cbr \/\u003EJustin’s master, the emperor Anastatius, was a Green and Monophysite.  Justin, and to an even greater degree his nephew, were Orthodox Catholics (or during the schism of the time Chalcedonians) who supported the Blue faction.\u003Cbr \/\u003E\u003Cbr \/\u003EAnastasius failed to make formal provisions for the succession.   His death in 518 threw Constantiople into confusion, as none his three nephews had strong support.    The Manichean eunuch Amantius, Chamberlain to Anastasius, hoped to be a power behind the throne of his chosen puppet,  an obscure character named Theocritus.   The palace guards had traditionally dominated the succession in Rome,  so Amantius needed the support of at least one of the two palace guard groups, the Excubitors and the Scholarians.  \u003Cbr \/\u003E\u003Cbr \/\u003EJustin, head of the Excubitors, secretly promised to support Theocritus and took money from Amantius to bribe the support of influential fence-sitters.  But instead of carrying out this secret plot, Justin lobbied and bullied the Blues, their Senate allies (most Senators were Blue), and his own soldiers.   Finally winning acclamation of most of the Blues in the Hippodrome, and fearful acquiescence of the Greens, Justin assumed the purple robes of emperor.\u003Cbr \/\u003E\u003Cbr \/\u003ERoman imperial successions had always been highly irregular, but the ideal of authority that other political players would most accept is suggested by Justin’s letter, upon assuming power, to the Pope in Rome: “We have been elected to the Empire by the favor of the indivisible Trinity, by the choice of the highest ministers of the sacred Palace, and of the Senate, and finally by the election of the army.”\u003Cbr \/\u003E\u003Cbr \/\u003ETo cover his tracks, Justin had Amantius and Theocritus executed, under the pretext that Amantius (a heretic Manichean, but tolerated under Anastatius) had insulted the Orthodox Patriarch of Constantinople.  He named his nephew Count of the Domestics.  Justinian was a, or perhaps the, power behind the throne.   Falling in love with a repentant prostitute, Theodora, he had Justin’s quaestor, Proclus, cleverly draft a law that allowed him to marry a former prostitute while still forbidding such a degrading marriage to other Senators.\u003Cbr \/\u003E\u003Cbr \/\u003EEarly in 527 AD, Justin fell sick and named Justinian Augustus (co-ruler) and successor. A few months later, Justin died and Justinian at age 45 became emperor.\u003Cbr \/\u003E\u003Cbr \/\u003EThe former Petrus Sabbatius was to lavish his adoptive name and the empire's treasure on cities new and old, grand buildings, and wars of reconquest.   Most importantly for our purposes, Justinian would plaster his just-sounding name on a recompilation of Roman law that has profoundly shaped the West down to our own time.\u003Cbr \/\u003E\u003Cbr \/\u003EComing: Tribonian, John of Cappadocia, revolt, massacre, prostration, and the the birth of a bloody code.\u003Cbr \/\u003E\u003Cspan style=\"font-weight:bold;\"\u003E\u003Cbr \/\u003EReferences\u003C\/span\u003E\u003Cbr \/\u003EProcopius,\u003Ca href=\"http:\/\/penelope.uchicago.edu\/Thayer\/E\/Roman\/Texts\/Procopius\/Anecdota\/home.html\"\u003E \u003Cspan style=\"font-style:italic;\"\u003EAnecdota (Secret History)\u003C\/span\u003E\u003C\/a\u003E\u003Cbr \/\u003EProcopius,\u003Ca href=\"http:\/\/www.gutenberg.org\/files\/16764\/16764-h\/16764-h.htm\"\u003E \u003Cspan style=\"font-style:italic;\"\u003EHistory of the Wars\u003C\/span\u003E\u003C\/a\u003E\u003Cbr \/\u003EJ.B. Bury, \u003Cspan style=\"font-style:italic;\"\u003EHistory of the Later Roman Empire\u003C\/span\u003E\u003Cbr \/\u003EGibbon, \u003Cspan style=\"font-style:italic;\"\u003EThe Decline and Fall of the Roman Empire\u003C\/span\u003E"},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/5880089053884755731\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/5880089053884755731","title":"6 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/5880089053884755731"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/5880089053884755731"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2010\/10\/petrus-sabbatius-comes-to-power.html","title":"Petrus Sabbatius comes to power"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"6"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-7079363988958824476"},"published":{"$t":"2010-10-03T16:33:00.000-07:00"},"updated":{"$t":"2010-10-03T16:34:02.034-07:00"},"title":{"type":"text","$t":"Signals, gifts, and politics"},"content":{"type":"html","$t":"(I recently rediscovered this old post of mine and thought it deserved re-posting).\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"http:\/\/www.marginalrevolution.com\/marginalrevolution\/2008\/05\/podcast-with-ro.html#comments\"\u003EParaphrasing\u003C\/a\u003E Robin Hanson from a recent podcast: \u003Ci\u003E\"In gifts, it's common signals of quality that matter, not private signals of quality.\"\u003C\/i\u003E\u003Cbr \/\u003E\u003Cbr \/\u003ERobin Hanson has a great theory for why neoclassical economics so often fails to explain human relationships and institutions, especially personal relationships.  Why, he asks for example, do guests bring wine to dinner at an acquaintance's home instead of paying cash, like they would at a restaurant?  Traditional economics cannot explain such basic things.\u003Cbr \/\u003E\u003Cbr \/\u003EInstead Robin posits, building on the work of previous economists and evolutionary psychologists, that signaling dominates most of our relationships and many of our institutions.   In other words, much of our behavior is used to signal, or prove by our behavior, to our fellows our intelligence, empathy, status, and so on.  In the hunter-gatherer environments in which our genes evolved, such relationships were far more impportant to our genetic success than any other aspects of our environment.  Thus our behaviors are dominated by the signals that would have most advantageously (for our genes) developed our relationships in that environment.\u003Cbr \/\u003E\u003Cbr \/\u003EThe general theory is sound -- I've held a version of it for quite a long time -- but many of the conclusions he draws from this theory, such as the above quote about gifts, are quite questionable.  The thoughtful gift, namely the gift that is targeted towards the recipient's unique preferences, is widely welcomed as the best kind of gift.  \"It's the thought that counts\" may be a cliche and an exaggeration, but it nevertheless carries substantial truth.   The thoughtful gift signals our intelligence, our empathy, and the fact that those skills are being used in favor of the gift recipient.\u003Cbr \/\u003E\u003Cbr \/\u003EThis (and a second theory described below) explains far better than Robin does why cash makes such a bad gift.  A gift or exchange like bringing wine to dinner provides the opportunity to signal that one has remembered the dinner menu, and often also signals that one knows the hosts' wine preferences.  Cash by sharp contrast is the most thoughtless gift.  Cash is suitable only for contractual dealings with strangers; it is worse than useless for developing relationships.   \u003Cbr \/\u003E\u003Cbr \/\u003EGift cards exhibit a modicum more empathy than cash (you have to know your pal likes Starbucks), but prior generations who put more effort into relationships considered gift certificates to be rather rude as a personal gift: they were only considered suitable as, for example, a substitute for a cash wage bonus. Today, like \"friends\" links on Facebook, gift cards signal a modicum of passing fancy which substitutes for the many closer relationships and more thoughtful gifts that most of our forebears enjoyed.\u003Cbr \/\u003E\u003Cbr \/\u003EA second reason that cash makes such a poor gift is that it provides a very poor emotional and sensory experience.  Most signals, as at least indirect products of evolution, are targeted at our emotions far more than they are targeted at  the intellect.   A good wine, for example, will be experienced far more fondly and thus remembered far longer than a dirty dollar bill.  The most common signals also tend to signal emotional states or skills (e.g. empathy) far more than intellectual ones.\u003Cbr \/\u003E\u003Cbr \/\u003EPer Friedrich Hayek, this emotional infrastructure breaks down when we are dealing with strangers -- in those cases contractual relationships and \"filthy lucre\" are far more efficient and effective ways of relating.  But the cold natures of these transactions, i.e. the fact that these relationships are divorced from the emotional signals evolution has wired us to expect, explains much of the political resistance to markets with their \"filthy lucre\", \"greed\", etc.  Merchants, property, contracts, and so on are crucial to our modern economy, but they send the wrong emotional signals to our hunter-gatherer brains.\u003Cbr \/\u003E\u003Cbr \/\u003EMost politics, and in particular the pathologies of politics, are themselves about instinctive signaling -- for example signaling tribal loyalty on the right, or signaling altruistic natures on the left.  Most political ideologies freely and fraudulently ignore the crucial distinction between friend and stranger: in the world of political signaling we are supposed to care as much about the vast anonymous \"poor\" as we do about our own children who we well know to be helpless, and we are supposed to be loyal to a vast country of hundreds of millions of strangers (including more than a few very strange strangers) as if they were all familiar kin.  In both cases, these are largely fake signals that don't cost the fraudulent signaler very much: the right-winger does not actually have to be patriotic, and the left-winger does not actually have to be altruistic, and in both cases they usually are not.  Few of the children of hawk Congressmen served in the Iraq War, and Barack Obama has given only a miniscule portion of his income to charity.   But they are very good at making the politically correct noises that most humans emotionally expect to hear.  Thus left-wingers can get great social mileage from calling right-wingers \"greedy\", meaning that right-wingers are failing to send enough altruistic signals, and right-wingers can get great social mileage from calling left-wingers \"unpatriotic.\"  People who, due to real altruism, care more about the actual consequences of political policies than about sending the proper social signals to their peers, usually end up being called both \"greedy\" and \"unpatriotic\" in the bargain."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/7079363988958824476\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/7079363988958824476","title":"1 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/7079363988958824476"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/7079363988958824476"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2008\/05\/signals-gifts-and-politics.html","title":"Signals, gifts, and politics"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"1"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-4909663949988563507"},"published":{"$t":"2010-09-29T15:10:00.000-07:00"},"updated":{"$t":"2010-09-30T10:35:46.144-07:00"},"title":{"type":"text","$t":"Bugs in the stack"},"content":{"type":"html","$t":"Continuing at long last with my series on the history of Roman law, I will introduce two of the central players: the administrator and legal scholar Tribonian and his master Justinian, emperor of the late Roman (\"Byzantine\") empire from 527-565 A.D.   Today however, a bit about the importance of their legal code.\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhNk31w6QHYUkysGMmpEhRWRiXUVrGeDKyG6x6YD7tKpU0qj2DDC2Hh_cai4B6PELPkmeuEJqn0yD9GzVh19UleKf35178SFuE-X-DnynQ5oZaI_hxSqfeW40-aLB5tkXfEhGQj\/s1600\/LegalProtocolStack.JPG\"\u003E\u003Cimg style=\"float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;width: 219px; height: 137px;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhNk31w6QHYUkysGMmpEhRWRiXUVrGeDKyG6x6YD7tKpU0qj2DDC2Hh_cai4B6PELPkmeuEJqn0yD9GzVh19UleKf35178SFuE-X-DnynQ5oZaI_hxSqfeW40-aLB5tkXfEhGQj\/s400\/LegalProtocolStack.JPG\" border=\"0\" alt=\"\"id=\"BLOGGER_PHOTO_ID_5522463638642010690\" \/\u003E\u003C\/a\u003EIf law shapes society’s most basic structures, as master genes -- genes that control other genes -- shape the basic form of our bodies, then Justinian's Code is the ancestral master DNA of the West.  If society is a \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Protocol_stack\"\u003Eprotocol stack\u003C\/a\u003E and law is a low-level protocol governing our higher-level interactions of politics and commerce, then it's fair to say that the Justinian Code was the Internet Protocol that long governed, and still in many ways governs, the Web that is Western society.\u003Cbr \/\u003E\u003Cbr \/\u003EIf tech metaphors don't do it for you, let's try religion: Justinian was the Moses of the Western legal world.  When the first universities, which were practically just law schools, were founded in Italy in the 11th century, the newly rediscovered Justinian Code was the main draw and the center of the curriculum.   \u003Cbr \/\u003E\u003Cbr \/\u003EVariations of the legal system of Justinian and Tribonian have been taught in Western universities, and often enacted into the law of Western societies, ever since.   And indeed in the 19th and 20th centuries these variations were enacted into law all over the world.   The only substantial exception, a partial exception, to the overwhelming influence of this code has been the English legal system and its offshoots.   \u003Cbr \/\u003E\u003Cbr \/\u003EIdeas derived from Justinian's Code also form many of the basic and often flawed assumptions of the political science and philosophy of law taught in universities to this day.\u003Cbr \/\u003E\u003Cbr \/\u003EThe Romans had a highly evolved substantive law of crime, torts (“delicts”), property, contracts, and many other commercial and personal matters.   In these areas the preservation and recovery of the Roman law was indispensible.    The influence of the \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2007\/05\/why-legal-procedure-is-central-to.html\"\u003Eprocedural and constitutional\u003C\/a\u003E aspects of Justinian's Code was quite another matter, as I hope to detail in future posts.   The strong influence of Justinian and Tribonian over Western procedural and constitutional law started with the universities, continued in the Romanization of Continental law during and after the Renaissance, accelerated with the codifications of the Prussians and Napoleon of the 18th and 19th centuries, and reached its zenith with the totalitarian dicatorships of the 20th century.   Only some of the odious influence of the procedural law that Tribonian and his crew assembled and drafted for their master has gone into perhaps temporary decline since then.  \u003Cbr \/\u003E\u003Cbr \/\u003EThe historian Procopius, who served in Justinian's army, was a superstitious, or at least creatively metaphorical, man who thought that Justinian was a fiend sent from hell to do maximum destruction to the world.  That opinion was only based on the consequences of Justinian in his own lifetime.   The cumulative influence of his procedural and constitutional laws on the world since that time has been overwhelmingly more harmful.\u003Cbr \/\u003E\u003Cbr \/\u003ETribonian in the service of Justinian introduced and passed on fundamental flaws in the Western political DNA.   Or, to switch back to our other tech metaphor, some severe bugs in the lowest layer of our society’s protocol stack.\u003Cbr \/\u003E\u003Cbr \/\u003EComing up: introductions to Justinian and Tribonian."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/4909663949988563507\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/4909663949988563507","title":"3 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/4909663949988563507"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/4909663949988563507"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2010\/09\/bugs-in-stack.html","title":"Bugs in the stack"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"media$thumbnail":{"xmlns$media":"http://search.yahoo.com/mrss/","url":"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhNk31w6QHYUkysGMmpEhRWRiXUVrGeDKyG6x6YD7tKpU0qj2DDC2Hh_cai4B6PELPkmeuEJqn0yD9GzVh19UleKf35178SFuE-X-DnynQ5oZaI_hxSqfeW40-aLB5tkXfEhGQj\/s72-c\/LegalProtocolStack.JPG","height":"72","width":"72"},"thr$total":{"$t":"3"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-8019985166749542752"},"published":{"$t":"2010-09-24T21:36:00.001-07:00"},"updated":{"$t":"2010-09-25T13:50:55.279-07:00"},"title":{"type":"text","$t":"The Malthusian mystery"},"content":{"type":"html","$t":"After a long stint of research and thought I have returned to share some of the results.\u003Cbr \/\u003E\u003Cbr \/\u003EIn the early 19th century the Reverend Thomas Malthus, foreshadowing Charles Darwin, wrote:\u003Cbr \/\u003E\u003Cblockquote\u003EThroughout the animal and vegetable kingdoms Nature has scattered the seeds of life abroad with the most profuse and liberal hand but has been comparatively sparing in the room and the nourishment necessary to rear them.  The germs of existence contained in this earth if they could freely develop themselves would fill millions of worlds in the course of a few thousand years.  Necessity, that imperious all pervading law of nature, restrains them within the prescribed bounds. The race of plants and the race of animals shrink under this great restrictive law and man cannot by any efforts of reason escape from it ... Wherever therefore there is liberty the power of increase is exerted and the superabundant effects are repressed afterwards by want of room and nourishment.\u003C\/blockquote\u003EThis is the Malthusian trap: any improvements in institutions, technologies, or any other improvement in labor productivity will over the course of a few generations increase the population until it once again flirts with subsistence levels.  \u003Cbr \/\u003E\u003Cbr \/\u003EDelayed marriage and plagues can delay or reverse such population growth for a time and produce higher than subsistence standards of living, but, with some small variations (see diagram below), eventually our Darwinian proclivity to procreate will return our descendants back to subsistence levels.   \u003Cbr \/\u003E\u003Cbr \/\u003EBut just as Malthus was writing, his Great Britains were becoming the first living things to ever break free of the Malthusian trap.   As a result, in the 21st century the developed world has both populations \u003Ci\u003Eand\u003C\/i\u003E standards of living never before achieved. \u003Cbr \/\u003E\u003Cbr \/\u003EWe can picture the progress of civilization in Malthusian terms.   Click to enlarge and examine this schematic diagram: \u003Cbr \/\u003E\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgR6FCm-rvvIfDy69aq2YdtcF380t8fmcvm91HmEt8QHZUGf-6lPO_bu2cporcGpfCoy9EE000Dr0L3GwHg-lETUFWE307U1qhoCKyghywAVYi_Xuix-kwWkRbevg6RjD6egTjL\/s1600\/PopulationPerNaturalLocalHectareVsFoodProductionLaborProductivity.JPG\"\u003E\u003Cimg style=\"float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;width: 400px; height: 299px;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgR6FCm-rvvIfDy69aq2YdtcF380t8fmcvm91HmEt8QHZUGf-6lPO_bu2cporcGpfCoy9EE000Dr0L3GwHg-lETUFWE307U1qhoCKyghywAVYi_Xuix-kwWkRbevg6RjD6egTjL\/s400\/PopulationPerNaturalLocalHectareVsFoodProductionLaborProductivity.JPG\" border=\"0\" alt=\"\"id=\"BLOGGER_PHOTO_ID_5520955878700850178\" \/\u003E\u003C\/a\u003E\u003Ci\u003EClick to enlarge.\u003C\/i\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EIn this chart, the horizontal axis represents, on a logarithmic scale, the human population per area of land adjusted for natural (but not artificial) variability in its potential to support human food production.  Such an adjusted area is typically called by ecologists a \"global hectare\" and my phrase \"natural global hectare\" represents a hypothetical measure of this independent of all human labor and capital improvements.\u003Cbr \/\u003E\u003Cbr \/\u003EThe vertical axis represents per capita nutrition derived, via human labor and capital, from this ecology.  \u003Cbr \/\u003E\u003Cbr \/\u003EThe slope line or \"labor productivity isocline\" represents, intuitively speaking, a level of civilization.  In other words, a level of technological and institutional progress. More specifically, it represents food production output per worker (productivity) adjusted for the marginality of ecology being used.   As the isoclines move up and right, a given unit of labor is producing more human nutrition from the same global hectare.   So our own 21st century agriculture is far more productive than 19th century British agriculture, which in turn was far more productive than medieval European agricultural, which in turn was more productive than Neolithic agriculture, which in turn was more productive than hunting and gathering.\u003Cbr \/\u003E\u003Cbr \/\u003EAs we move along a given isocline (a given \"level of civilization\" as just described) we experience the Malthusian tradeoff: more population per global hectare with lower nutrition, or less population per global hectare with higher nutrition.   As we escape from the Malthusian trap, nutrition itself becomes satisfied and the left axis really represents a more general per capita income.   Prior to escaping from the Malthusian trap, nutrition dominated the average human budget with fuel (mostly to cook food), clothing, shelter, etc. usually less than 20% of a personal budget or the overall economy.\u003Cbr \/\u003E\u003Cbr \/\u003EA number of interesting patterns emerge from this kind of analysis.   First, \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2008\/07\/hampton-sides-sheds-light-on-mancur.html\"\u003Eroving bandit\u003C\/a\u003E societies such as hunter-gatherers and pastoral nomads tended to have lower population levels and higher per-capita nutrition than stationary bandit societies (settled agriculture).  The Western European Dark Ages is an interesting intermediate case.   This certainly suggests that most prior analyses of Malthusian tradeoffs, which have focused on pure economics, are very incomplete -- that security and politics play a crucial role, and not just in the trivial sense wars and other causes of mortality.  There are good reasons of security of property and capital investments to expect this difference between roving and stationary bandits, as I hope to describe in future post(s).\u003Cbr \/\u003E\u003Cbr \/\u003EThe main question I hope to answer in forthcoming posts is: why did our escape from the Malthusian trap happen when and where it did, and not elsewhere?   This will probably involve exploring a wide variety of technologies and institutions and especially the key factors of capital investment and security.\u003Cbr \/\u003E\u003Cbr \/\u003EOne obvious possible answer -- and the most likely reason humans will continue departing from the Malthusian trap for some time to come -- is birth control.  But the British population up to the late 19th century was booming and seldom made effective use of birth control, so this can't explain Great Britain's initial escape from the Malthusian trap.  A second answer is to invoke the industrial revolution.  But this is a vague term and risks getting at least some of the causation backwards, as one of the factors enabling the industrial revolution was a large swelling of the British industrial work force because improving farm labor productivity meant that fewer farm workers could feed more people.   And it neglects a third crucial factor, the transportation revolution.   And it risks focusing on technology when institutional changes played a crucial role.   All of which I hope to explore and to discuss with my readers.\u003Cbr \/\u003E\u003Cbr \/\u003EMeanwhile, for now I leave you with the following fascinating looks at London and Beijing early in the 20th century.   See if you can spot a difference between the two societies which I find crucial.  Indeed it is visually obvious and is implicit in a theme of the Chinese documentary.  The internal combustion engines are irrelevant for our pre-20th-century purposes.  Escape from the Malthusian trap was well underway by the early 19th century and the difference I have in mind had existed to some extent at least for many centuries.  But if you're into more trivial pursuits see if you can spot the two \"horseless carriages\" on the London streets. \u003Cbr \/\u003E\u003Cbr \/\u003ELondon in the 1900s:\u003Cbr \/\u003E\u003Cobject height=\"385\" width=\"480\"\u003E\u003Cparam name=\"movie\" value=\"http:\/\/www.youtube.com\/v\/v-5Ts_i164c?fs=1\u0026amp;hl=en_US\"\u003E\u003Cparam name=\"allowFullScreen\" value=\"true\"\u003E\u003Cparam name=\"allowscriptaccess\" value=\"always\"\u003E\u003Cembed src=\"http:\/\/www.youtube.com\/v\/v-5Ts_i164c?fs=1\u0026amp;hl=en_US\" type=\"application\/x-shockwave-flash\" allowscriptaccess=\"always\" allowfullscreen=\"true\" height=\"385\" width=\"480\"\u003E\u003C\/embed\u003E\u003C\/object\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EBeijing and some other Chinese locales in the 1920s:\u003Cbr \/\u003E\u003Cobject height=\"385\" width=\"480\"\u003E\u003Cparam name=\"movie\" value=\"http:\/\/www.youtube.com\/v\/vIJYEaBH1Yk?fs=1\u0026amp;hl=en_US\"\u003E\u003Cparam name=\"allowFullScreen\" value=\"true\"\u003E\u003Cparam name=\"allowscriptaccess\" value=\"always\"\u003E\u003Cembed src=\"http:\/\/www.youtube.com\/v\/vIJYEaBH1Yk?fs=1\u0026amp;hl=en_US\" type=\"application\/x-shockwave-flash\" allowscriptaccess=\"always\" allowfullscreen=\"true\" height=\"385\" width=\"480\"\u003E\u003C\/embed\u003E\u003C\/object\u003E"},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/8019985166749542752\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/8019985166749542752","title":"23 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/8019985166749542752"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/8019985166749542752"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2010\/09\/malthusian-mystery.html","title":"The Malthusian mystery"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"media$thumbnail":{"xmlns$media":"http://search.yahoo.com/mrss/","url":"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgR6FCm-rvvIfDy69aq2YdtcF380t8fmcvm91HmEt8QHZUGf-6lPO_bu2cporcGpfCoy9EE000Dr0L3GwHg-lETUFWE307U1qhoCKyghywAVYi_Xuix-kwWkRbevg6RjD6egTjL\/s72-c\/PopulationPerNaturalLocalHectareVsFoodProductionLaborProductivity.JPG","height":"72","width":"72"},"thr$total":{"$t":"23"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-6553298646764498264"},"published":{"$t":"2010-02-11T00:11:00.000-08:00"},"updated":{"$t":"2010-02-11T01:07:26.691-08:00"},"title":{"type":"text","$t":"Interstellar archaeology and surface engineering"},"content":{"type":"html","$t":"The SETI League has published a short \u003Ca href=\"http:\/\/www.setileague.org\/editor\/cfcs.htm\"\u003Earticle\u003C\/a\u003E describing my strategy for what some have dubbed \"interstellar archaeology\", namely the use of astronomical instruments to look for alien artifacts in other star systems or galaxies.  In contrast to SETI, which listens for radio or optical transmissions, interstellar archaeology is looking for material structures.  The connection between surface engineering and strategies that look for alien constructions seems quite obvious to me, now that I have thought of it, but I've done a literature and Internet search and haven't seen the connection made by others.  The discussions seem to be all about the design of these hypothetical astrostructures themselves rather than about what astronomical instruments could give us a great deal of information about, if there are any to be seen, namely their surfaces.  \u003Cbr \/\u003E\u003Cbr \/\u003EMy strategy emphasizes that, whatever the alien structure may be, we would be looking at its surface.  Artificial surfaces tend to be highly engineered for useful thermal and optical properties.  The spectra of artificial satellites, painted surfaces, skyscraper windows, and so on exhibit many features which are extremely improbable in nature.  For example, skyscraper windows and spacecraft surfaces often have gold at concentrations millions of times higher than stellar dust clouds, because of gold's very good thermal and optical functions.  There are also many artificial molecules used in paints, again with unique spectra that would stand out from natural galactic features.   Advanced ETI may have moved on to more advanced surfaces, but whatever they use, it is very likely to have highly unnatural spectra in order to optimize its function.   \u003Cbr \/\u003E\u003Cbr \/\u003EMy surface-engineering-based search strategy has the added benefit that it doesn't matter how large any individual structure is, so long as a collection of artifacts collectively present surfaces that look artificial enough to stand out from natural galactic spectra.   It also doesn't matter whether or not ETI are operating any of a number of hypothesized high-energy nuclear technologies: natural sunlight reflected off artificial surfaces is sufficient.  Thus \"Fermi bubbles\", hypothetical regions of other galaxies to which an ETI civilization has spread, may be most readily recognized not by features recognizable to the human eye (in any nearby large galaxy, astronomers would already have discovered them), nor by determining what kinds of structures the ETI have constructed, but analyzing, often by exhaustive computer search, spectra of different regions in galaxies for the tell-tale signatures of engineered surfaces."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/6553298646764498264\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/6553298646764498264","title":"6 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/6553298646764498264"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/6553298646764498264"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2010\/02\/interstellar-archaeology-and-surface.html","title":"Interstellar archaeology and surface engineering"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"6"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-1089729856886300468"},"published":{"$t":"2010-02-01T23:58:00.001-08:00"},"updated":{"$t":"2010-02-02T00:31:34.633-08:00"},"title":{"type":"text","$t":"The basics: procedural vs. substantive law"},"content":{"type":"html","$t":"Several readers have expressed interest in learning some law.  I highly encourage this.  Knowledge of legal basics is not only of great practical use in modern society, it is essential for understanding politics and history, regardless of whether you have any interest in becoming a lawyer.  I will thus be making a number of posts over the next few months discussing a variety of basic legal concepts.   These may include subject matter jurisdiction, personal jurisdiction, the tort of trespass, contract formation, and a variety of other basic legal ideas.  Today I write about the crucial distinction between procedural and substantive law.\u003Cbr \/\u003E\u003Cbr \/\u003EProcedural law is about how the law gets passed and enforced: who has jurisdiction over whom, and what coercive processes they may use to bring suspected lawbreakers to justice.  The famous Miranda lines \"you have the right to remain silent....\" generally uttered in the U.S. when you are arrested are a species of U.S. federal procedural law.   Procedure usually starts in a given case with a great deal of \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2009\/09\/nondeterminism-and-legal-procedure.html\"\u003Euncertainty\u003C\/a\u003E and tries to reduce that uncertainty by fairly gathering and evaluating evidence, interpreting the law, and applying those facts to the law to reach legal conclusions.\u003Cbr \/\u003E\u003Cbr \/\u003ESubstantive law involves every law that is not procedural: it is what we normally discuss when talking about law or politics, namely the laws defining and restricting rights and duties for their own sake, not primarily for the sake of enforcing other laws. \u003Cbr \/\u003E\u003Cbr \/\u003EThus for example modern property, contract, tort, family, and criminal law are substantive legal areas, as are environmental, workplace, traffic, and most other regulations.   On the other hand, the laws defining who may sue whom and where, and what does and does not constitute proper arrest, interrogation, and search of criminal suspects, are procedural laws.   Historically, just to confuse things a bit, property rights sometimes included rights of coercive procedure, for example the lord who had jurisdiction over his unfree tenants.   This made property law in some cases part of the procedural law as well as a substantive law of economic property.\u003Cbr \/\u003E\u003Cbr \/\u003EComputer protocols work in layers: wires carry bits of information, and bits of information carry text, pictures, and so on.  The raw bits of information are a lower level protocol that carries the text and pictures in a higher level protocol.   Language works like this too: at the lowest level, paper has letters written on it.  Letters are a lower-level protocol that carries words in a higher level protocol.   You can think of the distinction between substantive and procedural law in the same way: the procedural layer is a lower layer that \"carries\" the substantive law by specifying how it is to be enforced.\u003Cbr \/\u003E\u003Cbr \/\u003EWe can also think of government and government-like entities as lower levels of the legal protocol.  Indeed, it is very useful to study political structures \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2007\/05\/why-legal-procedure-is-central-to.html\"\u003Ealongside procedural law.\u003C\/a\u003E  Think of coercive entities like police and courts as the paper and pencil, procedural law as the letters, and substantive law as the words and sentences we want to make out of these raw materials."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/1089729856886300468\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/1089729856886300468","title":"8 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/1089729856886300468"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/1089729856886300468"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2010\/02\/basics-procedural-vs-substantive-law.html","title":"The basics: procedural vs. substantive law"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"8"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-1119811571956884029"},"published":{"$t":"2009-11-11T21:59:00.001-08:00"},"updated":{"$t":"2009-11-12T00:51:42.825-08:00"},"title":{"type":"text","$t":"Software and business method patents: at least four justices see through the Christmas ornament loophole"},"content":{"type":"html","$t":"Several years ago, before section 101 of the U.S. patent statute became fashionable again, I wrote a paper on it, \u003Ca href=\"http:\/\/papers.ssrn.com\/sol3\/papers.cfm?abstract_id=936326\"\u003E\"Elemental Subject Matter.\" \u003C\/a\u003E   I remember several professors and patent attorneys, who shall remain nameless, telling me that section 101, which defines what kinds of subject matter are patentable and what kinds are not, was a useless topic to explore -- these issues, they said, had all been resolved and the legal excitement was elsewhere.  I thought otherwise.  I researched and in my paper I described the basic loophole that made software patents possible.   Algorithms are \"laws of nature\" or \"abstract ideas\" and as such are supposed to be unpatentable.  Patent lawyers being clever got around this by tacking on an extra fig-leaf or Christmas-ornament element to patent claims: the patent was for process X,Y,Z \"and a computer\", where X and Y and Z is the novel and non-obvious algorithm and \"computer\" is just your general-purpose computer.   Under a long line of high court precedents, starting with the old English case of \u003Ci\u003ENielson v. Harford\u003C\/i\u003E, and continuing through many Supreme Court cases, this was an invalid claim: {X,Y,Z}, the part of the patent that makes it novel and non-obvious, must itself be patentable subject matter, i.e. not just an algorithm or law of nature or abstract idea.   But the Federal Circuit, which hears all U.S. patent appeals and thus dominates U.S. patent law, ignored \u003Ci\u003ENielson\u003C\/i\u003E.  Software became patentable because lawyers could trivially tack on \"computer\" or \"memory\" onto software claims, turning abstract algorithms into patentable \"machines.\" Still later, the Federal Circuit allowed even these fig-leafs to be dropped from software patents, they were implicitly understood.  The issue has never come before the U.S. Supreme Court.  Until now.\u003Cbr \/\u003E\u003Cbr \/\u003EAt least four Supreme Court justices brought up the issue in Monday's \u003Ca href=\"http:\/\/supremecourtus.gov\/oral_arguments\/argument_transcripts\/08-964.pdf\"\u003Eoral arguments\u003C\/a\u003E in \u003Ci\u003EBilski v. Kappos\u003C\/i\u003E, a business methods patent.  The main patent claim reads as follows:\u003Cblockquote\u003EA method for managing the consumption risk costs of a commodity sold by a commodity provider at a fixed price comprising the steps of:\u003Cbr \/\u003E\u003Cbr \/\u003E(a) initiating a series of transactions between said commodity provider and consumers of said commodity wherein said consumers purchase said commodity at a fixed rate based upon historical averages, said fixed rate corresponding to a risk position of said consumer;\u003Cbr \/\u003E\u003Cbr \/\u003E(b) identifying market participants for said commodity having a counter-risk position to said consumers; and\u003Cbr \/\u003E\u003Cbr \/\u003E(c) initiating a series of transactions between said commodity provider and said market participants at a second fixed rate such that said series of market participant transactions balances the risk position of said series of consumer transactions\u003C\/blockquote\u003E(Forget about the fact that this is not even novel much less non-obvious.  When the Federal Circuit allows claims to be made in areas where they previously weren't, the U.S. Patent Office agents are incompetent to analyze techniques in the new area or to search for prior art, and indeed a search of prior patents, which is almost all they know how to do, naturally turns up no prior art.  Thus the many preposterously obvious software and business method patents we've seen.  The case is being heard on the assumption that the patent office agent was correct, absurd as it is, to declare this claim novel and non-obvious, and the issue is thus focused on whether such business methods are patentable subject matter under section 101 of the patent code).\u003Cbr \/\u003E\u003Cbr \/\u003EThese four justices seem to agree with the view of my paper that the Christmas ornament loophole lies at the heart of software and business method patents:\u003Cbr \/\u003E\u003Cbr \/\u003EJUSTICE STEVENS: I don't understand how that can be a patent on a machine if the only thing novel is the process that the machine is using. Isn't -- isn't the question -- really, the question there was whether the new process was patentable. \u003Cbr \/\u003E(p. 42)\u003Cbr \/\u003E\u003Cbr \/\u003E(in reply to Justice Stevens repeating the above point)\u003Cbr \/\u003EJUSTICE KENNEDY: That's -- that's a problem I have. \u003Cbr \/\u003E(p. 44)\u003Cbr \/\u003E\u003Cbr \/\u003EJUSTICE BREYER: But then all we do is every example that I just gave, that I thought were examples that certainly would not be patented, you simply patent them. All you do is just have a set of instructions for saying how to set a computer to do it. Anyone can do that. Now, it's a machine.  So all the business patents are all right back in...all you do is you get somebody who knows computers, and you turn every business patent into a setting of switches on the machine because there are no businesses that don't use those machines.\u003Cbr \/\u003E(p. 46)\u003Cbr \/\u003E\u003Cbr \/\u003EThis is also what Chief Justice Roberts is clumsily getting at on pg. 35:\u003Cbr \/\u003E\u003Cbr \/\u003ECHIEF JUSTICE ROBERTS: ...that involves the most tangential and insignificant use of a machine. And yet you say that might be enough to take something from patentability to not patentable. \u003Cbr \/\u003E\u003Cbr \/\u003EI'd like to think that somebody over there in the Supreme Court building has been reading my paper, but more likely, yet remarkably, Justice John Paul Stevens, the author of \u003Ci\u003EParker vs. Flook\u003C\/i\u003E, the last case to apply \u003Ci\u003ENielson v. Harford\u003C\/i\u003E properly, and the only justice left from that 1977 court, still remembers \u003Ci\u003ENielson\u003C\/i\u003E and has taught a whole new generation of justices its meaning.\u003Cbr \/\u003E\u003Cbr \/\u003EThe implications of this view may seem harshly radical (if you rely on software patents) or pleasantly reactionary (if you fondly remember the days when we didn't have them).   The patent bar and software patent holders have been in a tizzy since Monday, fearing that the Court's hostility to business method patents will lead to a ruling that will spill over to invalidate the recent non-ornamented software patents they have been drafting and the USPTO has negligently been approving.  And software engineers have been dreaming that they will finally be freed from some of the increasingly dense patent thicket.  But if the Court, as the above comments suggest, returns to \u003Ci\u003ENielson\u003C\/i\u003E, the result could be even more dramatic than is hoped or feared.  Taking the \u003Ci\u003ENielson\u003C\/i\u003E logic to its conclusion would invalidate practically all software-only and business method patents, including ornamented ones.  Those who want software patents would have to go do what they should have done in the first place -- get Congress to pass a statute expanding patentable subject matter to software, and very importantly command the USPTO to recruit and train computer scientists and people who know how to search the non-patent software literature for prior art so that software claims that don't make sense won't pass muster.  Then, if this experiment works, a few decades later try the same method for business patents.   And if the experiment doesn't work, scrap software patents.  At this point, the Federal Circuit's illegitimate experiment with software and business method patents is failing miserably.  Let's hope the Supreme Court takes this opportunity to restore its old patent jurisprudence that the Federal Circuit so shamelessly flouted."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/1119811571956884029\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/1119811571956884029","title":"4 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/1119811571956884029"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/1119811571956884029"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2009\/11\/software-and-business-method-patents-at.html","title":"Software and business method patents: at least four justices see through the Christmas ornament loophole"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"4"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-1023885246353061022"},"published":{"$t":"2009-11-05T22:45:00.000-08:00"},"updated":{"$t":"2009-11-06T01:04:41.898-08:00"},"title":{"type":"text","$t":"The auction and the sword"},"content":{"type":"html","$t":"\u003Cspan style=\"font-style:italic;\"\u003EAnno Domini\u003C\/span\u003E 193 is often called the Year of the Five Emperors after the five that ruled as \u003Cspan style=\"font-style:italic;\"\u003Eprinceps\u003C\/span\u003E (\"first citizen\") in all or major parts of the Roman Empire: Pertinax, Didianus Julianus, Pescennius Niger, Clodius Albinus, and Septimus Severus.   Indeed, counting the Emperor Commodus, who died at the end of 192, the Empire saw six emperors in the space of five months.\u003Cbr \/\u003E\u003Cbr \/\u003EThe Roman imperial succession was supposed to proceed by adoption of the most competent possible successor [3].  This followed the example of Julius Caesar's adoption of Octavian as his heir, and Octavian's subsequent taking on the title of \u003Cspan style=\"font-style:italic;\"\u003Eprinceps\u003C\/span\u003E as Augustus Caesar. In practice, however, at least three other factors often intervened: first, emperors tended to favor their natural sons over their adopted ones; second, the Praetorian Guard, the emperor's bodyguard, often exercised a life-or-death control over the succession; and third, Roman legions were often motivated to intervene.   Combining this rickety system of succession with the awful power of the autocratic emperor, whose \"will was law\", made successions an all-or-nothing, win-or-die struggle of often devastating violence.  The Year of the Five Emperors witnessed more than its share of such violence.  It gave rise to the Severan dynasty and more importantly to its legal authorities, who are cited in courts of law today, millenia after the emperors themselves have been forgotten.  The Severan's jurists also voiced political ideas that would echo down to our time, as we shall see in future articles.\u003Cbr \/\u003E\u003Cbr \/\u003ECommodus, the incompetent and unpopular natural son and successor of Marcus Aurelius, was poisoned by his mistress Marcia (not, I'm afraid to tell fans of \u003Cspan style=\"font-style:italic;\"\u003EGladiator\u003C\/span\u003E, slain by Russell Crowe in the Colosseum).   Apparently this assassination was a plot that included the Praetorian prefect Laetus and the urban prefect Pertinax.  The urban prefect was something like the mayor of the city of Rome: he supervised all the \u003Cspan style=\"font-style:italic;\"\u003Ecollegia\u003C\/span\u003E (corporations and guilds) in the city, supervised maintenance of its aqueducts and sewers, supervised the import and doling of grain, supervised a force of police and night watchmen, and other such administrative tasks.  The Praetorian prefect was the head of the emperor's bodyguard, the Praetorian Guard, which also (as here) often had the power to make or break emperors.\u003Cbr \/\u003E\u003Cbr \/\u003EThe Guard declared Pertinax emperor.  After only three months in power, as the great historian Cassius Dio reports, the Praetorians, unsatisfied with the funds Pertinax had provided them and fearing persecution, turned against Pertinax:\u003Cblockquote\u003EBut Laetus...proceeded to put out of the way many of the soldiers, pretending that it was by the emperor's orders. The others, when they became aware of it, feared that they, too, should perish, and made a disturbance; but two hundred, bolder than their fellows, actually invaded the palace with drawn swords. Pertinax had no warning of their approach until they were already up on the hill; then his wife rushed in and informed him of what had happened. On learning this he behaved in a manner that one will call noble, or senseless, or whatever one pleases. For, even though he could in all probability have killed his assailants,— as he had in the night-guard and the cavalry at hand to protect him, and as there were also many people in the palace at the time,— or might at least have concealed himself and made his escape to some place or other, by closing the gates of the palace and the other intervening doors, he nevertheless adopted neither of these courses. Instead, hoping to overawe them by his appearance and to win them over by his words, he went to meet the approaching band, which was already inside the palace; for no one of their fellow-soldiers had barred the way, and the porters and other freedmen, so far from making any door fast, had actually opened absolutely all the entrances.[1]\u003C\/blockquote\u003EThe soldiers dispatched Pertinax and the Praetorians then decided to make their pecuniary preferences far more clear before they chose the next emperor: \u003Cblockquote\u003EMeanwhile Didius Julianus, at once an insatiate money-getter and a wanton spendthrift, who was always eager for revolution and hence had been exiled by Commodus to his native city of Mediolanum, now, when he heard of the death of Pertinax, hastily made his way to the camp, and, standing at the gates of the enclosure, made bids to the soldiers for the rule over the Romans. Then ensued a most disgraceful business and one unworthy of Rome.  For, just as if it had been in some market or auction-room, both the City and its entire empire were auctioned off. The sellers were the ones who had slain their emperor, and the would-be buyers were Sulpicianus and Julianus, who vied to outbid each other, one from the inside, the other from the outside.  They gradually raised their bids up to twenty thousand sesterces per soldier. Some of the soldiers would carry word to Julianus, \"Sulpicianus offers so much; how much more do you make it?\" And to Sulpicianus in turn, \"Julianus promises so much; how much do you raise him?\"  Sulpicianus would have won the day, being inside and being prefect of the city and also the first to name the figure twenty thousand, had not Julianus raised his bid no longer by a small amount but by five thousand at one time, both shouting it in a loud voice and also indicating the amount with his fingers. So the soldiers, captivated by this excessive bid and at the same time fearing that Sulpicianus might avenge Pertinax (an idea that Julianus put into their heads), received Julianus inside and declared him emperor.[1]\u003C\/blockquote\u003E  But this was politics, not voluntary commerce, and the military hierarchy of the Roman legions proved to be mightier than the highest bidder.  Three governors (commanding several legions each), Albinus of Britain, Severus of Pannonia (south-central Europe), and Niger of Syria, declared themselves emperor, suspended forwarding of tax revenues to Rome, and started marching on Rome to dethrone what they considered to be a corruptly selected emperor.  Severus got there first:\u003Cblockquote\u003ESeverus, after winning over everything in Europe except Byzantium, was hastening against Rome.   He did not venture outside the protection of arms, but having selected his six hundred most valiant men, he passed his time day and night in their midst; these did not once put off their breastplates until they were in Rome.[1] \u003C\/blockquote\u003EThe security precautions of the Praetorians proved to be no match for Severus' legions, and this was so obvious that the city and Praetorian rank-and-file basically rebelled against Didianus Julianus and the Praetorian leaders and turned the city and the emperorship over to Severus:\u003Cblockquote\u003EJulianus, on learning of [Severus' approach to Rome], caused the senate to declare Severus a public enemy, and proceeded to prepare against him. In the suburbs he constructed a rampart, provided with gates, so that he might take up a position out there and fight from that base.  The city during these days became nothing more nor less than a camp, in the enemy's country, as it were. Great was the turmoil on the part of the various forces that were encamped and drilling,— men, horses, and elephants,— and great, also, was the fear inspired in the rest of the population by the armed troops, because the latter hated them.  Yet at times we would be overcome by laughter;he Pretorians did nothing worthy of their name and of their promise, for they had learned to live delicately; the sailors summoned from the fleet stationed at Misenum did not even know how to drill; and the elephants found their towers burdensome and would not even carry their drivers any longer, but threw them off, too.  But what caused us the greatest amusement was his fortifying of the palace with latticed gates and strong doors. For, inasmuch as it seemed probable that the soldiers would never have slain Pertinax so easily if the doors had been securely locked, Julianus believed that in case of defeat he would be able to shut himself up there and survive. \u003Cbr \/\u003E\u003Cbr \/\u003EBut Severus presently reached Italy, and took possession of Ravenna without striking a blow. Moreover, the men whom Julianus kept sending against him, either to persuade him to turn back or to block his advance, were going over the Severus' side;  and the Pretorians, in whom Julianus reposed most confidence, were becoming worn out by their constant toil and were becoming greatly alarmed at the report of Severus' near approach. At this juncture Julianus called us together and bade us appoint Severus to share his throne.  But the soldiers, convinced by letters of Severus that if they surrendered the slayers of Pertinax and themselves kept the peace they would suffer no harm, arrested the men who had killed Pertinax, and announced this fact to Silius Messalla, who was then consul.  The latter assembled us in the Athenaeum, so named from the educational activities that were carried on in it, and informed us of the soldiers' action. We thereupon sentenced Julianus to death, named Severus emperor, and bestowed divine honours on Pertinax. And so it came about that Julianus was slain as he was reclining in the palace itself; his only words were, \"But what evil have I done? Whom have I killed?\" He had lived sixty years, four months, and the same number of days, out of which he had reigned sixty-six days.[1]\u003C\/blockquote\u003ESeverus \"inflicted the death penalty\" on the plotters against Pertinax and \"murdered\" a number of Senators, after swearing a sacred oath not to harm any Senators. (The quoted language is Cassius Dio's [2] in translation).   So what were Severus' homicides -- legal executions or illegal murders?  This was question of legal procedure.  Under the old Republican legal tradition, still nominally enforce but in practice long defunct where the emperor was concerned, most of these killings would have been considered extrajudicial, i.e. murders.  As we shall see, under the laws codified under the Severan dynasty, \"the emperor's will was law\" -- he by definition could never murder, only execute, and his oaths were by definition not binding on his future self.\u003Cbr \/\u003E\u003Cbr \/\u003EMajor civil war ensued as the Severan legions went up against those of Albinus and Niger.  The terrific battles included a spectacular siege of Byzantium -- later to become Constantnople, but already a mighty fortress strategically placed within on the Bosporus, controlling the maritime traffic between the Mediterranean and Black Seas.   After four years of civil war between Roman legions [3], Severus came out the winner.  I will examine the reign of the Severan dynasty, and in particular the effects of military structure of the victorious legions on the political structure and legal procedures of Rome, in subsequent posts.\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Cb\u003EReferences\u003C\/b\u003E\u003Cbr\u003E\u003Cbr \/\u003E[1] and [2] Cassius Dio, \u003Cspan style=\"font-style:italic;\"\u003ERoman History\u003C\/span\u003E, books [1] \u003Ca href=\"http:\/\/penelope.uchicago.edu\/Thayer\/E\/Roman\/Texts\/Cassius_Dio\/74*.html\"\u003E74\u003C\/a\u003E and [2] \u003Ca href=\"http:\/\/penelope.uchicago.edu\/Thayer\/E\/Roman\/Texts\/Cassius_Dio\/75*.html\"\u003E75\u003C\/a\u003E.\u003Cbr \/\u003E\u003Cbr \/\u003E[3] Tony Honore, \u003Cspan style=\"font-style:italic;\"\u003EUlpian\u003C\/span\u003E, Oxford University Press (second edition 2002)."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/1023885246353061022\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/1023885246353061022","title":"11 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/1023885246353061022"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/1023885246353061022"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2009\/11\/auction-and-sword.html","title":"The auction and the sword"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"11"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-3794511286433883600"},"published":{"$t":"2009-11-05T22:22:00.000-08:00"},"updated":{"$t":"2009-11-05T22:36:15.772-08:00"},"title":{"type":"text","$t":"Commencing a history of Roman political and legal institutions"},"content":{"type":"html","$t":"Most modern governments have political structures and legal procedures derived in a long evolution from those of the ancient Roman emperors, with a shallow overlay of modern democracy. The main exceptions, the Anglo-American countries, have legal procedures derived primarily from a partially independent evolution in England, but still with substantial influences from the old Roman autocrats.   Political ideas and legal procedures are \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2007\/05\/why-legal-procedure-is-central-to.html\"\u003Eclosely related\u003C\/a\u003E, and versions of these derived from the Roman Empire have dominated most of European history.  \u003Cbr \/\u003E\u003Cbr \/\u003EI have started writing a history of this legal and political tradition.  It starts with the Year of the Five Emperors, the rise of the Severan dynasty, and under that dynasty the first two major jurists (legal authorities) in the later Roman legal tradition, Papinian and Ulpian.   It continues through the famous Codes of the emperor Justinian (as compiled by his jurist Tribonian), to the birth of universities in Western Europe upon the rediscovery of Justinian's codes, through the political philosophies of Bodin and Hobbes, to the Reception of Roman law into Western Europe, to the Code Napoleon, the German and Russian legal codes, and modern dictatorships based on the political and legal ideas of Rome.   This will be a sprawling history and indeed I will probably never finish it.  But meanwhile I will post a good bit of it to this blog, starting with the next post.   I expect to proceed largely in temporal order, but no guarantees.   Quite a few of my blog posts over the next two years may be part of this series.   It should be quite enjoyable as well as provide unique insights into the history of political forms and constitutions."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/3794511286433883600\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/3794511286433883600","title":"7 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/3794511286433883600"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/3794511286433883600"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2009\/11\/commencing-history-of-roman-political.html","title":"Commencing a history of Roman political and legal institutions"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"7"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-4812736114937033138"},"published":{"$t":"2009-10-31T13:25:00.000-07:00"},"updated":{"$t":"2009-10-31T13:58:08.664-07:00"},"title":{"type":"text","$t":"Incentives"},"content":{"type":"html","$t":"Moral hazard and risk compensation \u003Ca href=\"http:\/\/www.msnbc.msn.com\/id\/33470581\/ns\/us_news-life\/\"\u003Efor hikers.\u003C\/a\u003E\u003Cbr \/\u003E\u003Cblockquote\u003EIf they had not been toting the device that works like Onstar for hikers, \"we would have never attempted this hike,\" one of them said after the third rescue crew forced them to board their chopper.\u003C\/blockquote\u003EI hope everybody by now knows about the moral hazard and risk compensation that comes with securitization, and the central role of novel mortgage securitization in the recent financial crisis that led to the current recession.  If not, here's a good \u003Ca href=\"http:\/\/www.businessinsider.com\/angelo-mozilo-explains-how-fannie--freddie-were-his-enablers-2009-5  \"\u003Eexample:\u003C\/a\u003E\u003Cblockquote\u003EBy buying his mortgages and thus freeing up his capital to solicit even more business, Fannie and Freddie are a big reason Mr. Mozilo has driven [now-defunct sub-prime lender] Countrywide past the Citigroups and the Wells Fargos to the top of the mortgage heap. \"If it wasn't for them,\" he said of Fannie and Freddie, \"Wells knows they'd have us.\"\u003C\/blockquote\u003EHere's my analysis of \u003Ca href=\"http:\/\/szabo.best.vwh.net\/synch.html\"\u003Eincentives and clocks:\u003C\/a\u003E\u003Cblockquote\u003EMechanical clocks, bell towers, and sandglasses provided the world’s first fair and fungible measure of sacrifice.  So many of the things we sacrifice for are not fungible, but we can arrange our affairs around the measurement of the sacrifice rather than its results.  Merchants and workers alike used the new precision of clock time to prove, brag, and complain about their sacrifices.\u003C\/blockquote\u003EIf you want something in an emergency you can wait in line, pay through the nose, or do without: \u003Ca href=\"http:\/\/szabo.best.vwh.net\/emergencyeconomics.html\"\u003Echoose one.\u003C\/a\u003E  Similar lessons apply to the current health care debate:\u003Cblockquote\u003EIn emergencies rationing becomes extreme: people wait in long lines, pay \"extortionate\" prices, or, even worse, do without. We are thrown into economically unfamiliar territory and transaction costs balloon. Goods will always be rationed in one or more of the above four ways, and in an emergency the rationing can be quite severe. Our charitable spirit can temporarily overcome self-interest, but it can't overcome the knowledge problem or the scarcity of goods. \u003C\/blockquote\u003EEven in emergencies, when charity is most likely to spring forth, we need incentives.  For example, doctors in emergencies are an interesting exception to the general rule in contract law against officious intermeddlers: if you are a patient who is in no position to consent or decline treatment, a doctor can go ahead and treat you and bill you.  An implied-in-law or \"quasi\" contract has been formed.  The same is not true in almost any other case: if that annoying windshield-washing guy starts cleaning your window without your consent, or if the neighbor kid comes along one day and mows your law without permission, you don't legally owe them a thing."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/4812736114937033138\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/4812736114937033138","title":"0 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/4812736114937033138"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/4812736114937033138"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2009\/10\/incentives.html","title":"Incentives"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"0"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-3950264040828294349"},"published":{"$t":"2009-10-25T20:59:00.000-07:00"},"updated":{"$t":"2010-10-05T16:25:03.888-07:00"},"title":{"type":"text","$t":"Our great...grandmother was a proton-powered rock"},"content":{"type":"html","$t":"I've just read a very compelling theory of the origin of life.  This pegs my \"that explains so many things!\" meter in a very big way.  Alkaline vents -- the tame cousins of black smokers -- were common underneath earth's early oceans, but were chemically different than today.   They were a chemical engineer's utopia: high temperatures and pressures, iron-sulfur mineral catalysts, a substantial proton gradient (alkaline vent water to soda-water-like ocean) and vast amounts of surface area formed by microbubbles.  A new theory posits that Peter Mitchell's revolutionary discovery, proton-gradient manufacture of ATP, \"the energy currency of life\", was the original energy source of life, and that early evolution from primordial nucleic acids to the common ancestors of archaea, bacteria, and ourselves occurred in these sea-vent microbubbles.  A proton gradient across a membrane simply means that one side is more acidic (it contains more naked protons) and the other side is more alkaline (it contains more water molecules missing a proton, called \u003Cs\u003E\"hydroxyl radicals\"\u003C\/s\u003E hydroxide ions).\u003Cbr \/\u003E\u003Cbr \/\u003EBecause of Mitchell's discovery we now know that all known life uses membranes with proton gradients across them to convert energy into ATP molecules.  Wherever the energy comes from -- from light, from carbohydrates stolen from other organisms (i.e. eating food), wherever -- in every living thing it gets converted into a proton gradient that then is tapped to manufacture ATP.  In higher animals ATP is made from a proton gradient that is in turn made from \"burning\" blood sugar with oxygen, and this ATP powers our muscles and brains.  In plants ATP is central to photosynthesis: light striking chlorophyll generates a proton gradient, and that proton gradient is used to manufacture ATP, which in turn is used to make sugars and other plant carbohydrates.  In all life ATP powers the energy-using chemical reactions needed to make proteins, DNA, and RNA, the complex chemicals of life.   (For biochemists reading this, relax, this is a summary: I've necessarily left out a very large number of complex steps, many still not fully understood).\u003Cbr \/\u003E\u003Cbr \/\u003EThe new theory of the origin of life recognizes that proton gradients existed on a massive scale in alkaline vents.  The primordial, carbon-dioxide-rich oceans were acidic like Coca-Cola: they contained too many protons.  These soda-water oceans were out of balance with the alkaline vent water, which contained water molecules with protons missing (hydroxide ions).   Protons streamed across this gradient, with the protons from the soda-water ocean filling up the proton-deficient hydroxide ions to create normal water molecules.  This stream of protons was a massive energy source that could be tapped to drive vast numbers of energy-consuming chemical reactions.  Large amounts and varieties of chemicals were made on the vast surface areas of the microbubbles, eventually leading to the immensely complex chemicals and reaction pathways (metabolisms) that became life.\u003Cbr \/\u003E\u003Cbr \/\u003EWhen, much later, plants evolved, they pulled almost all of the carbon dioxide out of the air and oceans, converting it into hydrocarbons and oxygen.   Then animals evolved that could breath the oxygen, \"burning\" it with carbohydrates from eating the plants.   Yet these very different energy sources get converted by plants and animals alike into the same thing -- proton gradients across membranes which are used to make ATP, the energy currency of life.\u003Cbr \/\u003E\u003Cbr \/\u003EIronically, we humans by burning fossil fuels are putting a small fraction of this ancient carbon dioxide which plants removed from the air and oceans back into the air, where it not only may be causing a bit of global warming, but is also dissolving back into the oceans and turning them a bit more acidic -- a tiny step back in the direction of the primordial conditions in which carbon dioxide concentrations were vastly higher than our puny modern levels, making the origins of life possible.  \u003Cbr \/\u003E\u003Cbr \/\u003EThe theory's ten-step recipe for life:\u003Cblockquote\u003E1. Water percolated down into newly formed rock under the seafloor, where it reacted with minerals such as olivine, producing a warm alkaline fluid rich in hydrogen, sulphides and other chemicals - a process called serpentinisation.\u003Cbr \/\u003E\u003Cbr \/\u003EThis hot fluid welled up at alkaline hydrothermal vents like those at the Lost City, a vent system discovered near the Mid-Atlantic Ridge in 2000.\u003Cbr \/\u003E\u003Cbr \/\u003E2. Unlike today's seas, the early ocean was acidic and rich in dissolved iron. When upwelling hydrothermal fluids reacted with this primordial seawater, they produced carbonate rocks riddled with tiny pores and a \"foam\" of iron-sulphur bubbles.\u003Cbr \/\u003E\u003Cbr \/\u003E3. Inside the iron-sulphur bubbles, hydrogen reacted with carbon dioxide, forming simple organic molecules such as methane, formate and acetate. Some of these reactions were catalysed by the iron-sulphur minerals. Similar iron-sulphur catalysts are still found at the heart of many proteins today.\u003Cbr \/\u003E\u003Cbr \/\u003E4. The electrochemical gradient between the alkaline vent fluid and the acidic seawater leads to the spontaneous formation of acetyl phosphate and pyrophospate, which act just like adenosine triphosphate or ATP, the chemical that powers living cells.\u003Cbr \/\u003E\u003Cbr \/\u003EThese molecules drove the formation of amino acids – the building blocks of proteins – and nucleotides, the building blocks for RNA and DNA.\u003Cbr \/\u003E\u003Cbr \/\u003E5. Thermal currents and diffusion within the vent pores concentrated larger molecules like nucleotides, driving the formation of RNA and DNA – and providing an ideal setting for their evolution into the world of DNA and proteins. Evolution got under way, with sets of molecules capable of producing more of themselves starting to dominate.\u003Cbr \/\u003E\u003Cbr \/\u003E6. Fatty molecules coated the iron-sulphur froth and spontaneously formed cell-like bubbles. Some of these bubbles would have enclosed self-replicating sets of molecules – the first organic cells. The earliest protocells may have been elusive entities, though, often dissolving and reforming as they circulated within the vents.\u003Cbr \/\u003E\u003Cbr \/\u003E7. The evolution of an enzyme called pyrophosphatase, which catalyses the production of pyrophosphate, allowed the protocells to extract more energy from the gradient between the alkaline vent fluid and the acidic ocean. This ancient enzyme is still found in many bacteria and archaea, the first two branches on the tree of life.\u003Cbr \/\u003E\u003Cbr \/\u003E8. Some protocells started using ATP as well as acetyl phosphate and pyrophosphate. The production of ATP using energy from the electrochemical gradient is perfected with the evolution of the enzyme ATP synthase, found within all life today.\u003Cbr \/\u003E\u003Cbr \/\u003E9. Protocells further from the main vent axis, where the natural electrochemical gradient is weaker, started to generate their own gradient by pumping protons across their membranes, using the energy released when carbon dioxide reacts with hydrogen.\u003Cbr \/\u003E\u003Cbr \/\u003EThis reaction yields only a small amount of energy, not enough to make ATP. By repeating the reaction and storing the energy in the form of an electrochemical gradient, however, protocells \"saved up\" enough energy for ATP production.\u003Cbr \/\u003E\u003Cbr \/\u003E10. Once protocells could generate their own electrochemical gradient, they were no longer tied to the vents. Cells left the vents on two separate occasions, with one exodus giving rise to bacteria and the other to archaea.\u003C\/blockquote\u003EMore \u003Ca href=\"http:\/\/www.blogger.com\/%20http:\/\/www.newscientist.com\/article\/mg20427306.200-was-our-oldest-ancestor-a-protonpowered-rock.html?full=true\"\u003Ehere. \u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhCKJi2OV0Q_8lX8dBut6d0gAyA-tCPqCzfXQCpt_Un7i10UWOadMlucISuGh2-O6QbhCLAnKdJzkxCiEvFPUHw9JQ9xdBzTMxPZyeuRR-Tniebo_4VurOJ2bxhKT3YOk8Paz-q\/s1600-h\/Lost_City_(hydrothermal_field)02.jpg\"\u003E\u003Cimg style=\"margin: 0pt 10px 10px 0pt; float: left; cursor: pointer; width: 320px; height: 210px;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhCKJi2OV0Q_8lX8dBut6d0gAyA-tCPqCzfXQCpt_Un7i10UWOadMlucISuGh2-O6QbhCLAnKdJzkxCiEvFPUHw9JQ9xdBzTMxPZyeuRR-Tniebo_4VurOJ2bxhKT3YOk8Paz-q\/s320\/Lost_City_(hydrothermal_field)02.jpg\" alt=\"\" id=\"BLOGGER_PHOTO_ID_5396761439446260818\" border=\"0\" \/\u003E\u003C\/a\u003E\u003Ci\u003EDendritic carbonate growths on the Lost City alkaline vent\u003C\/i\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EGiven the vast complexity of the genes and metabolism that would likely have existed in the common rock-bubble ancestor of archaea and bacteria, I suspect it will be a long time before all but the simplest of these steps are recreated in a lab.  Still, this is by far the most compelling theory of the origin of life I've ever seen. \u003Cbr \/\u003E\u003Cbr \/\u003EPeter Mitchell, discoverer of the proton-gradient manufacture of ATP, was a fascinating character: instead of entering the \"publish or perish\" and \"clique review\" rat-race of government-funded science, he dropped out of mainstream scientific culture and set up his own charitable company (nonprofit in U.S. lingo), Glyn Research Ltd.   His discoveries were compelling enough to win over the early \"he's a wingnut\" skeptics and are now the centerpiece of our understanding of biological energetics.  My essay \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2007\/03\/trouble-with-science.html\"\u003E\"The Trouble With Science\"\u003C\/a\u003E suggests why this kind of independence is good for science.  Here's more about Mitchell's theory of proton-powered life called \u003Ca href=\"http:\/\/en.wikipedia.org.\/wiki\/Chemiosmosis\"\u003Echemiosmosis.\u003C\/a\u003E   The ten-step process above is the theory of William Martin and Michael Russell, and is an extension of Gunter Wachterhauser's \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Iron-sulfur_world_theory\"\u003Eiron-sulfur world\u003C\/a\u003E theory."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/3950264040828294349\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/3950264040828294349","title":"8 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/3950264040828294349"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/3950264040828294349"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2009\/10\/our-greatgrandmother-was-proton-powered.html","title":"Our great...grandmother was a proton-powered rock"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"media$thumbnail":{"xmlns$media":"http://search.yahoo.com/mrss/","url":"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhCKJi2OV0Q_8lX8dBut6d0gAyA-tCPqCzfXQCpt_Un7i10UWOadMlucISuGh2-O6QbhCLAnKdJzkxCiEvFPUHw9JQ9xdBzTMxPZyeuRR-Tniebo_4VurOJ2bxhKT3YOk8Paz-q\/s72-c\/Lost_City_(hydrothermal_field)02.jpg","height":"72","width":"72"},"thr$total":{"$t":"8"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-5187861612187849820"},"published":{"$t":"2009-10-20T15:45:00.000-07:00"},"updated":{"$t":"2009-10-20T16:19:42.949-07:00"},"title":{"type":"text","$t":"Non-market but voluntary economic institutions"},"content":{"type":"html","$t":"Often in political parlance the phrase \"the market\" is used quite broadly to cover a wide variety of voluntary economic institutions, including firms, non-profit organizations, families, and so on in addition to markets proper.  But traditional neoclassical economics is about ideal markets proper: instantaneous buying and selling on a costless spot exchange.  Ronald Coase started expanding the scope of economics with his work on the firm, and this line of thinking has developed into a school, often called the \"new institutional economics\" or NIE that focuses on non-market or partial-market voluntary economic institutions as well as on the conditions that must be satisfied for efficient markets to be possible.   The economics Nobel committee has finally recognized the study of non-market but voluntary economic institutions with its awards this year to Oliver Williamson and Elinor Ostrom.\u003Cbr \/\u003E\u003Cbr \/\u003EWilliamson and his fellow travelers Oliver Hart, Yoram Barzel, Steven Cheung, and Janet Landa have long influenced my thinking about \u003Ca href=\"http:\/\/szabo.best.vwh.net\/measuringvalue.html\"\u003Emeasuring value\u003C\/a\u003E, \u003Ca href=\"http:\/\/szabo.best.vwh.net\/berlinmentalmicro.pdf\"\u003Emental transaction costs\u003C\/a\u003E, \u003Ca href=\"http:\/\/131.193.153.231\/www\/issues\/issue2_9\/szabo\/\"\u003Esmart contracts\u003C\/a\u003E, \u003Ca href=\"http:\/\/szabo.best.vwh.net\/shell.html\"\u003E\u003Cbr \/\u003Ethe origins of money\u003C\/a\u003E, and more.\u003Cbr \/\u003E\u003Cbr \/\u003EThe new institutional economics school in a nutshell holds that often transaction costs are too high for spot markets to work properly.   If spot markets were perfectly efficient we would not need firms or long-term contracts, for example, but in fact we have those and many other institutions besides pure markets.   The NIE studies and has started to explain the functions of institutions that are not markets proper, such as long-term contracts and firms, as well as the legal underpinnings of market economies, especially property and contracts.   Contracts and property are the main formal expressions of economic relations recognized by the NIE, which makes this school especially interesting to someone like me interested in the economic role of contracts and property and how to adapt these institutions to (and even to some extent incorporate them into) evolving technology.\u003Cbr \/\u003E\u003Cbr \/\u003ENote that these institutions are \"voluntary\" in the sense of the traditional common-law principle of non-initiation of force, and assume a sophisticated legal framework. When this assumption doesn't hold, these principles usually work in a very different way or don't work at all, and one has to be very careful applying them.  (See \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2008\/05\/coase-theorem-is-false-contracts-depend.html\"\u003Ehere\u003C\/a\u003E and \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2009\/09\/coase-theorem-in-action.html\"\u003Ehere\u003C\/a\u003E for more on the problem of coercive externalities).\u003Cbr \/\u003E\u003Cbr \/\u003EMeanwhile, here is a good article introducing the other economics Nobel winner this year, \u003Ca href=\"http:\/\/www.marginalrevolution.com\/marginalrevolution\/2009\/10\/elinor-ostrom-and-the-wellgoverned-commons.html\"\u003EElinor Ostrom\u003C\/a\u003E."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/5187861612187849820\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/5187861612187849820","title":"4 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/5187861612187849820"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/5187861612187849820"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2009\/10\/non-market-but-voluntary-economic.html","title":"Non-market but voluntary economic institutions"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"4"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-8102474125307550883"},"published":{"$t":"2009-10-17T16:02:00.000-07:00"},"updated":{"$t":"2009-10-17T17:39:33.025-07:00"},"title":{"type":"text","$t":"How to save yourself from chasing futuristic red herrings"},"content":{"type":"html","$t":"For many people, the often outlandish proposals and predictions of futurists are just obviously impractical and are to be laughed off.   This attitude, irrational is it may seem to futurists of the stripe who take outlandish ideas very seriously, is itself not to be sneered at -- automatic unbelievers in the alien save themselves from chasing many red herrings.  Those who laugh at futurism because they are unimaginative dolts I will not try to defend, but those who laugh at futurism when futurists take themselves too seriously are usually spot-on.  For those of a more serious nature and intellect who want to actually figure out the flaws in futuristic ideas, here are some heuristics:\u003Cbr \/\u003E\u003Cbr \/\u003E(1) Find \u003Cspan style=\"font-weight: bold;\"\u003Ethe easier thing\u003C\/span\u003E.   If there is an easier way to get much of the value from a proposal, ask yourself, why hasn't somebody pursued this easier way?    For example, seasteading proposes the creation of novel structures for people to settle permanentantly in the ocean.    Ask yourself, why don't there already exist communities that live permanently on cruise ships?  Why haven't oil companies moved the families of their offshore platform workers out to live where the work is?\u003Cbr \/\u003E\u003Cbr \/\u003E(2) Look to see if if the futurists have proposed \u003Cspan style=\"font-weight: bold;\"\u003Eexperiments\u003C\/span\u003E that can be done much sooner and more cheaply that would verify or \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2007\/02\/falsifiable-design-methodology-for.html\"\u003Efalsify\u003C\/a\u003E the propsosal or prediction.   Many of the \"most important\", in terms of perceived future impact, hyper-futuristic ideas are conveniently unfalsifiable: artificial intelligence, uploading of consciousness, and so on.  There are a near-infinite number of unfalsifiable theories that our imaginations could dream up,  making the odds of any given such theory to be true about zero.  The ability to conduct such dispositive experiments, the ability to prove a hypothesized event false if certain conditions occur, paradoxically makes that event far more likely.  A related heuristic is to be very leery of ideas that, as is said of fusion power, are \"always thirty years in the future\".   If the futurist can't explain why the futurist of 30 years ago who predicted something similar was wrong, that futurist should indeed be laughed at, early and often.  Far too many futurists are so futuristic that they know little about the past which they purport to be projecting.  Some don't even know when predictions similar to theirs were already made decades ago, and were already supposed to have come true.   At the same time, be wary of futurists who are not willing to make short-term predictions, lest we obtain a track record of the vast uncertainty involved in their brand of futurism.\u003Cbr \/\u003E\u003Cbr \/\u003E(3) Except for rare phenomena of high predictability, such as the orbits of planets, \u003Cspan style=\"font-weight: bold;\"\u003Epast performance does not guarantee future results.\u003C\/span\u003E  Futurists often chart exponential curves of growth in some measure of technology: the speed of transport, the number of transistors that can fit on a chip, and so on.  The first half of a logistics curve looks much like an exponential curve.  You can fit an exponential curve to the data points, but it's really a logistic curve, which in the long run, and possibly even in the short run, will lead to a radically different kind of future.   Because of physical limits and human psychology, reality far more closely resembles logistic curves than exponential ones.  For example, world population growth seemed to follow an exponential curve until about the 1960s, when it flipped into a quite different mathematical regime.   This transition to sub-exponential growth started much sooner in the developed world, which should have been but was not a clue for the population alarmists.   As for physical limits, a good example is transport speed: it seemed to be growing exponentially until it hit the sound barrier in earth's atmosphere and the implacable nature of earth's gravity well beyond it in the latter half of the twentieth century.   More on the dubious nature of exponential projections \u003Ca href=\"http:\/\/scienceblogs.com\/builtonfacts\/2009\/09\/sunday_function_47.php\"\u003Ehere.\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003E(4) Beware of the prophets of \u003Cspan style=\"font-weight: bold;\"\u003Efalse certainty\u003C\/span\u003E.   These are people who focus on one out of many possible outcomes, or take very seriously unfalsifiable predictions, or follow exponential projections, or have neglected to find the easier thing, and pretend, because nobody has proven them wrong, that their version of the future has a high probability.  We have, for example, the Bayesiologists, who, while to their credit are at least aware of first-order uncertainty (known unknowns), neglect the higher-order uncertainties (unknown unknowns) inherent in most futurism and demand that we make some intuitive guess as to the numerical probability of their predicted event. (When asked for an intuitive numerical guess about some hyper-futuristic prediction, \"50%, plus or minus 50%, distribution function unknown\" is usually the best answer).\u003Cbr \/\u003E\u003Cbr \/\u003E(5) Look at \u003Cspan style=\"font-weight: bold;\"\u003Einterests\u003C\/span\u003E.  You may not understand the science involved, but individual and institutional interests are human universals.  Take astrobiology, for example.  Here we have a science without a subject.  Now the astrobiologists to a man argue that extraterrestrial life must be common, indeed that it may well be right around the corner underneath the ice of Enceladus or Europa or on one of those exciting new exoplanets.  There appears to be, as many activists like to say about global warming, a \"consensus\" among the astrobiologists about the ubiquity of life in the universe.  But only primitive life, of course -- otherwise the uncomfortable fact that we have never observed the signs of any artificial surfaces, despite observing billions of stars in our own galaxy and billions of other galaxies, would rear its inconvenient head.  Thus the Rare Earth Hypothesis, in which for clever reasons life is supposed to almost always stops evolving beyond some primitive stage, in sharp contrast to the ongoing evolution of life to higher complexity in the only history of life we have actually observed.  Does the astrobiologists' consensus reflect their expertise and your ignorance in astronomical and biological matters, or does it reflect something else?  Consider this -- if you were skeptical about this astrobiological thesis, why would you become an astrobiologist in the first place, risking your career on a science that has no subject?  If the politicians and academic boards who fund them ever became convinced that extraterrestrial life probably does not exist anywhere where we will be able to observe it before they retire, astrobiologists would have to find new jobs.  This is a career for true believers.   Beyond this rather dramatic selection effect, we have individual and institutional self-interest to keep the argument going -- to fund their careers, astrobiologists must persuade us that life in universe is common, common enough that we should fund multibillion dollar telescopes and spacecraft and, of course, grant copious amounts of research funding to them in order to look for it within or astronomically very near our solar system, which is as far as we can observe the signs of primitive life.   Even if you know nothing whatsoever about either astronomy or biology,  but do understand a thing or to about humans, you are wise to be highly skeptical of the claims of astrobiologists.\u003Cbr \/\u003E\u003Cbr \/\u003E(6) Be especially skeptical of \u003Cspan style=\"font-weight: bold;\"\u003Epolitical futurism\u003C\/span\u003E.   From NASA's Shuttle and Space Station, which were supposed to revolutionize space industry, to the politicization of doom-and-gloom scenarios such as overpopulation and the supposed dire consequences of global warming, politics mixed with futurism has a very poor track record.  By contrast, private entities like the Singularity Institute, Foresight Institute, and so forth, while even more outlandish and preposterously self-serious, can provide creative starting points for brainstorming towards more practical ideas and are relatively harmless.\u003Cbr \/\u003E\u003Cbr \/\u003E(That leads me to my last heuristic -- (7) avoid futurists who can't \u003Cspan style=\"font-weight: bold;\"\u003Elaugh at themselves\u003C\/span\u003E).\u003Cbr \/\u003E\u003Cbr \/\u003EFuturism at its best is a creative and entertaining game of ideas.  Playing with outlandish ideas can be very productive -- for example, the Easier Thing on occasion may turn out to actually be a good idea you can implement now, and you arrive at the easier thing by starting with an outlandish idea.   I occasionally explore outlandish futuristic ideas here at Unenumerated, which prides itself on an unending variety of topics.  There is nothing to sneer at about futurism as fun unless you have an unimaginative rock for a brain.   However, those who take these ideas too seriously, or have created a false sense of certainty about them, do deserve a few guffaws."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/8102474125307550883\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/8102474125307550883","title":"14 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/8102474125307550883"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/8102474125307550883"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2009\/10\/how-to-save-yourself-from-chasing.html","title":"How to save yourself from chasing futuristic red herrings"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"14"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-7603117008089309094"},"published":{"$t":"2009-10-12T03:03:00.000-07:00"},"updated":{"$t":"2009-10-12T03:25:34.245-07:00"},"title":{"type":"text","$t":"The tax collector's problem"},"content":{"type":"html","$t":"Here's an edited excerpt from my old essay \u003Ca href=\"http:\/\/szabo.best.vwh.net\/measuringvalue.html\"\u003E\"Measuring Value\"\u003C\/a\u003E:\u003Cbr \/\u003E\u003Cbr \/\u003ETax collection is the most efficient department of government.  Its efficiency rivals that of many private sector institutions. \u003Cbr \/\u003E\u003Cp\u003EFrom the point of view of many taxpayers this is an incredible claim, given that tax collectors take money we ourselves know how to spend quite well, thank you, and often spend it on amazingly wasteful activities.   And the rules by which they take it often seem quite arbitrary.   Tax rules are usually complex but nevertheless fail to let us account for many events important to the earning of our incomes that differentiate us from other taxpayers.\u003Cbr \/\u003E\u003C\/p\u003E\u003Cp\u003EHow the money gets spent is quite outside the scope of my claim that tax collectors are uncommonly efficient.   It is the collection process itself that is the subject of that claim, and the tax collection rules.  This essay will demonstrate the efficiency of tax collector's rules by two arguments:\u003Cbr \/\u003E\u003C\/p\u003E\u003Cp\u003E(1) First, we will show why tax collectors have an incentive to be efficient (and what \"efficiency\" means in this context)\u003C\/p\u003E\u003Cp\u003E(2) Second, we will explore the problem of creating tax rules, and see how the difficulty of measuring value rears its ugly head.   Tax rules solve the value measurement problem through brilliant, often very non-obvious solutions similar to solutions developed in the private and legal sectors.  Often (as, for example, with accounting) tax collectors share solutions used to measure value in private relationships (such as the absentee investor-management relationship in  joint stock corporations). It is in making these very difficult and unintuitive trade-offs, and then executing them in a series of queries, audits, and collection actions, that tax collectors efficiently optimize their revenue, even if the results seem quite wasteful to the taxpayer.\u003Cbr \/\u003E\u003C\/p\u003E\u003Cp\u003EThe tax collector's incentives are aligned with the other branches of their government in a task that benefits all associated with the government, namely the collection of their revenue.   No organization of any type collects more revenue with fewer expenditures than tax collection agencies.   Of course, they have the advantage of coercion, but they must overcome measurement problems that are often the same as other users of accounting systems, such as owners of large companies.   It is not surprising, then,  that tax collectors have sometimes pioneered value measurement techniques, and often have been the first to bring them into large scale use.\u003Cbr \/\u003E\u003C\/p\u003E\u003Cp\u003ELike other kinds of auditors, the tax collector's measurement problem is tougher than it looks.  Investment manager Terry Coxon has described it well[1].  Bad measures  or inaccurate measurements allow some industries to understate their income, while forcing others to pay taxes on income they haven't really earned.  Coxon describes the result: the industries that are hurt tend to shrink.  The industries that benefit pay fewer taxes than could be extracted.  In both cases, less revenue is generated for the tax man than he might be able to get with better rules.\u003Cbr \/\u003E\u003C\/p\u003E\u003Cp\u003EThis is an application of the Laffer curve to the fortunes of specific industries.  On this curve, developed by the brilliant economist Arthur Laffer, as the tax rate increases, the amount of revenue increases, but at an increasingly slower rate than the tax rate, due to increased avoidance, evasion, and most of all disincentive to engage  in the taxed activity.    At a certain rate due to these reasons tax revenues are optimized.  Hiking the tax rate beyond the Laffer optimum results in lower rather than higher revenues for the government.  Ironically, the Laffer curve was used by advocates for lower taxes, even though it is a theory of tax collection optimum to government revenue, not a theory of tax collection optimal to social welfare or individual preference satisfaction.\u003Cbr \/\u003E\u003C\/p\u003E\u003Cp\u003EOn a larger scale, the Laffer curve may be the most important economic law of political history. Adams[2] uses it to explain the rise and fall of empires.   The most successful governments have been implicitly guided by their own incentives – both their short-term desire for revenue and their long-term success against other governments -- to optimize their revenues according to the Laffer Curve.    Governments that overburdened their taxpayers, such as the Soviet Union and later Roman Empire, ended up on the dust-heap of history, while governments that collected below the optimum were often conquered by their better-funded neighbors.   Democratic governments may maintain high tax revenues over historical time by more peaceful means than conquering underfunded states.   They are the first states in history with tax revenues so high relative to external threats that they have the luxury of spending most of the money in non-military areas.   Their tax regimes have operated closer to the Laffer optimum than those of most previous kinds of governments.  (Alternatively, this luxury may be made possible by the efficiency of nuclear weapons in deterring attack rather than  the increased incentives of democracies to optimize to tax collection).\u003Cbr \/\u003E\u003C\/p\u003E\u003Cp\u003EWhen we apply the Laffer curve to examining the relative impact of tax rules on various industries, we conclude that the desire to optimize tax revenues causes tax collectors to want to accurately measure the income or wealth being taxed.   Measuring value is crucial to determining the taxpayer's incentives to avoid or evade the tax or opt out of the taxed activity.  For their part, taxpayers can and do spoof these measurements in various ways.  Most tax shelter schemes, for example, are based on the taxpayer minimizing reported value while optimizing actual, private value.  Tax collection involves a measurement game with unaligned incentives, similar to but even more severe than measurement games between owner and employee, investor and management, store and shopper, and plaintiff-defendant (or judge-guilty party). \u003Cbr \/\u003E\u003C\/p\u003E\u003Cp\u003EAs with accounting rules, legal damage rules, or contractual terms, the choice of tax rules involves trading off complexity (or, more generally, the costs of measurement) for more accurate measures of value.  And worst of all, as with the other rule-making problems, rule choices ultimately ground out on subjective measures of value.    Thus a vast number of cases are left where the tax code is unfair or can be avoided.  Since tax collectors are not mind readers, tax rules and judgments must substitute for actual subjective values its judgments of what the “reasonable” or “average” person's preferences would be in the situation.  Coxon provides the following example.   Imagine that we wanted to optimize the personal income tax rules to measure income as accurately as possible.   We might start reasoning along these lines:\u003Cbr \/\u003E\u003C\/p\u003E\u003Ci\u003E\u003C\/i\u003E\u003Cblockquote\u003E... look a little closer and you find that an individual incurs costs and expenses in earning a salary.  He has to pay for transportation to and from work.   He may spend money on clothes he wouldn't otherwise buy and on lunches that would cost less at home.   And he may have spent thousands of dollars acquiring the skills and knowledge he uses in this work.\u003Cbr \/\u003E\u003Cbr \/\u003EIdeal, precise rules for measuring his income would, somehow, take all these and other costs into account.  The rules would deduct the cost of commuting (unless he enjoys traveling about town early in the morning and later in the afternoon).   They would deduct the cost of the clothes he wouldn't otherwise pay (to the extent it exceeds the cost of the clothes he would buy anyway).  They would deduct the difference between the cost of eating lunch at work and the cost of lunch at home (unless he would eat lunch out anyway).   And each year these ideal rules would deduct a portion of the cost of his education (unless he didn't learn anything useful in school or had enough fun to offset the cost).\u003Cbr \/\u003E\u003Cbr \/\u003E[Because there are limits to complexity, and] because tax agents can't read minds, the government gives them arbitrary rules to follow: no deductions are allowed for commuting expenses, for clothing that is suitable for wearing outside of work, for lunches that aren't part of the “business entertainment” or for the cost of acquiring the skills a job requires (although you can deduct the cost of improving your skills).\u003C\/blockquote\u003E\u003Cp\u003EThe resulting rules often seem arbitrary, but they are not.   They are trade-offs, often non-obvious but brilliant,  between the costs of measuring more value with greater accuracy and extra revenue extracted thereby.   However, the value measurement problem is hardly unique to tax collection.   It is endemic when assessing damages in contract and tort law, and when devising fines punishments in administrative and criminal law.   Many private sector rules found in contracts, accounting, and other institutions also have the quality that they use highly non-obvious measures of value that turn out, upon close examination, to be brilliant solutions to seemingly intractable problems of mind-reading and the unacceptable complexity of covering all cases or contingencies.  Such measurement problems occur in every kind of economic system or relationship.   The best solutions civilization has developed to solve them are in most institutions brilliant but highly imperfect.   There is vast room for improvement, but failed large-scale experiments in attempts to improve these measures can be devastating.\u003Cbr \/\u003E\u003C\/p\u003E\u003Cp\u003EThe Laffer curve and measurement costs can also be used to analyze the relative benefits of various tax collection schemes to government.  Prior to the industrial revolution, for example, the income tax was infeasible.   Most taxes were on the prices of commodities sold, or on various ad-hoc measures of wealth such as the frontage of one's house.  (This measurement game resulted in the very tall and deep but narrow houses that can still be found in some European cities such as Amsterdam.  The stairs are so narrow that even normal furniture has to be hauled up to the upper story and then through a window with a small crane, itself a common feature on these houses).\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"http:\/\/szabo.best.vwh.net\/taxstaircase.jpg\"\u003E\u003Cimg style=\"float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;width: 240px; height: 320px;\" src=\"http:\/\/szabo.best.vwh.net\/taxstaircase.jpg\" border=\"0\" alt=\"\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003E\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"http:\/\/szabo.best.vwh.net\/taxnarrowhouse.jpg\"\u003E\u003Cimg style=\"float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;width: 316px; height: 244px;\" src=\"http:\/\/szabo.best.vwh.net\/taxnarrowhouse.jpg\" border=\"0\" alt=\"\" \/\u003E\u003C\/a\u003E\u003Ci\u003ETaxes distorted the economy of the Netherlands -- quite literally. Here are some houses in Amsterdam built in the 17th and 18th centuries, and a typical narrow staircase. Furniture and other large objects must be hauled up by the small cranes seen above the top-story windows. \u003C\/i\u003E\u003Cbr \/\u003E\u003Cp\u003EPrior to the industrial revolution, incomes were often a very private matter.     However, starting in England in the early nineteenth century, large firms grew to an increasing proportion of the economy.  Broadly speaking, large firms and joint-stock companies were made possible by two phases of accounting advances.   The first phase, double-entry bookkeeping, was developed for the trading banks and \"super companies\" of early fourteenth century Italy.  The second phase were accounting and reporting techniques developed for the larger joint stock companies of the Netherlands and England, starting with the India companies in the seventeenth century.\u003Cbr \/\u003E\u003C\/p\u003E\u003Cp\u003EAccounting allowed manager-owners to keep track of employees and (in the second phase) for non-management owners to keep track of managers.  These accounting techniques, along with the rise of literacy and numeracy among the workers, provided a  new way for tax collectors to measure value.  Once these larger companies came to handle a sufficient fraction of an jurisdiction's value of transactions, it was rational for governments to take advantage of their measurement techniques, and they did so -- the result being the most lucrative tax scheme ever, the income tax.\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ch4\u003EReferences\u003C\/h4\u003E\u003Cbr \/\u003E[1] Adams, Charles, For Good and Evil: The Impact of Taxes on Civilization\u003Cbr \/\u003E\u003Cbr \/\u003E[2] Coxon, T., 1996 Keep What You Earn, Times Business\/Random House"},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/7603117008089309094\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/7603117008089309094","title":"4 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/7603117008089309094"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/7603117008089309094"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2009\/10\/tax-collectors-problem.html","title":"The tax collector's problem"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"4"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-6665228757903532476"},"published":{"$t":"2009-10-09T00:12:00.001-07:00"},"updated":{"$t":"2009-10-09T02:59:10.939-07:00"},"title":{"type":"text","$t":"When does citizen's arrest become battery?"},"content":{"type":"html","$t":"\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEh1UUmXVqOUKv5xzMwqE1SHuVUepS-DF0TLK55SEdvH0lBRdErbMJMDvIPlsMnmktFk_2SSsMxn3TImeM8f9qo6yqV-IQXn3XqWicNddaxwYbMwY60jR1DAJjmOcdKF7ny1qfLa\/s1600-h\/CitizensArrest1.JPG\"\u003E\u003Cimg style=\"float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;width: 320px; height: 186px;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEh1UUmXVqOUKv5xzMwqE1SHuVUepS-DF0TLK55SEdvH0lBRdErbMJMDvIPlsMnmktFk_2SSsMxn3TImeM8f9qo6yqV-IQXn3XqWicNddaxwYbMwY60jR1DAJjmOcdKF7ny1qfLa\/s320\/CitizensArrest1.JPG\" border=\"0\" alt=\"\"id=\"BLOGGER_PHOTO_ID_5390517948110424690\" \/\u003E\u003C\/a\u003E\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEh6V_MeIoen38Qn0lttVVtenQPoiFg-fS7QovsjsNAcAhQQrLwb5zChe6AESkSFDtebEcCDWC0Ngrhj47h4o55WUhD0IS714z72_M_GJi5DaIzPMsV-XyaracDCdGOBA4oNzMEF\/s1600-h\/CitizensArrest2.JPG\"\u003E\u003Cimg style=\"float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;width: 320px; height: 189px;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEh6V_MeIoen38Qn0lttVVtenQPoiFg-fS7QovsjsNAcAhQQrLwb5zChe6AESkSFDtebEcCDWC0Ngrhj47h4o55WUhD0IS714z72_M_GJi5DaIzPMsV-XyaracDCdGOBA4oNzMEF\/s320\/CitizensArrest2.JPG\" border=\"0\" alt=\"\"id=\"BLOGGER_PHOTO_ID_5390508520182030818\" \/\u003E\u003C\/a\u003E\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiGYqBF6IRmgnn4S9LTDLO1MLJ0poBJQMraTte0NTRo8fTfh20s-Y7sMRO7Zs4WPzbYy4fJ9aoiIrhs0VqpstYRrmFHnmNhdmq59KeULl2DDlFhFo-IgrmunFHtXMWNu52vQCFc\/s1600-h\/CitizensArrest3.JPG\"\u003E\u003Cimg style=\"float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;width: 320px; height: 186px;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiGYqBF6IRmgnn4S9LTDLO1MLJ0poBJQMraTte0NTRo8fTfh20s-Y7sMRO7Zs4WPzbYy4fJ9aoiIrhs0VqpstYRrmFHnmNhdmq59KeULl2DDlFhFo-IgrmunFHtXMWNu52vQCFc\/s320\/CitizensArrest3.JPG\" border=\"0\" alt=\"\"id=\"BLOGGER_PHOTO_ID_5390508154167549090\" \/\u003E\u003C\/a\u003E\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEi7_0-CbectlUl0PM6E-ikBTtnQDzrp1PvlIDltxyDh06SswpMibyxuvJepm3MZ5O6zzRRD_mDcp_Fv035FYp37GRyBkwbSG3BlHKMKxvUhS_oSSCMksrOf2j-9xbMG7YIybZyV\/s1600-h\/CitizensArrest5.JPG\"\u003E\u003Cimg style=\"float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;width: 320px; height: 189px;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEi7_0-CbectlUl0PM6E-ikBTtnQDzrp1PvlIDltxyDh06SswpMibyxuvJepm3MZ5O6zzRRD_mDcp_Fv035FYp37GRyBkwbSG3BlHKMKxvUhS_oSSCMksrOf2j-9xbMG7YIybZyV\/s320\/CitizensArrest5.JPG\" border=\"0\" alt=\"\"id=\"BLOGGER_PHOTO_ID_5390508290637367218\" \/\u003E\u003C\/a\u003E\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgtxw2UGApA4CPUSjFvFHsHc9vzpTZH9wv7ZmiJ8DHfTsaNDPeMx6f45RtJvdsNdM2JLNAoBuGKUnJ545e_GajavcqNK5Dx1TugwPhmg9hZfLlmfNXd774hCGr16WBel5kMlgde\/s1600-h\/CitizensArrest6.JPG\"\u003E\u003Cimg style=\"float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;width: 320px; height: 184px;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgtxw2UGApA4CPUSjFvFHsHc9vzpTZH9wv7ZmiJ8DHfTsaNDPeMx6f45RtJvdsNdM2JLNAoBuGKUnJ545e_GajavcqNK5Dx1TugwPhmg9hZfLlmfNXd774hCGr16WBel5kMlgde\/s320\/CitizensArrest6.JPG\" border=\"0\" alt=\"\"id=\"BLOGGER_PHOTO_ID_5390510460274917186\" \/\u003E\u003C\/a\u003EHere's a rough \u003Ca href=\"http:\/\/www.chicagotribune.com\/videobeta\/watch\/?watch=e7e3938a-fdf3-438c-b8bc-345e549d303d\"\u003Ecitizen's arrest\u003C\/a\u003E caught on film.  Plenty of action during the \"more than 7-8 minutes\" between when the photographer started shooting and the on-duty police arrived, despite a police station reportedly 2 blocks away.   Some interesting comments from locals (apparently most of them police officers) \u003Ca href=\"http:\/\/secondcitycop.blogspot.com\/2009\/10\/bystanders-pummel-purse-snatcher.html#c613996377587124021\"\u003Ehere.\u003C\/a\u003E  Although freelance photographer Mike Anzaldi was there and I wasn't, I'm not completely without doubt  about his claim that all the blows administered by the Asian fellow (including a kick to the stomach not pictured here) were justified to \"calm him down\".  You can see some of the ambiguity between controlling a resisting arrestee and battery.  (For more of the story, hear Anzaldi's commentary and see more pictures at the first link above).  My kudos to Anzaldi for his great documentation of this event.  Not so much to the (presumably, since anonymous) cop bloggers with bad attitudes at the second link above, although they do raise one interesting issue, that the victim here did not end up pressing charges -- as a result, the alleged purse-snatcher was only charged with a misdemeanor.  Victims often lack an incentive to press charges, and police often try to motivate victims to press charges by withholding stolen property they have recovered.   If victims won't act out of a public spirit, or at least out of revenge, to help punish criminals, how can criminals be incapacitated and deterred?   By contrast the volunteer citizen arrestors here seem to be acting in a public or at least gallant spirit.  I'm not going to take it on faith, as the anonymous bloggers apparently do, that the police have great incentives here either, rather that this does seem to raise a public goods issue, to which police forces are a very imperfect, and in this case quite belated, solution.  (AFAIK, BTW, no charges have been filed against any of the arrestors in this case, and I doubt any will be -- they seem to be near but not over the line in using reasonable force to control a resisting arrestee, and even if they were a bit over the line police sympathize with their situation and would be loathe to arrest, and even if arrested and prosecuted a jury would probably let them off).\u003Cbr \/\u003E\u003Cbr \/\u003EIncidentally, if it had been police officers making the arrest here, those bites would probably constitute battery on a police officer.  But there seems to be no analogous protection for citizens making an arrest -- we should consider adding such protection where the arrest is legitimate.  (Often, BTW, the \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2009\/09\/nondeterminism-and-legal-procedure.html\"\u003Eburden of proof\u003C\/a\u003E on citizen arrest is much higher than for police -- in many states the arrestor must have actually seen the crime being committed, a greater burden than the typical police officer's burden of probable cause.  I am skeptical of this discrepancy, too).\u003Cbr \/\u003E\u003Cbr \/\u003EI previously posted on another case with a video showing a \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2009\/06\/exceeding-authority-under-castle-law.html\"\u003Estore owner shooting a robber\u003C\/a\u003E, the first time in proper self-defense (or defense of others) under a castle law, but the second time apparently over the line between such proper force and murder."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/6665228757903532476\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/6665228757903532476","title":"1 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/6665228757903532476"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/6665228757903532476"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2009\/10\/when-does-citizens-arrest-become.html","title":"When does citizen's arrest become battery?"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"media$thumbnail":{"xmlns$media":"http://search.yahoo.com/mrss/","url":"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEh1UUmXVqOUKv5xzMwqE1SHuVUepS-DF0TLK55SEdvH0lBRdErbMJMDvIPlsMnmktFk_2SSsMxn3TImeM8f9qo6yqV-IQXn3XqWicNddaxwYbMwY60jR1DAJjmOcdKF7ny1qfLa\/s72-c\/CitizensArrest1.JPG","height":"72","width":"72"},"thr$total":{"$t":"1"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-8997332346474951764"},"published":{"$t":"2009-09-24T13:41:00.000-07:00"},"updated":{"$t":"2009-09-24T18:46:49.235-07:00"},"title":{"type":"text","$t":"Staving off the Cosmic Malthus"},"content":{"type":"html","$t":"\u003Ca href=\"http:\/\/www.overcomingbias.com\/2009\/09\/limits-to-growth.html\"\u003ERobin Hanson\u003C\/a\u003E has a good argument about the inevitability of Malthusian economics in our future -- \u003Ca href=\"http:\/\/www.aleph.se\/andart\/archives\/2009\/09\/the_hot_limits_to_growth.html\"\u003Ehere\u003C\/a\u003E refined by Anders Sandberg.  This Malthusian future is distant in human terms but an eyeblink in cosmic terms.  Sandberg observes that that our cosmic environment, while very large, is finite and dispersed.  Emigration beyond our solar system can expand these resources only polynomially, which can't keep up with exponential economic or population growth.   Therefore, our current boom era of exponential economic growth, wherein manufacturing productivity has grown at about the same positive percentage rate per year starting in Western Europe in the late Middle Ages, is historically very unique and must eventually come to an end.  Furthermore, Hanson argues that the specter of Malthus, purged in the late 20th century by declining fertility, will return -- Darwinian genetic adaptation to modern fertility-reducing conditions and technologies will eventually bring population growth rates back to exponentially positive rates until once again resource limits are reached and most humans (or posthumans) live at subsistence levels -- very extreme poverty by the standards of modern developed countries.\u003Cbr \/\u003E\u003Cbr \/\u003EThe Darwinian argument may be overcome if culture keeps evolving faster than genes and thereby can keep overcoming future genetic adaptations.  (Richard Dawkins argues that we can \u003Ca href=\"http:\/\/americanfiction.suite101.com\/article.cfm\/richard_dawkins_the_selfish_gene\"\u003Eovercome\u003C\/a\u003E our selfish genes).   It may be rebutted that units of culture (what Dawkins calls \"memes\") themselves are Darwinian competitors and thus also face Malthusian limits, or that future computerized minds may reproduce very quickly and evolve as fast as culture. I won't elaborate on these arguments further here as Robin has got me into a hyper-futuristic mood and I'd like to suggest another way in which we might achieve more \"room at the bottom\".\u003Cbr \/\u003E\u003Cbr \/\u003EHanson counts atoms in order to estimate the density of information (or of minds) that might be created.  But, just as Freeman Dyson, Gerard O'Neill, and others showed that planets are a waste of mass, so that technologically mature civilizations won't have planets, I'll argue here that atoms are a waste of mass-energy, and technologically mature civilizations may not have very many of them.  Instead information may be stored in photons and collections of electrons and positrons (for example \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Geonium_atom\"\u003Egeonium\u003C\/a\u003E) may handle most information processing and form the substrate of minds.\u003Cbr \/\u003E\u003Cbr \/\u003EGiven that a photon can come in a vast number of possibly distinguishable frequencies, the spectrum spanning more than 20 orders of magnitude, we may be able to store at least 10^30 bits per photon.  One approach to creating photons is to simply capture the energy of solar nuclear fusions as photons, as we already know how to do -- this should give us about 10^95 bits worth of photons of average energy blue.  But we'd have to either wait billions of years for all these fusion reactions to occur naturally in the sun or accelerate them somehow.   More completely, the neutrons and protons in the sun, if converted into photons of average energy blue, would give us 10^97 bits and we may not have to wait billions of years if we can figure out how to bring about this hypothetical conversion.  This is a fascinating but very speculative bit of physics which I will explore further.\u003Cbr \/\u003E\u003Cbr \/\u003EOf course, we will still need some electrons or positrons around to actually process that information and recycle photons.   And we still need some neutrons and protons around to fuse for energy to make up for the waste heat, to the extent that geonium computations will be less than perfectly reversible.   Unless we are very clever and figure out how to make solid structures that don't blow up out of electrons and positrons, we will need some magnetic tanks made out of traditional heavy atoms to hold the geonium.  Worse, the strong tendency for baryon number to be conserved makes cracking protons difficult and perhaps impossible.  Protons are made out of three quarks, and while cracking quarks is quite possible (particles with two quarks but zero net baryon number decay spontaneously into particles with no quarks), the tendency for baryon numbers to be conserved at the energy levels used by current particle accelerators suggests that cracking the proton, if we can even figure out how to do it, may require vast amounts of energy, so that only a tiny fraction of the sun's neutrons and protons might be converted before we run out of energy from the fusion of the remaining nuclei.  Right now we know how to crack the neutron into a proton and electron, but we don't know how to crack the proton.  To be feasible we will have to discover a way to \"catalyze\" proton decay, by analogy to how the activation energies of chemical reactions can be lowered by catalysts.\u003Cbr \/\u003E\u003Cbr \/\u003EIf feasible, converting wasteful atoms into more useful photons would give us many orders of magnitude more room at the bottom.  Staving off Malthus then becomes a question of how much information can be stored in a photon, and of how quickly electrons or positrons can process those photons.\u003Cbr \/\u003E\u003Cbr \/\u003EWe still face Heisenberg uncertainty as a limit on how quickly these photonic memories can be recalled.  The product of the measured time of arrival of a photon and its measured energy (and thus the number of distinguishable frequencies) has a fixed uncertainty -- if we measure the time with greater precision, we can distinguish fewer frequencies, and vice versa.  This sets a finite limit on the rate at which we can process the information stored in the photons.  \u003Ca href=\"http:\/\/physics.princeton.edu\/~mcdonald\/examples\/QM\/lloyd_nature_406_1047_00.pdf\"\u003ESeth Lloyd\u003C\/a\u003E has calculated that 1 kilogram of mass converted into energy can perform at most 10^50 operations per second.  So future civilizations could only stave off Malthus by going photonic -- Malthus will still eventually catch up, assuming Darwinian competition in reproduction remains.\u003Cbr \/\u003E\u003Cbr \/\u003EIn addition to classical bits stored as photon frequencies, an exponentially higher number of quantum bits (qubits) might be stored in the entangled states of these photons.   However, to use some number of these qubits requires destroying an exponentially larger amount of them.   Thus, against exponential population growth memory storage itself remains cheap, but recalling memories or thinking about things becomes exponentially expensive.  Qubit minds might stave off Malthus by hibernating for exponentially longer periods of time, waking up only to observe an exponentially decreasing number of interesting events.\u003Cbr \/\u003E\u003Cbr \/\u003EMy argument that we may figure out how to crack three-quark particles like neutrons and protons into photons relies on the probability, due to the imbalance of protons and anti-protons (and neutrons and anti-neutrons) in the observable universe, that \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Baryogenesis\"\u003Ebaryon number\u003C\/a\u003E (a property of quarks) is not necessarily conserved, and is \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2007\/02\/falsifiable-design-methodology-for.html\"\u003Efalsifiable\u003C\/a\u003E in that sense: if for example we discover with better telescopes that the amount of antimatter in the universe is the same as the amount of matter, that will at least strongly suggest that even at Big Bang energies baryon number is conserved, rendering the possibility of ever converting the quarks which constitute most of the mass of neutrons and protons into non-quarkish things (like electrons, positrons or photons) extremely unlikely.   It's also somewhat imminently testable insofar as if LHC and similar colliders continue to fail to crack the proton, that further dims prospects.  Feasibility, however, is not so testable: one could argue that, even if baryon number was not conserved in the Big Bang, and even if we soon discover how to crack the proton in high-energy colliders, we may never figure out a method, analogous to catalysis in chemical reactions, to crack protons at economically low energies or to productively recycle the energies used to perform the conversions rather than it being dispersed as waste heat. \u003Cbr \/\u003E\u003Cbr \/\u003E(h\/t: the phrase \"Cosmic Malthus\" to describe Hanson's theory is from commenter Norman at Robin's blog)."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/8997332346474951764\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/8997332346474951764","title":"4 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/8997332346474951764"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/8997332346474951764"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2009\/09\/staving-off-cosmic-malthus.html","title":"Staving off the Cosmic Malthus"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"4"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-8593259749767567734"},"published":{"$t":"2009-09-16T21:36:00.000-07:00"},"updated":{"$t":"2009-09-16T23:22:19.248-07:00"},"title":{"type":"text","$t":"Nondeterminism and legal procedure"},"content":{"type":"html","$t":"Two of the most important characteristics of legal procedure are \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2007\/05\/why-legal-procedure-is-central-to.html\"\u003Elocal coercion\u003C\/a\u003E and nondeterminism.  I've written plenty about coercion recently, so here I'll put forward some thoughts about its nondeterminism.\u003Cbr \/\u003E\u003Cbr \/\u003EA deterministic process is one in which, for any state of the world -- a state being a theoretical description of everything that might change the future -- there is only one next state. The omniscient \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Laplace%27s_demon\"\u003ELaplace's daemon\u003C\/a\u003E could in principle predict everything about the future if the universe were deterministic.   In a nondeterministic process, there can be more than one future state, and not even Laplace's daemon can know for sure, and may not know at all, which one will happen.   We can model simple processes as \"state machines\": in the present the process is in one state, in the next instant in the future the process may have transitioned to another state, and so on.\u003Cbr \/\u003E\u003Cbr \/\u003EHere's a picture of a deterministic process -- one with only one possible future:\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Cimg style=\"float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;width: 100px; height: 28px;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhTCgryV1Wg-X_XUjmr_yhmef4khrlKqzr9pRHgSmUt49iRY-qQeEmCQcjrNIVDvkQ1-3b2_0aTMJ-EmmwDyYFCIDtomU7vLchC3k5Q3DozKQU2RUGq0I7OCMBA7Q6ItQpO0kRj\/s200\/StateMachine1Future.png\" border=\"0\" alt=\"\"id=\"BLOGGER_PHOTO_ID_5382293133643766242\" \/\u003E\u003Cbr \/\u003E\u003Cp\u003E\u003Cbr \/\u003EHere's a picture of a nondeterministic process:\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Cimg style=\"float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;width: 100px; height: 100px;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjskEwN8MFM8UNd_IvBUzzH_knx_w4YdkIU1-e6sGT7ZTYbgvXuNgT_WLMxihjsY5pWXd-wnycjjbEsULqYMUkqTxALl473i9TjTfnD5rLtFTY2iQiyqc3C65752LoSkumeFmFs\/s200\/StateMachine3Futures.png\" border=\"0\" alt=\"\"id=\"BLOGGER_PHOTO_ID_5382291848945486642\" \/\u003E\u003Cbr \/\u003E\u003Cp\u003E\u003Cbr \/\u003E\u003Cp\u003E\u003Cbr \/\u003E\u003Cp\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EIf as in the picture above there are more than two possible future states, this can also be modeled as a sequence of binary events:\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Cimg style=\"float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;width: 160px; height: 72px;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhc6x8fTcu2zkZriJB_SCJun8I6Pj_rtf3VS2HJ4EXNwKHsw79HqJpmA08CFX2l8dTCDSUBScChfsQxdEulVlcFJZH3UzVYiZWsoTS4-CPjmuMIDTe_weiLF28-zEfLKmKTKUyj\/s200\/StateMachine3Futures2AtATime.png\" border=\"0\" alt=\"\"id=\"BLOGGER_PHOTO_ID_5382293466456038722\" \/\u003E\u003Cbr \/\u003E\u003Cp\u003E\u003Cbr \/\u003E\u003Cp\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EAn event can be natural or a human act.  If it's a human act, the decision to act often can or should be based on good estimates of in which state(s) the world is or was in.  In legal procedure, generally an arrest should only be made based on an estimate that the person arrested in fact committed a specific crime, for example.\u003Cbr \/\u003E\u003Cbr \/\u003EIf  causally related nondeterministic processes repeat themselves often enough, we can develop a probabilistic model of them.   Physicists have developed probability density models for very small-scale phenomena in quantum mechanics, for example.\u003Cbr \/\u003E\u003Cbr \/\u003EPractical nondeterminism stems from at least four sources: (1) some of the physical world is inherently nondeterministic, (2) even where deterministic in principle, the configuration of physical states in the world is vastly more complex than we can completely describe -- nobody and no computer comes anywhere close to resembling Laplace's demon, (3) people are far, far more complex than we can mutually comprehend -- especially if you get more than a \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Dunbar_number\"\u003EDunbar number \u003C\/a\u003Eof us together, and (4) the words and phrases we communicate with are often ambiguous.\u003Cbr \/\u003E\u003Cbr \/\u003EMost of the nondeterminism in legal procedure stems from questions of who did what when and where, and the legal consequences that should ensue based on codes and judicial opinions written in ambiguous language.   Law summarizes this uncertainty with a number of \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Burden_of_proof\"\u003Equalitative probabilities\u003C\/a\u003E often called \"burdens of proof\".  The following list is sort of, but not necessarily (as they come from different legal domains and are not necessarily comparable), in order of lesser to greater burden of proof:\u003Cbr \/\u003E\u003Cul\u003E\u003Cbr \/\u003E\u003Cli\u003E Colorability\u003Cbr \/\u003E\u003Cli\u003E Air of Reality\u003Cbr \/\u003E\u003Cli\u003E Reasonable suspicion\u003Cbr \/\u003E\u003Cli\u003E Prima facie case\u003Cbr \/\u003E\u003Cli\u003E Probable cause\u003Cbr \/\u003E\u003Cli\u003E Preponderance of the evidence\u003Cbr \/\u003E\u003Cli\u003E Clear and convincing evidence\u003Cbr \/\u003E\u003Cli\u003E Beyond reasonable doubt\u003Cbr \/\u003E\u003Cli\u003E (To reverse a jury verdict) No reasonable jury could have reached the verdict\u003Cbr \/\u003E\u003C\/ul\u003E\u003Cbr \/\u003EThese label the probabilities -- not in the sense of numbers between 0 and 1, but in the sense of kinds of evidence and degrees of convincing argument -- required for various decisions of legal procedure to be made: for a search warrant to issue, for an arrest to be made, for property to be confiscated, for a legal motion to be accepted or denied, for liability to accrue in a civil trial, for a sentence of guilty in a criminal trial, for decisions about jurisdiction, and so on.\u003Cbr \/\u003E\u003Cbr \/\u003EIt's useful to look at these, not merely as classical probabilities, but in the style of quantum physics, as a superposition of states.  When a nondeterministic event -- or a deterministic event for which we lack important knowledge -- has happened in the past, we can treat it as a superposition of all the possible events that might have happened.  When a person or persons undertakes a procedural act -- arrests a person, issues a verdict, and so on -- under law they should be doing so based on a judgment, to some degree of certainty, that one particular set of facts occurred that justify the act.  We can thus see a criminal defendant, for example, as in the state \"guilty or not guilty\" until a jury \"collapses\" this probability distribution to a verdict (which collapse, however, unlike quantum mechanics, can sometimes be reversed by an appeals court if deemed erroneous).    A suspect is in the state \"beyond reasonable suspicion\" or \"not beyond reasonable suspicion\" until a police officer acts, for example to pull over your car on the highway, in a way that requires reasonable suspicion.  In principle, at least, this decision too shoul dbe reversible (for example, if the officer pulled over your car without reasonable suspicion and noticed an open beer bottle, that evidence could be thrown out of court based on the lack of reasonable suspicion in the original stop).\u003Cbr \/\u003E\u003Cbr \/\u003ELegal procedure needs to control nondeterminism so that people can operate in an environment of reasonably reliable legal rights.  Think, for example, about how inefficient the economy would be if most property was in imminent danger of being taken from one owner and given to another due to frequent decisions reversing old court cases,  or how full of worry our lives would be if we could be taken off the street and put in jail at random.  Thus there is, for example, a strong presumption in English-law countries that a jury's decision is final: and this effected by putting the burden of proof on the court reversing the decision high: \"no reasonable jury could have reached the verdict\", a burden of proof in a criminal case much higher than the jury's own \"beyond reasonable doubt.\""},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/8593259749767567734\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/8593259749767567734","title":"9 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/8593259749767567734"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/8593259749767567734"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2009\/09\/nondeterminism-and-legal-procedure.html","title":"Nondeterminism and legal procedure"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"media$thumbnail":{"xmlns$media":"http://search.yahoo.com/mrss/","url":"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhTCgryV1Wg-X_XUjmr_yhmef4khrlKqzr9pRHgSmUt49iRY-qQeEmCQcjrNIVDvkQ1-3b2_0aTMJ-EmmwDyYFCIDtomU7vLchC3k5Q3DozKQU2RUGq0I7OCMBA7Q6ItQpO0kRj\/s72-c\/StateMachine1Future.png","height":"72","width":"72"},"thr$total":{"$t":"9"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-6955037282923606902"},"published":{"$t":"2009-09-05T00:34:00.000-07:00"},"updated":{"$t":"2009-09-05T01:10:50.594-07:00"},"title":{"type":"text","$t":"The Coase Theorem in action"},"content":{"type":"html","$t":"\u003Ca href=\"http:\/\/dilbert.com\/strips\/comic\/2007-06-01\/\" title=\"Dilbert.com\"\u003E\u003Cimg src=\"http:\/\/dilbert.com\/dyn\/str_strip\/000000000\/00000000\/0000000\/000000\/00000\/1000\/600\/1613\/1613.strip.gif\" border=\"0\" alt=\"Dilbert.com\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EA nice illustration of the major flaw I have described in the \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2008\/05\/coase-theorem-is-false-contracts-depend.html\"\u003ECoase Theorem\u003C\/a\u003E.  Much of what is valuable in the above link I actually wrote in the comments and will now foreground with some minor edits:\u003Cbr \/\u003E\u003Cblockquote\u003EA music store is next door to a doctor's office. The music store would prefer (if the office of a rich doctor who wants quiet for his patients did not exist next door) to let its customers test its electric guitars at volume VM1 \u003E 0. The doctor prefers it to be quieter (VD \u003C VM1). Coase theory assumes that the only possible choices are within the range {VM1, VD}, i.e. any volume of electric guitar testing in between or including these two preferences. In the absence of transaction costs and given only this range, one can indeed conclude that the music store and the doctor will bargain to an efficient outcome. But these aren't the only choices. The music store can, at additional cost to itself C, turn up the volume nobs on its amplifiers and play the music at volume VM2 \u003E VM1. If the doctor is willing to pay the music store P1 to change the volume from VM1 to VD, and P2 \u003E P1 + C to turn the volume down from VM2 to VD, the music store has an incentive to play the music at volume VM2 instead of VM1, or to threaten same, in order to extract for itself a greater benefit from the situation.\u003Cbr \/\u003E\u003Cbr \/\u003EIn other words, the same physical effect that produced the externality gives rise to an opportunity and incentive to play a negative-sum game. Here it changes the music store's prefered volume in the absence of a rich doctor next door from VM1, to VM2 \u003E VM1, due to the opportunity to extort extra payments from the doctor by creating an even less bearable din, for which the doctor is willing to pay even more to avoid. The music store is willing to incur an extra cost C to itself in order to extract the greater payment P2 from the doctor. For the overall game the payment P2 is a wash and C makes it negative-sum. (In the music store example, cost C comes from the music store chasing away some of its own customers, albeit at a slower rate than it chases away the doctor's customers, by testing its guitars more noisly than it would prefer in the absence of the doctor).\u003Cbr \/\u003E\u003Cbr \/\u003EIf, as in reality, there are transaction costs causing bargains to sometimes not be reached, the outcome is even worse, as noise VM2 is costlier, perhaps far more costlier, to the doctor's practice than VM1: such outcomes are often far worse outcome under transaction costs than the range of possible outcomes that Coaseians contemplate.\u003Cbr \/\u003E\u003Cbr \/\u003EOf course, more generally in the absence of proper prior legal allocations of rights the doctor and music store could threaten each other in other ways: the doctor could threaten to poison the guitar frets, the music store could call in the mob on the doctor, etc.\u003Cbr \/\u003E\u003Cbr \/\u003E(Furthermore, even with tort law preventing these other negative-sum games the music store has an incentive to falsely \"reveal\" preference VM2 instead of VM1 to the doctor and to the judge -- a common problem that good tort law usually, but hardly with perfection, tackles). \u003Cbr \/\u003E\u003Cbr \/\u003EThe example of the music store and its amplifier volume shows that the externality itself contains potential or actual coercion -- the same physical effect that causes the externality often makes negative-sum games possible, and in the absence of any prior legal limits on the externality, opportunities and incentives for coercive negative-sum games are inherent in the externality -- so that analyses of such externalities with the Coase Theorem, which assumes such games don't exist, will often lead to misleading or false conclusions.\u003Cbr \/\u003E\u003Cbr \/\u003EThe game being played here by the music store is negative-sum for the same reason a tax is, firstly because the music store's coercion distorts the behavior of the doctor and his patients. Assuming the doctor is helpless to stop the noise without making the payoff (e.g. we artificially assume he can't order a mob hit on the music store, or poison its customers, or emit any other such \"extreme\" externality to avenge or deter the music store's excess externality) he will go golfing more, and see fewer patients, if he is paying P2 to the store instead of P1. Fewer patients will be healed, a net loss of welfare. Since we assume the music store is rational, it will demand only the Laffer-maximum amount of extortion, but Laffer-maximum taxes still have plenty of distoritve effects that produce inefficiencies compared to the no-taxation case. Secondly, the behavior of the music store is also distorted because it has excess profits to spend. It will invest its extra money in opening new music stores and concert halls next to other doctor's offices, nursing homes, and similar because that is a lucrative source of profit, and so other activities that would prefer quiet will be distorted in turn. It is often unreasonable to assume that Coaseian payees are spending their extra money efficiently. Interestingly, Gary Becker assumed the Coaseian payor's behavior was not distorted and that the Coaseian payee was spending its extra profits efficiently, and used this Coaseian reasoning to argue that governments themselves are efficient outcomes of Coaseian bargaining.  Becker's argument is wrong for the same reason that [anarcho-capitalist David] Friedman's [Coaseian] argument is wrong for legal protection agencies: it doesn't account for the economic distortions caused by coercion.\u003Cbr \/\u003E\u003Cbr \/\u003ETo see where these negative-sum games lead, let's take the case of roving loudspeakers. Pickup trucks drive through the city, parking in front of every business in turn and demanding large payments to take their noise elsewhere. The optimal extortion for the extortors in this case is nearly 100% of all business wealth in the city (again assuming the victims are defenseless), because if extortor A doesn't extort any remaining wealth extortor B will be happy to come in and take it. The economy is so distorted that practically nothing gets produced or distributed and the city's economy collapses. This is the \"roving bandit\" case studied by Mancur Olson. Where two stores are next to each other and neither can move constitute \"stationary bandits\", as do gangs or governments with \"monopolies of coercion\" over fixed territories. As the roving loudspeakers case illustrates, rational stationary bandits collect a far lower percent of their victims' profits in taxes than do roving bandits. (But stationary bandits with the much lower rate than 100% end up collecting a far higher absolute amount -- recall the Laffer curve) . If on the other hand we assume the victims are not defenseless, we have negative-sum games like hawk\/dove, negative tit-for-tat, etc. which again are paradigmatically very different from voluntary Coaseian bargains.\u003Cbr \/\u003E\u003Cbr \/\u003EWe can measure the effectiveness of an excess (or coercive) externality for extracting super-Coasiean payoffs by how great a harm the externality can produce for the least cost to the emitter. The ubiquity of technology that is very effective in producing the greatest harm for the least cost, i.e. weapons, in our world should be a very good clue that our world is not Coaseian. Music volume, spark emission, and so on beyond the \"preferred\" level Coaseians falsely assume to be maximal are logically weapons. Their harm\/cost ratio is lower than guns, tanks, bombers, missiles, flamethrowers, herbicides, and so on, but they have an advantage in being physically hard to distinguish from merely Coaseian externalities, which would come in handy in a world where judges and other lawmakers actually based law on the Coase theorem (the good news is that they mostly don't).\u003C\/blockquote\u003E"},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/6955037282923606902\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/6955037282923606902","title":"33 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/6955037282923606902"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/6955037282923606902"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2009\/09\/coase-theorem-in-action.html","title":"The Coase Theorem in action"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"33"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-3604471195851858180"},"published":{"$t":"2009-08-22T23:37:00.000-07:00"},"updated":{"$t":"2009-08-29T22:47:39.307-07:00"},"title":{"type":"text","$t":"Praying to Gliese 581d"},"content":{"type":"html","$t":"COSMOS magazine of Australia is teaming up with the Australian national government and the Jet Propulsion Laboratory (JPL) and NASA in the United States to send a ream of messages gathered from the public via the JPL-run Deep Space Network (on which I once worked) to the nearby star system of Gliese 581, which includes the recently discovered extrasolar planet Gliese 581d.  The schedule is to send the messages on Friday, August 28th.  According to COSMOS's editor, Wilson da Silva, \u003Cbr \/\u003E\u003Cblockquote\u003EYes, it is a \"stunt\": the purpose is to engage the public during Science Week in Australia and get them thinking about the big questions: are we alone, is life common in the universe, how often does intelligent life arise, how big is space, etc etc.\u003C\/blockquote\u003EIt will apparently also be good for COSMOS' advertising and subscription revenue:\u003Cbr \/\u003E\u003Cblockquote\u003ESo far, it has been very successful: more than 1,000 newspapers and other media have published online stories all over the world, it has been featured on 9,000 blogs and more than 1.17 million pages of the site have been read in the past 10 days.\u003C\/blockquote\u003EI can't say whether it will hurt or harm the quests of the government agencies and contractors involved for more taxpayer money.\u003Cbr \/\u003E\u003Cbr \/\u003EAlas, this admitted publicity stunt gets the public thinking about \"the big questions\" in a way that is rather prejudiced about the answers.  The very act of sending a message to a specific star suggests to our newly attracted pupils that there is some substantial probability of extraterrestrial intelligence (ETI) at the other end, when astronomers have observed over 10 billion galaxies and have never seen any signs of ETI.  The odds of even one other ETI civilization in our galaxy, much less specifically around one of the two hundred billion stars in our galaxy, Gliese 581, are rather remote.  Just how remote we will now explore -- then we shall take a look at the prayers to Gliese 581d.\u003Cbr \/\u003E\u003Cbr \/\u003EThe mindset at work with the COSMOS transmission is similar to those behind the web calculator Drake Equations that I've seen.   The Drake Equation supposedly brings together all the main probabilities relevant to calculating how many ETI we might expect to find in our galaxy: the expected number of habitable planets, the probability of the origin of life given a habitable planet, the probability of intelligence evolving given life, and so on.  You are supposed to be able to input your own assumptions into these calculators and it spits out the expected number of ETI in our galaxy based on these assumptions.  Real scientists actually observe the universe and fit their equations and parameters to what they see, rather than what they wish were true, but these \"science education\" sites invite the visitor to plug in what they wish -- unless it doesn't fit what the web site authors wish.\u003Cbr \/\u003E\u003Cbr \/\u003EFrom these sites we learn something very interesting, not about how science should be done or what it has observed, but about the hopes and wishes of their authors.  These calculators don't allow just any numbers to be placed in them, but only numbers within a range defined by the authors.  They don't even allow numbers to be placed into them that are most consistent with what astronomers have actually observed in the universe, i.e. the ubiquitous naturalness and lack of artificiality everywhere they look.  Let's use as an example the \u003Ca href=\"http:\/\/www.planetarysystems.org\/drake_equation.html\"\u003Eleast pathological.\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EA reasonable guess, given the improbability of actually existential threats between the \u003Ca href=\"http:\/\/szabo.best.vwh.net\/bookconsciousness.html\"\u003Einvention of printing\u003C\/a\u003E (with the permanence it brings to civilization) and the end of the universe, is that most casually connected series of civilizations will achieve a substantially \u003E1 billion years lifetime.  (In other words, while many civilizations might rise and fall, and subsequent intelligent species might even replace prior ones, once a civilization achieves printing this causal chain of civilizations is unlikely to be permanently terminated, and will probably move beyond the home planet and within a few tens of millions of years spread across its home galaxy).  The largest value this calculator allows for average civilization lifetime is 1 billion years, but even putting in this too small value makes it impossible to put in at least one other value consistent with our observations.  (Update: since I wrote this section on the Drake calculator for a private list a few months ago, they've updated the calculator and it now supports lifetimes up to 5 billion years, but the other limitations remain).\u003Cbr \/\u003E\u003Cbr \/\u003EAstronomers have looked far and wide in the skies, builders and miners and geologists and archaeologists have dug and examined millions of places on our own planet, and have seen neither any alien civilization, nor even their remains, on or near our planet or anywhere in our galaxy.  They would likely have long since spread across our galaxy by now, a process that would take only a few tens of millions of years.  They would have blotted out the stars to keep their energy from going to waste. Our observations of other galaxies -- with extremely few galaxies deeply moved into the infrared consistent with a space-faring civilization efficiently harvesting the energy of its stars -- strongly suggest that the number of civilizations is far less than 1 per galaxy.  The naturally rare molecules used in the artificial surfaces of these massive constructions would also stand out in spectra against the naturally common molecules in dust clouds, planetary nebulae, etc. that astronomers actually observe.\u003Cbr \/\u003E\u003Cbr \/\u003EBut even sticking with the order of magnitude of between 0.1 and 1 per galaxy, this \"model\" does not allow the input of values consistent with both this order of magnitude and with what we observe about life on our own planet.\u003Cbr \/\u003E\u003Cbr \/\u003EOne has to put the minimum allowed for both the fraction of habitable planets with life the fraction of inhabited planets that achieve intelligent life to achieve this order of magnitude. Based on the commonality of near-intelligence life on our planet the latter number is probably much higher than the minimum allowed value 1\/10^6.   Based on the extremely improbable genetic complexity of even the simplest known self-sufficient microbial ecosystem, the former number is probably much lower than 1\/10^6.  But the program prevents input of these kinds of values most consistent with our observations.\u003Cbr \/\u003E\u003Cbr \/\u003EOther Drake calculators I have looked at are far worse still in not allowing the most reasonable values to be placed into the Drake Equation.   They are not teaching science -- numerology, or here we might call it Bayesiology, is not science -- they are selling a belief, the belief that our galaxy is filled with morally advanced beings that we can talk to.  How are these grossly misleading \"educational tools\" and publicity stunts like COSMOS helpful in teaching the questions of \"are we alone, is life common in the universe, how often does intelligent life arise, how big is space, etc.\"?\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Cdel\u003ECOSMOS\u003C\/del\u003E \u003Cu\u003EAn Enid News \u0026 Eagle piece republished by COSMOS\u003C\/u\u003E \u003Ca href=\"http:\/\/www.cosmosmagazine.com\/media\/2925\/et-text-home-messages-bleem-gliese-581d\"\u003Einvokes\u003C\/a\u003E another prejudiced cliche of the SETI (Search for ETI) crowd: ETI living in a heavenly utopia:\u003Cbr \/\u003E \u003Cblockquote\u003E Me [Human interviewer]: \"... So you don’t elect leaders?\u003Cbr \/\u003E  Then who keeps you safe?”\u003Cbr \/\u003E\u003Cbr \/\u003E  Bleem: “From what?”\u003Cbr \/\u003E\u003Cbr \/\u003E  Me: “From criminals, from other countries that declare\u003Cbr \/\u003E  war on you.”\u003Cbr \/\u003E\u003Cbr \/\u003E  Bleem: “Explain criminals.”\u003Cbr \/\u003E\u003Cbr \/\u003E  Me: “People who steal other people’s things or hurt\u003Cbr \/\u003E  them. Some even kill other people.”\u003Cbr \/\u003E\u003Cbr \/\u003E  Bleem: “Explain steal.”\u003Cbr \/\u003E\u003Cbr \/\u003E  Me: “Taking things that don’t belong to you.”\u003Cbr \/\u003E\u003Cbr \/\u003E  Bleem: “Explain kill.”\u003Cbr \/\u003E\u003Cbr \/\u003E  Me: “To terminate one’s existence.”\u003C\/blockquote\u003EThis nonsense neatly avoids an important question Drs. Jared Diamond and \u003Ca href=\"http:\/\/www.davidbrin.com\/shouldsetitransmit.html\"\u003EDavid Brin \u003C\/a\u003E have raised -- if, per COSMOS' assumption that ETI is common, these creatures, likely far more ancient and powerful than humans, do receive our message and thereby discover us, may that not put humanity in severe danger?   Instead of \"shouting at the cosmos\", shouldn't we put reasonable restrictions on the power, focus, and targets of transmissions until we learn whether and what kinds of threats might exist?  (I realize Gliese 581 probably doesn't raise this issue, because being within about 20 light-years they would probably have already detected our oxygen spectra, our \"I Love Lucy\" and \"Seinfeld\" broadcasts, our nuclear tests, and much else, but the [update: COSMOS' own, as well as the EN\u0026E's] article[s], supposedly an exercise in education, doesn't even raise the issue and explain this).  \u003Cbr \/\u003E\u003Cbr \/\u003EBy blithely ignoring this issue while it sends the messages, COSMOS again answers the question with extreme prejudice by assuming it is safe.   They even have a theological justification: ETI wouldn't harm a flea, because the only thing these innocents can understand is their seraphic utopia.  Apparently no living thing up there in the heavens eats any other living thing -- our ETI are puzzled by the very concept of \"kill\".  Our beatific interlocutors were apparently created by an onmniscient and omnibenevolent god to dwell together in heavenly communal bliss rather than evolved through Darwinian evolution.   Children of Australia, there's your biology lesson for the day.\u003Cbr \/\u003E\u003Cbr \/\u003ECOSMOS has rejected \u003Ca href=\"http:\/\/www.hellofromearth.net\/\"\u003E\"inappropriate\" messages to Gliese 581d\u003C\/a\u003E, but it does not describe what its criteria for \"inappropriate\" might be.  How can any of us humans predict the reaction to any given message of a genetically completed unrelated creature, even assuming it exists, in a culture about which we know absolutely nothing?  COSMOS has no basis for deciding that any stupid or insulting message, and there are plenty of stupid and insulting messages that they let through, is better than any other, besides their own particular human 21st century Australian reactions.\u003Cbr \/\u003E\u003Cbr \/\u003EMany submitters are sending normal chatty messages, while some are quite properly treating the whole thing as a joke, but it is worth thinking abut how closely many of the messages in this \"science\" project resemble prayers (all errors in the original):\u003Cbr \/\u003E\u003Cbr \/\u003E\"I hope when you recieve these messages that you will come and visit and bring a new age to the human race. LIVE LONG AND PROSPER.\"\u003Cbr \/\u003E\u003Cbr \/\u003E\"All things work together for good.\"\u003Cbr \/\u003E\u003Cbr \/\u003E\"We're live in one universe,so we just like a family.We can share our happy with you.\"\u003Cbr \/\u003E\u003Cbr \/\u003E\"We are so small.\"\u003Cbr \/\u003E\u003Cbr \/\u003E\"Please help us to stop the obesity problem that haunts our world!\"\u003Cbr \/\u003E\u003Cbr \/\u003E\"Please come visit us on Earth as soon as you can.We've been waiting a long time to see you.Don't make us wait any longer! LIVE LONG \u0026 PROSPER!!!\"\u003Cbr \/\u003E\u003Cbr \/\u003E\"I know we are not alone.You are watching us.\"\u003Cbr \/\u003E\u003Cbr \/\u003E\"Don't let humans colonize habitable extrasolar planets, contact us before then please. Thanks for not colonizing Earth long ago and allowing humans to evolve.\"\u003Cbr \/\u003E\u003Cbr \/\u003E\"Bring some peace to the earth.\"\u003Cbr \/\u003E\u003Cbr \/\u003E\"I am told if you say something to the universe it may come true.\"\u003Cbr \/\u003E\u003Cbr \/\u003E\"We know that we are not alone,hope to hear from you.\"\u003Cbr \/\u003E\u003Cbr \/\u003E\"Your technologies must be advanced than humans by millons of years.let us share all good things and we shall be friends.\"\u003Cbr \/\u003E\u003Cbr \/\u003E\"Hello God, are you there?\"\u003Cbr \/\u003E\u003Cbr \/\u003EAnd that's just from the first page of messages.  These interstellar tweets that COSMOS collected and NASA obligingly plans to send via its Deep Space Network to Gliese 581, the earlier \"Teen Message\" sent by Dr. Alexander Zaitsev and his team from the Evpatoria dish in the Ukraine, and the Drake calculators that invite you to believe that your wishes are scientifically true, unless they disagree with the authors', are exercises, not in science education, but in \"educating\" the public in the tenets of an often twisted faith."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/3604471195851858180\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/3604471195851858180","title":"24 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/3604471195851858180"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/3604471195851858180"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2009\/08\/praying-to-gliese-581d.html","title":"Praying to Gliese 581d"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"24"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-955215834400534360"},"published":{"$t":"2009-07-04T11:36:00.001-07:00"},"updated":{"$t":"2009-07-04T14:21:43.047-07:00"},"title":{"type":"text","$t":"Political lessons"},"content":{"type":"html","$t":"I often get asked to provide an overview of my political ideas.  There are so many elements to my ideas -- the importance of coercion and security and how to reconcile coercion with the substantive common law principle of non-initiation of force, the unique and crucial nature of procedural law, the role of low exit costs in enabling freedom and motivating the creation of good law, good vs. bad legal competition, the use (and intellectual recovery, where necessary) of highly-evolved or promising ideas such as political property rights, choice of law and forum, separation of duties with checks and balances, limits on delegation, \"smart\" (technologically codified and enforced) laws, and so on -- that it's impossible to write a summary article.   Therefore this post is more in the \"link farm\" style.\u003Cbr \/\u003E\u003Cbr \/\u003EThere are hundreds of pages of reading material here.  Which you should tackle depends on which areas you disagree with or don't understand.\u003Cbr \/\u003E\u003Cbr \/\u003EUtopians -- those who think government is or could be an institution based on voluntary agreements or peace, or anarchists who think voluntary or peaceful interactions would dominate in the absence of legal procedure based on coercion -- and those who don't know how such utopianism is readily rebutted by real history, should first read my articles about the central role coercion has, does, and will play in human interaction:\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2008\/07\/hampton-sides-sheds-light-on-mancur.html\"\u003EHampton Sides Sheds Light on Olson and Coase\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2008\/05\/coase-theorem-is-false-contracts-depend.html\"\u003EThe Coase Theorem is False -- Contracts Depend on Tort Law\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EThe next set everybody should read, as you can't understand politics without understanding the crucial role of legal procedure, and especially jurisdiction (a way to quickly evaluate any proposed new form of government or legal system: ask the proposer how arrest is distinguished from kidnapping, and search and seizure from trespassing and theft -- if they can't give a good answer, the proposal is based on ignorance and you need not waste any more of your time on it):\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2007\/05\/why-legal-procedure-is-central-to.html\"\u003EWhy Legal Procedure Is Central to Politics\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2006\/10\/three-kinds-of-jurisdiction.html\"\u003EThree Kinds of Jurisdiction\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2007\/08\/exit-and-freedom.html\"\u003EExit and Freedom\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2006\/03\/property-in-everything-some-background.html\"\u003EProperty In Everything\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2006\/06\/jurisdiction-as-property-paper.html\"\u003EJurisdiction as Property\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2009\/05\/political-property-and-evolution-of.html\"\u003EPolitical Property and the Evolution of Liberty\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2008\/02\/unbundled-jurisdictions-and-exit-costs.html\"\u003EUnbundled Jurisdiction and Exit Costs\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2007\/08\/government-for-profit.html\"\u003EGovernment for Profit\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2006\/09\/semaynes-case-liberty-of-house.html\"\u003ESemayne's Case: Liberty of the House\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Cbr \/\u003ENext are some lessons from the Roman style of government -- based on agency rather than political property rights.  (This kind of government has dominated Western political thought -- if you have not read the previous list of articles it is probably the only way you can imagine that legal systems can work):\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2006\/07\/democracy-as-regular-rebellion.html\"\u003EDemocracy as Regular Rebellion\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2005\/10\/principle-of-least-authority.html\"\u003EThe Principle of Least Authority\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2009\/04\/separation-of-powers-and-credible.html\"\u003ESeparation of Powers and Credible Commitment\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2006\/02\/executive-power-and-interpretation-of.html\"\u003EExecutive Power and the Interpretation of Laws\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2008\/03\/unpredictable-elections.html\"\u003EUnpredictable Elections\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EThose interested in the United States Constitution -- whether you want to emulate it, interpret it, revise it, or trash it -- will find the following of use:\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2006\/03\/corporate-origins-of-united-states.html\"\u003ECorporate Origins of the United States\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2006\/08\/charters-and-judicial-review.html\"\u003ECharters and Judicial Review\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2006\/09\/due-process-property-rights.html\"\u003EDue Process Property Rights\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2005\/10\/civil-liberties-in-forever-war.html\"\u003ECivil Liberties and the Forever War\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EComments on the United States Constitution (\u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2008\/03\/comments-on-united-states-constitution.html\"\u003Ei\u003C\/a\u003E, \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2008\/03\/comments-on-united-states-constitution_06.html\"\u003Eii\u003C\/a\u003E, \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2008\/03\/comments-on-united-states-constitution_19.html\"\u003Eiii\u003C\/a\u003E)\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EFor those who want to explore the use of technology to help codify and enforce law:\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2006\/11\/wet-code-and-dry.html\"\u003EWet Code and Dry\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2006\/05\/security-and-burden-of-lawsuit.html\"\u003ESecurity and the Burden of Lawsuit\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"http:\/\/szabo.best.vwh.net\/smart_contracts_2.html\"\u003ESmart Contracts\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"http:\/\/szabo.best.vwh.net\/securetitle.html\"\u003ESecure Property Titles with Owner Authority\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"http:\/\/szabo.best.vwh.net\/contractlanguage.html\"\u003EA Formal Legal Drafting Language\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"http:\/\/szabo.best.vwh.net\/proplets.html\"\u003EDevices for Controlling Property\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2009\/05\/liar-resistant-government.html\"\u003ELiar-Resistant Government\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EFor those who want to explore some related ideas on philosophy and history:\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2006\/02\/irreducible-complexity-of-society.html\"\u003EThe Irreducible Complexity of Society\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"http:\/\/szabo.best.vwh.net\/tradition.html\"\u003EObjective versus Intersubjective Truth\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"http:\/\/szabo.best.vwh.net\/hermeneutics.html\"\u003EHermeneutics\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"http:\/\/szabo.best.vwh.net\/kolmogorov.html\"\u003EAn Introduction to Algorithmic Information Theory\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"http:\/\/szabo.best.vwh.net\/bookconsciousness.html\"\u003EBook Consciousness\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2006\/07\/security-and-origins-of-agriculture.html\"\u003ESecurity and the Origins of Agriculture\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2005\/10\/patterns-of-integrity.html\"\u003EPatterns of Integrity\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2005\/11\/origins-of-joint-stock-corporation.html\"\u003EOrigins of the Joint-Stock Corporation\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EFinally, some notes on political action:\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2007\/08\/ten-ways-to-make-difference.html\"\u003ETen Ways to Make a Political Difference\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EFeel free to comment or ask questions about any of these or other of my writings here."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/955215834400534360\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/955215834400534360","title":"13 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/955215834400534360"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/955215834400534360"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2009\/07\/political-lessons.html","title":"Political lessons"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"13"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-2777334667850881449"},"published":{"$t":"2009-06-19T00:51:00.000-07:00"},"updated":{"$t":"2009-06-19T04:35:46.954-07:00"},"title":{"type":"text","$t":"Ice rockets earthside"},"content":{"type":"html","$t":"It pulls hundreds of times the g's over far less time than what I \u003Ca href=\"http:\/\/szabo.best.vwh.net\/comet.mining.html\"\u003Ehad in mind\u003C\/a\u003E, but I do seem to have helped inspire Lenape Fire Turtle and friends.  Their ice rocket is even reported to have stayed in one piece until it hit the pavement:\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Cobject width=\"425\" height=\"344\"\u003E\u003Cparam name=\"movie\" value=\"http:\/\/www.youtube.com\/v\/Mym3oaoSHb0\u0026hl=en\u0026fs=1\u0026\"\u003E\u003C\/param\u003E\u003Cparam name=\"allowFullScreen\" value=\"true\"\u003E\u003C\/param\u003E\u003Cparam name=\"allowscriptaccess\" value=\"always\"\u003E\u003C\/param\u003E\u003Cembed src=\"http:\/\/www.youtube.com\/v\/Mym3oaoSHb0\u0026hl=en\u0026fs=1\u0026\" type=\"application\/x-shockwave-flash\" allowscriptaccess=\"always\" allowfullscreen=\"true\" width=\"425\" height=\"344\"\u003E\u003C\/embed\u003E\u003C\/object\u003E\u003Cbr \/\u003E\u003Cbr \/\u003ENext Fire Turtle tried to make a pulse jet motor out of ice injected with propane. Alas, the exhaust came out a hole melted in the side instead of the hole intended.  If you look closely at the start of the side view portion of the video (the second half), you can already see the flaw in the casting where the ice is thin and the hole will appear:\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Cobject width=\"425\" height=\"344\"\u003E\u003Cparam name=\"movie\" value=\"http:\/\/www.youtube.com\/v\/68TFUboFxvQ\u0026hl=en\u0026fs=1\u0026rel=0\"\u003E\u003C\/param\u003E\u003Cparam name=\"allowFullScreen\" value=\"true\"\u003E\u003C\/param\u003E\u003Cparam name=\"allowscriptaccess\" value=\"always\"\u003E\u003C\/param\u003E\u003Cembed src=\"http:\/\/www.youtube.com\/v\/68TFUboFxvQ\u0026hl=en\u0026fs=1\u0026rel=0\" type=\"application\/x-shockwave-flash\" allowscriptaccess=\"always\" allowfullscreen=\"true\" width=\"425\" height=\"344\"\u003E\u003C\/embed\u003E\u003C\/object\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EHaving looked ahead to a future when the economics and technologies become propitious, my own proposal was to take a grinder to an ice cylinder floating in space, melt the resulting ice flakes into water, and feed that liquid into a \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Solar_thermal_rocket\"\u003Esolar thermal rocket engine\u003C\/a\u003E.  The small snow-cone machine would gradually eat up most of the ice on the multi-year voyage from comet (or Ceres, or similar) to market.   Alternatively, ammonia might be extracted from the comet and stored as a liquid inside a tank made from water ice, adding complication to the extraction process but greatly increasing the efficiency of the rocket motor and thus the mass of water ice, ammonia, or other comet stuff brought to market.  More explanations of these icy and muddy daydreams lie \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2006\/12\/go-native.html\"\u003Ehere.\u003C\/a\u003E  When I was a kid in body as well as at heart I just stomped around in mudpuddles.\u003Cbr \/\u003E\u003Cbr \/\u003EThe ice rocket could in that future eliminate the need to launch from earth not just rocket propellant, but also propellant tanks -- or more precisely substitute a much lighter coat of sealing paint and sun shade for the tanks.  A well-shaded vacuum can become extremely cold, preventing the ice from sublimating away.  After propellant, tanks are by far the heaviest and bulkiest items that today must be launched out of our planet's deep gravity well, and ice rockets could substitute native materials for both.\u003Cbr \/\u003E\u003Cbr \/\u003EMeanwhile, it's all just good clean terrestrial fun.\u003Cbr \/\u003E\u003Cbr \/\u003EP.S. I also like the \u003Ca href=\"http:\/\/www.icerocket.com\/\"\u003Esearch engine.\u003C\/a\u003E"},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/2777334667850881449\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/2777334667850881449","title":"0 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/2777334667850881449"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/2777334667850881449"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2009\/06\/ice-rockets-earthside.html","title":"Ice rockets earthside"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"0"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-5260740506048712878"},"published":{"$t":"2009-06-08T17:34:00.001-07:00"},"updated":{"$t":"2009-06-10T13:34:35.445-07:00"},"title":{"type":"text","$t":"The collectible premium"},"content":{"type":"html","$t":"In the \u003Ca href=\"http:\/\/blogsandwikis.bentley.edu\/themoneyillusion\/?p=849#comment-2047\"\u003Ecomments section\u003C\/a\u003E of yet another economics professor's blog, Devin Finbarr makes some excellent observations regarding the \u003Ca href=\"http:\/\/szabo.best.vwh.net\/shell.html\"\u003Ecollectible\u003C\/a\u003E nature of most investment assets, starting with this nice classification:\u003Cbr \/\u003E\u003Cblockquote\u003EThere are only three types of goods in an economy:\u003Cbr \/\u003E1) goods providing direct utility ( a car, tv, chocolate )\u003Cbr \/\u003E2) collectibles ( a baseball card, diamonds, gold )\u003Cbr \/\u003E3) flows ( stocks, bonds )\u003C\/blockquote\u003EThe demand for every investment asset -- stocks, housing, commodities, etc. -- is a function of some combination of these factors.  In housing all three demand factors are at work. Every asset that is not just a fixed monetary cash flow has a collectible premium that reflects, when rational, inflation expectations.  (n.b. this is technical nomenclature that can have a slightly different meaning than the normal use of the words -- for example I, and presumably Devin, classify the enjoyment one can get from collecting baseball cards or wearing gold jewelry as part of their \"utility\" rather than their \"collectible\" nature, the latter being purely a matter of the asset's perceived or actual function as a store of value or medium of exchange).\u003Cbr \/\u003E\u003Cbr \/\u003EIt is often very difficult to guess what the factors of demand coming from direct consumption utility are (for example, is the sunny yet cool California coast and the wealthy and smart neighbors it attracts worth paying five times as much or is the coastal California price premium, as Devin suggests, primarily a collectible premium?).  Sometimes it's also difficult to estimate cash flow.  Thus  it's often hard to estimate the collectible premium.  Also, since the collectible (or inflation expectations) premium is little recognized, a wide variety of bogus explanations are often used to explain price movements that are actually due to changing inflation expectations: the most popular being dubious theories of changes in supply (e.g. \"peak oil\") or consumption demand, since demand for assets as inflation hedges is very under-recognized.  Also common are theories that impute price changes due to changes in inflation expectations to purely irrational psychology,  \"technical\", or \"trend\" factors based on the history of the price itself.   (The history of housing prices from 1940 to 2005 made houses look like a lucrative and low-risk investment, for example).\u003Cbr \/\u003E\u003Cbr \/\u003EDevin describes inflation expectations as causing a hunt for stores of value in which packs of investors irrationally change their focus from one market to another, causes bubbles and bursts.  Since the collectible premium is often so hard to estimate, and is so little recognized, and so many investors do despite those warnings you hear invest based solely on past price history, I don't substantially disagree with this:\u003Cbr \/\u003E\u003Cblockquote\u003EA stock market is in disequilibrium when people start trading stocks as collectibles rather than as flows. In other words, instead of buying a stock based on the hope of generating a return via dividends, they start buying a stock in order to sell it to someone else ( price appreciation)....\u003Cbr \/\u003E\u003Cbr \/\u003EWhen the government dilutes the money supply, people start searching for a replacement collectible to serve as a store of value. People end up buying stocks not based on dividend yields, but in order to trade for later at a higher dollar price. People buy houses not based on direct utility or as an alternative to paying rent, but in order to sell for later at a higher price. These goods start trading as collectibles, and thus are subject to the whims of the herd.\u003C\/blockquote\u003EIn short, if long-term inflation expectations were zero, the prices of housing, stocks, commodities, etc. could be estimated from demand deriving solely from their cash flow plus consumption demand -- there would be no collectible premium.  But since asset prices come with a difficult to estimate and fluctuating inflation expectations premium, this makes it far harder to judge whether an asset is over- or under-priced, leading to greater over- and under-pricing, i.e. seemingly irrational asset booms and busts. \u003Cbr \/\u003E\u003Cbr \/\u003EA couple of caveats:\u003Cbr \/\u003E\u003Cbr \/\u003E(1) It's important to observe in the context of stocks that their cash flows can come from share buybacks and takeovers as well as dividends, so even with zero inflation expectations people would rationally invest partly for expected price rises in addition to dividends.\u003Cbr \/\u003E\u003Cbr \/\u003E(2) There are a number of other sources of high uncertainty in asset markets, e.g. uncertainty over credit conditions, so that bubbles and bursts would not completely go away with zero inflation expectations.  However the contribution of changing inflation expectations has, I believe, been the largest factor in most asset price movements since the 1970s.\u003Cbr \/\u003E\u003Cbr \/\u003EBubbles and bursts are based on high degrees of uncertainty about the future far more than on genuine mass irrationality.   Of course, things like the Internet bubble seem quite irrational in hindsight, but if you keep in mind what was going on in the late 1990s -- a huge increase in subjective value due to new (to the vast majority of investors) Internet services such as e-mail, Web, search engines, and on-line price quotes -- it was not, without hindsight, terribly irrational to suppose that most of this value would be monetized as profit for the innovating companies.  It turned out to be mostly unmonetized -- instead we got most of the foregoing plus shared music, Wikipedia, blogs, and other things of great value for almost free -- so that the Internet bubble collapsed and seems irrational in hindsight. \u003Cbr \/\u003E\u003Cbr \/\u003EBubbles and bursts due to uncertainty over technological innovation will undoubtedly occur again, but the greatest ongoing source of uncertainty in our markets is not regarding technology and monetization of innovation, but rather uncertainties about currencies, credit, globalization, and related political factors, out of which the uncertainty over currencies is usually the greatest.\u003Cbr \/\u003E\u003Cbr \/\u003EMy takes on last summer's commodity hysteria as it was happening can be found via \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2008\/06\/commodity-hysteria-overview.html\"\u003Ehere.\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EDevin has put these theories to good use:\u003Cblockquote\u003Esince inflation helps build the bubble, even a small amount of deflation can cause rapid price collapses. The fall in price will be much greater than the fall in dividends. Late last summer I was looking at numbers, and noticed that real estate, equities, oil, and gold had all been down for two months straight. The only thing those goods have in common is the currency they are priced in. So I said, “Holy deflation, Batman!” and sold half of the index funds that I owned.\u003C\/blockquote\u003EI congratulate Devin and I do like the strategy suggested here, i.e. arbitrage between asset markets with irrationally different collectible premiums.  This strategy does, however, assume that one can estimate the price derived from just supply and cash flow plus consumption demand, at least enough to be able to determine that there is a substantial collectible premium.\u003Cbr \/\u003E\u003Cbr \/\u003EThat said, I'd add (perhaps disagreeing with Devin) that in the large collapse in commodities since last summer, decreased expectations for future industrial consumption (due to rising expectations of a long-term worldwide recession) and probably a change in the rationality of the collectible premium of commodities were also major factors alongside the decrease in inflation expectations.   Thus gold did not fall nearly as much as the industrial commodities.  (It's also possible that this reflects some sort of security premium in a crisis of gold over other commodities, but despite all the gold coin ads to this effect I'm skeptical about that being a large factor). Of course, a change in consumption expectations will also tend to make stocks go down, due to the more direct cause of decreased profits leading to decreased cash flows from dividends etc.   Commodities markets reflected informed expectations about future inflation and consumption more quickly than stocks, giving Devin his signal.  \u003Cbr \/\u003E\u003Cbr \/\u003EGold and commodities prices have a good long-term correlation across business cycles.  Industrial mineral prices do tend to vary more than gold within a business cycle due to changes in consumption expectation.  (Of course these are not really predictable \"cycles\", but unpredictable effects of things like credit conditions, but \"business cycle\" is the unfortunate standard term in economics for this variation in overall credit and consumption).  Another example of the collectible premium arbitrage strategy is to look at the oil\/gold price ratio.  Last summer this ratio was far too high (in hindsight, although at the time I was skeptical that this unprecedented ratio would last), reflecting a very high valuation of industrial commodities as collectibles.  Recently it has much lower, reflecting much lower valuation as collectibles (probably irrationally too low), as well as lowered consumption expectations (the business cycle).  In both cases one would have profited over the course of entire business cycle (and even in these two cases, luckily, over the short run) from betting against even more extreme deviations from the average historical ratio (or historical trend -- it's certainly plausible that oil and some other industrial minerals are being depleted faster than gold, or that there are long-term secular difference in their demand functions, but as the recent oil\/gold ratio collapse to 1980 levels suggests, the secular depletion\/demand gap between oil and gold is probably quite small, and almost certainly less than 2% per year over the long run)."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/5260740506048712878\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/5260740506048712878","title":"25 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/5260740506048712878"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/5260740506048712878"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2009\/06\/collectible-premium.html","title":"The collectible premium"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"25"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-7499558138524687520"},"published":{"$t":"2009-06-04T01:41:00.000-07:00"},"updated":{"$t":"2009-06-04T04:35:28.517-07:00"},"title":{"type":"text","$t":"Exceeding authority under a castle law"},"content":{"type":"html","$t":"Here's a good video lesson on the difference between legal defense of people within a dwelling and murder in a \u003Ca href=\"http:\/\/www.oscn.net\/applications\/oscn\/DeliverDocument.asp?CiteID=69782\"\u003Ecastle doctrine state.\u003C\/a\u003E  The narration by the announcer here is not clear: the unarmed (it turns out) robber goes down because the pharmacist (the defendant) has shot him in the head.   The armed robber flees without firing a shot.  The prosecution claims the unarmed robber then lay there unconscious, which is plausible given that the defendant turned his back on him.   The prosecutor argues (correctly, if we accept the prosecution's version of the facts) that the first shot to the head was proper self-defense, whereas the later five shots (the video is sped up) were not justifiable self-defense.  The defense argues that the injured robber was getting back up and thus, even though not brandishing a weapon (and as it turns out unarmed), could have posed a danger justifying the five shots that killed the injured robber.  From seeing on the video the pharmacist turn his back on that robber I'm skeptical of the defense's version of the facts, but that's up to the jury.\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Cobject width=\"425\" height=\"344\"\u003E\u003Cparam name=\"movie\" value=\"http:\/\/www.youtube.com\/v\/pRMaAUfS59k\u0026hl=en\u0026fs=1\u0026\"\u003E\u003C\/param\u003E\u003Cparam name=\"allowFullScreen\" value=\"true\"\u003E\u003C\/param\u003E\u003Cparam name=\"allowscriptaccess\" value=\"always\"\u003E\u003C\/param\u003E\u003Cembed src=\"http:\/\/www.youtube.com\/v\/pRMaAUfS59k\u0026hl=en\u0026fs=1\u0026\" type=\"application\/x-shockwave-flash\" allowscriptaccess=\"always\" allowfullscreen=\"true\" width=\"425\" height=\"344\"\u003E\u003C\/embed\u003E\u003C\/object\u003E\u003Cbr \/\u003E\u003Cbr \/\u003ENote that calling the police immediately afterward, as here, is a very good idea -- not calling the police as soon is one safely can is a very bad idea, suggesting guilt -- but it probably won't be enough in this case to save this guy from some jail time.\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"http:\/\/www.ignatius-piazza-front-sight.com\/2009\/06\/01\/ignatius-piazza-how-to-get-charged-with-murder\/\"\u003EIgnatius Piazza\u003C\/a\u003E, a self-defense trainer, has a good collection of videos on this case.  Local TV station \u003Ca href=\"http:\/\/krmg.com\/blogs\/the_krmg_morning_news_blog\/2009\/05\/video-okc-pharmacist-shoots-ki.html\"\u003EKRMG\u003C\/a\u003E has a version with the prosecutor narrating the surveillance video (a much better but obviously biased narration).\u003Cbr \/\u003E\u003Cbr \/\u003ENot mentioned in these videos is that the armed robber who ran away was also and quite properly charged with murder -- what is called a \u003Ci\u003Efelony murder\u003C\/i\u003E, because he committed a felony that led to a death, even death caused by a victim of that felony as here.\u003Cbr \/\u003E\u003Cbr \/\u003ETechnically, all the Oklahoma statute does is shift from the defendant the burden of proving \"a reasonable fear of imminent peril of death or great bodily harm\" when killing somebody who has forcefully entered a dwelling or vehicle -- instead the prosecutor must prove that the fear was not reasonable.  Here, the burden of proof does shift to the prosecutor, but, again assuming the facts are as he claims, he should be able to prove beyond reasonable doubt either that the pharmacist in fact had no such fear, or that any such fear of harm from an unconscious man was unreasonable.  \u003Cbr \/\u003E\u003Cbr \/\u003EEven assuming the injured robber had regained consciousness, a much better course of action would have been to have the women at the back of the store call the police and to hold the gun to the robber's head until the police arrived.\u003Cbr \/\u003E\u003Cbr \/\u003EI strongly second Ignatius' advice that if you own a gun that you may one day have to use for self-defense, that you take a good training course.  Military training is \u003Ci\u003Enot\u003C\/i\u003E sufficient for this and indeed may have led this pharmacist, a military veteran, astray.  Military doctrine is a very different thing than the civilian law of self-defense and the castle doctrine.  I do take issue with Ignatius' simplistic description of a supposed \"universal\" rule for when self-defense is justified.  Some jurisdictions allow far more defense of self, others, and persons within dwellings or vehicles than he describes (especially castle doctrine and stand-your-ground states), and some allow less.   If you are going to have a gun around for self-defense, you should learn the laws of your own state, province, or country and you should train yourself accordingly.  The laws vary widely.   If you aren't willing to learn the laws and train accordingly, as this pharmacist apparently failed to do, you shouldn't keep a gun.   By using a gun against criminals you are, morally speaking, deputizing yourself as a law enforcer -- a very good thing, since the police usually can't get there in time to protect victims, but a status that comes with a moral responsibility to train yourself in how to legally use a gun. Self-defense and castle laws give you this authority; misusing these rights is what the prosecutor properly (again assuming his version of the facts) calls \"exceeding authority\" and thus murder.  Note that under the recent \u003Ci\u003E\u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/District_of_Columbia_v._Heller\"\u003EHeller\u003C\/a\u003E\u003C\/i\u003E Second Amendment case, self-defense and defense of others is a primary justification for our right to own a gun in the first place in the U.S.\u003Cbr \/\u003E\u003Cbr \/\u003EThe castle doctrine under common law, as well as the quite related knock-and-announce rule for law enforcement, comes from \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2006\/09\/semaynes-case-liberty-of-house.html\"\u003ESemayne's case:\u003C\/a\u003E  \"That the house of everyone is to him as his castle and fortress, as well for his defence against injury and violence, as for his repose...if thieves come to a man's house to rob him, or murder, and the owner or his servants kill any of the thieves in defence of himself and his house it is not felony, and he shall lose nothing.\"   Modern castle statutes, such as Oklahoma's, often also apply this doctrine to businesses and vehicles.   The Wikipedia article on the U.S. \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Castle_doctrine\"\u003Ecastle doctrine\u003C\/a\u003E has a list of states with stand-your-ground laws and castle laws, with links to the statutory texts.\u003Cbr \/\u003E\u003Cbr \/\u003EBy the way, political scientists who define governments as entities having a \"monopoly of force\" are idiots.  I just thought I'd get in that shot of my own while I'm here."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/7499558138524687520\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/7499558138524687520","title":"5 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/7499558138524687520"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/7499558138524687520"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2009\/06\/exceeding-authority-under-castle-law.html","title":"Exceeding authority under a castle law"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"5"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-8020390180872264774"},"published":{"$t":"2009-05-26T21:52:00.000-07:00"},"updated":{"$t":"2009-05-27T15:27:10.806-07:00"},"title":{"type":"text","$t":"Sotomayor, Calabresi, and the Chief Justice at our moot court"},"content":{"type":"html","$t":"Our 2006 \u003Ca href=\"http:\/\/www.c-spanarchives.org\/library\/includes\/templates\/library\/flash_popup.php?pID=191127-1\u0026clipStart=\u0026clipStop=\"\u003Emoot court\u003C\/a\u003E competiton at The George Washington University featured Chief Justice John Roberts, law \u0026 economics guru Judge Guido Calabresi, and Judge Sonia Sotomayor (now a nominee to serve with Roberts on our highest court), and was replayed today on C-SPAN.  I saw this in person when I was at GWU -- it was fun to watch my fellow law students arguing with these seasoned judges about whether subliminal ads can be banned under the First Amendment.  \u003Ca href=\"http:\/\/volokh.com\/archives\/archive_2009_05_24-2009_05_30.shtml#1243388406\"\u003EH\/T\u003C\/a\u003E to GWU Professor Orin Kerr."},"link":[{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/8020390180872264774"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/8020390180872264774"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2009\/05\/sotomayor-calabresi-and-chief-justice.html","title":"Sotomayor, Calabresi, and the Chief Justice at our moot court"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}]},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-3260658968477303678"},"published":{"$t":"2009-05-22T14:41:00.001-07:00"},"updated":{"$t":"2009-05-22T16:11:47.803-07:00"},"title":{"type":"text","$t":"Futarchy: an experiment we'd learn a great deal from, but please don't try it on me"},"content":{"type":"html","$t":"\u003Ca href=\"http:\/\/unqualified-reservations.blogspot.com\/2009\/05\/futarchy-considered-retarded.html\"\u003EMencius Moldbug\u003C\/a\u003E and \u003Ca href=\"http:\/\/www.overcomingbias.com\/2009\/05\/reply-to-moldbug-.html\"\u003ERobin Hanson\u003C\/a\u003E are debating Robin's intriguing idea of \"futarchy\", which has attracted many fans. The \u003Ca href=\"http:\/\/hanson.gmu.edu\/futarchy.html\"\u003Ebasic idea\u003C\/a\u003E of futarchy is \"when a betting market clearly estimates that a proposed policy would increase expected national welfare, that proposal becomes law.\"\u003Cbr \/\u003E\u003Cbr \/\u003ERobin and Mencius both make some great points in this debate -- for example, Mencius observes that GDP and similar estimates of \"national welfare\" are poor criteria for decision-making, analogous to a corporation making decisions to maximize revenue instead of profits. GDP in the United States, for example, rose dramatically during World War II, but its standard of living was probably significantly lower for most people than in the Great Depression due to rationing, death, and other traumas of war. \u003Cbr \/\u003E\u003Cbr \/\u003EBut both Mencius and Robin have misconstrued or vaguely glossed over two of the biggest problems with zero-sum decision markets, especially when applied to government decisions. First an observation: all prediction markets are decision markets unless the resulting prediction is so useless that nobody ever makes a decision based on it or some government somehow bans all possible kinds of decisions based on those markets. The distinction Robin and Mencius make between the two serves to obfuscate those issues that are problems with real decision markets rather than with theoretical or play prediction markets. Two of the biggest problems are:\u003Cbr \/\u003E\u003Cbr \/\u003E1. The problem of \"morons' money\", deemed by Mencius to be the money of some less-informed fraction of players who are disincentivized to play the zero-sum prediction game, actually means the money of \u003Cem\u003Eanybody\u003C\/em\u003E with information worse than the best player's information. Since it's a zero-sum game, and much less entertaining than sports betting, any money that is stupider than the average money has a disincentive to play -- in sharp contrast to normal positive-sum markets. But when the less-informed half of the players leave the market, we have a new half of the market that has a disincentive to play, and so on. There's only one person left for whom it would be rational to play, if there were any market left. Prediction markets can work in an experiment only because students of the professor or fans of the idea feel they have a duty to play, or want to signal to fans that they like the idea, or because there are a few people who, like the much larger population of sports bettors, find it genuinely entertaining and thus worth wasting some time and\/or money on. Robin I believe has tacitly recognized this problem in his proposals to goose these markets with subsidies. But how big subsidies are needed? It's a high-risk market, so you need to guarantee a high rate of positive return to the average player to compensate for the risk if you want good information entering the market.\u003Cbr \/\u003E\u003Cbr \/\u003E2. Moral hazard: As I stated, prediction markets are also decision markets. We're right now going through major economic problems that stem from neglect of moral hazard. Selling securities, insurance, or betting without the investors\/bettors or their agents or regulators exercising due diligence and control creates pathological incentives for people to do things like, as we've seen in the mortgage market, give cheap loans to bad credit risks because there were a bunch of number-crunchers with woefully incomplete models buying or insuring these loans who didn't understanding that most kinds of markets \u003Cem\u003Ecreate additional risk\u003C\/em\u003E by creating moral hazard, that this moral hazard must be well controlled if the market is to work, and that controlling moral hazard is usually far from straightforward. \u003Cbr \/\u003E\u003Cbr \/\u003EIn these betting markets, which are decision markets, people inside and outside government will make their own decisions based on the market. Coercive decisions will have an especially pathological effect: they turn the zero-sum market into an overall negative-sum game. For example, a market predicting the death of someone can, as Tim May long ago observed, readily be used as an assassination market. That's why, for example, PAM, a since-abandoned effort by the U.S. Department of Defense to try out Robin's ideas for prediction markets, had a market for predicting the death of Yasser Arafat but not of George W. Bush. Since these are markets for government decisions, the decisions it drives will, like assassinations, be primarily coercive in nature, for example to wage war on country X or to tax one group of people in order to subsidize another.  If the decisions resulting from such a market were voluntary, you could just go onto a voluntary market to satisfy your needs instead of bothering with deciding that government must make some decision and then betting on its outcome. Furthermore, Mencius, although waxing entirely too rude behind his pseudonymous mask, is probably quite right that these markets will reflect the demand for desired decisions far more than a \"supply\" of information about how to best make that decision: per (1.), there is little to no incentive to supply such information without huge subsidies to give the markets an overall positive rate of return comparable to other high-risk markets. \u003Cbr \/\u003E\u003Cbr \/\u003EFor example the market for \"if the U.S. gives $20 billion to GM the U.S. GDP will rise by 1.1% or more [instead of the expected consensus by some group of economists of 1.0%]\" will be dominated by GM, its unions, its dealers and suppliers, and so forth goosing it to a \"probably true\" prediction, not by people betting on the extremely uncertain, practically lost in the random noise, outcome of the proposition. If GM thinks it can sway the odds of a decision in its favor by 5% by, increasingly as the time for decision approaches, investing up to nearly $1 billion in the market, it will do so. GM has far more to gain by the gift of other people's money than arbitragers making risky bets with their own money have to gain from arbitraging the market back down to whatever they believe to be the true odds of the GDP rising 1.1%.   If GM is banned directly from participating in the market, there are numerous other parties with similar stakes in the outcome and they can't all be banned.  GM and its allies also have much to gain by lobbying the government to set up this kind of market for direct subsidies instead of futarchic markets for more generic decisions you might find more useful, such as a \"remove the President if the GDP doesn't rise 1.1% or more\" market. Futarchy thus becomes little more than an auction for government favors, like the time the Praetorian Guard auctioned off the emperorship to the highest bidder. \u003Cbr \/\u003E\u003Cbr \/\u003EIt would be interesting to try straightforward government-by-the-highest-bidder. We'd probably discover why historians have equated this kind of process with corruption, but it would be well worth the suffering of some hapless residents in some small county somewhere to try the experiment and learn from it. It would of course be interesting to try out futarchy in a similarly real but small scale, restricting the players as well as the victims of the market to our guinea pig jurisdiction since there are no big GM-subsidy stakes at play. \u003Cbr \/\u003E\u003Cbr \/\u003EOf course, some would argue that we are living in this kind of experiment anyway, just under a blizzard of euphemisms instead of a straightforward honest auction. Others would argue that democratic voters bring no more information to governmental decisions than \"moron money\" would in these markets. I have no ready refutations for these arguments, but they don't prove futarchy is better than either what we have now or other possible alternative reforms.\u003Cbr \/\u003E\u003Cbr \/\u003EIn summary, fans of prediction markets in general, and futarchy in particular, need to actually specify how to deal with moral hazard, as insurance companies and their regulators have, rather than mysterious hand-waving about the supposed \"several ways to deal with it\", as well as to acknowledge the need to subsidize these markets and figure out how to fairly distribute these endowments."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/3260658968477303678\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/3260658968477303678","title":"14 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/3260658968477303678"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/3260658968477303678"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2009\/05\/futarchy-experiment-wed-learn-great.html","title":"Futarchy: an experiment we'd learn a great deal from, but please don't try it on me"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"14"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-8634090179432804455"},"published":{"$t":"2009-05-19T22:17:00.000-07:00"},"updated":{"$t":"2009-05-20T00:25:45.362-07:00"},"title":{"type":"text","$t":"What caused the birth of agriculture and the industrial revolution?"},"content":{"type":"html","$t":"Robin Hanson \u003Ca href=\"http:\/\/www.overcomingbias.com\/2009\/05\/the-growth-groove-game.html\"\u003Easks\u003C\/a\u003E, \"what key features make this [human] growth groove possible?\" -- two key events being the birth of agriculture and the industrial revolution.  Commenter \"gwern\" is on the money in saying that (a) explaining why the IR happened when and where it did is hard, and (b) the explanation has to include something that China didn't have much sooner, which eliminates most of the usual explanations.  I'd add that explaning the birth of agriculture is even harder -- we have vast amounts of historical data on the IR and only archaeological and comparative anthropological evidence about the birth of agriculture.\u003Cbr \/\u003E\u003Cbr \/\u003EIndeed, the most important thing in explaing these two events is to be aware of enough facts from different fields, and have sufficient doses of skepticism and common sense, that you can eliminate the many theories that are popular but obviously, if you know enough such things, wrong.  For example, be aware that hunter-gatherers were experts on botany and animal behavior. It's not plausible that the simple ideas that seeds can grow into plants that you can eat later, or that you can keep an animal tied or penned up and eat it later, were not discovered and known countless times during the c. 100,000 years between when our brains became modern-sized and agriculture developed. There has to have been some major barrier to benefitting from such obvious ideas to have kept agriculture from developing far sooner. I also don't find genetics plausible as a cause of agriculture, since agriculture ended up spreading to a number of human groups that had become genetically isolated long before the dawn of agriculture. (Genetic evolution caused \u003Cem\u003Eby\u003C\/em\u003E agriculture is another story -- Cochran and Harpending have some ideas very much worth thinking about). Also not plausible are climate explanations -- there were many local climates hospitable to agriculture throughout those 100,000 years -- just not necessarily at Mediterranean or higher lattitudes.\u003Cbr \/\u003E\u003Cbr \/\u003EThat said, going back to the IR there a number of likely-to-firm differences between China and Western Europe (or Great Britain in particular):\u003Cbr \/\u003E\u003Cbr \/\u003E(1) Differences in political and legal culture. What differences, specifically, it's hard to say, because there is very little about, for example, Sung or Ming dynasty commercial law that has been translated into English: far too little to compare to English law in the 18th century, for example. We know some very general things, such as that Western Europe was (and still is) a far more legalistic culture than China. Also, we know that Western Europe (contrary to Gregory Clark's claim) radically changed its property law between the 16th and 19th centuries, from a feudal model of of hierarchy of tenures and bundled political property rights to a model based on old Roman law with flattened and purely economic ownership. There ensued movements such as the enclosure movement in England and an accompanying large increase in capital investments in land. But we don't know when or to what extent similar incentives to capital investment might have been present or missing in China.\u003Cbr \/\u003E\u003Cbr \/\u003E(2) China never controlled the world's oceans and merchant marine, but the British just prior and during its IR did. If this explains the IR, then to explain our explanation (i.e. why did Britain come to control the world's ocean-going trade) we have to step back and solve the even more puzzling question of how a tiny country of fishing-folk and small-time crusaders, Portugal, and not an advanced superpower like China, was the first country to take over most of the world's oceanic trade routes (later to be beaten back by other Western European countries and eventually Great Britain).\u003Cbr \/\u003E\u003Cbr \/\u003E(3) China had the printing press, but in contrast to Western Europe it did not lead to a rapid growth in literacy sustained over several centuries -- perhaps because of bureaucratic central control rather than the free-enterprise printing businesses that sprung up all over Western Europe, perhaps because the much greater number of symbols did not as efficiently lend itself to printing as the Roman alphabet, or a combination of these two factors.\u003Cbr \/\u003E\u003Cbr \/\u003E(The Romans were not all good -- indeed they gave our culture something quite nasty which I will blog on in the near future).\u003Cbr \/\u003E\u003Cbr \/\u003EOther interesting related phenomenon to explain, (and it would be nice per Occam's Razor if it was the same general explanation, but social life is rarely that simple) is why Japan industrialized well in advance of China and Britain was a few decades ahead of the rest of Western Europe during most of the 18th and the first half of the 19th century.\u003Cbr \/\u003E\u003Cbr \/\u003ERobin: \"If you wanted to attribute the industrial revolution to writing, you'd have to explain why there was a strong threshold effect, so that pre-1800 writing levels had weak growth rate effects, while post-1800 writing levels had strong effects.\"\u003Cbr \/\u003E\u003Cbr \/\u003EBesides threshold effects, there could be delay effects: for example, the the rapid growth of books and literacy after the mid-15th century in Western Europe gave rise to a slow but accelerating series of innovations (most obviously scientific and technological advances, but perhaps also innovations in business or law), which in turn gave rise to the IR."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/8634090179432804455\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/8634090179432804455","title":"12 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/8634090179432804455"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/8634090179432804455"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2009\/05\/what-caused-birth-of-agriculture-and.html","title":"What caused the birth of agriculture and the industrial revolution?"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"12"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-1403963792582958540"},"published":{"$t":"2009-05-14T22:58:00.000-07:00"},"updated":{"$t":"2009-05-15T02:39:37.717-07:00"},"title":{"type":"text","$t":"Political property and the evolution of liberty"},"content":{"type":"html","$t":"A \"liberty\" (Latin \u003Cem\u003Elibertatis\u003C\/em\u003E or freedom) in the king's courts of medieval Europe usually referred something very different than it refers to now. It referred to the right of someone to deprive some other people of some of their normal rights as law-abiding subjects. In other words, it referred to a political property, a specifically limited right to \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2007\/05\/why-legal-procedure-is-central-to.html\"\u003Ecoerce\u003C\/a\u003E some set of people, usually for law enforcement or military or other political purposes. This curious meaning, in some ways quite the opposite of our modern meaning, reflects the conundrum that one person may use some freedoms to deprive another person of their freedoms. To prevent this, these \"positive\" freedoms to coerce can be limited to \u003Cem\u003Eprocedural\u003C\/em\u003E powers by which are enforced \u003Cem\u003Esubstantive\u003C\/em\u003E laws that are generally non-coercive, i.e. that generally protect only \"negative\" rights. English-derived common law (i.e. law in Great Britain, the Commonwealth, the United States, etc.) since at least the sixteenth century has generally accomplished this, and as we shall see it has used the flexibility of vague phrases to evolve a variety of modern negative rights.\u003Cbr \/\u003E\u003Cbr \/\u003EMedieval positive liberties that could be owned included the right of a lord to hang thieves caught red-handed in his territory, the right to hold a market and run a law-merchant court, to collect taxes for the king or for oneself, to be a privateer (i.e. a pirate legitimized under the king's laws), to conquer and run a foreign territory, and so on. There were many dozens of kinds of these \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2007\/08\/government-for-profit.html\"\u003Epolitical properties\u003C\/a\u003E specified in thousands of property deeds, called \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2006\/03\/property-in-everything-some-background.html\"\u003Echarters.\u003C\/a\u003E Charters often freely bundled real property (i.e. land) with a variety of political properties over territories matching the boundaries of the real property, but on occasion political properties could be unbundled from land, and specific kinds of political property could be combined with each other in a dizzying variety of ways. Political properties could be held by individuals (as in lords of the manor, counties Palatine, the proprietary American Colonies, and many other examples) or corporations (guilds, boroughs, cities like London and York, companies like the East India Company, the corporate American colonies, and so on).\u003Cbr \/\u003E\u003Cbr \/\u003EIndividually owned politcal properties were generally hereditary. The king exercised his own hereditary political property, called the Realm or the Crown, from which at least in theory all other political property rights had been originally granted. As the original grantor the king retained via his courts jurisdiction over disputes involving those coercive properties, via the extraordnary or prerogative writs. Most political property rights only involved certain narrow subsets of the royal political powers, while some (such as the county Palatine) were very broad, including all royal powers within the boundaries of the county subject only to the intrusion of the king's extraordinary writs.\u003Cbr \/\u003E\u003Cbr \/\u003EIn the foreign relations context, in the granting of powers of naval warfare, piracy, and colonization, political property was used for offense as much as for defense. In the domestic context, justice was meted out by these privately owned courts more often than injustice, but it should be observed that breaking free of the jurisdiction of the local lord in order to come under the jurisdiction of the king was, more than any other event, referred to as gaining one's \"freedom\". If you were the subject of a lord as well as, mostly indirectly, of the king, you were \"unfree\". If you were the subject of only the king and his ministers, you were \"free\". At least that is how the king's courts and ministers and any newspapermen that didn't want to be imprisoned for libel by the king's courts referred to it.\u003Cbr \/\u003E\u003Cbr \/\u003EIn their quest to usurp the political properties of the lords, boroughs, cities, and guilds to run their local courts, the king's courts used cases brought under the extraordinary writs to evolve a set of \"liberties\" with a different meaning: liberties the way most of us think of them, negative liberties that individuals held against these private law enforcers as subjects of the king, and thus justified removal of the cases to the king's courts. The definitions of various political properties increasingly included the procedures within which those rights to coerce had to be exercsed in order to protect the king's subjects from injustice.  Thus we see, for example, over the sixteenth to eighteenth centuries the king's courts successively stripping guilds of various of their jurisdictional powers and thereby increasing the liberty of the individual to freely engage in their trade.  To try to be consistent, the king's judges also often, though by no means always, respected these negative liberties themselves in order to justify by rules their usurpation of the positive liberties of rival private courts.\u003Cbr \/\u003E\u003Cbr \/\u003EMany of the basic constitutional rights of individuals, for example of the rights enshrined in the U.S. Bill of Rights, descend from these efforts. The \u003Cem\u003Elex mercatoria\u003C\/em\u003E evolved in the privately owned market courts of Western Europe. Much of this merchant law was later incorporated into the common law (the law of the king's courts) in Great Britain by merchant juries in the century leading up to the industrial revolution. At the same time, the king's courts gained a large degree of \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2009\/04\/separation-of-powers-and-credible.html\"\u003Eindependence\u003C\/a\u003E from both the king and the rising power of Parliament, forming a separation of powers between the executive, legislative, and judicial branches that was to be used as a model for the United States Constitution.\u003Cbr \/\u003E\u003Cbr \/\u003ELord Coke, Chief Justice of the king's court of Common Pleas under King James I in the early seventeenth century, declared in \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Dr._Bonham%27s_Case\"\u003E\u003Cem\u003EDr. Bonham's Case\u003C\/em\u003E\u003C\/a\u003E that these common law rights could even limit the power of Parliament, but this argument came to be neglected by later courts. There has been longstanding debate over whether this argument of Coke's was a legally binding \"holding\" necessary to reach the verdict of the case or an unecessary \"dictum\" and thus not binding precedent.  A similar doctrine was, however, revived in the United States based on interpreting broad statements in our Constitution such as \"due process\" in terms of rights derived from English common law in order to limit the powers of Congress and the President. The term \"due process\" comes from a series of charters that followed the Great Charter (Magna Carta). The phrase was considered largely synonymous with \"the law of the land\" that features in the Magna Carta, and referred to procedural rights, including the rights of political property and procedural limitations on those rights, that were considred the \"common law\" at that time. However the United States' courts' much later interpretation of the phrase has been far more creative and modern, including the oxymoronic phrase \"substantive due process\" under which rights to freedom of contract, school choice, birth control, and abortion, among other such negative personal rights, have been unearthed and applied to limit State and Federal legislative and executive powers. (More on the history of due process \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2007\/06\/very-brief-history-of-due-process.html\"\u003Ehere\u003C\/a\u003E). The modern British Parliament, on the other hand, is considered to have arbitrary sovereign powers, which can only be limited in certain cases by interpreting the language of its statutes in narrow ways to conform with the unwritten British constitution, i.e. its procedural common law traditions, but again with many creative modern flourishes.\u003Cbr \/\u003E\u003Cbr \/\u003EIn their efforts to limit locally coercive liberties by enhancing \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Negative_liberty\"\u003Enegative liberties\u003C\/a\u003E, the king's courts fell short of consistency in some important ways. For example, a liberty of a corporation to enforce its regulations about a given subject matter (e.g. medicine, for a medical guild) in a given territory was often stripped from that corporation in a case involving a dispute between an individual and that corporation (e.g. somebody practicing medicine in the territory without permission of the guild), on the theory that \"one should not be a judge in his own case.\" This is a very sound principle, and in the case of the guilds it led to the rise of free trade, but as the corporate barristers were quick to point out, the king's courts often did not apply this principle to themselves -- cases involving the king, which were many, remained in the king's courts.   To some extent this was achieved by the independence of the king's courts, but it did not prevent these courts from gradually usurping the political property of the private courts and other privately held legal institutions and, with the generous help of Parliament and its own will to power, eventually extirpating them. \u003Cbr \/\u003E\u003Cbr \/\u003EThere is a detailed analysis of many English cases involving privately owned rights to hold courts and enforce laws, including \u003Cem\u003EDr. Bonham's Case\u003C\/em\u003E, in my paper \u003Ca href=\"http:\/\/papers.ssrn.com\/sol3\/papers.cfm?abstract_id=936314\"\u003EJurisdiction as Property.\u003C\/a\u003E\u003Cem\u003E\u003C\/em\u003E"},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/1403963792582958540\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/1403963792582958540","title":"5 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/1403963792582958540"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/1403963792582958540"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2009\/05\/political-property-and-evolution-of.html","title":"Political property and the evolution of liberty"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"5"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-5213068338486626672"},"published":{"$t":"2009-05-14T00:39:00.000-07:00"},"updated":{"$t":"2009-05-14T03:02:47.870-07:00"},"title":{"type":"text","$t":"Paradoxes resolved (mostly)"},"content":{"type":"html","$t":"A paradox is usually just a good \u003Cem\u003Ereductio ad absurdum\u003C\/em\u003E, or what mathematicians call a proof by contradiction.   The paradox serves to disprove one of its assumptions (or equivalently, if we \"exclude the middle\", to prove the opposite of one of its assumptions).   Many intellectuals often overly complicate paradoxes, for the sake of entertainment or out of wishful thinking that the dubious assumption has not in fact been disproven.  A paradox is only truly mysterious if more than one of the assumptions being used are truly mysterious, and thus we can't tell which assumption caused the contradiction.  But usually it's more a case of obsfucation or wishful thinking than of genuine mystery.   Many academics have a terrible habit of hiding or confusing their assumptions, and this allows wishful thinking to run rampant.\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Cstrong\u003ENewcomb's paradox\u003C\/strong\u003E  \u003Cbr \/\u003E\u003Cbr \/\u003EChooser -- let's say that's you --- plays a game wherein you choose whether to open both boxes A and B or just B.  For whatever odd reason --  Predictor is an omniscient diety, Predictor is running a very repeatable simulation of the Chooser's mind, time travel, the Predictor has repeatedly run the Chooser through this experiment before, etc. -- the Predictor already knows with very high probability what box(es) the Chooser will select.   The first step in the game is that the Predictor makes his prediction.  Then a trustworthy third party puts $1,000 into box A, and $1,000,000 into box B if the Predictor has predicted B only, otherwise nothing into box B.  After these two steps are completed the Chooser selects which box(es) to open.\u003Cbr \/\u003E\u003Cbr \/\u003EHere's the payoff matrix for Chooser:\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ctable\u003E\u003Ctr\u003E\u003Ctd\u003E\u003Cem\u003EPredicted choice\u003C\/em\u003E\u003C\/td\u003E\u003Ctd\u003E\u003Cem\u003EActual choice\u003C\/em\u003E\u003C\/td\u003E\u003Ctd\u003E\u003Cem\u003EPayoff\u003C\/em\u003E\u003C\/td\u003E\u003C\/tr\u003E\u003Ctr\u003E\u003Ctd\u003EA and B\u003C\/td\u003E\u003Ctd\u003EA and B\u003C\/td\u003E\u003Ctd\u003E$1,000\u003C\/td\u003E\u003C\/tr\u003E\u003Ctr\u003E\u003Ctd\u003EA and B\u003C\/td\u003E\u003Ctd\u003EB only\u003C\/td\u003E\u003Ctd\u003E$0\u003C\/td\u003E\u003C\/tr\u003E\u003Ctr\u003E\u003Ctd\u003EB only\u003C\/td\u003E\u003Ctd\u003EA and B\u003C\/td\u003E\u003Ctd\u003E$1,001,000\u003C\/td\u003E\u003C\/tr\u003E\u003Ctr\u003E\u003Ctd\u003EB only\u003C\/td\u003E\u003Ctd\u003EB only\u003C\/td\u003E\u003Ctd\u003E$1,000,000\u003C\/td\u003E\u003C\/tr\u003E\u003C\/table\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EWhat is Chooser's best strategy?  According to game theory, A and B beats B-only by $1,000 whether the Predictor predicts A and B or just B.  Therefore Chooser should choose to open both A and B.\u003Cbr \/\u003E\u003Cbr \/\u003EBut another strategy for Chooser is the following: The Chooser, knowing that the Predictor has very good information about his forthcoming choice and has mechanically acted on it, and thus is almost surely correct, eliminates those choices where the Predictor is wrong and chooses B-only over A and B because of the remaining two choices it has a higher payoff.\u003Cbr \/\u003E\u003Cbr \/\u003EBy following 2-player game theory, the expected value of Chooser's winnings is only a bit over $1,000, while by taking into account the high accuracy of the Predictor's prediction and maximizing expected value the expected value is a bit over $1,000,000.\u003Cbr \/\u003E\u003Cbr \/\u003EThe paradox dissappears if you stop assuming a game with two players.   The Predictor does not have any stake in the outcome and is not a player.  Indeed, we are told that Predictor will make no free choice at all, but will simply mechanically predict what Chooser will do.   It's the Chooser's free will in the face of a mechanical but oddly well-informed Predictor.   Chooser should not be misled by the payoff matrix into assuming this is a 2-player game, but should instead choose the best of the two choices of significant probability.\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Cstrong\u003EFermi's Paradox\u003C\/strong\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EEnrico Fermi asked, if there are extraterrestrial civilizations, why haven't we seen them?  No alien artifacts large or small on earth, nor anything visibly unnatural on the many millions of square kilometers of billion-year-old (or more) surface we've observed elsewhere in our solar system, nor any visible megastructures in our galaxy.   Under Darwinian evolution life and civilization tends to spread to use as much energy and matter as it can.   New volcanic islands and areas where life has been destroyed by volcanoes are quickly colonized by a very observable spread of plants that soon soak up a significant fraction of the incoming sunlight.  Human civilizations have similarly in the blink of astronomical time spread all over our planet, leaving a number of highly visible artifacts such as the Great Wall of China, a dazzling display of lights on the night side of our planet, and in our atmosphere increased carbon dioxide and a potpouri of odd chemicals.  Photosynthetic life has given our planet a bizarre oxygen atmosphere and turned our continents significantly darker.  Even if an alien society somehow turned radically un-Darwinian and thus remained obsessively small and hidden, it would take just one \"crazy hermit\" to appear once in hundreds of millions of years to take off and replicate his crazy Darwinian verion of that civilization across the galaxy, building visible structures all over the galaxy to efficiently use stellar energy and recycle volatile elements.  \u003Cbr \/\u003E\u003Cbr \/\u003EThe average star in our galaxy is about 10 billion years old; if it takes 5 billion years for life to appear and evolve into a civilization and 200 million years for the their descendants to spread across our galaxy (which only requires travel at a small fraction of the speed of light), the average civilization that has already emerged in our galaxy should have spread across it 2.3 billion years ago.   \u003Cbr \/\u003E\u003Cbr \/\u003EIf they exist, or existed, evidence of this existence should be all over the galaxy, just as with the existence of life and civilization on earth.  But we see no evidence that any advanced civilization has ever expanded into our solar system or any where else in our galaxy.  Even worse, we see no evidence of artificiality in other galaxies.  Artificial entities would severely change what we observe in the cosmos, but instead the millions of galaxies we've observed seem to look quite natural.  This can be easily tested by studying data from our current telescopes.  Unless we discover a significant proportion of galaxies that are oddly dim in the optical but bright in the infrared (or perhaps, if the alien machines are extremely clever and very miserly, in the microwave), indicating artificially efficient use of stellar energy, and oddly bright in the heavy element spectra and dim in the volatile elements spectra, indicating artifically efficient enclosure of the volatile elements (for efficient volatile recycling), we must conclude that the odds of finding a civilization in any given galaxy, and thus of another civilization in our own galaxy, are remote.  Fermi's paradox simply proves its major assumption wrong: there are no little green men in our galaxy.  Sorry to pop that good old sense of wonder.   \u003Cbr \/\u003E\u003Cbr \/\u003EIt would be fun to listen in on a civilization from a distant galaxy, if we ever find one and if we ever figure out how to detect such faint signals.   Imagine the Wikipedia of a billion-year-old civilization!\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Cstrong\u003EKavka's toxin\u003C\/strong\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EPerhaps less easily resolved, because one of its assumptions is the vague and subjective idea of \"intent\", is the paradox of Gregory Kavka's toxin: you get $1 million put in your bank account at 9 AM if at 7 AM you intend to drink an extremely painful but not otherwise harmful toxin at 11 AM.   The toxin basically causes you to live in sheer hell for 24 hours. You get to keep the million dollars whether you drink the toxin or not.  Can you intend to do something that when the time comes would not be rational to do?  Kavka says you can't -- that there is no way to win the $1 million.  Turn off your alarm and sleep in.\u003Cbr \/\u003E\u003Cbr \/\u003EMy analysis is that the only ways to win the $1 million are through credible commitment or self-delusion.  Thus the Wikipedia \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Kavka%27s_toxin_puzzle\"\u003Eentry\u003C\/a\u003E cites election-year political promises that would actually be too expensive to implement as an example of Kavka's toxin.  Of course the political party only fools others (and perhaps themselves) into believing its intent.   Standard election procedures, in which campaign promises are not legally binding, prevent \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2009\/04\/separation-of-powers-and-credible.html\"\u003Ecredible commitment\u003C\/a\u003E, so serious intent only could arise through self-delusion."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/5213068338486626672\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/5213068338486626672","title":"5 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/5213068338486626672"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/5213068338486626672"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2009\/05\/paradoxes-resolved-mostly.html","title":"Paradoxes resolved (mostly)"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"5"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-4610152982762061291"},"published":{"$t":"2009-05-07T16:13:00.000-07:00"},"updated":{"$t":"2009-05-08T01:19:31.238-07:00"},"title":{"type":"text","$t":"Liar-resistant government"},"content":{"type":"html","$t":"I have extensively explored the technological codification of certain aspects of law -- law that is \"smart\" as in \"smart weapons\". These could implement in digital protocol important parts of law that are now processed by the mind via legal language or through physical enforcement. My focus has been on \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Smart_contract\"\u003Esmart contracts\u003C\/a\u003E, \u003Ca href=\"http:\/\/szabo.best.vwh.net\/proplets.html\"\u003Esmart property\u003C\/a\u003E, and other such technological reifications of private law. Here I explore the dangerous territory of extending these ideas to public law, especially to governmental forms and legal procedures. Officials of a wide variety of governments have too often over the course of history covered up or falsified evidence, destroyed or forged public records, and introduced other lies into legal and political processes. We need to protect future legal procedures and other governmental operations from such abuses.\u003Cbr \/\u003E\u003Cbr \/\u003EThe canonical problem explored by computer scientists in designing these protocols, the \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Two_Generals%27_Problem\"\u003EByzantine Generals Problem\u003C\/a\u003E, is itself an exercise about liars in government. \u003Cbr \/\u003E\u003Cbr \/\u003EThis article focuses on technologically ensuring the veracity and execution of those steps of legal procedure which are capable of such enhancement (formalizeable or objective aspects which I call \"dry\", in contrast to the many inherently subjective and non-syntactical \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2006\/11\/wet-code-and-dry.html\"\u003E\"wet\"\u003C\/a\u003E aspects of the law): securing chains of evidence, securing chains of command, securely recording and publicizing the ownership and transfer of property, and so on.\u003Cbr \/\u003E\u003Cbr \/\u003EA set of ideas I have for procedural law, or \"government\" broadly defined, is that many of its dry steps might be based on Byzantine fault tolerance protocols along with cryptographic protocols that form tamper-evident structures such as unforgeable chains of evidence. I describe some of these and related protocols further \u003Ca href=\"http:\/\/szabo.best.vwh.net\/distributed.html\"\u003Ehere\u003C\/a\u003E, \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2007\/02\/confidential-auditing.html\"\u003Ehere\u003C\/a\u003E, and \u003Ca href=\"http:\/\/szabo.best.vwh.net\/coalition.html\"\u003Ehere\u003C\/a\u003E, but I will describe the basic idea of Byzantine fault tolerance here.\u003Cbr \/\u003E\u003Cbr \/\u003EThe basic idea of a Byzantine fault tolerant protocol is that it is a highly distributed peer-to-peer protocol robust from a certain fraction or less of its participants lying about information originally observed or created by one or a small subset of them. The fraction varies based on various assumptions of the model, but common figures are 1\/3 and 1\/2 for information originating from one node assuming that node is truthful. If the fraction required for successful collusive lying is not achieved (and such an attack requires either informed negotiations occurring before this protocol step or negotiating the collusion in a single step, the latter possible to avoid by assuming fraud if messaging is abnormally delayed), the liars are detected and can be excluded from future participation in the network. In a less formal sense, Byzantine fault tolerant protocols are simply distributed, peer-to-peer networks with dense communications (in the least efficient but most secure versions, every node sends every bit of information to ever other node) in order to protect against minorities of colluding liars, and to detect and exclude any liars who have not reached the threshold of collusion and thus can be excluded from the network.\u003Cbr \/\u003E\u003Cbr \/\u003EByzantine fault tolerance protocols are not as strong as cryptographic protocols. They can also suffer from the \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Sockpuppet_(Internet)\"\u003Esock puppet\u003C\/a\u003E problem (also called in some literature the \"Sybil\" problem), in which one or a few liars control a much larger and sufficient fraction of network nodes, if the participants are not strongly identified as unique individuals. Thus where it is possible, we should augment these dense peer-to-peer protocols with or use instead stronger cryptographic schemes such as hashing and a variety of cryptographic signatures. If the Byzantine protocol is overcome by collusive liars in a way that cannot be detected before sufficient collusion occurs or prevented by cryptography, some outside manual \"meta-protocol\" is required to figure out who is lying and repair the network or create a new network containing the truthful state. For some kinds of communications, digital signatures and a chain of evidence based on cryptographic hash chains are a much stronger security against forgery. Byzantine protocols, with their imperfect detection and exclusion of liars, are to be relied on only where the lie is of a nature not amenable to prevention by cryptographic chains of evidence.\u003Cbr \/\u003E\u003Cbr \/\u003ESensors and effectors can be readily hooked up to these high-integrity networks. Cryptography can, for example, provide us an unforgeable chain of evidence from a security camera to our computer displays and an unforgeable return chain of command from our mice to a gun or a jail cell lock. Cryptography can also secure smart contracts with the local officials: a judge declares you bailable, said authorization being transmitted to your jail door. Your girlfriend fills out a web form which pays the bail bondsman with a credit card. The bondsman's computer debits her account and then puts up the digital bond, and the jail door opens. You're out and I don't get to date your kind-hearted girlfriend. \u003Cbr \/\u003E\u003Cbr \/\u003EOne popular piece of secure government that many people have worked on is secure \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Punchscan\"\u003Evoting.\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003ESeveral years ago I sketched an important sub-protocol of liar-resistant government, namely \u003Ca href=\"http:\/\/szabo.best.vwh.net\/securetitle.html\"\u003Esecure property titles\u003C\/a\u003E (or, more generally, secure public registries). Such titles could, of course, include titles to \u003Ca href=\"http:\/\/papers.ssrn.com\/sol3\/papers.cfm?abstract_id=936314\"\u003Epolitical\u003C\/a\u003E as well as real, personal, and intellectual property, and physical security devices such as sensors and weapons could be controlled based on them. In addition to to the cryptographic integrity of the records themselves, the public title registry can follow any rules of transfer in at least a Byzantine failure resistant way. Normal title transfers, signed over by the former owner, would be cryptographically strong.\u003Cbr \/\u003E\u003Cbr \/\u003EBesides the obvious real property titles, domain names, and so, on, these registries could securely record and transfer the shares of a corporation. \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2005\/12\/bit-gold.html\"\u003EBit gold\u003C\/a\u003E, my sketch of an electronic currency that minimally relies on trust in any one person or organization, achieves this minimal vulnerability by using secure property titles. Satoshi Nakamoto has implemented \u003Ca href=\"http:\/\/www.bitcoin.org\/\"\u003EBitCoin\u003C\/a\u003E which very similarly uses a dense Byzantine fault tolerant peer-to-peer network and and cryptographic hash chains to ensure the integrity of a currency.\u003Cbr \/\u003E\u003Cbr \/\u003EMaking a number of important legal and political functions liar-resistant is on the horizon, and bits and pieces of this task are already being implemented."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/4610152982762061291\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/4610152982762061291","title":"2 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/4610152982762061291"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/4610152982762061291"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2009\/05\/liar-resistant-government.html","title":"Liar-resistant government"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"2"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-1536858025762328341"},"published":{"$t":"2009-04-28T16:45:00.000-07:00"},"updated":{"$t":"2009-04-28T17:07:27.151-07:00"},"title":{"type":"text","$t":"Separation of powers and credible commitment"},"content":{"type":"html","$t":"Douglass North and Niall Ferguson, among other historians, have observed the dramatic lowering of English government bond rates after the Glorious Revolution in 1688 (alternatively seen as a Dutch invasion aided and abetted by Parliamentary and City of London traitors to the House of Stuart, and a subsequent \"political merger\" of the former enemy nations, as Ferguson puts it).  North and Ferguson have imputed these lower rates to the superiority of modern democracy which they see as having been given birth by that Revolution.   \u003Cbr \/\u003E\u003Cbr \/\u003EAside from the very uncommon but \u003Ca href=\"http:\/\/unqualified-reservations.blogspot.com\/\"\u003Everbose Jacobite\u003C\/a\u003E, and aside from that sad majority of historians who are shallow parrots of yesterday's tabloid headlines and fail to see the importance of anything so abstract as government bond rates, there is general agreement by the remaining historians about the effect of the Revolution on the great lowering of England's bond rates.  But, while the identification of the Glorious Revolution as a great improvement in the financial condition of the English government (and subsequent world dominance of the British Empire, spread of free trade, abolition of slavery, etc. -- as well as to modern evils such as historically unprecedented rates of deficit spending, taxation, and inflation) is accurate, the attribution by North and Ferguson of these lower rates to the supposed \"democratic\" nature of the Revolution is quite wrong.\u003Cbr \/\u003E\u003Cbr \/\u003EA more accurate if rather vague view of the situation is given by \u003Ca href=\"http:\/\/clubtroppo.com.au\/2007\/12\/13\/odysseus-heritage-continues-to-grow\/\"\u003ENicholas Gruen\u003C\/a\u003E:   \u003Cbr \/\u003E\u003Cbr \/\u003E\u003Cblockquote\u003E Be that as it may, one of the huge things that powered us into the modern world was the idea of subjecting monarchs to the rule of law - particularly in Holland and the UK (after the Glorious Revolution of 1688). Because debtors for the first time had an expectation of being repaid when the monarch borrowed money off them, bond rates went right down and the government could borrow money. ‘A free nation deep in debt’ I think was the contemporary expression as Britain and Holland’s stars rose.\u003C\/blockquote\u003EWe can be far more specific about how the Dutch Invasion of 1688 caused England's bond rates to decrease.  There are rather three specific events, quite related to the rule of law but not at all related to voting of the masses (which was not a feature of England for more than a century following that Revolution), but far more pertinent to the English government's immediately subsequent ability to finance itself at low rates.   The first was the Bank of England.   Whatever the advantages or faults of central banking to the general economy, the Bank of England was the financial engine behind the Royal Navy's subsequent boast, factual until the 20th century, that \"Britania Rules the Waves\", and specifically its ability to enforce free trade and destroy slavery.   The two other events are quite related.   The second event was a now-obscure lawsuit against King William and Queen Mary resulting in a crucial legal opinion written by one of England's greatest Chief Justices, Lord Holt, in 1701.   The third was a  now-obscure provision of the 1701 Act of Settlement which reasserted the independence of Holt and the other English justices from both Crown and Parliament.   The Bank of England is well known, but these latter two events are at least as important and deserve to be yanked from their obscurity and put into every History 101 lesson.  \u003Cbr \/\u003E\u003Cbr \/\u003EJustice Iredell gives a good description of \u003Cem\u003EThe Banker's Case\u003C\/em\u003E in the later U.S. case \u003Ca href=\"http:\/\/press-pubs.uchicago.edu\/founders\/print_documents\/amendXIs1.html\"\u003EChisholm v. Georgia.\u003C\/a\u003E  Briefly, in the case brought by banker creditors of the Crown in 1701 to collect in what was owed them under debts contracted by the Stuart kings, the House of Lords (the ultimate court of appeal), led by Lord Chief Justice Holt, held that that the Court of the Exchequer had the power to decide and remedy a case of debt brought against the Crown, and that their decision holding the debts valid and remedying them with payment from the Exchequer was proper.  In this particular case, William had no power to renege, not only on debts incurred under his reign, but on the debts incurred by his Stuart predecessors Charles II and James II.  \u003Cbr \/\u003E\u003Cbr \/\u003EThis would not have meant too much of the Crown had retained a unilateral ability to fire the justices of the Court of the Exchequer for deciding against the Crown.   In the Act of Settlement Parliament determined that the Crown's justices held their posts for life \"on good behavior\": it would take a vote of the House of Commons, the House of Lords, \u003Cem\u003Eand\u003C\/em\u003E the concurrence of the Crown itself to impeach a justice.  \u003Cbr \/\u003E\u003Cbr \/\u003EThe combination of \u003Cem\u003EThe Banker's Case\u003C\/em\u003E and judicial tenure for life created what economists call a credible commitment for the government to abide by its contracts.   This is a comitment that neither a single person as sovereign operating under Ulpian's principle of Roman law that \"the prince's will is law\", nor a democratic legisulature acting under Rosseau's principle that \"the general will\" supposedly reflected in the enactments of this legislature are unreviewable law, can make.  Such a sovereign can simply declare it to be the law that they need not abide by their contracts or by the property rights of their subjects.   It is the separation of powers -- and especially an judiciary with power of final decision over contracts involving the government treasury that is as independent as possible of those tax collectors, borrowers, and repayers -- not democratic voting that makes the credible commitment of a government to repay its debts and otherwise honor its contracts possible."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/1536858025762328341\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/1536858025762328341","title":"2 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/1536858025762328341"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/1536858025762328341"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2009\/04\/separation-of-powers-and-credible.html","title":"Separation of powers and credible commitment"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"2"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-469372615943081164"},"published":{"$t":"2009-04-14T15:24:00.000-07:00"},"updated":{"$t":"2009-04-14T17:30:57.592-07:00"},"title":{"type":"text","$t":"Polynesians vs. Adam Smith"},"content":{"type":"html","$t":"Adam Smith observed how even the most basic of products in \u003Ca href=\"http:\/\/wsu.edu\/~dee\/ENLIGHT\/WEALTH1.HTM\"\u003E1776\u003C\/a\u003E, at the dawn of the industrial revolution in Britain, depended, directly and indirectly, on the work of thousands of people:\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Cblockquote\u003EObserve the accommodation of the most common artificer or day-laborer in a civilized and thriving country, and you will perceive that the number of people of whose industry a part, though but a small part, has been employed in procuring him this accommodation, exceeds all computation. The woollen coat, for example, which covers the day laborer, as coarse and rough as it may appear, is the produce of the joint labor of a great multitude of workmen. The shepherd, the sorter of the wool, the wool-comber or carder, the dyer, the scribbler, the spinner, the weaver, the fuller, the dresser, with many others, must all join their different arts in order to complete even this homely production. How many merchants and carriers, besides, must have been employed in transporting the materials from some of those workmen to others who often live in a very distant part of the country! How much commerce and navigation in particular, how many shipbuilders, sailors, sailmakers, ropemakers, must have been employed in order to bring together the different drugs made use of by the dyer, which often come from the remotest corners of the world! What a variety of labor, too, is necessary in order to produce the tools of the meanest of those workmen! To say nothing of such complicated machines as the ship of the sailor, the mill of the fuller, or even the loom of the weaver, let us consider only what a variety of labor is requisite in order to form that very simple machine, the shears with which the shepherd clips the wool. The miner, the builder of the furnace for smelting the ore, the feller of the timber, the burner of the charcoal to be made use of in the smelting-house, the brickmaker, the bricklayer, the workmen who attend the furnace, the millwright, the forger, the smith, must all of them join their different arts in order to produce them. Were we to examine, in the same manner, all the different parts of his dress and household furniture, the coarse linen shirt which he wears nest his skin, the shoes which cover his feet, the bed which he lies on, and all the different parts which compose it, the kitchen grate at which be prepares his victuals, the coals which he makes use of for that purpose, dug from the bowels of the earth, and brought to him perhaps by a long sea and a long land carriage, all the other utensils of his kitchen, all the furniture of his table, the knives and forks, the earthen or pewter plates upon which he serves up and divides his victuals, the different hands employed in preparing his bread and his beer, the glass window which lets in the heat and the light, and keeps out the wind and the rain, with all the knowledge and art requisite for preparing that beautiful and happy invention, without which these northern parts of the world could scarce have afforded a very comfortable habitation, together with the tools of all the different workmen employed in producing those different conveniences; if we examine, I say, all these things, and \u003Cem\u003Econsider what a variety of labor is employed about each of them, we shall be sensible that without the assistance and co-operation of many thousands, the very meanest person in a civilized country could not be provided\u003C\/em\u003E [emphasis added], even according to what we may falsely imagine the easy and simple manner in which he is commonly accommodated. \u003C\/blockquote\u003ELeonard Read used the \u003Ca href=\"http:\/\/www.econlib.org\/library\/Essays\/rdPncl1.html\"\u003Epencil\u003C\/a\u003E as an even more startling example of how a simple 20th century product depended on a vast global network of economic relations.  The number of people required, directly and indirectly, to manufacture a high-technology device, such as a cellphone or laptop computer, is probably in the millions.  Friedrich Hayek explained the fine-grained division of labor that makes modern technology and wealth possible as a division of knowledge in \u003Ca href=\"http:\/\/www.econlib.org\/library\/Essays\/hykKnw1.html\"\u003E\"The Use of Knowledge in Society\"\u003C\/a\u003E:\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Cblockquote\u003EThe peculiar character of the problem of a rational economic order is determined precisely by the fact that the knowledge of the circumstances of which we must make use never exists in concentrated or integrated form but solely as the dispersed bits of incomplete and frequently contradictory knowledge which all the separate individuals possess. The economic problem of society is thus not merely a problem of how to allocate \"given\" resources—if \"given\" is taken to mean given to a single mind which deliberately solves the problem set by these \"data.\" It is rather a problem of how to secure the best use of resources known to any of the members of society, for ends whose relative importance only these individuals know.\u003C\/blockquote\u003EYet there existed a culture, the pre-European Polynesians, which established self-sufficient economies sometimes not totalling more than a few hundred people on dozens of small islands int the Pacific.   Due to the small number of people that made up a self-sufficient economy, they did it using technology and institutions radically different from the agricultural civilizations of the Eurasian continent where they had come from.  The Polynesians did not work metal: metalworking (for example the mining, smelting, smithing, etc. required to extract and work iron) requires too much of a division of labor.  They used only the materials readily available on a South Seas island: their houses, ovens, boats, weapons, etc. were all made out of plants, stones, and animal parts.  Since they lived at a Malthusian equilibrium (which almost every culture lived under until northwest Europe in the 17th century started a long climb out of it), their standard of living was on average the same as the world average -- dirt poor by our standards.   This was enough, however, to produce catamarans that could navigate the South Pacific long before Magellan and Cook.  \u003Cbr \/\u003E\u003Cbr \/\u003ESmall island economies greatly increased the premium and resulting emphasis on trade between islands in Polynesia and Melanesia (the Melanesians were an earlier group of island settlers).   When inter-island trade was feasible, large proportions of resources and attention went into it.  The \u003Ca href=\"http:\/\/szabo.best.vwh.net\/kula.html\"\u003Ekula ring\u003C\/a\u003E was a splendid example of a sophisticated trade institution that developed among some of the Melanesians.\u003Cbr \/\u003E\u003Cbr \/\u003EWhat's more, the Polynesians could do something that we moderns cannot -- replicate their entire economy from one island to another by packing up their families, along with a variety of plants and a handful of animals, onto a handful of catamarans.  Could we similarly replicate our entire modern global economy, or a set of tools that could produce an equivalent result, to, say, another planet on a handful of rockets?    That was the ambition of \u003Ca href=\"http:\/\/metamodern.com\/\"\u003EK. Eric Drexler's \u003C\/a\u003Enanotechnology: pack a rocket full of \"assemblers\": self-replicating robots that can make almost anything.   In the mid-20th century, mathematician and computer scientist John Von Neumann sketched a theoretical model of a self-replicating machine -- a self-replicating pattern in the 2-dimensional world of \"cellular automata\" (where, among other simplifications, copy operations come for free). I have long been \u003Ca href=\"http:\/\/szabo.best.vwh.net\/nano.musings.html\"\u003Eskeptical\u003C\/a\u003E of the idea that physical self-replication can be done with a simple design:\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Cblockquote\u003EWhile going from macroscopic industrial parts proposed by von Neumann, or the nucleic acids, amino acids and myriad of tertiary biochemicals in bacteria, to atomic-scale diamondoid parts reduces the search space, and thus complexity, but this also reduces the degrees of design freedom. It could be that the search space of diamondoid replicators is so small that there is no possible configuration of, say, 10 million carbon atoms can copy itself in practice, when we get down to the details of atomic placement in each operation. A particularly difficult task in atomic placement for one small segement of a Stewart platform (eg assembling the ratchet complex) may necessitate a blowup in the complexity of the platform itself or in the machinery that brings molecules to and places them for the platform. To be truly self-replicating we need to close all the loops in the graph of operations. Attempts to close the last 1% (\"vitamins\") might introduce even more open loops than we close. The minimum complexity might easily exceed the degrees of freedom in the search space, in which case a solution does not exist. \u003C\/blockquote\u003EThe seeming simplicity of the the small-island Polynesian economy, lacking a sophisticated division of production and distribution operations and thus lacking a highly complex division of knowledge, is in one sense an illusion.  This simplicity was made possible by making intensive use of very high evolved plant life.   \u003Ca href=\"http:\/\/szabo.best.vwh.net\/complexity.html\"\u003EThe complexity of life is extremely high.\u003C\/a\u003E   The self-sufficiency of the pre-European Polynesian economy is only possible if agriculture can be productively accomplished with tools made by the farmer or his friends.   There is no simple design of a pan-assembler or self-replicating device -- the simplest ones we know of, life, are of extremely high complexity, and it will be a long time before we create new versions of life, much less artificial self-replicating machinery, in a lab.\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2007\/02\/3d-printers.html\"\u003EPartially self-replicating \u003C\/a\u003Emachines are, of course, quite possible.  The actual direct and indirect labor required for these machines, like those required for laptops and cell phones, is in the millions of people, and for many of the same reasons -- these machines are based on sophisticated microchips and plastics, among other parts of complex origin.  Even if we radically redesigned every tool and machine we have for our hypothetical self-sufficient extraterrestrial economy -- and such radical redesign would be utterly necessary -- it would still likely require hundreds of thousands of people and gigatonnes of machinery, at least, to have a wealthy yet self-sufficient economy beyond earth.  \u003Cbr \/\u003E\u003Cbr \/\u003ETake Smith's coat and Read's pencil, elaborate the required network still further for today's complex products, and multiply by many thousands of products -- that is what is required to fill the shelves of your hardware super-store (in the U.S., Home Depot and Lowe's).  Do this again for your drugstore, your clothing store, etc.  You'd have no such super-stores in our space colony.   It would in many ways be quite poor by earth standards. \u003Cbr \/\u003E\u003Cbr \/\u003EThe Polynesians relied on the ready availability of high-evolved life that could readily be grown in the native environment (no complex artificial creations like Plexiglass domes or grow-lights needed), and yet were dirt-poor by our standards.  Modern products generally require elaborate divisions of labor necessarily involving millions of people.   Such an economy cannot be planned, as numerous attempts to do so demonstrated in the 20th century.  A modern economy requires a decentralized information-transmitting mechanism such as a market to work.   In sharp contrast to the Polynesian small-island economy, our global economy cannot be easily replicated.  We have to make it work here, or nowhere."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/469372615943081164\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/469372615943081164","title":"3 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/469372615943081164"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/469372615943081164"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2009\/04\/polynesians-vs-adam-smith.html","title":"Polynesians vs. Adam Smith"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"3"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-5037187065906381770"},"published":{"$t":"2009-04-06T18:21:00.001-07:00"},"updated":{"$t":"2009-04-06T21:19:15.316-07:00"},"title":{"type":"text","$t":"Money and the efficiency of plunder"},"content":{"type":"html","$t":"\u003Cem\u003E(Note to readers -- after several months of posting reruns, I am back to doing original posts until further notice).\u003C\/em\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EArnold Kling describes his \u003Ca href=\"http:\/\/econlog.econlib.org\/archives\/2008\/11\/lectures_on_mac_4.html\"\u003Emilitaristic\u003C\/a\u003E theory of the origins of money, and kindly also \u003Ca href=\"http:\/\/econlog.econlib.org\/archives\/2008\/11\/the_origins_of.html\"\u003Equotes\u003C\/a\u003E and refers readers to my \u003Ca href=\"http:\/\/szabo.best.vwh.net\/shell.html\"\u003Etheory\u003C\/a\u003E (or set of theories, as I posit that shell proto-money played a crucial role in several different kinds of hunter-gatherer transactions). Here is the gist of Kling's theory:\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Cblockquote\u003E\u003Cp\u003EImagine that you're a warlord leading a band of soldiers. Your business model is that your soliders prey on farmers, taking plunder and tribute. To help motivate your soldiers, you promise them a share of the booty. When the band of warriors is small, the promises can be verbal and informal. However, in order to organize a large army, you need formal, written contracts. Lacking lawyers and xerox machines, you make little carvings on metal, hand them out to soldiers, and say, \"After the battle, turn this in to the clerk and we'll give you a share of captured slaves and grain and stuff.\"\u003C\/p\u003E\u003C\/blockquote\u003EThere may not be as much contrast between our theories as Kling suggests. We both seem to agree that the traditional economists' explanation of money emerging from a barter market that otherwise obeyed the principles of efficient modern markets is not historically sound (although I do believe it is theoretically and empirically sound as a theory of the way things \u003Ci\u003Ecan\u003C\/i\u003E happen -- money-like intermediate commodities can and have been observed to emerge from barter markets). Where we may differ, and perhaps not by much, is on the role of coercion. I believe that both coercive and voluntary transactions (and transactions that partook of both components) were important, and that the voluntary transactions were not efficient market exchanges:\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Cdiv align=\"left\"\u003E\u003Cblockquote\u003E\u003Cp\u003EVoluntary spot trades are not the only kinds of transactions that benefit from lower transaction costs. This is the key to understanding the origin and evolution of money. Family heirlooms could be used as collateral to remove the credit risk from delayed exchanges. [As explained elswhere in the article, these were typically exchanges that involved very high transaction costs. I'd add in clarification now that the closest modern economic model of them would be bilateral monopoly, not spot exchange on an efficient market]. \u003Cem\u003EThe ability of a victorious tribe to extract tribute from the vanquished was of great benefit to the victor . The victor's ability to collect tribute benefited from some of the same kinds of transaction cost techniques as did trade. So did the plaintiff in assessment of damages for offenses against custom or law\u003C\/em\u003E [emphasis added], and kin groups arranging a marriage. Kin also benefited from timely and peaceful gifts of wealth by inheritance. The major human life events that modern cultures segregate from the world of trade benefited no less than trade, and sometimes more so, from techniques that lowered transaction costs. None of these techniques was more effective, important, or early than primitive money -- collectibles.\u003Cbr \/\u003E...\u003Cbr \/\u003EWarfare involved, among other things, killing, maiming, torture, kidnapping, rape, and the extortion of tribute in exchange for avoiding such fates. When two neighbor tribes were not at war, one was usually paying tribute to the other. Tribute could also serve to bind alliances, achieving economies of scale in warfare. Mostly, it was a form of exploitation more lucrative to the victor than further violence against the defeated. \u003Cbr \/\u003E\u003Cbr \/\u003EVictory in war was sometimes followed by an immediate payment from the losers to the victims. Often this just took the form of looting by the enthusiastic victors, while the losers desperately hid their collectibles. More often, tribute was demanded on a regular basis. In this case, the triple coincidence could and sometimes was avoided by a sophisticated schedule of payments in kind that matched the losing tribe's ability to supply a good or service with the victor's demand for it. However, even with this solution primitive money could provide a better way -- a common medium of value that greatly simplified the terms of payment – very important in an era when terms of the treaty could not be recorded but had to be memorized. In some cases, as with the wampum as used in the Iriquois Confederacy, the collectibles doubled as a primitive mnemonic device that, while not verbatim, could be used as an aid to recall the terms of the treaty. For the winners, collectibles provided a way to collect tribute at closer to the Laffer optimum. For the losers, collectibles buried in caches provided a way to “under-report”, leading the victors to believe the losers were less wealthy and thus demand less than they might. Caches of collectibles also provided insurance against over-zealous tribute collectors. Much of the wealth in primitive societies escaped the notice of the missionaries and anthropologists due to its highly secretive nature. Only archeology can reveal the existence of this hidden wealth. \u003Cbr \/\u003E\u003Cbr \/\u003EHiding and other strategies presented a problem that tribute collectors share with modern tax collectors – how to estimate the amount of wealth they can extract. Value measurement is a thorny problem in many kinds of transactions, but never more so than in the antagonistic collection of tax or tribute. In making these very difficult and nonintuitive trade-offs, and then executing them in a series of queries, audits, and collection actions, tribute collectors efficiently optimized their revenue, even if the results seemed quite wasteful to the tribute payer. \u003Cbr \/\u003E\u003Cbr \/\u003EImagine a tribe collecting tribute from several neighbor tribes it previously defeated in war. It must estimate how much it can extract from each tribe. Bad estimates leave the wealth of some tribes understated, while forcing others to pay tribute based on estimates of wealth they don't actually have. The result: the tribes that are hurt tend to shrink. The tribes that benefit pay less tribute than could be extracted. In both cases, less revenue is generated for the victors than they might be able to get with better rules. This is an application of the Laffer curve to the fortunes of specific tribes. On this curve, applied to income taxes by the brilliant economist Arthur Laffer, as the tax rate increases, the amount of revenue increases, but at an increasingly slower rate than the tax rate, due to increased avoidance, evasion, and most of all disincentive to engage in the taxed activity. At a certain rate due to these reasons tax revenues are optimized. Hiking the tax rate beyond the Laffer optimum results in lower rather than higher revenues for the government. \u003C\/p\u003E\u003C\/blockquote\u003EWe do seem to differ in that Kling's account is basically an account of the origins of coinage in the agricultural era, and mine is an account of the origins of shell proto-money in the hunter-gatherer era. As indicated above, I believe both coercion and voluntary transactions (and admixtures of same) played an important role in the hunter-gatherer era, and as a general matter that's also true of the agricultural era.\u003Cbr \/\u003E\u003Cbr \/\u003EI have very little disagreement with Kling's account of the importance of coercion in the origin of coinage. Indeed, here's what I had to say about the origins of coinage: \u003C\/div\u003E\u003Cblockquote\u003EGiven what we have seen about the benefits of proto-money to tribute and tax collectors, as well as the critical nature of the value measurement problem in optimally coercing such payments, it is not surprising that tax collectors, specifically the kings of Lydia, were the first major issuers of coinage. The king, deriving his revenue from tax collection, had a strong incentive to measure to value of wealth held and exchanged by his subjects more accurately.  That the exchange also benefited from cheaper measurement by traders of the medium of exchange, creating something closer to efficient markets, and allowing individuals to enter into the marketplace on a larger scale for the first time, was for the king a fortuitous side effect.\u003C\/blockquote\u003EMy account of coinage differs from Kling only in that I'm looking at the \u003Ca href=\"http:\/\/szabo.best.vwh.net\/measuringvalue.html\"\u003Emeasurement problem\u003C\/a\u003E that occurs when collecting the plunder; he is looking at the measurement problem that occurs when distributing the plunder out to the soldiers. Both are important. Indeed I have also \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2008\/03\/logical-emergence-of-money-from-barter.html\"\u003Ediscussed\u003C\/a\u003E the latter before on this blog (I don't recall the origins of the idea -- I may have read it somewhere -- a bleg to my kind readers, if you know of a reference, please post it in the comments):\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Cblockquote\u003EMarkets will tend to standardize on whatever the dominant transactor, the party that controls the largest plurality of cash flow, standardizes on, and in most historical societies the dominant transactions were tax collection and the payment of those taxes to soldiers.\u003C\/blockquote\u003EBy \"dominant\" here I just mean constituting the plurality (the largest player), not the majority of the value of all transactions, whether coercive or voluntary or some admixture of same. Coinage made measuring the value of both plunder and the distribution of plunder more accurate: both were important in increasing the efficiency of plunder and giving rise to coinage. More efficient exchanges, resembling more spot exchanges than bilateral monopoliies, and thus a larger tax base, were a fortuitous consequence for the Lydian kings (and later for the Greeks who eventually conquered the relatively coinless Persians).\u003Cbr \/\u003E\u003Cbr \/\u003EThe issue of coercion is also deeply implicated in the origins of agriculture itself.  After all, hunter-gatherers were expert botanists compared to the modern layman.  They were perfectly well aware that one could plant seeds (and shoots, for asexual reproduction) and have them grow, and could have easily learned the basic techniques associated with early agriculture once they had experimented with this knowledge.   Yet these expert botanists with brains the same size as ours existed for 100,000 years before the agricultural breakthrough occured.  The problem was not one of farming technique, it was one of securing this capital investment from fellow tribe members and foreign tribes.  Only once this problem in coercion and transaction costs was solved could agricultural society appear.  More \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2006\/07\/security-and-origins-of-agriculture.html\"\u003Ehere\u003C\/a\u003E and \u003Ca href=\"http:\/\/szabo.best.vwh.net\/history.html\"\u003Ehere.\u003C\/a\u003E"},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/5037187065906381770\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/5037187065906381770","title":"4 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/5037187065906381770"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/5037187065906381770"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2009\/04\/money-and-efficiency-of-plunder.html","title":"Money and the efficiency of plunder"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"4"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-116552604719458785"},"published":{"$t":"2009-01-31T17:40:00.000-08:00"},"updated":{"$t":"2009-01-31T17:46:34.305-08:00"},"title":{"type":"text","$t":"Law embedded in the world"},"content":{"type":"html","$t":"Trying to beat the protocol can get you in trouble:\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Cembed src=\"http:\/\/www.youtube.com\/v\/BwvwmgIrEYc\" width=\"425\" height=\"350\" type=\"application\/x-shockwave-flash\" wmode=\"transparent\"\u003E\u003C\/embed\u003E"},"link":[{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/116552604719458785"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/116552604719458785"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2006\/12\/law-embedded-in-world.html","title":"Law embedded in the world"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}]},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-117054143701661452"},"published":{"$t":"2009-01-31T17:36:00.000-08:00"},"updated":{"$t":"2009-01-31T17:37:48.684-08:00"},"title":{"type":"text","$t":"Confidential auditing"},"content":{"type":"html","$t":"I once described how \u003Ca href=\"http:\/\/szabo.best.vwh.net\/confidential.html\"\u003Econfidential auditing\u003C\/a\u003E was possible and beneficial:\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Cblockquote\u003EThe auditing function is a vast and indispensable part of the modern economy. Auditing controls allow, among other things, employers to delegate resources and authority to employees, franchisors to delegate to franchisees, stockholders to delegate to management, advertisers to count eybeballs, marketers to gather more reliable data on customers, and make possible a wide variety of other such relationships. Auditing controls might fairly be called the security protocols of capitalism...[However,] auditing is in deep conflict with efforts towards greater privacy. Auditors have an ethic of recording, investigating, and reporting as much as possible, and often see privacy efforts as attempts to prevent auditing and potentially cover up fraud...[But confidential auditing is possible because] we can achieve auditing logs unforgeable after commitment via secure timestamps. We can then achieve to a great extent unforgeability prior to commitment, with \u003Ca href=\"http:\/\/szabo.best.vwh.net\/separationofduties.html\"\u003Esegregation of duties\u003C\/a\u003E via multiparty integrity constraints. We then audit these commitments via multiparty private computations.\u003C\/blockquote\u003EIn an \u003Ca href=\"http:\/\/szabo.best.vwh.net\/msc.html\"\u003Earticle about multiparty secure (i.e. private) computations\u003C\/a\u003E I described this process as follows:\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Cblockquote\u003EPerformance phase analysis with multiparty secure computer theory would seem to apply only to those contracts which can be performed inside the virtual computer. But the use of post-unforgeable auditing logs, combined with running auditing protocols inside the shared virtual computer, allows a wide variety of performances outside the virtual computer to at least be observed and verified by selected arbitrators, albeit not proactively self-enforced.\u003Cbr \/\u003E\u003Cbr \/\u003EThe participants in this mutually confidential auditing protocol can verify that the books match the details of transactions stored in a previously committed transaction log, and that the numbers add up correctly. The participants can compute summary statistics on their confidentially shared transaction logs, including cross-checking of the logs against counterparties to a transaction, without revealing those logs. They only learn what can be inferred from the statistics; [they] can't see the details of the transactions\u003C\/blockquote\u003EIn this I had been inspired by Eric Hughes' idea of \u003Ca href=\"http:\/\/cypherpunks.venona.com\/date\/1993\/08\/msg00452.html\"\u003Eencrypted open books\u003C\/a\u003E.  My sketch is more general insofar as it addresses pre-transaction forging (with separation of duties), post-transaction forging (with \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2006\/01\/secure-timestamping-and-confidential.html\"\u003Esecure timestamping\u003C\/a\u003E), and the auditing protocol itself (with multiparty private computation running off the logs themselves rather than Hughes' specialized protocol running off already prepared books).  \u003Cbr \/\u003E\u003Cbr \/\u003EBut my description was only a proof-of-concept sketch that one could go all the way from preparing to transact to transaction log to finished audits while maintaining both integrity and privacy, with neither depending on large amounts of trust in the auditors.  Recently Shen et. al. came up with a \u003Ca href=\"http:\/\/faculty.cs.tamu.edu\/zhao\/papers\/conf\/2004\/0403-ICDCS-SLLZ.pdf\"\u003Edetailed design\u003C\/a\u003E of such a confidential auditing scheme in the context of gathering statistics from the logs of distributed computations:\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Cblockquote\u003E...no single TTP [trusted third party] node can have the full knowledge of the logs, and thus no single node can misuse the log information without being detected.  On the basis of a relaxed form of secure distributed computing paragidms, one can implement confidential auditing service so that the auditor can retrieve certain aggregated system information e.g., the number of transactions, the total volume, the event traces, etc., without having to access the full log data...To prevent an unsupervised TTP from manipulating the system, we design query processing schemes that require TTP nodes work together, using the multiparty private computation, to perform any useful auditing functions. \u003C\/blockquote\u003E"},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/117054143701661452\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/117054143701661452","title":"6 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/117054143701661452"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/117054143701661452"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2007\/02\/confidential-auditing.html","title":"Confidential auditing"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"6"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-113719319567594528"},"published":{"$t":"2009-01-31T17:31:00.000-08:00"},"updated":{"$t":"2009-01-31T17:31:33.847-08:00"},"title":{"type":"text","$t":"Secure timestamping and confidential auditing"},"content":{"type":"html","$t":"Another interesting protocol is cryptographic timestamping.  The purpose is to prove that a particular piece of content (i.e. some array of bits) existed at a particular period of time.   The basic idea goes back to the anagram publication technique that Robert Hooke, Galileo, and some other early scientists used to prove that they discovered certain things long before they published them.  When Hooke, for example, discovered his \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Hooke%27s_law\"\u003Elaw of elasticity\u003C\/a\u003E, he published the gobbledygook letters \"ceiiinosssttuv.\"  Later, when he published his law of elasticity, he published \"ut tensio sic vis\" (as the extension, so with the force).  The earlier published anagram proved that he had discovered this law long before he published it.\u003Cbr \/\u003E\u003Cbr \/\u003EThe modern protocol uses \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Cryptographic_hash_function\"\u003Ecryptographic hash functions \u003C\/a\u003Einstead of anagrams.  Any set of bits (digital content, a network event, whatever) is passed through the hash function, turning into into a unique random-looking string of bits.  Those bits are then published to multiple timestamp servers on the Internet.  The timestamp servers create a chain of hashes.  Using the chain of published hashes, it is easy to later prove that (1) the hash was published before one event and after another event, thus proving the time of publication, and (2) that the hash uniquely corresponds to a particular content.\u003Cbr \/\u003E\u003Cbr \/\u003ENote that the content of the file does not need to be published until proof is needed.  Thus, for example, one could digitally timestamp a secret digital inventor's notebook in order to prove later that the invention existed at that time.  (Might be quite useful under the American first-to-invent system).\u003Cbr \/\u003E\u003Cbr \/\u003EIndeed, using multiparty secure computation or the related protocols called zero-knowledge proofs, one can even make a later proof without publishing the content.   For example, if Bob received a secret encrypted e-mail message from Alice, Alice and Bob could prove to the world that Alice sent a message at 18:42:39 and Bob received it at 18:43:05 without revealing the actual contents of the message.  In a confidential audit of Alice's books based on securely timestamped transactions between Alice and Bob and Alice and Charles, performed using \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2006\/01\/multiparty-secure-computation.html\"\u003Esecure multiparty computation\u003C\/a\u003E, Alice can prove to the auditor that her books balance based on real transactions with Bob and Charles, without revealing in unencrypted form to the auditor either the transactions or the books.  Such is the magical reality of cryptography!\u003Cbr \/\u003E\u003Cbr \/\u003EHere are some \u003Ca href=\"http:\/\/www.cs.ut.ee\/~lipmaa\/crypto\/link\/timestamping\/\"\u003Elinks to papers and other references\u003C\/a\u003E on secure timestamping."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/113719319567594528\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/113719319567594528","title":"4 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/113719319567594528"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/113719319567594528"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2006\/01\/secure-timestamping-and-confidential.html","title":"Secure timestamping and confidential auditing"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"4"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-787785326038856819"},"published":{"$t":"2008-12-27T16:17:00.000-08:00"},"updated":{"$t":"2008-12-27T16:18:01.903-08:00"},"title":{"type":"text","$t":"Bit gold markets"},"content":{"type":"html","$t":"The basic idea of bit gold is for \"bit gold miners\" to set their computers to solving computationally intensive mathematical puzzles, then to publish the solutions to these puzzles in secure public registries, giving them unique title to these provably scarce and securely timestamped bits.   These titles to timestamped bits will be more secure and provably scarce than precious metals, collectibles, and any other objects that have ever been used as money. In a \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2005\/12\/bit-gold.html\"\u003Edescription\u003C\/a\u003E of bit gold, which was mostly an overview of the technology, I wrote about how, because the algorithms and architectures for solving computationally intensive mathematical puzzles to create bit gold will often be dramatically improved, the bits (the puzzle solutions) from one period (anywhere from seconds to weeks, let's say a week) to the next are not fungible.  But fungible units can be created from non-fungible ones:\u003Cbr \/\u003E\u003Cblockquote\u003Ebit gold will not be fungible based on a simple function of, for example, the length of the string. Instead, to create fungible units dealers will have to combine different-valued pieces of bit gold into larger units of approximately equal value. This is analogous to what many commodity dealers do today [pooling commodities with a wide variety of qualities into a handful of standard grades] to make commodity markets possible.\u003C\/blockquote\u003EBit strings (puzzle problem\/solution pairs) are securely timestamped by their time of publication. More recent solutions that have been produced in greater quantities will be discounted by markets. To create fungible units dealers will bundle strings of different value into pools of a standard value (i.e. collect strings into a pool so that the sum of the market values of the strings in the pool add up to the standard value).\u003Cbr \/\u003E\u003Cbr \/\u003EIt's a bit indirect, but computers can easily handle these logistics. Leaving aside the gold metaphor for a minute, one can think of these bit strings as digital rare postage stamps. Each stamp might trade for a different price, but one can sort stamps into pools so that the prices of stamps in each pool add up to the same total price. Then divide each pool into tranches to create your standard currency denominations.\u003Cbr \/\u003E\u003Cbr \/\u003EThe rare stamp metaphor is, however, in other ways very misleading.  Unlike stamps, but like gold, there are no ongoing changes in subjective valuations between bit strings to worry about, but instead the demand for bit gold is purely for its monetary functions, and thus purely based on how scarce the supply of puzzles solved during a given time period was and is.  As a result, pooling and tranching will work far better for bit gold than it does for actual rare postage stamps.\u003Cbr \/\u003E\u003Cbr \/\u003EThis deserves more elaboration.  It seems to be a common objection to bit gold that the mere difference in the price of a bit from one time period to the next produced by technology improvements introduce intractible subjective valuations, making the matter of comparing one week to the next subject to too much uncertainty and transaction costs, as occurs with many collectibles.  Just as pooling and tranching rare postage stamps would be a somewhat risky affair as subjective valuations of the underlying stamps change, so too this is supposed for bit gold.\u003Cbr \/\u003E\u003Cbr \/\u003EThe problem that would occur if we tried to turn most collectibles into a standard currency by pooling and tranching is that, besides a subjective aesthetic component in the demand curve that doesn't come into play with computer bits, their scarcity is uncertain.  Art can turn out to be forged, rare stamps thought to be lost or to have never existed might be found, and so on.  The supply curve, in other words, can be highly uncertain and in danger of elasticity.  Since the supply and demand curves of different pools can change differently over time, the relative values of pools would diverge from their initial values, so that trying to use tranches as standard denominations of a currency would create arbitrage opportunities.\u003Cbr \/\u003E\u003Cbr \/\u003EBy sharp contrast bit gold will be entirely public: no one gains secure title to any puzzle solutions until they are published.  Thus, the exact amount and kind of puzzle solutions during a given period are well known, and perfectly define the supply curve relative to future weeks for all time thereafter.\u003Cbr \/\u003E\u003Cbr \/\u003EThere will be, in other words, a perfectly objective, measurable, and inelastic supply curve, completely derivable from the relative scarcity of bits (puzzle solutions) on the week (or the day, or the hour, or the minute, if necessary) of their publication. Arbitrage to set the different prices of different weeks (or minutes) can be computerized on this basis. The demand curve, the demand for puzzle solutions for the monetary functions they can perform as a store of value and medium of exchange, will be based on recognition of the superiority of bit gold as a form of money that is more secure and has a far less elastic supply curve than traditional commodities such as precious metals.  Since there are no aesthetic differences, the demand curve will be the same function of scarcity for all weeks (or minutes), so it won't affect the simple scheme of automated arbitrage between epochs with different supply curves.   The supply and demand curves of different pools will change in the same way over time, and the relative values of pools will not diverge from their initial relative values.  Using tranches as standard denominations for a currency does not create arbitrage opportunities.\u003Cbr \/\u003E\u003Cbr \/\u003EFor most of history collectibles were used for as stores of value and media of exchange; aesthetics played an important role.  But before we can separate out the roles of scarcity and aesthetics, we must ask why humans evolved such aesthetic values.  The aesthetic instincts, for example the instinct to collect shiny things, evolved just because in the evolutionary environment they approximated an instinct to collect scarce things, and to distinguish hard-to-find from easy-to-find things, i.e. an instinct to recognize and collect objects that can best perform monetary functions, as I describe \u003Ca href=\"http:\/\/szabo.best.vwh.net\/shell.html\"\u003Ehere\u003C\/a\u003E, in the \"Evolution...\" section early in the paper, and the \"Attributes of Collectibles\" section late in the paper.\u003Cbr \/\u003E\u003Cbr \/\u003EAs a proximate matter, the contribution to the demand curve from demand for monetary functions (store of value or medium of exchange or both) and the contribution from aesthetic considerations are completely separable.   One can demand a commodity for its aesthetic value, or for its value as money, or for both, or for neither.  Thus a check for a million dollars might have a design that is utterly philistine, yet the check is still worth a million dollars.\u003Cbr \/\u003E\u003Cbr \/\u003EThe value of gold today is almost entirely based on its monetary value rather than mere aesthetic value. There are plenty of metals that are as shiny and smooth as gold, but people don't demand them as a store of value or medium of exchange because they are common. There are plenty of rocks that look as good as diamonds, but \"diamonds are a girl's best friend\" because they are hard to obtain and thus hold their value.   Value comes to attach to the unique aesthetic features of gold or diamonds because these features signal scarcity.   The value of precious metals or gems as stores of value, media of exchange, or even as cultural icons does not come from these aesthetic features, it is only signalled by them.  It is their secure scarcity, not their aesthetic features, that allows them to be more securely used as a store of value and thus gives them a monetary value, and often a corresponding emotional and cultural value, far above the often trivial value they would have if they had the same aesthetics but were common.\u003Cbr \/\u003E\u003Cbr \/\u003EThere will be a problem defining futures contracts for yet-to-be produced bit gold: how much it might cost to solve a given puzzle a year later, or even a month, will be a very uncertain matter. But the pools that define currencies will be based on spot prices for already produced bit gold, not on futures.\u003Cbr \/\u003E\u003Cbr \/\u003E[These comments edit and add to comments of mine under previous blog post(s)]"},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/787785326038856819\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/787785326038856819","title":"17 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/787785326038856819"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/787785326038856819"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2008\/04\/bit-gold-markets.html","title":"Bit gold markets"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"17"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-113588451301633208"},"published":{"$t":"2008-12-27T16:16:00.000-08:00"},"updated":{"$t":"2008-12-27T16:17:00.164-08:00"},"title":{"type":"text","$t":"Bit gold"},"content":{"type":"html","$t":"A long time ago I hit upon the idea of bit gold.  The problem, in a nutshell, is that our money currently depends on \u003Ca href=\"http:\/\/szabo.best.vwh.net\/ttps.html\"\u003Etrust in a third party\u003C\/a\u003E for its value.  As many inflationary and hyperinflationary episodes during the 20th century demonstrated, this is not an ideal state of affairs.   Similarly, \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2005\/11\/flying-money-brief-overview.html\"\u003Eprivate bank note issue\u003C\/a\u003E, while it had various advantages as well as disadvantages, similarly depended on a trusted third party.\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"http:\/\/szabo.best.vwh.net\/shell.html\"\u003EPrecious metals and collectibles\u003C\/a\u003E have an unforgeable scarcity due to the costliness of their creation.  This once provided money the value of which was largely independent of any trusted third party.  Precious metals have problems, however.  It's too costly to assay metals repeatedly for common transactions.  Thus a trusted third party (usually associated with a tax collector who accepted the coins as payment) was invoked to stamp a standard amount of the metal into a coin.  Transporting large values of metal can be a rather insecure affair, as the British found when transporting gold across a U-boat infested Atlantic to Canada during World War I to support their gold standard.  What's worse, you can't pay online with metal.\u003Cbr \/\u003E\u003Cbr \/\u003EThus, it would be very nice if there were a protocol whereby unforgeably costly bits could be created online with minimal dependence on trusted third parties, and then securely stored, transferred, and assayed with similar minimal trust.  Bit gold.\u003Cbr \/\u003E\u003Cbr \/\u003EMy proposal for bit gold is based on computing a string of bits from a string of challenge bits, using functions called variously \"client puzzle function,\" \"proof of work function,\" or \u003Ca href=\"http:\/\/szabo.best.vwh.net\/intrapoly.html\"\u003E\"secure benchmark function.\"\u003C\/a\u003E.   The resulting string of bits is the proof of work.  Where a \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/One_way_function\"\u003Eone-way function\u003C\/a\u003E is prohibitively difficult to compute backwards, a secure benchmark function ideally comes with a specific cost, measured in compute cycles, to compute backwards.  \u003Cbr \/\u003E\u003Cbr \/\u003EHere are the main steps of the bit gold system that I envision:\u003Cbr \/\u003E\u003Cbr \/\u003E(1) A public string of bits, the \"challenge string,\" is created (see step 5).\u003Cbr \/\u003E\u003Cbr \/\u003E(2) Alice on her computer generates the proof of work string from the challenge bits using a benchmark function.\u003Cbr \/\u003E\u003Cbr \/\u003E(3) The proof of work is \u003Ca href=\"http:\/\/www.cs.ut.ee\/~lipmaa\/crypto\/link\/timestamping\/\"\u003Esecurely timestamped.\u003C\/a\u003E This should work in a distributed fashion, with several different timestamp services so that no particular timestamp service need be substantially relied on.\u003Cbr \/\u003E\u003Cbr \/\u003E(4) Alice adds the challenge string and the timestamped proof of work string to a \u003Ca href=\"http:\/\/szabo.best.vwh.net\/securetitle.html\"\u003Edistributed property title registry\u003C\/a\u003Efor bit gold.  Here, too, no single server is substantially relied on to properly operate the registry.\u003Cbr \/\u003E\u003Cbr \/\u003E(5) The last-created string of bit gold provides the challenge bits for the next-created string.\u003Cbr \/\u003E\u003Cbr \/\u003E(6) To verify that Alice is the owner of a particular string of bit gold, Bob checks the unforgeable chain of title in the bit gold title registry.\u003Cbr \/\u003E\u003Cbr \/\u003E(7) To assay the value of a string of bit gold, Bob checks and verifies the challenge bits, the proof of work string, and the timestamp.  \u003Cbr \/\u003E\u003Cbr \/\u003ENote that Alice's control over her bit gold does not depend on her sole possession of the bits, but rather on her lead position in the unforgeable chain of title (chain of digital signatures) in the title registry.\u003Cbr \/\u003E\u003Cbr \/\u003EAll of this can be automated by software.  The main limits to the security of the scheme are how well trust can be distributed in steps (3) and (4), and the problem of machine architecture which will be discussed below.\u003Cbr \/\u003E\u003Cbr \/\u003EHal Finney has implemented \u003Ca href=\"http:\/\/rpow.net\/\"\u003Ea variant of bit gold called RPOW\u003C\/a\u003E (Reusable Proofs of Work).  This relies on publishing the computer code for the \"mint,\" which runs on a remote tamper-evident computer.  The purchaser of of bit gold can then use remote attestation, which Finney calls the \u003Ca href=\"http:\/\/rpow.net\/security.html\"\u003Etransparent server\u003C\/a\u003E technique, to verify that a particular number of cycles were actually performed.\u003Cbr \/\u003E\u003Cbr \/\u003EThe main problem with all these schemes is that proof of work schemes depend on computer architecture, not just an abstract mathematics based on an abstract \"compute cycle.\"  (\u003Ca href=\"http:\/\/szabo.best.vwh.net\/intrapoly.html\"\u003EI wrote about this obscurely several years ago.\u003C\/a\u003E)  Thus, it might be possible to be a very low cost producer (by several orders of magnitude) and swamp the market with bit gold. However, since bit gold is timestamped, the time created as well as the mathematical difficulty of the work can be automatically proven.  From this, it can usually be inferred what the cost of producing during that time period was.  \u003Cbr \/\u003E\u003Cbr \/\u003EUnlike fungible atoms of gold, but as with collector's items, a large supply during a given time period will drive down the value of those particular items.  In this respect \"bit gold\" acts more like collector's items than like gold.  However, the match between this ex post market and the auction determining the initial value might create a very substantial profit for the \"bit gold miner\" who invents and deploys an optimized computer architecture.  \u003Cbr \/\u003E\u003Cbr \/\u003EThus, bit gold will not be fungible based on a simple function of, for example, the length of the string.  Instead, to create fungible units dealers will have to combine different-valued pieces of bit gold into larger units of approximately equal value.  This is analogous to what many commodity dealers do today to make commodity markets possible.  Trust is still distributed because the estimated values of such bundles can be independently verified by many other parties in a largely or entirely automated fashion.\u003Cbr \/\u003E\u003Cbr \/\u003EIn summary, all money mankind has ever used has been insecure in one way or another.  This insecurity has been manifested in a wide variety of ways, from counterfeiting to theft, but the most pernicious of which has probably been inflation. Bit gold may provide us with a money of unprecedented security from these dangers.  The potential for initially hidden supply gluts due to hidden innovations in machine architecture is a potential flaw in bit gold, or at least an imperfection which the initial auctions and ex post exchanges of bit gold will have to address."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/113588451301633208\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/113588451301633208","title":"32 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/113588451301633208"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/113588451301633208"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2005\/12\/bit-gold.html","title":"Bit gold"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"32"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-113263144627040016"},"published":{"$t":"2008-10-11T12:19:00.000-07:00"},"updated":{"$t":"2008-10-11T12:18:08.669-07:00"},"title":{"type":"text","$t":"Origins of the joint-stock corporation"},"content":{"type":"html","$t":"The modern joint-stock corporation has many sources in medieval Europe. First among these was corporate law itself. Although the era is commonly referred to as \"feudalism,\" for the hierarchy of individually owned \"fiefs\" of land and control of serfs as fixtures of that land, large amounts of wealth in Europe were actually controlled by corporate entities. Chief among these were church lands, the corporate entities being dioceses, religious orders and the Roman Church itself. These entities controlled a substantial fraction of the land in Western Europe. Furthermore cities (with varying degrees of political independence), merchant guilds, craft guilds, and many charitable entities (such as hospitals) were legal \"corporations,\" i.e. artificial and perpetual legal persons under law. Some basic issues in corporate law (for example, when are officers individually liable for acts of the corporation, and when the corporation is liable for acts of its agents) had already been solved in canon law and urban law long before the joint-stock corporation.\u003Cbr \/\u003E\u003Cbr \/\u003EAnother source of the joint-stock corporation was the tradition of dividing ownership over tangible things into \"shares.\" For example, it was common in Italian maritime states fund the construction and operation of ships by dividing them into a certain number of shares (24 and 64 were common divisions). Share owners were responsible for funding voyages (not including cargo, which was typically paid for by trading partnerships called \u003Ci\u003Ecommenda\u003C\/i\u003E) as well as the initial construction capital, and divided up the profits (fees paid by the merchants less costs). This tradition faded away in Venice when that republic's government took over ship ownership, but thrived across the Italian penninsula in Genoa. Ship shares became embedded into maritime law all over Europe and even survived the British Empire (today in Canada when you register a boat the government still registers 64 shares in it for its owner). The only organization controlled by the shareholders, however, was the captain and crew of the ship.\u003Cbr \/\u003E\u003Cbr \/\u003EThe medieval organizations that most resembled later joint-stock corporations were the Genovese \u003Ci\u003Emaone\u003C\/i\u003E. These bore some strong resemblances to the \u003Ci\u003Epublicani\u003C\/i\u003E tax farming corporations of the Roman Republican era, although it is not clear how they could have survived the intervening Late Empire and Dark Ages other than as very obscure (and perhaps now lost) written descriptions. In form and function \u003Cem\u003Emaone\u003C\/em\u003E also bore strong resemblances to some early joint-stock companies such as the Bank of Amsterdam, Bank of England, and the Dutch and English East India Companies.\u003Cbr \/\u003E\u003Cbr \/\u003EThe Italian cities often sold off their tax receivables to wealthy merchants at a discount as a way to borrow funds. (Discounting was one of the many ways late medieval financiers avoided the rather lax and narrow usury restrictions). The debts were divided into equal shares called \u003Ci\u003Eloca\u003C\/i\u003E or \u003Ci\u003Epartes\u003C\/i\u003E. Legally, these shares were personal property (chattels) and could be freely traded.\u003Cbr \/\u003E\u003Cbr \/\u003ETechnically, no organization was created when the city sold its tax receivables to merchants. However, to effectively collect the taxes, the holders of \u003Cem\u003Eloca\u003C\/em\u003E formed an organization called a \u003Cem\u003Emaona\u003C\/em\u003E or \u003Cem\u003Esocietas comperarum\u003C\/em\u003E. This organization would then subcontract to tax farmers to collect the taxes. By the fourteenth century, Genovese \u003Cem\u003Emaone\u003C\/em\u003E also engaged in military conquest and colonization. These were, quite literally, corporate raiders.\u003Cbr \/\u003E\u003Cbr \/\u003ENormally, \u003Cem\u003Emaone\u003C\/em\u003E were temporary, but some of them ended up lasting for a long time. In 1346 the \u003Cem\u003EMaona di Chio e di Focea\u003C\/em\u003E (a company for managing the taxes of Chios and Focea) was formed. This organization's members obtained from Genoa the exclusive right to collect taxes from Chios (an Aegean island) and Phocaea (a port on the Anatolian coast). But first the company would have to conquer them! Although technically a temporary organization, it lasted until 1566.\u003Cbr \/\u003E\u003Cbr \/\u003ERather than going to buy receivables from Genoa, subscriptions to the \u003Cem\u003Edi Chio e di Focea's \u003C\/em\u003E\u003Cem\u003Eloca\u003C\/em\u003E shares (still legally debt, but to be paid out in dividends as taxes and trading revenues were collected) went to fund 29 galleys to conquer Chios and Phocaea. The Genovese Republic, for a fee, granted the organization exclusive rights to collect taxes from the conquered territories as well as special trading privileges. The conquests, taxes, and trading were at least partially successful, and by the 16th century more than 600 persons owned \u003Cem\u003Eloca\u003C\/em\u003E of the \u003Cem\u003Emaona. \u003C\/em\u003EThis function and some of this structure would later be emulated by the Dutch and English India Companies, but with a basic legal difference -- \"shares\" in these later joint-stock companies would constitute ownership (like ship shares) not debt as with the \u003Cem\u003Emaona.\u003C\/em\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EThe most famous Genovese \u003Cem\u003Emaona\u003C\/em\u003E was the \u003Cem\u003EOfficium procuratorum San Giorgio\u003C\/em\u003E, later the \u003Cem\u003EBanco di San Giorgio\u003C\/em\u003E. Founded in 1407, this bank (and a later Genovese bank along the same lines, the Bank of Genoa) would be the inspiration for later central banks such as the Bank of Amsterdam and the Bank of England. \u003Cem\u003EBanco di San Giorgio\u003C\/em\u003E came to administer most of the Genovese Republic's debts. Dividends were paid out of tax collections (less directly than with earlier \u003Cem\u003Emaona\u003C\/em\u003E, but still more directly than the later Bank of England). The \u003Cem\u003Emaona\u003C\/em\u003E business was becoming more monopolistic, as it had become in Venice and would become with later central banks.\u003Cbr \/\u003E\u003Cbr \/\u003EAt the same time, however, the ship share system spread to northern Europe and branched out beyond ships. In Italy and Germany by the 16th century a wide variety of mines were divied up into ownership shares. During the Reformation, a pious follower of Martin Luther gave him some \u003Cem\u003Ekuxen\u003C\/em\u003E, shares in a mine in Saxony. Luther complained that he did not know what to do with them. (Indeed, since as with ship shares the mine managers could call on investors to pay up more capital, ownership was not for the financially naive).\u003Cbr \/\u003E\u003Ca href=\"http:\/\/photos1.blogger.com\/x\/blogger\/4193\/1738\/1600\/861881\/MartinLuther.jpg\"\u003E\u003Cimg style=\"MARGIN: 10px 10px 10px 0px; CURSOR: hand\" alt=\"\" src=\"http:\/\/photos1.blogger.com\/x\/blogger\/4193\/1738\/320\/405034\/MartinLuther.jpg\" align=\"left\" border=\"0\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003E\u003Cem\u003EMartin Luther\u003C\/em\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EShip shares and mine shares like these were issued in small numbers (usually between 24 and 640) and thus were not typically traded on exchanges. The number of employees was also small, usually no more than a few dozen. \u003Cem\u003EKuxen\u003C\/em\u003E were reportedly sometimes traded at the Leipzig fairs. Indeed, illiquidity was the rule in the first century of English joint-stock companies. It was not until the \u003Cem\u003EVereenigde Oostindische Compagnie\u003C\/em\u003E (the Dutch East India Company, founded out of a merger of smaller colonial companies in 1602) that volume existed to trade company shares on exhanges (which up to that time traded state and municipal bonds and commodities).\u003Cbr \/\u003E\u003Cbr \/\u003EInterestingly, the first joint-stock companies chartered by the English Crown (starting in 1553) were companies involved in trading (the Muscovy and Levant companies), mining (the Royal Mines and the Mineral and Battery), and trading combined with conquest (the India Companies, the Virginia and Plymouth companies, etc.) The two mining companies borrowed not only shares but managers and engineers (presumably along with their techniques) from Germany. The Genovese for their part would have felt at home with the trading and conquest companies.\u003Cbr \/\u003E\u003Cbr \/\u003EReferences include:\u003Cbr \/\u003E\u003Cbr \/\u003EHarold Berman, \u003Cem\u003ELaw and Revolution\u003C\/em\u003E.\u003Cbr \/\u003E\u003Cbr \/\u003EGuido Ferrarini, \"Origins of Limited Liability Companies and Company Law Modernisation in Italy: A Historical Outline\", \u003Cem\u003ECentro di Diritto e Finanza \u003C\/em\u003EWP 5-2002.\u003Cbr \/\u003E\u003Cbr \/\u003EMeir Kohn, \"The Capital Market Before 1600\", working paper 99-06, February 1999."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/113263144627040016\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/113263144627040016","title":"2 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/113263144627040016"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/113263144627040016"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2005\/11\/origins-of-joint-stock-corporation.html","title":"Origins of the joint-stock corporation"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"2"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-113270187255059898"},"published":{"$t":"2008-10-11T12:13:00.000-07:00"},"updated":{"$t":"2008-10-11T12:21:47.039-07:00"},"title":{"type":"text","$t":"Emergency economics"},"content":{"type":"html","$t":"\u003Cimg src=\"http:\/\/szabo.best.vwh.net\/longwalk.jpg\" align=\"top\" \/\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EFor those of you who didn't catch me on econ-law a few months ago [2005] during the hurricanes, here is an expanded version of what I posted there:\u003Cbr \/\u003E\u003Cbr \/\u003EHere are some alternative ways of rationing in an emergency. At least some of these have been written about by Yoram Barzel. We have witnessed all of them during hurricane Katrina [and also this summer (2008) during Ivan]:\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Cblockquote\u003E(1) market prices (\"price gouging\")\u003Cbr \/\u003E(2) waiting in line\u003Cbr \/\u003E(3) centrally planned rationing\u003Cbr \/\u003E(4) don't ration: just let the resource run out\u003C\/blockquote\u003EIt's not clear that, even with perfect knowledge, with or without an emrgency, centrally planned rationing could operate without using one of the other methods of rationing. In any case, our very poor knowledge about each others' needs is sufficient to ensure that, short of a perfect price system, we can't get what we want without waiting in line, and sometimes we just can't get what we want (or even, the Rolling Stones notwithstanding, what we need). The worse the price system -- in other words, the higher the transaction costs -- the more we wait in line or do without, as East Germany once demonstrated (cf. West Germany) and as North Korea continues to demonstrate. Luckily for those of us in largely market price based economies, we need only wait in line when trying to do business with the government, call a toll-free service line, go to a hot movie on opening night, or during an emergency -- i.e. in the remaining situations where prices don't operate very well or at all, due to transaction costs imposed by law or otherwise.\u003Cbr \/\u003E\u003Cbr \/\u003EMises and Hayek long ago demonstrated the weakness of centrally planned economies such as the old Soviet Union (or today's North Korea) -- the lack of knowledge the government has about peoples' needs and desires. Similarly, lack of the requisite detailed rknowledge of the needs of others, especially at specific times of crisis when they need our help most, is a huge problem even if we were perfectly charitable. Not even the local governments exhibited much knowledge of the needs of their neighbors, especially in New Orleans. Much less did the state or Feds (FEMA being only the most glaring example) exhibit even a tiny fraction of the knowledge that would be required for an optimal outcome. This is not the fault of the people in the government agencies to not act as knowlegeably as they are capable of acting, but rather the fault is in their implied promises and our expectations. For example, TV commentators, watching pictures of some Coast Guard helicopters, seem to have come to expect that government agencies will swoop down from the sky and rescue everybody and take on other attributes of God. Such as, for example, being able to knowledgeably evacuate people and distribute other scarce goods and services in a disaster.\u003Cbr \/\u003E\u003Cbr \/\u003EPer Mises and Hayek, even if the Soviet Union had been run by an perfectly beneficient dictator, people would have, short of a matching omniscience of said dictator (and of enough of his underlings to receive and act on the knowledge) still have waited in bread lines. When price controls hit gasoline in the United States in the 1970s, people similarly waited in gas lines.\u003Cbr \/\u003E\u003Cbr \/\u003EIn emergencies rationing becomes extreme: people wait in long lines, pay \"extortionate\" prices, or, even worse, do without. We are thrown into economically unfamiliar territory and transaction costs balloon. Goods will always be rationed in one or more of the above four ways, and in an emergency the rationing can be quite severe. Our charitable spirit can temporarily overcome self-interest, but it can't overcome the knowledge problem or the scarcity of goods.\u003Cbr \/\u003E\u003Cbr \/\u003EGiven that waiting in line, or doing without, are very painful (even sometimes deadly) alternatives, and that allowing the charge of very high prices can largely prevent use of these extreme and wasteful forms of rationing, why do we have price gouging laws?\u003Cbr \/\u003E\u003Cbr \/\u003ECan price gouging laws be explained as follows? In a zero transaction cost world, consumers would successfully negotiate with retailers for an insurance policy that caps prices in case of emergency. This may be, for example, because retailers are better able to bear the risk of emergency supply shortages than consumers are, or because consumers don't want to bear the risk of having to have an unusually large amount of money at hand during an emergency. (Katrina may be a good example of this -- it reportedly struck just before many paychecks were due, leaving many people who live from paycheck to paycheck without funds). However, the transaction costs for negotiating with consumers for such contracts are too high. Therefore, the default retail sales contract should include such insurance. Price gouging laws are a convenient way to do this. More generally, if it weren't such a bother almost all of us would like to purchase insurance against volatile prices in order to make our budgets more predictable.\u003Cbr \/\u003E\u003Cbr \/\u003EWhether and when wholesale contracts include such price caps provisions would provide interesting evidence in favor of or against this hypothesis, and under what conditions it would have been rational to for consumers and retailers to have made such a contract.\u003Cbr \/\u003E\u003Cimg src=\"http:\/\/szabo.best.vwh.net\/evac_01.jpg\" align=\"right\" \/\u003E\u003Cbr \/\u003EAs we have seen, there is a strong economic argument against price gouging laws. Consistent application of market pricing during an emergency would minimize the other inefficient, and occasionally deadly, rationing methods above, especially (4)actually running out of emergency supplies. Consumers could be confident that supplies will not run out, so stocking up on excess supplies based on fear of imminently running out of the supply (such as we've seen consumers do in some areas recently with gasoline) would be minimized. Given modern technology, perhaps we should work on improving the availability of credit and liquidity in emergencies via always-up wireless devices and immediately payable liquidity insurance policies instead of price gouging laws.\u003Cbr \/\u003E\u003Cbr \/\u003EFurthermore, the promise of very high prices might motivate retailers to fly in special deliveries of emergency supplies at otherwise prohibitive transportation rates. On can even imagine for-profit organizations doing many of the tasks that the National Guard, Red Cross, and similar organizations are doing now. Of course, the moral indignation would be enormous. People, at least in political discussion, tend to be extremely averse to \"windfall profits\" and seem to have a strong psychological preference for an implicit insurance policy that puts a price cap during emergencies on retail contracts."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/113270187255059898\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/113270187255059898","title":"3 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/113270187255059898"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/113270187255059898"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2005\/11\/emergency-economics.html","title":"Emergency economics"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"3"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-113174305236576060"},"published":{"$t":"2008-09-22T17:41:00.000-07:00"},"updated":{"$t":"2008-09-22T17:41:09.474-07:00"},"title":{"type":"text","$t":"Patent goo: self-replicating Paxil"},"content":{"type":"html","$t":"In his novel Cat’s Cradle, science fiction writer Kurt Vonnegut postulated “Ice-9.” Ice-9 was a form of water that was frozen at room temperature and catalyzed any normal water it came in contact with into more crystals of Ice-9. Once released into the environment, it froze all water, including us. Eric Drexler in the 1980s raised the specter of nano-robots that made copies of themselves and ate everything in their path: \"gray goo.\" A wide variety of similar hypothetical disasters have since been given referred to as some sort of \"goo.\"\u003Cbr \/\u003E\u003Cbr \/\u003ESelf-replicating chemicals are not merely hypothetical: since Cat's Cradle, scientists have discovered some real-world example of crystals that seed the environment, converting other forms (polymorphs) of the crystal into their own. The population of the original polymorph diminishes as it is converted into the new form: it is a “disappearing polymorph.” In 1996 Abbott Labs began manufacturing the new anti-AIDS drug ritonavir. In 1998 a more stable polymorph appeared in the American manufacturing plant. It converted the old form of the drug into a new polymorph, Form 2, that did not fight AIDS nearly as well. Abbott’s plant was contaminated, and it could no longer manufacture effective rintonavir. Abbott continued to successfully manufacture the drug in its Italian plant. Then American scientists visited, and that plant too was contaminated was contaminated and could henceforth only produce the ineffective Form 2. Apparently the scientists had carried some Form 2 crystals into the plant on their clothing.\u003Cbr \/\u003E\u003Cbr \/\u003EAnother instance of the “disappearing polymorph” may be the anti-depressant, Paxil (U.S. brand name for the chemical  paroxetine hydrochloride).  No, self-replicating Paxil doesn’t naturally spread into our brains and make people happy for free. It's not \"happy goo.\" On the contrary, self-replicating Paxil converted, according to one of the parties in the ensuing lawsuit, an old, and now off-patent, form of Paxil into a new, patented form of Paxil. Once the new form, the hemihydrate form of Paxil, was created, its crystals started floating about, converting small fractions of the old form, anhydrous Paxil, into hemihydrate. Both forms of the drug work equally well as an anti-depressant, but it became impossible to manufacture the off-patent anhydrate without some of it being converted into the patented form. Call it \"patent goo.\"\u003Cbr \/\u003E\u003Cbr \/\u003EApotex, a generic drug manufacturer, was all set up to manufacture the off-patent anhydrous generic Paxil when it discovered small fractions of it were being converted into the hemihydrate. They couldn’t remove the contamination. Smithkline, owner of the patent on the hemihydrate, sued them for patent infringement. Apotex argued that the hemihydrate form occurred naturally, so that Smithkline’s patent was invalid. Smithkline argued that it was a disappearing polymorph, that the hemihydrate form had not existed before they had created it in their labs, and that it was up to Apotex to remove the hemihydrate from its product or pay it a royalty. Apotex was unable to remove the hemihydrate and unwilling to pay a royalty. \u003Cbr \/\u003E\u003Cbr \/\u003EJudge Richard Posner heard this case in the trial court and wrote \u003Ca href=\"http:\/\/pub.bna.com\/ptcj\/983952.pdf\"\u003Ean opinion that contains a good explanation\u003C\/a\u003E of the self-replicating Paxil controversy. The Federal Circuit heard the appeal and decided that Smithkline’s patent on the hemihydrate was invalid as “inherently anticipated” because anhydrate naturally converts into hemihydrate. Normally, anticipation would require an actual reference describing the claimed chemical structure (in patent lingo that the hemihydrate was \"taught in the prior art\"). But Judge Rader held that inherent anticipation occurs when, more likely than not, an operation that is taught in the prior art would result in the claimed chemical. The anhydrate which was taught in the prior art would more than likely result in natural creation of some hemihydrate. Judge Gajarsa in concurrence argued that the drug was discovered not invented, making it unpatentable subject matter. Gajarsa’s opinion may have inspired the United States Supreme Court to raise the subject matter issue on its own (i.e., it had not been argued by the parties to the case) in \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2005\/10\/supreme-court-takes-patentable-subject.html\"\u003E\u003Ci\u003EMetabolite\u003C\/i\u003E\u003C\/a\u003E. The Supreme Court is considering whether to take the appeal on the self-replicating Paxil case as well."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/113174305236576060\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/113174305236576060","title":"7 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/113174305236576060"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/113174305236576060"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2005\/11\/patent-goo-self-replicating-paxil.html","title":"Patent goo: self-replicating Paxil"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"7"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-113216606336211160"},"published":{"$t":"2008-09-22T17:39:00.000-07:00"},"updated":{"$t":"2008-09-22T17:39:08.526-07:00"},"title":{"type":"text","$t":"The kula ring"},"content":{"type":"html","$t":"\u003Ca href=\"http:\/\/szabo.best.vwh.net\/KulaRing.gif\"\u003E\u003Cimg style=\"FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 389px; CURSOR: hand; HEIGHT: 473px\" height=\"475\" alt=\"\" src=\"http:\/\/szabo.best.vwh.net\/KulaRing.gif\" border=\"0\" \/\u003E\u003C\/a\u003EJust off the cost of New Guinea, Melanesians evolved (over thousands, and perhaps even tens of thousands, of years) a unique commercial institution known as the \"kula ring\" for the \u003Ca href=\"http:\/\/szabo.best.vwh.net\/shell.html\"\u003Ecollectibles\u003C\/a\u003E that circulated within it. \u003C!-- a href=\"http:\/\/szabo.best.vwh.net\/KulaRing.gif\"\u003E\u003Cimg style=\"FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 9px; CURSOR: hand; HEIGHT: 8px\" height=\"380\" alt=\"\" src=\"http:\/\/szabo.best.vwh.net\/KulaRing.gif\" border=\"0\" \/\u003E\u003C\/a --\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EThe unforgeably scarce kula collectibles doubled as \"high power\" money and mnemonic for stories and gossip. Many of the goods traded, mostly agricultural products, were available in different seasons, and so could not be traded in kind. Kula collectibles solved this double-coincidence problem as an unforgeabaly costly, wearable (for security), and circulated (literally!) money. Necklaces circulated clockwise, and armshells counter-clockwise, in a very regular pattern. By solving the double-coincidence problem an armshell or necklace would prove more valuable than its cost after only a few trades, but could circulate for decades. Gossip and stories that about prior owners of the collectibles further provided information about upstream credit and liquidity. In other Neolithic cultures collectibles, usually shells, circulated in a less regular pattern but had similar purposes and attributes. \u003Ca href=\"http:\/\/szabo.best.vwh.net\/KulaRingArmshellMwali.jpg\"\u003E\u003Cimg style=\"FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 404px; CURSOR: hand; HEIGHT: 318px\" height=\"232\" alt=\"\" src=\"http:\/\/szabo.best.vwh.net\/KulaRingArmshellMwali.jpg\" border=\"0\" \/\u003E\u003C\/a\u003E"},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/113216606336211160\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/113216606336211160","title":"2 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/113216606336211160"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/113216606336211160"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2005\/11\/kula-ring.html","title":"The \u003Ci\u003Ekula\u003C\/i\u003E ring"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"2"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-113633253645158050"},"published":{"$t":"2008-09-07T16:49:00.000-07:00"},"updated":{"$t":"2008-09-07T16:49:55.561-07:00"},"title":{"type":"text","$t":"A letter from the industrial revolution"},"content":{"type":"html","$t":"\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"http:\/\/www.sedgleymanor.com\/graphics\/halfpenny.gif\"\u003E\u003Cimg style=\"margin: 0pt 0pt 10px 10px; float: right; cursor: pointer; width: 200px;\" src=\"http:\/\/www.sedgleymanor.com\/graphics\/halfpenny.gif\" alt=\"\" border=\"0\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003E\u003Cem\u003EImages: Copper halfpenny minted by the Darbies' Coalbrookdale Company and celebrating the Iron Bridge.\u003C\/em\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EHere's an interesting letter from the dawn of the industrial revolution. It was written in 1775 by Abiah Darby, mother of Abraham Darby (III) and wife of Abraham Darby (II), the son of Abraham Darby (I), who invented the process of smelting iron with coke made from coal. The Darby family were Quakers and produced several early industrialists and engineers. This small letter makes or implies several points that may have been crucial to the growth of industry that makes modern wealth possible:\u003Cbr \/\u003E\u003Cbr \/\u003E* The importance of property rights and market prices in maintaining a sustainable balance between the supply and demand of wood. (\"woods for charcoal became very Scarce and landed Gentlemen rose the prices of cord wood exceeding high\"). Although wood became expensive, there remained a sufficient supply of wood for the buildings, mine works, wagons, rails, etc.\u003Cbr \/\u003E\u003Cbr \/\u003E* The ability of people living with sufficient technology and secure property rights to bypass and surpass ecological limitations (in this case substituting coal for wood, and later due to this cheap iron-making process, iron and steel for wood).\u003Cbr \/\u003E\u003Cbr \/\u003E* Decentralized money issue. Abiah points out that the remote area of Coalbrookdale, where coal and iron were available, still often operated as a barter economy. Thus apparently Abraham had to either coin tokens or open a bank to issue notes (common during this era) so that the Darbies could pay their workers.\u003Cbr \/\u003E\u003Cbr \/\u003E* Darby II's invention of the iron-tracked railroad (improving the productivity of the horses by over six times and precursor to the later steam-powered railroad).\u003Cbr \/\u003E\u003Cbr \/\u003E* The ability to securely establish large machine works and lay 20 miles of track out in the boondocks and not have them be torn up by trespassers and used for other purposes or confiscated or taxed into oblivion by local lords. In most of the rest of the world that could not be taken for granted.\u003Cbr \/\u003E\u003Cbr \/\u003E* The use of atmospheric pressure (Papin\/Savery\/Newcomen) steam engines to drain the mines and supply water to the waterwheel pond. (The atmospheric engine apparently wasn't up to the job of directly powering the bellows for the blast furnaces; that came later with the Watt steam pressure engine). Steam engines allowed water to be pumped out of mines at a far greater rate, and thus allowed coal and iron mines to be dug far deeper, creating a large and inexpensive new supply of coal and iron.\u003Cbr \/\u003E\u003Cbr \/\u003EThe link is a Word document, which I don't recommend opening for security reasons, but I've copied the contents below:\u003Cbr \/\u003E\u003Cbr \/\u003Ehttp:\/\/www.umassd.edu\/ir\/Resources\/MetalandMining\/m2.doc\u003Cbr \/\u003E\u003Cbr \/\u003EMrs. Abiah Darby on developments in the Darby ironworks at Coalbrookdale, 1708-1763\u003Cbr \/\u003E\u003Cbr \/\u003EEsteemed Friend,\u003Cbr \/\u003E\u003Cbr \/\u003EThy very acceptable favour of the 9th ulto. claim'd my earliest acknowledgments, which I should immediately have made, had not thy kind condescension in taking notice of my late honour'd Husband, and requesting to be inform'd of any circumstance which may be interesting relating him, caused my delay-to recollect what might occur concerning his transactions or improvements in the Manufactory of Iron, so beneficial to this nation. But before I proceed further, I cannot help lamenting with thee in thy just observation, \" that it has been universally observed, that the Destroyers of mankind are recorded and remembered, while the Benefactors are unnoticed and forgotten\". This seems owing to the depravity of the mind, which centres in reaping the present advantages, and suffering obscurity to vail the original causes of such benefits; and even the very names of those to whom we are indebted for the important discoveries, to sink into oblivion. Whereas if they were handed down to posterity, gratitude would naturally arise in the commemoration of their ingenuity, and the great advantages injoyed from their indefatigable labours-I now make free to communicate what I have heard my Husband say, and what arises from my own knowledge; also what I am inform'd from a person now living, whose father came here as a workman at the first beginning of these Pit Coal Works.\u003Cbr \/\u003E\u003Cbr \/\u003EThen to begin at the original. It was my Husband's Father, whose name he bore (Abraham Darby and who was the first that set on foot the Brass Works at or near Bristol) that attempted to mould and cast Iron pots, \u0026amp;c., in sand instead of Loam (as they were wont to do, which made it a tedious and more expensive process) in which he succeeded. This first attempt was tryed at an Air Furnace in Bristol. About the year 1709 he came into Shropshire to Coalbrookdale, and with other partners took a lease of the works, which only consisted of an old Blast Furnace and some Forges. He here cast Iron Goods in sand out of the Blast Furnace that blow'd with wood charcoal; for it was not yet thought of to blow with Pit Coal. Sometime after he suggested the thought, that it might be practable to smelt the Iron from the ore in the blast Furnace with Pit Coal: Upon this he first try'd with raw coal as it came out of the Mines, but it did not answer. He not discouraged, had the coal coak'd into Cynder, as is done for drying Malt, and it then succeeded to his satisfaction. But he found that only one sort of pit Coal would suit best for the purpose of making good Iron. -These were beneficial discoveries, for the moulding and casting in sand instead of Loam was of great service, both in respect to expence and expedition. And if we may compare little things with great-as the invention of printing was to writing, so was the moulding and casting in Sand to that of Loam. He then erected another Blast Furnace, and enlarged the Works. This discovery soon got abroad and became of great utility.\u003Cbr \/\u003E\u003Cbr \/\u003EThis Place and its environs was very barren, little money stiring amongst the Inhabitants. So that I have heard they were Obliged to exchange their small produce one to another instead of money, until he came and got the Works to bear, and made Money Circulate amongst the different parties who were employed by him. Yet notwithstanding the Service he was of to the Country, he had opposers and ill-wishers, and a remarkable circumstance of awful Memory occurs; of a person who endeavour'd to hinder the horses which carried the Iron Stone and Coal to the Furnaces, from coming through a road that he pretended had a right to Oppose: and one time when he saw the horses going alone, he in his Passion, wished he might Never Speak More if they should Ever come that way again. And instantly his Speech was stopped, and altho' he lived Several years after yet he Never Spoke More!\u003Cbr \/\u003E\u003Cbr \/\u003E  My Husband's Father died early in life; a religious good man, and an Eminent Minister amongst the people call'd Quakers.\u003Cbr \/\u003E\u003Cbr \/\u003EMy Husband Abraham Darby was but Six years old when his Father died-but he inherited his genius-enlarg'd upon his plan, and made many improvements. One of Consequence to the prosperity of these Works was as they [were] very short of water that in the Summer or dry Seasons they were obliged to blow very slow, and generally blow out the furnaces once a year, which was attended with great loss. But my Husband proposed the Erecting a Fire Engine to draw up the Water from the lower Works and convey it back into the upper po6ls, that by continual rotation of the Water the furnaces might be plentifully supplied; which answered Exceeding Well to these Works, and others have followed the Example.\u003Cbr \/\u003E\u003Cbr \/\u003EBut all this time the making of Barr Iron at Forges from Pit Coal pigs was not thought of. About 26 years ago my Husband conceived this happy thought-tbat it might be possible to make bar from pit coal pigs. Upon this he Sent some of our pigs to be tryed at the Forges, and that no prejudice might arise against them he did not discover from whence they came, or of what quality they were. And a good account being given of their working, he errected Blast Furnaces for Pig Iron for Forges. Edward Knight Esqr a capitol Iron Master urged my Husband to get a patent, that he might reap the benefit for years of this happy discovery: but he said he would not deprive the public of Such an Acquisition which he was Satisfyed it would be; and so it has proved, for it soon spread, and Many Furnaces both in this Neighbourhood and Several other places have been errected for this purpose.\u003Cbr \/\u003E\u003Cbr \/\u003EHad not these discoveries been made the Iron trade of our own produce would have dwindled away, for woods for charcoal became very Scarce and landed Gentlemen rose the prices of cord wood exceeding high-indeed it would not have been to be got. But from pit coal being introduced in its stead the demand for wood charcoal is much lessen'd, and in a few years I apprehend will set the use of that article aside.\u003Cbr \/\u003E\u003Cbr \/\u003EMany other improvements he was the author of. One of Service to these Works here they used to carry all their mine and coal upon horses' backs but he got roads made and laid with Sleepers and rails as they have them in the North of England for carring them to the Rivers, and brings them to the Furnaces in Waggons. And one waggon with three horses will bring as much as twenty horses used to bring on horses' backs. But this laying the roads with wood begot a Scarcity and rose the price of it. So that of late years the laying of the rails of cast Iron was substituted; which altho' expensive, answers well for Ware and Duration. We have in the different Works near twenty miles of this road which cost upwards of Eight hundred pounds a mile. That of Iron Wheels and axletrees for these waggons was I believe my Husband's Invention.\u003Cbr \/\u003E\u003Cbr \/\u003EHe kept himself confined to the Iron Trade and the Necessary Appendages annex'd thereto. He was just in Ms dealings-of universal benevolence and charity, living Strictly to the Rectitude of the Divine and Moral Law, held forth by his great Lord and Saviour, had an extraordinary command over his own spirit, which thro' the Assistance of Divine Grace enabled to bear up with fortitude above all opposition: for it may seem very strange, so valuable a man should have Antagonists, yet he had. Those called Gentlemen with an Envious Spirit could not bear to see him prosper; and others covetious; strove to make every advantage by raising their Rents of their collieries and lands in which he wanted to make roads; and endeavour'd to stop the works. But he surmounted all: and died in Peace beloved and Lamented by many."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/113633253645158050\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/113633253645158050","title":"5 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/113633253645158050"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/113633253645158050"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2006\/01\/letter-from-industrial-revolution.html","title":"A letter from the industrial revolution"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"5"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-112943446892163705"},"published":{"$t":"2008-09-07T16:47:00.000-07:00"},"updated":{"$t":"2008-09-07T16:48:09.474-07:00"},"title":{"type":"text","$t":"The principle of least authority"},"content":{"type":"html","$t":"I've written an \u003Ca href=\"http:\/\/szabo.best.vwh.net\/interpretingpower.html\"\u003Earticle\u003C\/a\u003E on my application of the\u003Ca href=\"http:\/\/www.erights.org\/talks\/no-sep\/secnotsep.pdf\"\u003E principle of least authority\u003C\/a\u003E to the interpretation of legal language. I argue that the United States Constitution, according to its original meaning, instructs judges to construe federal statutes, regulations, executive orders, and other official acts, as well as the Constitution itself, to confer the least authority consistent with their language.  \u003Cbr \/\u003E\u003Cbr \/\u003EThis article is based on a longer paper on \u003Ca href=\"http:\/\/szabo.best.vwh.net\/delegation.pdf\"\u003Ethe origins of the non-delegation doctrine\u003C\/a\u003E I wrote for law school.  That paper highlights a little-known debate on the non-delegation doctrine applied to the question of whether Congress could delegate the power to define postal roads.  James Madison, among others, argued that this was an unconstitutional delegation of legislative power to the executive."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/112943446892163705\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/112943446892163705","title":"2 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/112943446892163705"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/112943446892163705"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2005\/10\/principle-of-least-authority.html","title":"The principle of least authority"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"2"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-113078206249626389"},"published":{"$t":"2008-08-28T16:32:00.000-07:00"},"updated":{"$t":"2008-08-28T16:32:03.922-07:00"},"title":{"type":"text","$t":"Antiques, time, gold, and bit gold"},"content":{"type":"html","$t":"What do antiques, time, and gold have in common?  They are costly, due either to their original cost or the improbability of their history, and it is difficult to spoof this costliness.  For example, it is usually difficult to spend an extra hour at the office without sacrificing about an hour of your personal life.\u003Cbr \/\u003E\u003Cbr \/\u003EUnforgeable costliness is a pattern that recurs in many human institutions and is fundamental to civilization.   Modern employment is based on the \u003Ca href=\"http:\/\/szabo.best.vwh.net\/synch.html\"\u003Etime-rate wage.\u003C\/a\u003E  Our monetary system is based on money being made unforgeably costly either through \u003Ca href=\"http:\/\/szabo.best.vwh.net\/shell.html\"\u003Ecollectibles, commodity standards,\u003C\/a\u003E or (in modern fiat currencies) accounting.  \u003Cbr \/\u003E\u003Cbr \/\u003EThe unforgeable costliness pattern includes the following basic steps:\u003Cbr \/\u003E\u003Cbr \/\u003E(1) find or create a class of objects that is highly improbable, takes much effort to make, or both, \u003Cspan style=\"font-style:italic;\"\u003Eand\u003C\/span\u003E such that the measure of their costliness can be verified by other parties.\u003Cbr \/\u003E\u003Cbr \/\u003E(2) use the objects to enable a protocol or institution to cross trust boundaries\u003Cbr \/\u003E\u003Cbr \/\u003EThere are some \u003Ca href=\"http:\/\/szabo.best.vwh.net\/intrapoly.html\"\u003Eproblems\u003C\/a\u003E involved with implementing unforgeable costliness on a computer.   If such problems can be overcome, we can achieve \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2005\/12\/bit-gold.html\"\u003Ebit gold.\u003C\/a\u003E  This would be the first online currency based on highly distributed trust and unforgeable costliness rather than trust in a single entity and traditional accounting controls.   Hal Finney has implemented a \u003Ca href=\"http:\/\/rpow.net\/\"\u003Evariant\u003C\/a\u003E of bit gold based on a tamper-evident computer plug-in card, for which remote users can verify what code is running on the card."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/113078206249626389\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/113078206249626389","title":"0 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/113078206249626389"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/113078206249626389"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2005\/10\/antiques-time-gold-and-bit-gold.html","title":"Antiques, time, gold, and bit gold"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"0"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-113097634031434512"},"published":{"$t":"2008-08-27T16:33:00.000-07:00"},"updated":{"$t":"2008-08-27T16:34:03.945-07:00"},"title":{"type":"text","$t":"Flying money: a brief overview"},"content":{"type":"html","$t":"\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"http:\/\/szabo.best.vwh.net\/dlottmesoclaytokens.gif\"\u003E\u003Cimg style=\"float:center; margin:0 10px 10px 0;cursor:pointer; cursor:hand;width: 320px;\" src=\"http:\/\/szabo.best.vwh.net\/dlottmesoclaytokens.gif\" border=\"0\" alt=\"\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003EAbstract money today primarily involves accounts and other computerized bits, but traditionally came in the form of paper.  The Chinese, who invented paper money called it \"flying money.\" Abstract money is worthwhile because the dominant kind of money over human evolution, u\u003Ca href=\"http:\/\/szabo.best.vwh.net\/shell.html\"\u003Enforgeably costly commodities\u003C\/a\u003E, can be quite costly to store and transport compared to abstract documents. For money the biggest costs of storage and transportation are typically not mundane real estate or carriage costs, but active security threats such as robbery and embezzlement.\u003Cbr \/\u003E\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"http:\/\/szabo.best.vwh.net\/China1279CopperPlatePaperMoney.jpg\"\u003E\u003Cimg style=\"float:center; margin:0 10px 10px 0;cursor:pointer; cursor:hand;width: 320px;\" src=\"http:\/\/szabo.best.vwh.net\/China1279CopperPlatePaperMoney.jpg\" border=\"0\" alt=\"\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003EAbstract documents, unlike unforgeably costly commodities, require trust in a human institution to enforce the abstract claims of value made in the document. This enforcement, if effective, lets the recipient of the document be confident that it can be converted into something of value, traditionally an unforgeably costly commodity that backs the document. If the recipient of the document wants to trade the document to third parties -- negotiate it -- this enforcement may also provide confidence to these third parties that they too can receive something of value in exchange for relinquishing the abstract claim.\u003Cbr \/\u003E\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"http:\/\/szabo.best.vwh.net\/OldestKnownScottishBankNote.jpg\"\u003E\u003Cimg style=\"float:center; margin:0 0 10px 10px;cursor:pointer; cursor:hand;width: 320px;\" src=\"http:\/\/szabo.best.vwh.net\/OldestKnownScottishBankNote.jpg\" border=\"0\" alt=\"alternative text\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003EEnforcement typically came in the form of legal and reputation systems. For example, the Medieval European law merchant enforced contracts and monetary promises in the merchants' own courts, with remedies such as bankruptcy and expulsion from merchant guilds. Bosses (principals) enforced orders against their employees (agents), and there were also often family relationships within firms that increased trust within the firm.\u003Cbr \/\u003E\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"http:\/\/szabo.best.vwh.net\/KirklandSafetySocietyBankNote1837.jpg\"\u003E\u003Cimg style=\"float:center; margin:0 10px 10px 0;cursor:pointer; cursor:hand;width: 320px;\" src=\"http:\/\/szabo.best.vwh.net\/KirklandSafetySocietyBankNote1837.jpg\" border=\"0\" alt=\"\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003EIn most modern legal systems, and in many traditional legal and merchant reputation systems, credit money has come in two basic forms -- drafts, or orders from a boss to his employee (in legal jargon, from a principal to his agent) to transfer goods to a certain person, and notes, or promises to transfer goods to a certain person. A draft was enforced privately, by the ways bosses normally discipline employees; a promise to pay was enforced by an enforcement agency, often a government, by reputation among merchants, or both. Often the document reifying money that we will examine took on both of these roles.\u003Cbr \/\u003E\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"http:\/\/szabo.best.vwh.net\/DelawareBridgeBankNote1834.jpg\"\u003E\u003Cimg style=\"float:center; margin:0 0 10px 10px;cursor:pointer; cursor:hand;width: 320px;\" src=\"http:\/\/szabo.best.vwh.net\/DelawareBridgeBankNote1834.jpg\" border=\"0\" alt=\"\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003EThe draft, in particular the warehouse receipt, is probably oldest form of credit document. Warehouse receipts are issued to document the storage of personal property in a warehouse. Typically, a warehouse receipt is an acknowledgement that the warehouseman is holding the owner's goods. The receipt acts as a title to the goods; transferring the receipt is as good as transferring the goods. The receipt acts as an instruction to the warehouseman's agent to release the goods to whoever presents the receipt. Thus, it is more properly categorized as a draft (an order to an agent) than a note (a promise to pay), although in some ways and in some legal systems it has been treated as both.\u003Cbr \/\u003E\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"http:\/\/szabo.best.vwh.net\/DigitalWarehouseReceipt.GIF\"\u003E\u003Cimg style=\"float:center; margin:0 10px 10px 0;cursor:pointer; cursor:hand;width: 320px;\" src=\"http:\/\/szabo.best.vwh.net\/DigitalWarehouseReceipt.GIF\" border=\"0\" alt=\"\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003EAnother kind of draft is a bill of lading. This is a receipt for transported goods, and an order for the transport agent at the other end to release the goods to a person authorized by the shipper to receive them.\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Cblockquote\u003EDescription of illustrations(in order):  Sumerican clay envelope c. 3,500 B.C., probably a warehouse receipt or a billing of lading; plate for Chinese paper money, c. 1279 A.D., with recent print from that plate; private bank note of the Bank of Scotland, 1716; Early Mormon private bank (Kirkland Safety Society, Ohio, U.S.A.) note signed by Joseph Smith, 1837; private bank note from a private road and bridge operating company (Delaware Bridge Company, New Jersey, U.S.A.) 1838; warehouse receipt for silver with micro-barcodes 2002.\u003C\/blockquote\u003E"},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/113097634031434512\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/113097634031434512","title":"3 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/113097634031434512"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/113097634031434512"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2005\/11\/flying-money-brief-overview.html","title":"Flying money: a brief overview"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"3"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-115084001254416179"},"published":{"$t":"2008-08-24T14:54:00.000-07:00"},"updated":{"$t":"2008-08-24T14:53:48.173-07:00"},"title":{"type":"text","$t":"Smart contracts expand credit opportunities"},"content":{"type":"html","$t":"Way back in 1994 I wrote \u003Ca href=\"http:\/\/szabo.best.vwh.net\/smart.contracts.html\"\u003Ethe following \u003C\/a\u003E(the \"keys\" here were envisioned as digital codes acting as car keys):\u003Cbr \/\u003E\u003Cblockquote\u003E\u003Cp\u003EIf a loan was taken out to buy that car, and the owner failed to make payments, the smart contract could automatically invoke a lien, which returns control of the car keys to the bank. This smart lien might be much cheaper and more effective than a repo man. \u003C\/p\u003E\u003C\/blockquote\u003EI've since used this as one of the key examples of smart contracts, in particular smart contracts that help enforce security interests (collateral). Other kinds of smart contracts include digital rights management (for copyright licenses), financial cryptography (for payment systems and other kinds of financial contracts), \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2006\/04\/smart-contracts-reduce-mental.html\"\u003Eprice-sensitive controllers\u003C\/a\u003E, and a wide variety of other possibilities. More recently, some real-world examples of the \"auto-repo-auto\" have appeared, and it is now becoming more common. \u003Ca href=\"http:\/\/www.venturacountystar.com\/vcs\/bravo\/article\/0,1375,VCS_1798_4769614,00.html\"\u003EDeborah Yao describes some more of these:\u003C\/a\u003E\u003Cbr \/\u003E\u003Cblockquote\u003E\u003Cp\u003EStarter-interrupt devices are becoming a popular way for lenders to ensure they get paid, and consumers seem willing to accept them to get into nicer cars, use a smaller down payment and qualify for a lower interest rate, according to device manufacturers.\u003C\/p\u003E\u003Cp\u003E...The companies make a variation of the same device: The units are connected to the starter and emit a brief series of sounds or flashes of light, days before the payment deadline. If the customer then makes a timely payment, he or she can contact the dealer for a new code that will allow them to operate the vehicle. Some devices are remotely controlled by dealers. \u003C\/p\u003E\u003C\/blockquote\u003ENote that the process is far more manual and that there is much more attention to the user interface than I was thinking about in 1994. It's becoming increasingly apparent that a good user interface is often key to good security (phishing is another big example of this). \u003Ca href=\"http:\/\/www.firstmonday.org\/issues\/issue2_9\/szabo\/index.html\"\u003EContracts are ultimately relationships between people, \u003C\/a\u003Eso a smart contract protocol needs to go all the way from end to end -- from person to person. Furthermore, as long as the parties have access to a good legal system, making certain important steps manual is a good idea if it increases flexibility and safety without too substantially decreasing security or user friendliness.\u003Cbr \/\u003E\u003Cbr \/\u003EMy thanks to Ian Grigg for pointing me to Yao's article."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/115084001254416179\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/115084001254416179","title":"2 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/115084001254416179"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/115084001254416179"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2006\/06\/smart-contracts-expand-credit.html","title":"Smart contracts expand credit opportunities"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"2"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-116357458518296662"},"published":{"$t":"2008-08-24T14:51:00.000-07:00"},"updated":{"$t":"2008-08-24T14:50:56.251-07:00"},"title":{"type":"text","$t":"Wet code and dry"},"content":{"type":"html","$t":"There's a strong distinction to be made between \"wet code,\" interpreted by the brain, and \"dry code,\" interpreted by computers. Human-read media is wet code whereas computer code and computer-readable files (to the extent a computer deals meaningfully with them) are \"dry code.\" Law is wet code, interpreted by those on whom the law is imposed, and interpreted (often somewhat differently) by law enforcers, but most authoritatively (and even more differently) interpreted by judges. Human language is mostly wet code but to the extent computer programs crudely translate from one language to another, keyword-ad programs parse text to made an educated guess as to what ads a user will most likely click, and so on, human language text can also be dry code. Traditional contracts are wet code whereas \u003Ca href=\"http:\/\/www.firstmonday.org\/issues\/issue2_9\/szabo\/index.html\"\u003Esmart contracts\u003C\/a\u003E are mostly dry code. \u003Ca href=\"http:\/\/szabo.best.vwh.net\/securetitle.html\"\u003ESecure property titles\u003C\/a\u003E and the \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/DNS\"\u003Edomain name system\u003C\/a\u003E are mostly dry code.\u003Cbr \/\u003E\u003Cbr \/\u003EEven \"mostly dry code\" often has surprisingly soggy portions. Smart contracts, for example, can use dialogs to communicate their nature to the user and to allow the user to at least input some parameters, make menu choices, and the like. These are \u003Ca href=\"http:\/\/www.truststc.org\/pubs\/132\/Annarita_Giani_Berkeley.ppt\"\u003Ecognitive channels\u003C\/a\u003E that translate between wet code and dry code. Similarly, the human-readable name in the domain name system is wet code and trademark law is wet code that applies to domain names. \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Phishing\"\u003EPhishing\u003C\/a\u003E is an attack against cognitive channels using ambiguous wet code, which is probably why dry code programmers have a hard time coming to grips with it.\u003Cbr \/\u003E\u003Cbr \/\u003EThe syntactic properties of wet and dry code are often very similar -- for example, both human and computer language can usually be parsed by \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Pushdown_automata\"\u003Epushdown automata\u003C\/a\u003E into \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Context-free_grammar\"\u003Econtext-free grammars\u003C\/a\u003E. But their semantic content is often radically different, and the semantic content of wet code is often simply unintelligible to a computer, for a variety of often mysterious reasons. If we had good enough theories of human semantics we could program such theories into the computer and the computer would then understand like a brain after all. But we don't, in most areas, so we mostly can't program computers to emulate humans. I believe these mysteries are primarily due to the highly evolved nature of the brain contrasted to the recent and thus naive designs of computers, especially with respect to computers' typical lack of good sensors (they're mostly still far more sensory-deprived than \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Helen_Keller\"\u003EHelen Keller\u003C\/a\u003E, who had a very informative sense of touch) and relative inability to learn from natural and social environments. Their ability to aggregate disparate kinds of information, for example through \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Conceptual_metaphor\"\u003Econceptual metaphor\u003C\/a\u003E, is also relatively undeveloped.\u003Cbr \/\u003E\u003Cbr \/\u003EAs computers become \"smarter\" dry code is (very slowly) coming to do more that was formerly only done by wet code. Once it successfully emulates wet code it soon surpasses it in many respects; for example by now dry code can do simple arithmetic billions of times faster than the typical human. As the idea of smart contracts suggests, there are many fruitful analogies to be made from wet code to dry code, but we must keep in mind the radically different semantics, the strengths and weakness of each, and the need for each to interact with the other to solve real problems.\u003Cbr \/\u003E\u003Cbr \/\u003EI don't think there is a \"magic bullet\" theory of artificial intelligence that will uncover the semantic mysteries and give computers intelligence in one fell swoop. I don't think that computers will mysteriously \"wake up\" one day in some magic transition from \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Philosophical_zombie\"\u003Ezombie\u003C\/a\u003E to \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Qualia\"\u003Equalia.\u003C\/a\u003E (I basically agree with \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Daniel_Dennett\"\u003EDaniel Dennett\u003C\/a\u003E in this respect). Instead, we will continue to chip away at formalizing human intelligence, a few \"bits\" at a time, and will never reach a \"singularity\" where all of a sudden we one day way wake up and realize computers have surpassed us. Instead, there will be numerous \"micro-runaways\" for particular narrow abilities that we learn how to teach computers to do, such as the runaway over the last century or so in the superiority of computers over humans in basic arithmetic. Computers and humans will continue to co-evolve with computers making the faster progress but falling far short of apocalyptic predictions of \"\u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Technological_singularity\"\u003ESingularity\u003C\/a\u003E,\" except to the extent that much of civilization is already a rolling singularity. For example people can't generally predict what's going to happen next in markets or which new startups will succeed in the long run."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/116357458518296662\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/116357458518296662","title":"5 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/116357458518296662"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/116357458518296662"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2006\/11\/wet-code-and-dry.html","title":"Wet code and dry"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"5"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-116225501733818114"},"published":{"$t":"2008-08-20T17:25:00.000-07:00"},"updated":{"$t":"2008-08-20T18:11:05.770-07:00"},"title":{"type":"text","$t":"Genoa"},"content":{"type":"html","$t":"\u003Ca href=\"http:\/\/photos1.blogger.com\/blogger\/4193\/1738\/1600\/GenoaMunicipalCoatOfArms.png\"\u003E\u003Cimg style=\"FLOAT: left; MARGIN: 0px 10px 10px 0px; WIDTH: 240px; CURSOR: hand\" alt=\"\" src=\"http:\/\/photos1.blogger.com\/blogger\/4193\/1738\/320\/GenoaMunicipalCoatOfArms.png\" border=\"0\" \/\u003E\u003C\/a\u003E\u003Cem\u003EGenovese coat of arms with gryphons and cross of St. George.\u003C\/em\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EGenoa was the most commercially innovative city of premodern times. Insurance, the joint-stock corporation, close cooperation between navy and merchant marine, international trade and exploration, and banking all made substantial progress in Genoa. The basic drivers of these innovations were Genoa's merchant culture and its unprecedented commitment to freedom of contract.\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"http:\/\/photos1.blogger.com\/blogger\/4193\/1738\/1600\/genoaLighthouse.gif\"\u003E\u003Cimg style=\"FLOAT: right; MARGIN: 0px 10px 10px; CURSOR: hand\" alt=\"\" src=\"http:\/\/photos1.blogger.com\/blogger\/4193\/1738\/320\/genoaLighthouse.gif\" width=\"180\" border=\"0\" \/\u003E\u003C\/a\u003E\u003Cem\u003ELa Lanterna, the harbor lighthouse. 40 meters of rock and 77 meters of tower put the lantern 117 meters above sea level at the harbor mouth. The current version dates from the 16th century, but a lighthouse tower has been at the location from at least the 12th century.\u003C\/em\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EGenoa was probably a significant port under the Greeks, Etruscans, and then the Romans, but is not recorded as playing a major role in history during those periods. It declined in the Dark Ages but revived by the 11th century and was one of the first Italian towns to assert its independence. It played an important role in transporting and protecting crusader fleets and those of the merchants and colonists who followed. During the Crusades it gained footholds on the strategic bottlenecks of the Dardanelles and of the Bosporus across from Constantinople, giving it access to the Black Sea and the Silk Road to China.\u003Cbr \/\u003E\u003Cbr \/\u003EThe Genovese were the chief commercial innovators of the later Middle Ages, and if anything was key to their innovations it was their advanced contract law and their commitment to freedom of contract. Nothing showed this commitment more than its long struggle against Church doctrine banning usury, which at the time meant any charging of interest. Genovese contracts \"hid\" interest charges as profits (which were acceptable) or in exchange rates.\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"http:\/\/photos1.blogger.com\/blogger\/4193\/1738\/1600\/GenoanGalataTower.jpg\"\u003E\u003Cimg style=\"FLOAT: left; MARGIN: 0px 10px 10px 0px; CURSOR: hand\" alt=\"\" src=\"http:\/\/photos1.blogger.com\/blogger\/4193\/1738\/320\/GenoanGalataTower.jpg\" border=\"0\" \/\u003E\u003C\/a\u003E\u003Cem\u003EThe Galata Tower, built by the Genovese on the Bosporus across from Constantinople during the crusades. Their shared control over the Bosporus opened up the lucrative Oriental trade and allowed them to plant colonies along the Black Sea.\u003C\/em\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EAn example of the use of exchange rates to incorporate interest was the \"dry loan\" which structured interest as a transport charge commonly used in a \"wet loan\" which were normally paid off in a distant city as a way of transmitting money. Church leaders recognized many of these ruses and complained, but since Genovese municipal judges were, like the rest of the Genovese community, staunch advocates of freedom of contract, and since the Church was dependent on Genovese power (for example to transport and protect crusaders and pilgrims on the seas), the judges winked at these ruses and the Church mostly did not crack down on the practice. In the process of developing these ruses the Genovese became creative drafters of commercial contracts and learned to distinguish elements such as risk, loan, and investment that had been bundled together and treated as inseparable in previous eras.\u003Cbr \/\u003E\u003Cbr \/\u003EPerhaps the chief Genovese innovation was modern \u003Ca href=\"http:\/\/szabo.best.vwh.net\/insurance.html\"\u003Einsurance\u003C\/a\u003E unbundled from credit or investment:\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Cblockquote\u003EIn short succession Genoa developed insurance, insurance pools secured by landed estates, and reinsurance. Exchanges sprang up for trading public debt, commodity futures, and other commercial paper. Bankruptcy law and the settlement of international trade disputes reached new levels of sophistication. Accounting became widespread and double-entry bookkeeping was born. As a result of their cumulative breakthroughs in institutions and technology, Europeans became the first merchants to travel and trade around the entire globe.\u003C\/blockquote\u003EMedieval Genovese merchants, like their Venetian rivals, traveled from Iceland to China. Later Genovese such as Christopher Columbus would lead exploration of the New World.\u003Cbr \/\u003E\u003Cbr \/\u003EInsurance developed out of an ancient form of marine finance, a loan that only had to be paid back if the ship returned safely:\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Cblockquote\u003EThe earliest risk-pooling insurance contracts were structured similarly to, and enforced under the same legal principals as, loans. Indeed they bundled a loan from the combined investor\/insurer with an insurance clause -- in the event that the ship was wrecked, the loan need not be paid back. In 14th century Genoa, we see the separation of the investor from the insurer, via a contract with its conditional clause but requiring no initial loan. Investment contracts became separate entities and could be contracted with different parties, greatly improving the spreading of risk for these ventures. Such improved risk management was crucial for the explosion of overseas trade that Europe initiated over the succeeding centuries.\u003C\/blockquote\u003EOne of the most innovative families were the Vivaldis. Frederico Vivaldi was the one of the first merchants to be insured in the new way, and we still have some of his \u003Ca href=\"http:\/\/szabo.best.vwh.net\/insurance.html\"\u003Einsurance contracts.\u003C\/a\u003E His ancestors \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Vandino_and_Ugolino_Vivaldi\"\u003EVandino and Ugolino Vivaldi\u003C\/a\u003E were famous merchants and explorers of the west coast of Africa, pioneering new discoveries and a lucrative trade that would be exploited much more by the \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2006\/10\/how-to-succeed-or-fail-on-frontier.html\"\u003EPortuguese\u003C\/a\u003E starting in the 15th century, taking advantage of its naval control over the Straights of Gibraltar (which Genoa never clearly gained, since before the Portuguese conquest of Ceuta Muslims controlled both shores). Today the University of Genoa sits on the Via Vivaldi, named after this most adventurous of families.\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"http:\/\/photos1.blogger.com\/blogger\/4193\/1738\/1600\/GenoaTopography.jpg\"\u003E\u003Cimg style=\"FLOAT: left; MARGIN: 0px 10px 0px 0px; CURSOR: hand\" alt=\"\" src=\"http:\/\/photos1.blogger.com\/blogger\/4193\/1738\/320\/GenoaTopography.jpg\" border=\"0\" \/\u003E\u003C\/a\u003E\u003Cem\u003EThe Genoan topography \u003Ca href=\"http:\/\/szabo.best.vwh.net\/history.html\"\u003Ehelped it protect warehouses full of goods\u003C\/a\u003E, Genoa's main source of wealth, as well as its populace.\u003C\/em\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EAnother famous Genovese family was the D'orias. Tedesio D'Oria funded the Vivaldi brothers in their last voyage, an ill-fated attempt at the end of the 13th century to pioneer a route to India -- a feat not accomplished until about two hundred years later by the Portuguese. In the attempt they may have (re)discovered the Canary Islands, which in any case the Genovese would colonize by the middle of the 14th century. \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Andrea_Doria\"\u003EAndrea Doria\u003C\/a\u003E was the most famous Genovese admiral, responsible for defeating the Turks in the naval battle of Lepanto, among other feats.\u003Cbr \/\u003E\u003Cbr \/\u003EGenoa was also \u003Ca href=\"http:\/\/szabo.best.vwh.net\/jointstock.html\"\u003Ethe birthplace of corporations traded by shares\u003C\/a\u003E, the prototype for the later English joint-stock corporation. Like many of the early English joint-stock companies, most of the Genovese companies were colonial companies that derived their revenue from tribute, tax, and trade from the many colonies they established:\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Cblockquote\u003EThe medieval organizations that most resembled later joint-stock corporations were the Genovese \u003Cem\u003Emaone\u003C\/em\u003E. These bore some strong resemblances to the \u003Cem\u003Epublicani\u003C\/em\u003E tax farming corporations of the Roman Republican era, although it is not clear how they could have survived the intervening Late Empire and Dark Ages other than as very obscure (and perhaps now lost) written descriptions. In form and function \u003Cem\u003Emaone\u003C\/em\u003E also bore strong resemblances to some early joint-stock companies such as the Bank of Amsterdam, Bank of England, and the Dutch and English East India Companies.\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"http:\/\/photos1.blogger.com\/blogger\/4193\/1738\/1600\/GenoaPalazzoSanGiorgio.jpg\"\u003E\u003Cimg style=\"FLOAT: left; MARGIN: 0px 10px 10px 0px; CURSOR: hand\" alt=\"\" src=\"http:\/\/photos1.blogger.com\/blogger\/4193\/1738\/320\/GenoaPalazzoSanGiorgio.jpg\" border=\"0\" \/\u003E\u003C\/a\u003E\u003Cem\u003EPalazzo San Giorgio (St. George). The Bank of San Giorgio (est. 1407) came to handle most of the municipal debt, providing a prototype for later central banks such as the Bank of Amsterdam and the Bank of England.\u003C\/em\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EThe Italian cities often sold off their tax receivables to wealthy merchants at a discount as a way to borrow funds. (Discounting was one of the many ways late medieval financiers avoided the rather lax and formalistic usury restrictions that remained in Genoa). The debts were divided into equal shares called \u003Cem\u003Eloca\u003C\/em\u003E or \u003Cem\u003Epartes\u003C\/em\u003E. Legally, these debt shares were personal property (chattels) and could be freely traded.\u003Cbr \/\u003E\u003Cbr \/\u003ETechnically, no organization was created when the city sold its tax receivables to merchants. However, to effectively collect the taxes, the holders of \u003Cem\u003Eloca\u003C\/em\u003E formed an organization called a \u003Cem\u003Emaona\u003C\/em\u003E or \u003Cem\u003Esocietas comperarum\u003C\/em\u003E. This organization would then subcontract to tax farmers to collect the taxes. By the fourteenth century, Genovese \u003Cem\u003Emaone\u003C\/em\u003E also engaged in military conquest and colonization. These were, quite literally, corporate raiders.\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"http:\/\/photos1.blogger.com\/blogger\/4193\/1738\/1600\/genoa_il-borsa.jpg\"\u003E\u003Cimg style=\"FLOAT: right; MARGIN: 10px; CURSOR: hand\" alt=\"\" src=\"http:\/\/photos1.blogger.com\/blogger\/4193\/1738\/320\/genoa_il-borsa.jpg\" border=\"0\" \/\u003E\u003C\/a\u003E\u003Cem\u003EIl borsa (the Exchange). Genoa pioneered in issuing and trading shares of ships and of municipal and corporate debt.\u003C\/em\u003E\u003Cbr \/\u003E\u003Cbr \/\u003ENormally, \u003Cem\u003Emaone\u003C\/em\u003E were temporary, but some of them ended up lasting for a long time. In 1346 the \u003Cem\u003EMaona di Chio e di Focea\u003C\/em\u003E (a company for managing the taxes of Chios and Focea) was formed. This organization's members obtained from Genoa the exclusive right to collect taxes from Chios (an Aegean island) and Phocaea (a port on the Anatolian coast). But first the company would have to conquer them! Although technically a temporary organization, it lasted until 1566.\u003Cbr \/\u003E\u003Cbr \/\u003ERather than going to buy receivables from Genoa, subscriptions to the \u003Cem\u003Edi Chio e di Focea's\u003C\/em\u003E \u003Cem\u003Eloca\u003C\/em\u003E shares (still legally debt, but to be paid out in dividends as taxes and trading revenues were collected) went to fund 29 galleys to conquer Chios and Phocaea. The Genovese Republic, for a fee, granted the organization exclusive rights to collect taxes from the conquered territories as well as special trading privileges. The conquests, taxes, and trading were at least partially successful, and by the 16th century more than 600 persons owned \u003Cem\u003Eloca\u003C\/em\u003E of this \u003Cem\u003Emaona\u003C\/em\u003E. This function and some of this structure would later be emulated by the Dutch and English India Companies, but with a basic legal difference -- \"shares\" in these later joint-stock companies would constitute ownership (like ship shares) not debt as with the \u003Cem\u003Emaona\u003C\/em\u003E.\u003C\/blockquote\u003EGenoa was limited in its naval endeavors because Muslims, and then by the end of the 15th century the Portuguese and Spanish, controlled the Straights of Gibraltar. The Genovese nevertheless supplied several leading navigators of the great Age of Exploration, including \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Nicoloso_da_Recco\"\u003ENicoloso da Recco\u003C\/a\u003E, Lanzarotto Malecello, Antoniotto Uso di Mare, Christopher Colombus and probably the \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Sebastian_Cabot_(explorer)\"\u003ECabots.\u003C\/a\u003E Its merchants also played a leading role in investing in Spanish and later English endeavors. But with the Reformation the center of commercial innovation would move from Italy to the Netherlands and England. Those innovators stood on the shoulders of giants, and the biggest such giant had been Genoa.\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Cimg style=\"FLOAT: right; MARGIN: 10px; CURSOR: hand\" alt=\"\" src=\"http:\/\/photos1.blogger.com\/blogger\/4193\/1738\/320\/EnglandStGeorgeGriphon2.jpg\" border=\"0\" \/\u003E\u003Cem\u003EFlag with traditional English symbols: gryphons and cross of St. George. More importantly, England borrowed and improved upon many Genovese commercial innovations, ushering in the modern era of global trade and the industrial revolution.\u003C\/em\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EEngland was strongly allied with Genoa throughout much of the Middle Ages. It is thought by some that English symbols such as the Cross of St. George and the gryphon derive from this alliance. English ships flying the Cross of St. George in the Mediterranean were protected by Genovese fleets. More importantly, England derived many of the institutions most critical to the development of overseas trade and colonies and domestic industry from Genoa. England, like the Genovese and Portugal (and unlike many other powers of the time such as \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2006\/10\/how-to-succeed-or-fail-on-frontier.html\"\u003EChina\u003C\/a\u003E) put their navy primarily on the task of protecting its merchant marine. Its joint stock corporations, many of them colonial, derived from the Genovese colonial companies with their interests divided into shares. Lloyd's of London, with \"Names\" putting up their estates as collateral for reinsurance, still has the same basic structure as the marine insurance pools pioneered in the 14th century by the Genovese."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/116225501733818114\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/116225501733818114","title":"1 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/116225501733818114"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/116225501733818114"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2006\/10\/genoa.html","title":"Genoa"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"1"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-113051594695390673"},"published":{"$t":"2008-08-20T17:18:00.000-07:00"},"updated":{"$t":"2008-08-20T17:18:13.815-07:00"},"title":{"type":"text","$t":"Patterns of integrity"},"content":{"type":"html","$t":"One of my main interests is the history of institutions, and in particular the patterns that recur in successful institutions.  These organizational structures and security mechanisms allow naturally suspicious strangers to interact with integrity.  \u003Cbr \/\u003E\u003Cbr \/\u003EThese patterns include \u003Ca href=\"http:\/\/szabo.best.vwh.net\/seals.html\"\u003Etamper evidence\u003C\/a\u003E, \u003Ca href=\"http:\/\/szabo.best.vwh.net\/synch.html\"\u003Eshared time\u003C\/a\u003E, \u003Ca href=\"http:\/\/szabo.best.vwh.net\/shell.html\"\u003Eunforgeable costliness\u003C\/a\u003E, \u003Ca href=\"http:\/\/szabo.best.vwh.net\/separationofduties.html\"\u003Eseparation of duties\u003C\/a\u003E, \u003Ca href=\"http:\/\/szabo.best.vwh.net\/interpretingpower.html\"\u003Ethe principle of least authority\u003C\/a\u003E, \u003Ca href=\"http:\/\/szabo.best.vwh.net\/insurance.html\"\u003Erisk sharing\u003C\/a\u003E, and \u003Ca href=\"http:\/\/szabo.best.vwh.net\/hermeneutics.html\"\u003Elearning from our ancestors\u003C\/a\u003E, among many others.  These patterns have been useful for centuries, and (I can report after having spent many years working in the computer network security field) continue to be useful in the Internet era."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/113051594695390673\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/113051594695390673","title":"0 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/113051594695390673"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/113051594695390673"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2005\/10\/patterns-of-integrity.html","title":"Patterns of integrity"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"0"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-4030237786009097476"},"published":{"$t":"2008-08-20T14:32:00.000-07:00"},"updated":{"$t":"2008-08-20T14:50:02.272-07:00"},"title":{"type":"text","$t":"Reruns"},"content":{"type":"html","$t":"Unenumerated is going into reruns season.  For the next few weeks I will be reposting the best articles from this blog.  These will mostly be posts from previous years, so unless you have been a reader since the beginning or have read most of the archives many of these will be new to you.  \u003Cbr \/\u003E\u003Cbr \/\u003EMost blogs discuss the news or similar ephemera and for them reruns would be silly, but this blog mostly discusses issues of historical or otherwise long-term importance, and I will only be rerunning those kinds of articles.  If you haven't read a particular old article from Unenumerated yet it will be as informative and entertaining today as when it was first posted. \u003Cbr \/\u003E\u003Cbr \/\u003EI will probably have \"theme weeks\" where this blog will run several classic articles on a particular theme (jurisdiction, legal\/political procedure, property, contracts, money, traditional security, online security protocols, media, etc.)."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/4030237786009097476\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/4030237786009097476","title":"0 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/4030237786009097476"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/4030237786009097476"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2008\/08\/reruns.html","title":"Reruns"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"0"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-1616803017597945662"},"published":{"$t":"2008-08-11T20:09:00.000-07:00"},"updated":{"$t":"2008-08-13T20:31:27.106-07:00"},"title":{"type":"text","$t":"Inflation expectations, gold, and oil"},"content":{"type":"html","$t":"James Hamilton (link below) commits an egregious, but all too common, error:\u003Cbr \/\u003E\u003Cblockquote\u003EYet another example, and the one people often think of first, would be if there is a higher inflation rate in the U.S. than Europe. In that case we might expect to see an increase in the price of oil that exactly equals (in percentage terms) the decrease in the value of the dollar...The graph below plots the cumulative logarithmic change since 1999 in the dollar price of one euro along with the dollar price of one barrel of oil...\u003C\/blockquote\u003EHamilton then computes correlation coefficients between dollar oil prices and the euro\/dollar exchange rate, finds a number of periods in which they are not closely correlated, and concludes that the dollar does not explain most of the dramatic rise in oil prices.  Why do we keep seeing this kind of reasoning from supposed authorities like Mr. Hamilton? The flaw should be quite obvious, but since I've seen it mindlessly and repeatedly perpetrated by a number of professors of economics over the last few months, allow me to tediously correct it: if greater inflation is expected in \u003Ci\u003Eboth\u003C\/i\u003E the euro and the dollar, the price of oil will increase in \u003Cspan style=\"font-style:italic;\"\u003Eboth\u003C\/span\u003E euros and dollars. The euro\/dollar exchange rate reflects \u003Cspan style=\"font-style:italic;\"\u003Erelative\u003C\/span\u003E monetary changes between the dollar and the euro, and the monetary component of the dollar oil price reflects \u003Cspan style=\"font-style:italic;\"\u003Eabsolute\u003C\/span\u003E monetary changes in the dollar. It is absurdly illogical to expect the relative and the absolute to be strongly correlated. If the monetary changes in the euro and the dollar are of similar magnitude and direction, oil and gold prices will go up or down for these monetary reasons while the exchange rate changes little for these reasons. If European and U.S. monetary authorities are reacting in similar ways to, for example, similar credit crunches, there is no reason to expect a substantial correlation between euro\/dollar exchange rates and oil prices. We will see such correlation for monetary reasons only when they are reacting with substantially different magnitudes or in different directions.\u003Cbr \/\u003E\u003Cbr \/\u003EIn expectation terms, the euro\/dollar exchange rate reflects relative inflation expectations and surprise relative inflation between the dollar and the euro, whereas the monetary component of the dollar oil price reflects absolute inflation expectations and surprise absolute inflation for the dollar.\u003Cbr \/\u003E\u003Cbr \/\u003EAnalyzing the weekly price quotes since 2000, I get a correlation coefficient of 0.93 between the dollar price of gold and the dollar price of oil -- both absolute measures of dollar inflation expectations and surprise dollar inflation. The alternative hypotheses, changes in expectations and surprises in technological\/geological supply or industrial demand, have very different effects on gold and oil that should lead to low correlations between their prices. The high correlation between gold and oil implies that oil as well as gold price changes are dominated by monetary factors. Many professional economists seem to be in denial about these basics of life under fiat currencies, perhaps since this ruins using the highly visible gas prices for simple chapter 1 lessons about how the fundamentals of consumption demand and supply by themselves are supposed to fully determine prices. These chapter 1 exercises, besides neglecting expectations, assume fixed-value currencies, and spectacularly fail for mineral commodities in our world of fiat currencies. In that world there is a monetary component to mineral commodity prices exponential in size to the expected inflation rate. This monetary component always dominates the gold price and at more than minimal levels of expected inflation (i.e. \u003E ~2%\/year) it also dominates oil prices, as demonstrated by the high correlation between gold and oil prices since 2000.\u003Cbr \/\u003E\u003Cbr \/\u003E[UPDATE: another thing that puzzles many economists is why oil consumption has not dramatically slackened, and indeed in some areas has still risen, in response to climbing oil prices.  This demand puzzle is a problem for any theory, whether monetary or fundamental.  The answer involves demand fundamentals, but does \u003Ci\u003Enot\u003C\/i\u003E involve fundamentals that have \u003Ci\u003Echanged\u003C\/i\u003E substantially in the last decade: demand forms a fairly constant backdrop for the monetarily-driven dramatic rise in oil prices; it does not itself explain the rise. The answer to the demand puzzle is that despite all the recent political sci-fi rhetoric to the contrary, oil is a superior form of energy, often with no economical ready substitutes, as well as a great chemical feedstock. Automobiles in particular give us quite valuable \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2008\/04\/gas-stations-grant-real-options.html\"\u003Ereal options\u003C\/a\u003E that the vast majority of us actively seek and are extremely reluctant to give up. When gas prices go up we cut back on luxuries and many other kinds of necessities to make room for greater gas expenditures. Alternatives are typically costly status items, like hybrids, that are not practical substitutes for most people. As a result the demand for oil is far less elastic than for most commodities. Furthermore, because the dramatic oil price rise of the last decade is largely a monetary not a fundamental effect, the costs of alternative energies and conservation are also inflating -- they are simply much stickier than oil prices and will thus lag but eventually catch up to them. Investments in them will turn out far worse than a mere fundamental analysis would indicate, and enough people remember the 1970s, and how tacky and dangerous the small cars everybody bought in the late 1970s and early 1980s seemed by the late 1980s, that this has made people more reluctant to buy small or alternative in the current runup. Adding to oil's inelasticity are the many countries that subsidize fuel consumption.\u003Cbr \/\u003E\u003Cbr \/\u003EObserve that this inelasticity and these subsidies, while important for explaining the demand puzzle, have not changed substantially as dollar oil prices have climbed by more than a factor of 10 since 1998. The component of the demand curve reflecting fundamentals has gradually risen, but it has also risen by a similar proportion in many prior decades and can't explain any dramatic increase in oil prices. What has changed are inflation expectations, driven by increasing government deficits and expected central bank behavior in response to the credit crunch, among other monetary factors. Our higher oil and gold prices reflect, exponentially, the increase in these expectations.]\u003Cbr \/\u003E\u003Cbr \/\u003E(Here's the \u003Ca href=\"http:\/\/www.econbrowser.com\/archives\/2008\/08\/oil_and_the_dol_1.html\"\u003Elink\u003C\/a\u003E to Hamilton's erroneous analysis, H\/T Marginal Revolution, and my comments above were originally made at that blog, and appear here slightly edited).\u003Cbr \/\u003E\u003Cbr \/\u003EHere are two graphs I've recently made based on my historical studies of the relationships between inflation, long-term inflation expectations, gold, and oil (click to enlarge):\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEg0FaAcn2EEb0mTBdJmISyrXBrjTitycrHvTuoL5KZiRR1iVXIoRSZIaeGEOKEYPhP36fkxj16xaDudeIDwJ0QQY7n6d3Hr37hg7R8-P26ilJyjg9Y3cQ0lNCtX831er59keg3G\/s1600-h\/InflationExpectationsOilGold2000-2008.bmp\"\u003E\u003Cimg style=\"float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEg0FaAcn2EEb0mTBdJmISyrXBrjTitycrHvTuoL5KZiRR1iVXIoRSZIaeGEOKEYPhP36fkxj16xaDudeIDwJ0QQY7n6d3Hr37hg7R8-P26ilJyjg9Y3cQ0lNCtX831er59keg3G\/s640\/InflationExpectationsOilGold2000-2008.bmp\" border=\"0\" alt=\"\"id=\"BLOGGER_PHOTO_ID_5229022317456712866\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EThe first graph shows implied expected inflation based on historical weekly gold and oil prices, 2000-2008.   The oil and gold prices are adjusted for an estimate of historical inflation (specifically inflation as measured by CPU-I up to the date of the price, as opposed to inflation expected after the date of the price, which these adjusted prices imply) and for a small fundamental long-term trend (see below). The absolute expected inflation is based on certain baseline assumptions, whereas the relative changes in inflation expectations are not based on these parameters but simply on the theory that the oil and gold prices reflect the net present value of expected inflation, which is an \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2008\/07\/simulation-of-inflation-expectations.html\"\u003Eexponential\u003C\/a\u003E function.  There is a close correlation, specifically 0.93, between the weekly movements of gold and oil prices in this period.  The expectations implied by oil include both monetary component reflected by this correlation as well as a much smaller component primarily reflecting differing expectations and surprises between gold and oil in industrial demand and technologicaly\/geological supply.  \u003Cbr \/\u003E\u003Cbr \/\u003EThe separate oil (in gold prices) expectation graph reflects this difference. My attribution of all the differences between gold and oil to these fundamentals assumes that there has been insignificant change in the relative demand for gold and oil \u003Ci\u003Eas money\u003C\/i\u003E, which may be dubious assumption give the great recent rise in the use of oil and other commodity derivatives to hedge inflation in investment portfolios, and also the possibility that the security of economic property rights (i.e. effective long-term control by the same entity) in oil has increased recently faster than that of gold.   But the fundamental contribution to the price of oil in terms of gold must be substantial since the graph of the difference in price expectations between the two reflects major events impacting oil demand such as 9\/11(which along with the recession from the dot-com crash greatly impacted world and especially U.S. travel, reducing oil demand).  \u003Cbr \/\u003E\u003Cbr \/\u003EA few potentially important monetary events, such as the appointment of Ben Bernanke to replace Alan Greenspan as Fed chairman, are also labeled.  There is a significant increase in the both the level and volatility of inflation expectations around and after this appointment as the market tried to predict how inflationary Fed policy under Bernanke might become, and generally indicated that higher inflation could be expected from Bernanke than Greenspan.   Even before Bernanke was chosen, the ballooning federal deficits after 9\/11 caused a gradual but substantial increase in inflation expectations from then until the end of Greenspan's term.  Over his entire leadership from 1987 to 2006, Greenspan lowered inflation expectations from about 4% to below 2%, and they then rose to about 2 1\/2% by the end of Greenspan's term, and are back above 4% today.  (Greenspan in his own book, \u003Ci\u003EThe Age of Turbulence\u003C\/i\u003E, published in 2007, says that with fiat currencies we can expect inflation of about 4.5% from here on out, a more pessimistic estimate than that probably implied by gold prices in 2007, but perhaps a bit more prescient than the market given that inflation expectations have increased to above 4% in 2008. Of course, remember that my model reflects changes in inflation expectations much better than absolute inflation expectations, so these absolute numbers are very approximate).\u003Cbr \/\u003E\u003Cbr \/\u003ENot shown on these graphs is a very interesting possible difference of nearly 1% between inflation expectations implied by gold, recently a bit over 4%, and expectations implied by TIPS (U.S. Treasury bonds with returns adjusted by the U.S. CPU-I inflation index), recently 3.3%  The difference may largely reflect the errors I have suggested might exist in my absolute (but not relative) numbers due to my choices of parameters, but they might also reflect one or more of the following:\u003Cbr \/\u003E\u003Cbr \/\u003E(1) The difference between the consumption basket of the U.S. urban consumer (as reflected in the CPU-I) and a global consumption basket;\u003Cbr \/\u003E\u003Cbr \/\u003E(2) Understatement of actual subjectively experienced inflation by the CPU-I formual based on errors in its formula, perhaps including the \"hedonic\" and other adjustments made to it in recent years (we don't have TIPS prices to measure differences in gold- and TIPS-implied inflation prior to 2005);\u003Cbr \/\u003E\u003Cbr \/\u003E(3) subtleties involving discount rate and utility curve differences between the U.S. urban consumer and some global average; and\/or\u003Cbr \/\u003E\u003Cbr \/\u003E(4) Prices on the 10-year TIPS reflect inflation expectations only over the next 10 years, whereas gold reflects inflation expectations over an indefinetely long period.    If some event (e.g. the baby boomers reaching years of requiring peak medical attention, causing U.S. government deficits to skyrocket) posing great inflation risks is expected to occur within a foreseeable period of time but not within the next 10 years, this could be reflected in a spread between the two implied expectations.\u003Cbr \/\u003E\u003Cbr \/\u003EThere is also a small component of long-term relative oil\/gold fundamentals in my analysis.  Since the 1950s, oil prices have increased on average 0.9%\/year faster than gold, which I have attributed to a fundamental difference between the two: a greater proportion of oil is actually consumed every year than gold, and so oil is gradually (i.e. at 0.9%\/year) becoming scarcer relative to demand than gold.  The graphs and implied inflations are adjusted for this effect.  This is as close the numbers attribute any reality to \"peak oil\" theories: they show that we do not face an imminent demise of the oil economy, only a very long and very gradual increase in the technological\/geological scarcity relative to consumption demand for oil.  Extrapolating the same rate as the last 50 years, the price of oil in terms of gold will take 80 years to double.  Taking out monetary factors and this gradual effect, we have had in the recent years (indeed since 1999, although until about 2003 this was masked by low inflation expectations) a small acute crisis in the fundamentals of oil, rising a bit above the 0.9%\/year trend as it did in the 1970s, but this burp not substantially greater than in many former years such as in the 1970s, and I expect it, as occured in the 1980s, to reverse from technological substitutes for and conservation of oil which we are currently (as in the late 1970s and early 1980s) overinvesting in, due to monetary effects on oil prices being mistaken for fundamental ones.   This mistake will reify as alternative energies and conservation techniques (barring unexpected technological breakthroughs), with stickier prices lagging those of oil in reflecting inflation expectations, increase in price \u003Ci\u003Efaster\u003C\/i\u003E than oil in the next decade (assuming no further monetary problems that further increase inflation expectations and thus oil prices).  Prices besides oil, gold, and to a lesser extend other mineral commodities are far stickier than those mineral prices. Once inflation expectations increase, it takes many years for other prices (and especially the stickiest prices of all, wages) to catch up to oil and gold: these other prices greatly lag both increases and decreases in oil and gold prices, and indeed may never catch up at all if the expectations turn out to be wrong (as they indeed often are, given how little information the market actually has on future U.S. government and Fed behavior!)\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEidAcjNlVDLLG8mnWypyUKvlZu-_vHAo_QZINGelYLR_2qYZ7SEoAEL1QCX-L4bl1tRyIC35GFksG97TEqR0n21Dauu4MEVu2v5AIIWTvUapoV8S_GBdy7ru3-_gGVWPLmx6QjU\/s1600-h\/InflationExpectationsImpliedByOilGold1968-2008.bmp\"\u003E\u003Cimg style=\"float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEidAcjNlVDLLG8mnWypyUKvlZu-_vHAo_QZINGelYLR_2qYZ7SEoAEL1QCX-L4bl1tRyIC35GFksG97TEqR0n21Dauu4MEVu2v5AIIWTvUapoV8S_GBdy7ru3-_gGVWPLmx6QjU\/s640\/InflationExpectationsImpliedByOilGold1968-2008.bmp\" border=\"0\" alt=\"\"id=\"BLOGGER_PHOTO_ID_5229022176296330418\" \/\u003E\u003C\/a\u003EThe second graph shows this expected versus the actual (or at least CPI-U) dollar inflation from 1968 to today.   Again from the difference between oil and gold we can see some oil fundamentals such as the impact of the Asian\/Russian crisis on lowering oil prices (in terms of gold as well as, in this case, dollars, as inflation expectations were also at their lowest) in 1998 and of the Iran\/Iraq war which depressed oil prices in terms of gold in the 1980s (probably due to decreased security of long-term economic property rights in their oil and the need by these oil states to fund their war with limited ability to borrow).\u003Cbr \/\u003E\u003Cbr \/\u003ESince I generated these graphs three weeks ago, there has been a substantial and as usual correlated drop in both dollar gold and oil prices, probably reflecting an easing of the  credit crunch in the U.S. and more confidence that the Fed, seeing its inflationary behavior lead to immediate and politically consequential pain at the gas pump, is less likely to use high inflation to default on current U.S. debts than was thought in previous weeks.  At the same time the overt default risk for Treasuries has nearly tripled, also reflecting some new \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2008\/07\/too-big-to-fail.html\"\u003Epolitical limits on inflationary default\u003C\/a\u003E.  By the way, in the most recent week the dollar also strengthened against the euro by a similar amount, so that the explanation for last week, but not most of the previous ones, involves a monetary improvement unique to the dollar rather than shared by the Fed and the ECB.\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhrXnhR005yNs5hz8IT9_2ZBQB8bhd2vhQvbtsWUhWQNyKM8QFuYxRGjTqqUSB0zL4bb_IRfkU3lXdnLbHHl8zk73Y3Luhak9FYK2MB9oAdQa9lah-tx2A3Pa1AhNm75ZBPkTqH\/s1600-h\/InflationExpectationsOilGold1974-2008.bmp\"\u003E\u003Cimg style=\"float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhrXnhR005yNs5hz8IT9_2ZBQB8bhd2vhQvbtsWUhWQNyKM8QFuYxRGjTqqUSB0zL4bb_IRfkU3lXdnLbHHl8zk73Y3Luhak9FYK2MB9oAdQa9lah-tx2A3Pa1AhNm75ZBPkTqH\/s640\/InflationExpectationsOilGold1974-2008.bmp\" border=\"0\" alt=\"\"id=\"BLOGGER_PHOTO_ID_5234204024260970738\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003E[UPDATE: here's a third graph showing implied inflation expectations derived from monthly quotes of gold and oil in dollars going back to 1974, using some different parameters than were used for the second graph econd graph.  The two expectations have a correlation coefficient of 0.76. (I forgot to run the correlation with the parameters that generated the second graph, so I wanted to show the graph corresponding to the 0.76).  This is still a strong correlation consistent with the long-term trends in oil and gold prices each reflecting a common estimate of future inflation -- gold and oil fundamentals are very different and so cannot lead to such strong correlation. This compared to two random walks with no long-term tendency to rise, which on average have no correlation.\u003Cbr \/\u003E\u003Cbr \/\u003EPer the comments below, the 0.93 coefficient cited above might for statistical reasons suggest much more correlation than actually there due to the rising nature of both making the differences from the mean calculated in the coefficient consistently large and thus reducing the proportional difference in movements: a random walk that tends to rise can also have correlation coefficients in the .60's to .90's.  Indeed taking correlations of differences we get only .25, on the high end of weak positive correlations, for one-week deltas, but this rises with the weeks of difference: I've calculated up to 40 week deltas which give 0.64, a strong correlation.  This suggests that weekly fluctuations are dominated more by non-monetary factors and the monetary factors don't start to dominate until the price movements are over about 6 months: fundamental fluctuations tend to be shorter term and tend (except for the 0.9% secular trend for which I've adjusted the data) cancel each other out.   There are also as I undestand it, and I am admittedly no statistical expert, statistical reasons to expect that the 0.25 is too low in that such differencing can exagerate noise.  For the two implied inflation expectations in the third graph, which have a 0.76 correlation coefficient, the exageratedly small differences in proportion due to large distances from the mean should be greatly reduced since the series is largely flat, finishing pretty much where it started.  But all this must be subject to review by people far more knowledge in statistics than I. :-)  ]"},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/1616803017597945662\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/1616803017597945662","title":"9 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/1616803017597945662"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/1616803017597945662"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2008\/07\/inflation-expectations-gold-and-oil.html","title":"Inflation expectations, gold, and oil"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"media$thumbnail":{"xmlns$media":"http://search.yahoo.com/mrss/","url":"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEg0FaAcn2EEb0mTBdJmISyrXBrjTitycrHvTuoL5KZiRR1iVXIoRSZIaeGEOKEYPhP36fkxj16xaDudeIDwJ0QQY7n6d3Hr37hg7R8-P26ilJyjg9Y3cQ0lNCtX831er59keg3G\/s72-c\/InflationExpectationsOilGold2000-2008.bmp","height":"72","width":"72"},"thr$total":{"$t":"9"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-5786989504080592745"},"published":{"$t":"2008-08-08T14:57:00.000-07:00"},"updated":{"$t":"2008-08-08T14:49:12.452-07:00"},"title":{"type":"text","$t":"Bank notes from the free banking era"},"content":{"type":"html","$t":"I have a beautful private collection of bank notes from the Free Banking Era in the United States (1837-1863).  During this era the U.S. had no central bank and paper money was issued by a variety of private banks.  Some was even issued by manufacturing and retail companies.  This money was backed by gold, silver, real estate, stocks, bonds, and a wide variety of other assets.  You can no longer cash them in, but they are now worth often substantial sums as collectibles.  As you can see below, the note designs were more varied and creative than modern money, and were remarkably free of politicians' faces.  \u003Cbr \/\u003E\u003Cbr \/\u003EDue to personal cash flow needs, I am selling some of my collection.  Nobody is printing any more of this kind of money and it is a great hedge against inflation.  As a collectible it is subject to less political risk than gold (recall FDR's confiscation of gold in the U.S., for example) or commodities (just watch C-SPAN to see what politicians want to do to commodities \"speculators\"). If you want to shop around, Google for what other people are asking.  Make sure you're looking at fresh prices though -- as you might imagine, along with commodities and many other collectibles their dollar prices have risen substantially over the past year.  You'll find that for most notes I'm offering a substantial discount.   \u003Cbr \/\u003E\u003C!-- All my notes were bought from reputable dealers.  --\u003E\u003Cbr \/\u003EPlease send your order or query to me at nszabo AT law DOT gwu DOT edu.  To compute the total charge add $10 for shipping and handling within the U.S., $20 if outside the continental U.S.\u003Cbr \/\u003E\u003Cbr \/\u003En.b.: \u003C!-- the pictures shown are for same design, year, bank, and denomination as my own, but are not pictures of my own notes. --\u003E  The photos are of the actual notes you will get, next to their descriptions.  (Some are a bit blurry, sorry -- I am going to try to get some clearer pics later).  The notes are well protected and in the same shape I bought them, generally good to extremely fine.  All my notes are hand-signed by issuers' officer(s) unless I indicate \"not issued.\"  You get your full money back (minus shipping) if you return them for any reason within 60 days.\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgP8JnxUMiPC3upovLs1IcEyBhIyql2rZf3Cajf8j1sj98pR1CbwtKiGfZj2swvwOJmH8tSB_VWdjaVoVMTPbW6_Q1dQGdZd4HTdlKCgLVTDu3UaF-8Lz6DZQTsai_5QWh4XTrl\/s1600-h\/DSCF0725.JPG\"\u003E\u003Cimg style=\"float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgP8JnxUMiPC3upovLs1IcEyBhIyql2rZf3Cajf8j1sj98pR1CbwtKiGfZj2swvwOJmH8tSB_VWdjaVoVMTPbW6_Q1dQGdZd4HTdlKCgLVTDu3UaF-8Lz6DZQTsai_5QWh4XTrl\/s640\/DSCF0725.JPG\" border=\"0\" alt=\"\"id=\"BLOGGER_PHOTO_ID_5232258500548552146\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003EBank of De Soto, Nebraska, $1 (1863)                      \u003Cbr \/\u003E$320  \u003C!-- $350 --\u003E\u003Cbr \/\u003E\u003Cbr \/\u003E\u003C!-- a onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhGJpNcxkJEVduMFN-0e1PoTVIzxstUn38bpmj_lZRe81_9AumBIOz-1d4Lo6nhe3xkf96qnhTwx3Diw8dw3raJzX9FPnEZf4URphk2WR6i7A5zR1LEFcBesq11YruSV-Fo27J6\/s1600-h\/BankOfDeSotoLarge.jpg\"\u003E\u003Cimg style=\"float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhGJpNcxkJEVduMFN-0e1PoTVIzxstUn38bpmj_lZRe81_9AumBIOz-1d4Lo6nhe3xkf96qnhTwx3Diw8dw3raJzX9FPnEZf4URphk2WR6i7A5zR1LEFcBesq11YruSV-Fo27J6\/s400\/BankOfDeSotoLarge.jpg\" border=\"0\" alt=\"\"id=\"BLOGGER_PHOTO_ID_5196315913933747922\" \/\u003E\u003C\/a --\u003E\u003Cbr \/\u003EBoone County Bank, Indiania, $20 (1860)                   \u003Cbr \/\u003E$350  \u003C!-- $390 --\u003E\u003Cbr \/\u003E\u003Cbr \/\u003E\u003C!-- a onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhKiof159pC3bSKZItIZq-xCFJPmCJ610aQ6L5SKy5EqQ2f1Tym964YT5tcWUMQkC-XYy6t8Ec7SMRWOe1ZEz0wiKmc9hfTAizdej8qYZCA-ZHJb-ytd-BYBAAR_kpt0xcrMLV5\/s1600-h\/BooneCountyBank20Large.jpg\"\u003E\u003Cimg style=\"float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhKiof159pC3bSKZItIZq-xCFJPmCJ610aQ6L5SKy5EqQ2f1Tym964YT5tcWUMQkC-XYy6t8Ec7SMRWOe1ZEz0wiKmc9hfTAizdej8qYZCA-ZHJb-ytd-BYBAAR_kpt0xcrMLV5\/s640\/BooneCountyBank20Large.jpg\" border=\"0\" alt=\"\"id=\"BLOGGER_PHOTO_ID_5196319070734710514\" \/\u003E\u003C\/a --\u003E\u003Cbr \/\u003ETecumseh Bank, Michigan, $1 (year unknown)                 \u003Cbr \/\u003E$55.  \u003C!-- $60 --\u003E Not issued.\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjVJ3AJkxmn6-XCD9znzKXuFoeUEGSWso8Gi344gukw9arZXr4w7XrfWU7N3IYxKOxD6t6PmQBCplZhaC7skTdmj3koItvkMkU4tTWs_X6FiQWieTC7BTAnvoFT8QM7oth6YXMB\/s1600-h\/DSCF0727.JPG\"\u003E\u003Cimg style=\"float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjVJ3AJkxmn6-XCD9znzKXuFoeUEGSWso8Gi344gukw9arZXr4w7XrfWU7N3IYxKOxD6t6PmQBCplZhaC7skTdmj3koItvkMkU4tTWs_X6FiQWieTC7BTAnvoFT8QM7oth6YXMB\/s640\/DSCF0727.JPG\" border=\"0\" alt=\"\"id=\"BLOGGER_PHOTO_ID_5232258745412746706\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003EStore at Alleghany Furnace, $5 (1858)                      \u003Cbr \/\u003E$90.  \u003C!-- $100 --\u003E Not issued.  \"Allegheny Furnace\" is misspelled \"Alleghany Furnace.\"  I don't know if this is unique to this note, or otherwise whether this fact is good, bad, or indifferent to the value.\u003Cbr \/\u003E\u003Cbr \/\u003EGreat Western Railroad Co., Iowa, $2 (1858)                \u003Cbr \/\u003E$100.  \u003C!-- $100 --\u003E Two holes have been punched and bit of one corner has been cut out of this one, probably indicating that it is a cancelled note.  Very rare.\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEh0ypcl40005debeu3GJiM9nV2Kx4YsR6c_aoPHsDGVCk8YpLu6X3U9PyP1esd0-EaWxszQgrwD70jG7bW0JpKr-sE8ll0rsuEi7iJdqxkCqBJe9ZZzERhIZbVOCCL4Eb0Mj1Fm\/s1600-h\/DSCF0737.JPG\"\u003E\u003Cimg style=\"float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEh0ypcl40005debeu3GJiM9nV2Kx4YsR6c_aoPHsDGVCk8YpLu6X3U9PyP1esd0-EaWxszQgrwD70jG7bW0JpKr-sE8ll0rsuEi7iJdqxkCqBJe9ZZzERhIZbVOCCL4Eb0Mj1Fm\/s640\/DSCF0737.JPG\" border=\"0\" alt=\"\"id=\"BLOGGER_PHOTO_ID_5232259882305873042\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003EBank of Manchester, Michigan, $2  (1837)                    \u003Cbr \/\u003E$65 \u003C!-- 75 --\u003E\u003Cbr \/\u003E\u003Cbr \/\u003E\u003C!-- a onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhDvrnlBm_SlDn5BBpx9K2Qz3UjVKrXRKGuhyrAwzMyrbbsRmekHg8HJ_pEcRJfSSaLmRorcZJWgtcvq4h-xfSOm-m96ZUqWffcdMdJkcBG4CMhyphenhyphen5OJYs81Fv6bg_yDr5A6St9A\/s1600-h\/HagerstownBankNote.jpg\"\u003E\u003Cimg style=\"float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhDvrnlBm_SlDn5BBpx9K2Qz3UjVKrXRKGuhyrAwzMyrbbsRmekHg8HJ_pEcRJfSSaLmRorcZJWgtcvq4h-xfSOm-m96ZUqWffcdMdJkcBG4CMhyphenhyphen5OJYs81Fv6bg_yDr5A6St9A\/s640\/HagerstownBankNote.jpg\" border=\"0\" alt=\"\"id=\"BLOGGER_PHOTO_ID_5196300512181024434\" \/\u003E\u003C\/a --\u003E\u003Cbr \/\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEj4dJWpduiU5tIENvxGyyK4HBQjqEKndLJ0ipNAIaATSzo_K0hZRhcXDltlZwMVBLlWBi0-Y91DL71xcU9HxFH5_aRs_DY-tGhI_LxSTzccQsdcDgy8SMn41LqpF4r0z4E9dyOd\/s1600-h\/DSCF0735.JPG\"\u003E\u003Cimg style=\"float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEj4dJWpduiU5tIENvxGyyK4HBQjqEKndLJ0ipNAIaATSzo_K0hZRhcXDltlZwMVBLlWBi0-Y91DL71xcU9HxFH5_aRs_DY-tGhI_LxSTzccQsdcDgy8SMn41LqpF4r0z4E9dyOd\/s640\/DSCF0735.JPG\" border=\"0\" alt=\"\"id=\"BLOGGER_PHOTO_ID_5232258973626920898\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003EHagerstown Bank, Maryland, $5  (probably 1857)              \u003Cbr \/\u003E$85. \u003C!-- $95 --\u003E  Not issued.\u003Cbr \/\u003E\u003Cbr \/\u003EMerchants and Mechanics Bank, Michigan, $5  (year unknown)    \u003Cbr \/\u003E$125.  \u003C!-- $145 --\u003E Not issued. \u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjerGvutMn1JiqPyEGr_DOaGCgK4pUIE3c5qq3pDsyuJSqEJXF0Kbip0-UKVUWfKCAFFB2rxzMUc8z_wEPfCtD-DT3jGOURMRlEzbC3QDzyvvFN6O9xopjK3lnOFAhZ-IREDtQq\/s1600-h\/DSCF0739.JPG\"\u003E\u003Cimg style=\"float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjerGvutMn1JiqPyEGr_DOaGCgK4pUIE3c5qq3pDsyuJSqEJXF0Kbip0-UKVUWfKCAFFB2rxzMUc8z_wEPfCtD-DT3jGOURMRlEzbC3QDzyvvFN6O9xopjK3lnOFAhZ-IREDtQq\/s640\/DSCF0739.JPG\" border=\"0\" alt=\"\"id=\"BLOGGER_PHOTO_ID_5232260392911511346\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003EMarine Fire Insurance Co., Wisconsin, $2  (1844)              \u003Cbr \/\u003E$330  \u003C!-- $360 --\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EI also have a signed $1 Los Angeles Clearing House Certificate from the pre-Federal Reserve Days (1907), $15.\u003Cbr \/\u003E\u003Cbr \/\u003EPlease send your order or query to me at nszabo AT law DOT gwu DOT edu.  To compute the total charge add $10 for shipping and handling within the U.S., $20 if outside the continental U.S."},"link":[{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/5786989504080592745"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/5786989504080592745"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2008\/05\/bank-notes-from-free-banking-era.html","title":"Bank notes from the free banking era"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"media$thumbnail":{"xmlns$media":"http://search.yahoo.com/mrss/","url":"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgP8JnxUMiPC3upovLs1IcEyBhIyql2rZf3Cajf8j1sj98pR1CbwtKiGfZj2swvwOJmH8tSB_VWdjaVoVMTPbW6_Q1dQGdZd4HTdlKCgLVTDu3UaF-8Lz6DZQTsai_5QWh4XTrl\/s72-c\/DSCF0725.JPG","height":"72","width":"72"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-714926668881716377"},"published":{"$t":"2008-07-19T17:15:00.000-07:00"},"updated":{"$t":"2008-07-21T13:24:01.784-07:00"},"title":{"type":"text","$t":"Simulations of inflation expectations and oil prices"},"content":{"type":"html","$t":"I have run some Monte Carlo simulations of hypothetical oil prices implied by long-term inflation expectations.  Based on the Hotelling model of a nonrenewable resource, modified to account for inflation expectations, described \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2008\/06\/commodities-currencies-and-st.html\"\u003Ehere\u003C\/a\u003E, inflation expectations are assumed to contemplate only the next 50 years, with a 1%\/year discount rate.  Oil in each year is assumed to be 1% less valuable to producers than in the preceeding year due to considerations of producer's time preferences, substitution, and less than perfectly secure property rights.  Based on a random walk of inflation expectations (in some cases biased upward to show what happens in an era of increasing inflation expectations, in some cases downward to show happier times of declining inflation expectations), this simulation computes the net present value of the sale of a barrel of oil in 50 years based on the expected inflation over those years minus the discount rate of 1%.   Note that these are not predictions I believe \u003Ci\u003Ewill\u003C\/i\u003E happen, they are all explanations of what has happened or scenarios of what might happen.\u003Cbr \/\u003E\u003Cbr \/\u003EThe most startling and important thing you'll notice in these charts is that oil  prices are an exponential function of long-run inflation expectations.  Put another way, oil prices swing at a rate that is an exponential function of changes in these inflation expectations.   The reason is quite straightforward -- inflation, like an interest rate, compounds.  With inflation the value of oil in the ground nominally grows in value at the rate of inflation, discounted (in this model at 1%) for the factors indicated above.  Thus in this model when inflation expectations are 1% or below, oil trades simply based on supply\/demand fundamentals and expectations about these fundamentals, which in this model are assumed constant.   Note that we assumd the discount rate (based on time preferences, substitability, property rights security, etc.) should be higher than 1%, that would only shift the exponential curve to the right, it wouldn't change its shape.\u003Cbr \/\u003E\u003Cbr \/\u003EPrecious metals generally move in the same way as oil in response to changing inflation expectations, but minerals that can be more readily substituted for than oil will probably not as quickly move to extreme prices.  So this model and these simulations are just as useful for precious metals as they are for oil, and are somewhat less useful but still explain most of the price movements of most other minerals.\u003Cbr \/\u003E\u003Cbr \/\u003EHere is a scenario similar to what we've recently experienced, with a possible further spike due to a small further increase in long-term inflation expectations, with such expectations then subsiding back to near today's value.  The simulation starts out with inflations expectations at 1% (assumed to correspond to $10\/barrel oil), then the expectations move to as high as 7.5%, which gives us $330\/barrel oil:\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgQitp0URtHoZZyFuS4MPZlX4kTRNOhawE3tGf1rpUHWK38zLBYuqxvhyOYgbG-Flo0Hk5mpVLMhAwiibBWGc24ZZEwoMaaYP8I6ZILntErIEqjXnTIT9pf_DEBACdXugQhb3-v\/s1600-h\/InflationExpectationsVsOilHypo_LineChart3.bmp\"\u003E\u003Cimg style=\"float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgQitp0URtHoZZyFuS4MPZlX4kTRNOhawE3tGf1rpUHWK38zLBYuqxvhyOYgbG-Flo0Hk5mpVLMhAwiibBWGc24ZZEwoMaaYP8I6ZILntErIEqjXnTIT9pf_DEBACdXugQhb3-v\/s640\/InflationExpectationsVsOilHypo_LineChart3.bmp\" border=\"0\" alt=\"\"id=\"BLOGGER_PHOTO_ID_5225237225710400354\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003E\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiGQxarTuYoeLG_cGZINj2TfwO-jHsSnS4KQtU5VLsg2TZnXHmnohhS6zjurUt8_8ICiGUxbXePt26FjCRJAqk-k8Q3GTeMhdM4UPO_WiVyRX33SYAmqzmcEJTTbY1AhCklNLqm\/s1600-h\/InflationExpectationsVsOilHypo_XYScatter3.bmp\"\u003E\u003Cimg style=\"float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiGQxarTuYoeLG_cGZINj2TfwO-jHsSnS4KQtU5VLsg2TZnXHmnohhS6zjurUt8_8ICiGUxbXePt26FjCRJAqk-k8Q3GTeMhdM4UPO_WiVyRX33SYAmqzmcEJTTbY1AhCklNLqm\/s640\/InflationExpectationsVsOilHypo_XYScatter3.bmp\" border=\"0\" alt=\"\"id=\"BLOGGER_PHOTO_ID_5225237407369383490\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EHere is a more extreme scenario of what might occur during a \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2008\/07\/too-big-to-fail.html\"\u003Epossible U.S. federal default\u003C\/a\u003E discussed in my previous post. At these extremes, prices of coal, natural gas, ethanol, and other near-substitutes for oil have to keep up with oil, and even the capital costs of more indirect substitutes (e.g. nuclear and alternative electricity) have to lose some of their stickiness and keep up more with oil, otherwise oil will be substituted for and prices won't reach these extremes.  My model does not properly account for increased substitability as oil prices increase, which is correct over the long run (inflation eventually reaches all goods and services) but incorrect over the shorter run (because oil prices are much less sticky than most other energy prices).  As a result these models probably overstate oil prices at the higher inflation expectation values.  Precious metals don't have the same problem, so hedging against the most extreme possibilities is better done with precious metals than with oil or other commodities.  \u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgC2ivRfVSzWM1k773VL2xea4BlhmEKB5miJ5BgXhpLuetnfrTOSD_ECd9VhMBbnrcT6y8_oeey4fwTGshN3hRmIKkrUi-5QqQgWmCPmjOeY4kEIQfNIhqVgBvT9K0gtCIrIY99\/s1600-h\/InflationExpectationsVsOilHypo_LineChart2.bmp\"\u003E\u003Cimg style=\"float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgC2ivRfVSzWM1k773VL2xea4BlhmEKB5miJ5BgXhpLuetnfrTOSD_ECd9VhMBbnrcT6y8_oeey4fwTGshN3hRmIKkrUi-5QqQgWmCPmjOeY4kEIQfNIhqVgBvT9K0gtCIrIY99\/s640\/InflationExpectationsVsOilHypo_LineChart2.bmp\" border=\"0\" alt=\"\"id=\"BLOGGER_PHOTO_ID_5224892399752163282\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003E\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhUpRR0IyoheYUS-lrIUAw9B7tcv5nWBgxDtqGM9QStJU3si0BAe9K1sO3jg9u0GuD7-B3iNfV6fjNZGQqCjjgUonfRuIbnwVKMIBjNI55YuzfdCbyw_mQvBreK97SH7MhxkqCa\/s1600-h\/InflationExpectationsVsOilHypo_XYScatter.bmp\"\u003E\u003Cimg style=\"float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhUpRR0IyoheYUS-lrIUAw9B7tcv5nWBgxDtqGM9QStJU3si0BAe9K1sO3jg9u0GuD7-B3iNfV6fjNZGQqCjjgUonfRuIbnwVKMIBjNI55YuzfdCbyw_mQvBreK97SH7MhxkqCa\/s640\/InflationExpectationsVsOilHypo_XYScatter.bmp\" border=\"0\" alt=\"\"id=\"BLOGGER_PHOTO_ID_5224892793100052338\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003ELet's finish with a cheerier scenario, where oil prices start at $130\/barrel (roughly what they recently have been) and then inflation expectations subside.  I consider this scenario and the first scenario about equally likely, and both of these more probable than the extreme second scenario:\u003Cbr \/\u003E\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEi1Jb-IMRokXKx4hdVSX-P15qzdsvVreFzkDMXACGHVh8mSsbWAtbUV-QHIQMm8BPGl_JhJdiw072yNzJwrGLQz1cv1aPaHU4SSv0AUZDw3Ssy7c4A_VRK5A_R-AipeH7EGQD_U\/s1600-h\/InflationExpectationsVsOilHypo_LineChart4.bmp\"\u003E\u003Cimg style=\"float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEi1Jb-IMRokXKx4hdVSX-P15qzdsvVreFzkDMXACGHVh8mSsbWAtbUV-QHIQMm8BPGl_JhJdiw072yNzJwrGLQz1cv1aPaHU4SSv0AUZDw3Ssy7c4A_VRK5A_R-AipeH7EGQD_U\/s640\/InflationExpectationsVsOilHypo_LineChart4.bmp\" border=\"0\" alt=\"\"id=\"BLOGGER_PHOTO_ID_5225241668411726306\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003E\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhfIvwhf8-tM5d95EWDQs6aFjmu2GR1m0XxkbUYZeTZmUlgGxHD3owddNf09ya376gIra9vCe6OFFmPhghovJjsAlhj7UA-mqod2NtDMxRwHsFkhx9w0EKauurqK0_icWCWU7DR\/s1600-h\/InflationExpectationsVsOilHypo_XYScatter4.bmp\"\u003E\u003Cimg style=\"float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhfIvwhf8-tM5d95EWDQs6aFjmu2GR1m0XxkbUYZeTZmUlgGxHD3owddNf09ya376gIra9vCe6OFFmPhghovJjsAlhj7UA-mqod2NtDMxRwHsFkhx9w0EKauurqK0_icWCWU7DR\/s640\/InflationExpectationsVsOilHypo_XYScatter4.bmp\" border=\"0\" alt=\"\"id=\"BLOGGER_PHOTO_ID_5225241798417263154\" \/\u003E\u003C\/a\u003E"},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/714926668881716377\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/714926668881716377","title":"0 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/714926668881716377"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/714926668881716377"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2008\/07\/simulation-of-inflation-expectations.html","title":"Simulations of inflation expectations and oil prices"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"media$thumbnail":{"xmlns$media":"http://search.yahoo.com/mrss/","url":"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgQitp0URtHoZZyFuS4MPZlX4kTRNOhawE3tGf1rpUHWK38zLBYuqxvhyOYgbG-Flo0Hk5mpVLMhAwiibBWGc24ZZEwoMaaYP8I6ZILntErIEqjXnTIT9pf_DEBACdXugQhb3-v\/s72-c\/InflationExpectationsVsOilHypo_LineChart3.bmp","height":"72","width":"72"},"thr$total":{"$t":"0"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-724641639318207020"},"published":{"$t":"2008-07-19T12:34:00.000-07:00"},"updated":{"$t":"2008-07-19T14:08:31.123-07:00"},"title":{"type":"text","$t":"Too big to fail"},"content":{"type":"html","$t":"Besides the \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2008\/06\/commodity-hysteria-overview.html\"\u003Eextraordinary rises in commodity prices\u003C\/a\u003E and \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2008\/07\/so-much-for-risk-free-investment.html\"\u003Enear-tripling of the U.S. federal government's default risk\u003C\/a\u003E, another important factor for those interested the world's economy to keep in mind is that \u003Ca href=\"http:\/\/blogs.cfr.org\/setser\/2008\/07\/07\/the-quiet-bailout-continues\/\"\u003Eforeign governments have been bailing out the U.S. federal government\u003C\/a\u003E by buying more of its Treasury bonds. Much of the increase in inflation expectations, and now in overt default expectations, reflected in commodity prices probably comes from the possibility that this ongoing foreign bailout of the U.S. may at some point stop and reverse.  If foreign central banks and sovereign funds suddendly dumped their Treasuries -- which paying a negative real interest rate and exposing one to dollar risk are after all a rather bad investment -- either the Federal Reserve would have to madly \"print\" trillions of dollars to buy up these Treasuries, causing oil prices to skyrocket still further and retail gasoline prices to quite possibly jump each week by dollars per gallon, until American cars, trucks, and airplanes would be useless, or the federal government, facing extraordinary costs of funding its deficits, would have to overtly default.   The problem the Federal Reserve faces is that with modern digital markets any inflationary behavior on its part is reflected in oil prices as soon as any big money learns about said behavior, and is thus usually reflected at the retail gas pump within a week.  I wrote in the above-linked post about sovereign debt risk of \"covert default\" through inflation, but that is an obsolete phrase -- you can go down to the local gas station and see these de facto federal defaults in progress.  If foreign governments thought the Federal Reserve was going to hyperinflate, that would probably cause them to dump the Treasuries in a kind of self-fulfilling prophecy.   It would be a run on the federal government itself, the biggest run on a bank the world has ever seen.  This is not a probable risk, but it has now become a quite signficant risk.  \u003Cbr \/\u003E\u003Cbr \/\u003EThe ongoing foreign bailout of the U.S. government by massive purchases of Treasury debt helps explain two things: (1) why U.S. Treasuries and bank rates related to them don't seem to be reflecting inflation expectations (i.e. why they are paying negative real interest rates compared to the expected inflation suggested by commodity prices) -- their price is being held artificially low, not just by Federal Reserve net purchases but by foreign central bank net and sovereign fund purchases as well.  Add to this the natural reduction in their interest rate due to the credit crunch causing a flight for safety (in a credit cruch people are willing to pay even negative real interest rates for a relatively safe investment).  The foreign bailout also explains (2) why commodity prices have raced so far ahead of PPI and CPI inflation.  Commodity prices may reflect, not so much increases in the dollar supply beyond dollar demand that have already happened, nor even expectations of a steady future consumer inflation that will happen eventually, nor an iminent severe consumer inflation is sure to happen soon, but expectations of a severe consumer inflation that mostly hasn't happened yet and may not happen, and of a possible Zimbabwe\/Weimar-style hyperinflation that probably won't happen.  But the increase in the probability of severe inflation combined with a great increase in the formerly extremely small (and still small, but not extremely so) probabilities of the more extreme hyperinflation still averages out to rather high inflation expectations.  \u003Cbr \/\u003E\u003Cbr \/\u003EWhy are central bankers bailing out the U.S. federal government and its dollar rather than acting like rational profit maximizers?   Central bankers and government treasury officials are very political animals, and they fear the disaster they believe would ensue should the \"full faith and credit of the United States [federal government]\" fail.  It is the most unthinkable economic event for the entity with the most collosal budget, and the dominant threatener and wielder of military force in the world, to go under.   The U.S. federal government has now deemed Bear Stearns, Fannie Mae, and Freddie Mac \"too big to fail\" and has bailed them out.   That federal government itself is the ultimate entity that is \"too big to fail\", and thus foreign governments and central bankers are bailing it out, and will probably (but hardly surely) continue to do.\u003Cbr \/\u003E\u003Cbr \/\u003EExtrapolating from oil prices rises (i.e. assuming the entire oil price rise has been due to monetary factors rather than to consumption, production cost, or non-monetary political fundamentals) using the net present value formula over 50 years, I estimate that long-run dollar inflation expectations have risen about 5%\/year from 1998, when there the Asian crisis caused a flight to the dollar and many people thought deflation was the bigger worry, to today.   This might for example reflect an increase in expectations from 0% to 5%\/year, or 1% to 6%\/year, etc. -- I don't have a way to estimate the absolute value.  Gold price rises over the last decade give a slightly smaller rise in inflation expectations, of about 4%\/year.  Note that this doesn't mean 5% or 6%\/year CPI or PPI inflation over the next 50 years is inevitable -- increased expectations reflect a range of probabilities, especially very heightened increases in probability estimates of extreme (\u003E10%\/year) and hyper (\u003E100%\/year) inflation in the dollar.   It's also still significantly possible that the ultimate lagging indicator, \"core inflation\", will stay in the 2-3%\/year range and the whole storm will blow over.  \u003Cbr \/\u003E\u003Cbr \/\u003EBesides the great rise in commodity prices, in particular the most \"money-like\" commodities oil and precious metals, the foreign bailout of the U.S. federal government is another reason to believe that \u003Ci\u003Eall\u003C\/i\u003E major currencies are falling against a hypothetical stable standard of value, not just the dollar.  As foreign central banks buy more U.S. Treasuries they take on more of the risk associated with the dollar, so we should expect the floating currencies these central banks issue to move more in correlation with each other.  Indeed, the dollar has held its own against the euro and against on average other major currencies since February as foreign central bank purchases of Treasuries have accelerated.\u003Cbr \/\u003E\u003Cbr \/\u003EPeople interested in my writings about money might also want to check out my classic essay on monetary origins, \u003Ca href=\"http:\/\/szabo.best.vwh.net\/shell.html\"\u003E\"Shelling Out: The Origins of Money\"\u003C\/a\u003E, my classic essay on \u003Ca href=\"http:\/\/szabo.best.vwh.net\/micropayments.html\"\u003Emicropayments\u003C\/a\u003E, and my \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2008\/06\/commodity-hysteria-overview.html\"\u003Eoverview\u003C\/a\u003E of the monetary reasons for the broad-based commodity price increases over the last decade and in particular over the last five years."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/724641639318207020\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/724641639318207020","title":"3 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/724641639318207020"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/724641639318207020"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2008\/07\/too-big-to-fail.html","title":"Too big to fail"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"3"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-2366024889397728845"},"published":{"$t":"2008-07-17T16:49:00.000-07:00"},"updated":{"$t":"2008-07-17T20:05:51.724-07:00"},"title":{"type":"text","$t":"So much for the \"risk-free investment\""},"content":{"type":"html","$t":"Last week the default risk on U.S. Treasury bonds doubled.  This week it has increased still more.  This risk is measured by credit default swaps (CDS's), which insure investors against bond defaults.  Of course this risk, contrary to a very stupid but very popular myth among U.S. economists, has never has been zero: there is no such thing as a \"risk-free\" investment.  Anybody with a modicum of knowledge of economic history knows (in other words, alas, very few people know) that over historical timeframes government defaults on their debt, both overt and covert (through inflation), are common.  Indeed over \u003E20 year timeframes even stocks are less risky than government bonds, but for shorter timeframes bonds are, in nominal terms at least, normally far less volatile than stocks.  \u003Ca href=\"http:\/\/www.reuters.com\/article\/marketsNews\/idUSN1121920080711\"\u003EReuters\u003C\/a\u003E observed,\u003Cbr \/\u003E\u003Cblockquote\u003EThe cost to insure Treasury debt with credit default swaps jumped to 16.5 basis points, or $16,500 per year for five years to insure $10 million in debt, from 8 basis points on Thursday, an analyst said....Debt protection costs on U.S. government debt are now higher than those for Germany, which trades at 9.5 basis points, and are trading at similar levels as Japan and the United Kingdom, which are around 16.5 basis points, the analyst said.\u003C\/blockquote\u003E\u003Cbr \/\u003ESo far this week it has increased to 22 basis points for five years of default insurance. \u003Ca href=\"http:\/\/www.bloomberg.com\/apps\/news?pid=newsarchive\u0026sid=aTO9F5KF1.ww\"\u003EBloomberg\u003C\/a\u003E observes the probable cause of this increased risk:\u003Cbr \/\u003E\u003Cblockquote\u003ETreasury Secretary Henry Paulson said July 13 the U.S. would seek authority from Congress to buy unlimited equity in so-called government-sponsored enterprises Fannie Mae and Freddie Mac and to extend them as much credit as needed. The move effectively put the weight of the treasury behind the companies, which own or guarantee almost half of the $12 trillion in U.S. home loans outstanding. The Federal Reserve also agreed to lend directly to Fannie Mae and Freddie Mac.\u003C\/blockquote\u003E\u003Cbr \/\u003EIn other words, not only is the Federal Reserve now \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2008\/05\/ben-bernanke-plays-john-law.html\"\u003Eplaying John Law\u003C\/a\u003E by printing dollars to buy bad real estate investments, but now the federal government has declared its willingness to get in on the act in an even bigger way.\u003Cbr \/\u003E\u003Cbr \/\u003ENote that default risks measured by CDS's do \u003Ci\u003Enot\u003C\/i\u003E include the risks of what are effectively ongoing \u003Ci\u003Ede facto\u003C\/i\u003E mini-defaults on all dollar-denominated debt due to inflation, risks that have been rising substantially over the past ten years, as reflected by the prices of the main insurance against inflation risk, \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2008\/06\/commodity-hysteria-overview.html\"\u003Ecommodities\u003C\/a\u003E.\u003Cbr \/\u003E\u003Cbr \/\u003EIn the U.S. there have been a number of de facto inflationary defaults on U.S. federal debt -- the Revolutionary War (Continentals), Civil War (Greenbacks), Great Depression (resetting the gold conversion rate).  The largest de facto default occured in the 1970s (float and inflation) and we are in the midst of one currently (float and inflation) that may turn out to be even larger.  But the only overt default on \"national\" governmental debt in our 232-year history was that of the Confederate States of America in the throes of losing its war against the (rest of the) U.S.   \u003Cbr \/\u003E\u003Cbr \/\u003ECompared to the 1970s, oil is responding faster and more completely to Fed inflation, and oil remains a crucial part of our industries.  As a result, the havoc caused by high oil prices may put a stronger limit this time on how quickly the Fed shredder can dispose of the real value of U.S. paper.  If the degree covert default is thus limited, but the risk of default increases, the risk of overt default rises.   The market last week seemed to be saying that the Fed may be starting to approach some such limit, perhaps a political limit due to hysteria over gas and food prices, on its practical ability to inflate the U.S. currency.  In other words, markets may be saying the Fed cannot necessary resort to a Weimar- or Zimbabwe-style hyperinflation -- that if federal financing gets to that extreme U.S. politicians may choose to overtly default instead.   \u003Cbr \/\u003E\u003Cbr \/\u003EThe city of Vacaville, California recently overtly defaulted on its debt, as have a number of other municipalities in the U.S.  Worldwide overt defaults on government debt during the second half of the 20th century usually occured in Third and Second World governments (e.g. Russia in the 1990s), but there were a large number of overt government defaults in governments of all sorts early in the Great Depression (indeed these were a leading cause of that economic disaster), and in prior centuries government defaults wherever governments borrowed money, including leading nations in Western Europe, were common.  Mature democracies with central banks that can engage in covert defaults (inflation) have had a far lower rate of overt defaults than other forms of government or democracies without central banks.\u003Cbr \/\u003E\u003Cbr \/\u003EThat the risk of \u003Ci\u003Eovert\u003C\/i\u003E default has now substantially increased means that investors are are recognizing that the unprecedented revenue-generating combination created in 1913 -- IRS (which has been able to reliably collect $trillions per year) and the Federal Reserve (which has been reliably able to enage in covert gradual defaults by printing money to buy $trillions worth of Treasury debt per year) -- is not indestructible.  U.S. Treasuries, like every other investment, have never been risk-free and they've just gotten quite a bit riskier.  Nevertheless compared to historical averages for governments, the risk of overt default by that powerhouse 1913 duo is pretty low.   With very high probability they will keep paying interest and principal on their debt while me and my fellow U.S. taxpayers will keep having to shell out substantial sums to the IRS every year, and see our dollars frittered away every year, that this dynamic duo may continue to uphold \"the good faith and credit of the United States\" while the discreditable activities, often done in rather poor faith, of the federal government in \"redistributing\" wealth, attacking foreign countries in very expensive ways, promising vast pensions that it cannot pay, promising health care that it cannot fund, and forcing private businesses to do bizarre things (like take on vast amounts of moral hazard by lending into \"underserved communities\", and to actually fund those government medical mandates) continues.\u003Cbr \/\u003E\u003Cbr \/\u003EIn related financial news, what I've been predicting for a long time would happen is starting to happen: the U.S. dollar inflation indices PPI and CPI, despite being under-reported compared to prior decades (due to a radical revision of the formulae), are starting to rise to 1970s rates of increase.  Sticky prices in manufactured goods and services, as well as wages (the stickiest prices of all), are playing a very long-term game of catch-up to commodity prices, and especially to gold and oil, which are leading indicators of inflation.  I continue to predict 5%-15%\/year increases in the CPI and PPI, and probable \"stagflation\" (inflation plus recession, which according to Keynesians is not supposed to happen), until such time as they catch up to the commodity price increases.  Commodity prices themselves, despite their stratospheric levels, may continue to increase as the Federal Reserve tries to deal with large government deficits and the fallout from the awful moral hazard in our housing markets, a moral hazard in no small part due to previous inflationary policy by the Fed itself combined with the outrageous pressures from U.S. politicians to relax lending standards in order to get people to buy houses in \"under-served communities\" and naive \"real estate always goes up\" bubble behavior on the part of the real estate industry and house buyers.  The Fed-and-IRS-backed political franchises Freddie Mac and Fannie Mae have been moral hazard disasters waiting to happen.   Inflation is still by far the largest problem these federal activities are causing; the doubling of the overt default risk is just an interesting related blip.  My recommendation: keep only spending money, not savings or long-term investments, in dollars or dollar-denominated debt, and keep trying to unstick your own wages by frequently asking your boss for a big raise.\u003Cbr \/\u003E\u003Cbr \/\u003EOn the increase in Treasury default risk  H\/T to \u003Ca href=\"http:\/\/www.marginalrevolution.com\/marginalrevolution\/2008\/07\/risk-free-no-lo.html\"\u003EAlex Tabarrok\u003C\/a\u003E."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/2366024889397728845\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/2366024889397728845","title":"4 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/2366024889397728845"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/2366024889397728845"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2008\/07\/so-much-for-risk-free-investment.html","title":"So much for the \"risk-free investment\""}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"4"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-5336388631738047740"},"published":{"$t":"2008-07-14T18:44:00.000-07:00"},"updated":{"$t":"2008-07-14T20:01:31.947-07:00"},"title":{"type":"text","$t":"Hampton Sides sheds light on Mancur Olson and Ronald Coase"},"content":{"type":"html","$t":"\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhkOHsuumH3KQBgS2aSNfTY7Uf9pHoVBRqslJjK0rtNMebbtci0A8ZsMCzp1sSs9BlL7Hn8WDIyz-9MXLdTd-H8eq-pnimE-HDJhihP6qOyxDrS3bvNk0NJ1Za22OV1m2gOmKym\/s1600-h\/2006-10-12-hamptonSides-photo1.jpg\"\u003E\u003Cimg style=\"float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhkOHsuumH3KQBgS2aSNfTY7Uf9pHoVBRqslJjK0rtNMebbtci0A8ZsMCzp1sSs9BlL7Hn8WDIyz-9MXLdTd-H8eq-pnimE-HDJhihP6qOyxDrS3bvNk0NJ1Za22OV1m2gOmKym\/s320\/2006-10-12-hamptonSides-photo1.jpg\" border=\"0\" alt=\"\"id=\"BLOGGER_PHOTO_ID_5223054707941656674\" \/\u003E\u003C\/a\u003EHampton Sides' book \u003Ci\u003EBlood and Thunder\u003C\/i\u003E is a detailed and colorful account of the Western frontier in the United States around the mid-19th century, mostly from the Mexican War to the Civil War.  It is half biography of the trapper, guide, and soldier Kit Carson, who participated in a wide variety of interesting and important events, and half general history, mostly of what is now the Southwestern U.S. and much of that in New Mexico, where Navajo, Apache, Pueblo, Mexicans, and Americans collided.  There is also some coverage of the prior history and prehistory of the Mexicans and \"Indian\" (aboriginal American) tribes in the area. Sides seems to have no theoretical axe to grind, and indeed doesn't try to explain events in terms of political or economic theories, but rather simply relates a large number of incidents in unabashed detail, letting readers draw whatever theories, if any, the reader might wish to draw.   Nevertheless Sides' account of the old U.S. frontier does shed quite a bit of light on a number of theoretical topics I have discussed here.\u003Cbr \/\u003E\u003Cbr \/\u003EMost of the book involves interactions between Indian tribes, often nomadic, and agricultural-based Mexican and Anglo-Saxon cultures.  The Navajo, for example, were nomadic herders that also profited from stealing, usually livestock, from nearby Pueblo, Mexican, and later United States ranches.   In his account of prehistory Sides relates how, a few hundred years before Columbus, the spectacular pueblos (apartment buildings) of the Anasazi farm-based civilization in the Chaco Canyon were abandoned just as the Navajo were migrating into Anasazi territory from the north.   Sides invokes as the main reason the popular ecological theory: that the Anasazi declined due to depleting nearby resources such as soils and forests, and suggests the Navajo as a contributing reason.\u003Cbr \/\u003E\u003Cbr \/\u003EI think this gets it backwards.   The Navajo entry at the same time the Anasazi's pueblos were abandoned is no coincidence, it is the main cause.   Faced by a militarily superior group of roving bandits, the Anasazi's \u003Ca href=\"http:\/\/szabo.best.vwh.net\/history.html\"\u003Eagricultural property was no longer secure\u003C\/a\u003E.   The Anasazi, ruled by stationary bandits, were conquered by the Navajo, nomadic herders and hunters.  Further evidence that Mancur Olson's bandit theory, rather than ecological theory, explains the abandonment of their civilization in the Chaco Canyon is that the Anasazi culture didn't disappear, it declined and moved.  Their descendants are the Pueblo Indians, and they dispersed to build a pueblos at the fringes of the Navajo territory.  (\"Anasazi\", incidentally, is a Navajo term meaning \"ancestors of our enemies\").  Accelerated depletion of resources is a symptom of insecure property rights: where property is insecure people act (with respect to natural resources rather than with respect to fellow humans) as roving bandits, whereas secure property owners extract their resources like stationary bandits, i.e. at a much lower and far more sustainable rate.\u003Cbr \/\u003E\u003Cbr \/\u003EPer Olson the Navajo, being roving bandits (with respect to both people and fixed resources) would have had a far higher Laffer maximum extortion rate and thus were not able to accumulate wealth to support a level of civilization nearly as high as the Anasazi under stationary bandits had supported.   The Pueblo Indians and later the Mexicans who bordered the Navajos and other roving bandit cultures were able to support agriculture, but were far poorer than other most other fully agricultural regions of the time due to the costs of Navajo and Apache raids.  The fall of the Anasazi was hardly the first time roving bandits had conquered stationary bandits causing a massive decline in wealth and civilization: it is a common pattern throughout history.\u003Cbr \/\u003E\u003Cbr \/\u003E(Incidentally, the Laffer maximum for banditry from a sedentary neighbor, where there are a few but not many competing bandits, is probably somewhere in between the maxima for fully roving and fully stationary bandits: Sides recounts how the Navajo would not steal \u003Ci\u003Eevery\u003C\/i\u003E animal from their Pueblo or Mexican neighbors during raids, but made sure to leave them enough breeding stock to rebuild their herds).\u003Cbr \/\u003E\u003Cbr \/\u003EThere are a large number of people who, following David Friedman, use the Coase Theorem as if it applied to the coercive bargaining that occurs in an anarchy.  Sides' relentless accounts of attacks and reprisals put a lie to this \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2008\/05\/coase-theorem-is-false-contracts-depend.html\"\u003ECoaseian\u003C\/a\u003E analysis of anarchy.  The Navajo came as close, perhaps, to anarchy has any recorded culture has ever come.  They had, for example, no sovereign leaders with which to make binding treaties.  When American generals tried to make treaties with individuals they thought were Navajo chiefs, they would find that said \"chiefs\" could not actually enforce treaty terms, at least not beyond their own small band.   Thus promises, for example, by Navajo \"chiefs\" to stop animal-stealing raids turned out to be unenforceable, because these \"chiefs\" could not actually punish young men in the many other Navajo bands for their raiding.  (Even with sovereign governments there is still a tension between limiting the scope of sovereign power, e.g. by a doctrine of enumerated powers or by federalism, and giving the federal government complete \"freedom of treaty\", i.e. the ability to enter treaties on any subject, or at least in suppression of any kind of coercion, that they can actually enforce against their citizens and residents). \u003Cbr \/\u003E\u003Cbr \/\u003ECoercion in all the forms one can imagine, and many that one would rather not try to imagine, was endemic to life among the native American tribes and to relations between those tribes and encroaching civilizations of the Mexicans and later Americans.  Raids involving theft (especially of livestock), looting, kidnapping, rape, murder, war, massacre, torture, extortion, mutilation of the living and the dead, and many other, shall we say, non-Coaseian interactions were a normal part of the external relationships between the Indian tribes and between the encroaching civilizations and those tribes.  \"Counting coup\", that is keeping track of wrongs that needed to be avenged, was standard among the Indian cultures and became standard among people like Kit Carson who dealt with them.   Another interesting phenomenon is that the tit-for-tat cycle of violence between tribes was often based on group blame: rather than solving the (usually insurmountable) problem of identifying and punishing the particular perpetrators, missions of vengeance would usually target relatives, fellow tribe members, or even broader groups that happened to be convenient.  Sometimes Indians aggrieved by a white attack would even take revenge on whites generally, for example the next group of white emigrants to come down the Santa Fe Trail, and this far too often happened in the reverse direction as well.  Sometimes individual blame morphed into group blame when a tribe to which an alleged perpetrator was thought to belong failed to arrest and surrender the accused.   This circumstance was especially used by American armies to justify invasion, massacre, and ethnic cleansing of tribes that refused to surrender or punish (often because they had no sovereign power to capture or punish) their thieves, kidnappers, and murderers.  The role such group blame plays in contemporary politics is left as an exercise for the reader. \u003Cbr \/\u003E\u003Cbr \/\u003EMancur Olson's explanations fit Sides' detailed accounts of life in an anarchy far better than the the Coaseians'. The trajectories of the Anasazi, Navajo, Pueblo, Mexicans, and Americans are classic cases of interactions between stationary and roving bandits. The Laffer maximum extortion of the stationary bandit is far lower than the combined Laffer maxima of the roving bandits.   Most kinds of farms can operate economically only if those stealing from the farm are stationary rather than roving.\u003Cbr \/\u003E\u003Cbr \/\u003EFinally, Sides gives a sad account of the utopian social engineering that led to America's Indian reservation system.  Bosque Redondo (the Round Forest) is a tragic example of this: an idealistic general of New England upbringing,  a forerunner is spirit at least of the Bellamies, rounded up the Navajos, marched them off to a promising-looking but empty stretch of the Pecos River and tried to teach them sedentary agriculture.  The general's overall reason for for conducting this experiment was not inaccurate: in Olson's terms, the Navajo would give up their roving banditry only if converted into (or put under the thumb of) stationary bandits.  But just as the Navajos did not learn to live like Anasazi, but instead displaced the Anasazi culture with their own, so they could not readily learn to live like Mexicans or Americans, or even like Pueblo Indians.  For example, for religious reasons they stubbornly refused to live in pueblos (apartment buildings) and these had to be abandoned.  Worse, the project had most of the trappings of utopia we would later see in the Soviet Union: forced concentration and mass movement of peoples, communal farms, and military-style central planning.  The communal property and military command structure under which the Navajo were subjected utterly failed to replicate the property rights and other crucial aspects of legal systems under which Mexicans and Americans had successfully conducted their agriculture.   The Bosque Redondo experiment was a miserable and deadly failure.  Stationary bandits can also destroy rather than allow the building of civilization if their policies are sufficiently pathological."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/5336388631738047740\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/5336388631738047740","title":"2 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/5336388631738047740"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/5336388631738047740"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2008\/07\/hampton-sides-sheds-light-on-mancur.html","title":"Hampton Sides sheds light on Mancur Olson and Ronald Coase"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"media$thumbnail":{"xmlns$media":"http://search.yahoo.com/mrss/","url":"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhkOHsuumH3KQBgS2aSNfTY7Uf9pHoVBRqslJjK0rtNMebbtci0A8ZsMCzp1sSs9BlL7Hn8WDIyz-9MXLdTd-H8eq-pnimE-HDJhihP6qOyxDrS3bvNk0NJ1Za22OV1m2gOmKym\/s72-c\/2006-10-12-hamptonSides-photo1.jpg","height":"72","width":"72"},"thr$total":{"$t":"2"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-5995458569373078956"},"published":{"$t":"2008-06-24T10:40:00.000-07:00"},"updated":{"$t":"2008-06-24T13:19:15.992-07:00"},"title":{"type":"text","$t":"Commodity hysteria -- an overview"},"content":{"type":"html","$t":"Congress is going crazy over commodities, and especially over oil.   They are convinced that we have a commodities bubble, so that all they have to do is smash down their boogymen, \"the speculators\", and all will be hunky dory.  They are convinced of this because those supply\/demand curves in the first chapter of our Econ 101 textbook no longer seem to be working for commodities.\u003Cbr \/\u003E\u003Cbr \/\u003EThis article provides an overview of the state of the commodities markets -- follow the links for more explanation of the various topics.\u003Cbr \/\u003E\u003Cbr \/\u003EThose supply\/demand curves in the first chapter of your Econ 101 textbook assumed that goods are sold for some fix standard of value, a currency.  But under floating currencies, which the world has had since the U.S. went off gold in 1970, there is no fixed standard of value.  When trading commodities, supply and demand for the \u003Ci\u003Ecurrencies\u003C\/i\u003E they are traded for must now be taken into account.  A long commodity position is also a short currency position, and vice versa.  Furthermore, \u003Ci\u003Eexpectations\u003C\/i\u003E about \u003Ci\u003Efuture\u003C\/i\u003E supply and demand for currencies must be accounted for.   Under floating currencies and a free market in commodities, commodity prices, especially for commodities like oil and gold where the stockpile (whether below or above ground) to production ratio is very high and storage costs low, are highly volatile – \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2008\/06\/commodities-currencies-and-st.html\"\u003Ea small change in inflation expectations causes a very large change in commodity prices.\u003C\/a\u003E  The commodities themselves start to act like gold: to \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2008\/03\/monetary-value-of-liquid-commodities.html\"\u003Etake on monetary functions \u003C\/a\u003Esuch as a store of value or a hedge for currency-denominated debt.  The \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2008\/03\/logical-emergence-of-money-from-barter.html\"\u003Elogical emergence of money from barter \u003C\/a\u003Eis taking place every day as commodities come to serve these monetary functions better than floating currencies.\u003Cbr \/\u003E\u003Cbr \/\u003EThe critics complain that commodities markets, no longer reflecting Econ 101 supply and demand, are no longer providing reliable price signals.  In fact commodity prices still are reflecting Econ 101 supply and demand, but this often tends to get buried in the noise of the much larger price changes caused by changes in inflation expectations.  The fault lies with \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2008\/05\/ben-bernanke-plays-john-law.html\"\u003Epoorly managed\u003C\/a\u003E floating currencies, not with attempts by currencies users to protect against the damage done by floating currencies, for example by hedging their dollar-denominated investment portfolios with long commodity positions.  Trying to stop \"speculation\" will be like curing a fever by attacking the immune system.  You may get rid of the fever, but you won't get rid of the flu, and the patient, no longer protected, may end up six feet under.\u003Cbr \/\u003E\u003Cbr \/\u003EThe evidence for all this, such as the great rise in the use of \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2008\/04\/commodity-derivatives-new-currencies.html\"\u003Ecommodity derivatives\u003C\/a\u003E and \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2008\/06\/war-against-retirees.html\"\u003Ecommodity index ETFs \u003C\/a\u003E(exchange-traded funds) and ETNs (exchange-traded notes) by long-term investors such as pension funds, endowments, and sovereign wealth funds, in parallel the great recent rises in commodity prices, are lumped by critics under their derogatory label of \"speculation.\"  Another, and probably even larger, source of the oil run-up are \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2008\/04\/hoarding-and-speculation-of-commodities.html\"\u003Edecisions by producers to keep oil in the ground \u003C\/a\u003E(where its storage costs are cheapest) rather than pump it only to sell it for depreciating dollars.   Similarly, there has been a great deal of informal \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2008\/04\/hoarding-and-speculation-of-commodities.html\"\u003E\"hoarding\"\u003C\/a\u003E of food.  Here the commodity is being stored by those who expect to consume, or who expect their customers to consume, the commodity in the future.  The stockpile is a hedge against both the falling currencies and political risk that governments might hoard and ration the food.  This “tacit speculation” too reflects an increase in inflation expectations.  If or when inflation expectations decrease, we can expect (contrary to “peak oil” theory) oil pumping to greatly increase, as having dollars will once again become more valuable than having oil in the ground, and we can expect informal food stockpiles to be drawn down and food prices to drop.\u003Cbr \/\u003E\u003Cbr \/\u003EThese are all attempts to preserve wealth in the face of a highly uncertain, and probably falling, value of the future dollar and other floating currencies.  In the era of floating currencies, not only are commodities a legitimate asset class, they are an essential asset class.  Floating currencies add a very large and dominating amount of noise to commodity price signals when inflation expectations change, but there is no easy fix for this problem. \u003Cbr \/\u003E\u003Cbr \/\u003EAttacks against commodity \"speculation\" are attacks against efforts to protect property and markets against highly uncertain currencies.  Without this protection, economies will be in grave danger of wealth destruction.  Instead of attacking \"speculation\", the great increase in trade of \"paper barrels\" or \"video barrels\" should be encouraged.  The more commodities can be traded as bits instead of by shipping physical commodities, the lower the transaction costs that will be imposed on tradition physical delivery markets.  The \"rolling-over\" of commodities futures -- when expiring futures are swapped for distant futures instead of taking delivery of the physical commodity -- should be formalized in long-term commodities  securities that minimally disrupt traditional \"commercial\" commodity hedging operations. \u003Cbr \/\u003E\u003Cbr \/\u003EWe may be seeing only the first stages of a switch from floating currencies, which may be proving to be unworkable, to commodity-backed currencies.  Floating currencies were and are a great historical experiment, and there is no guarantee that such experiments will work out in the long run. By serving monetary functions such as stores of value and hedges against currency-denominated debt, commodity index ETFs and ETNs are starting to serve as monetary substitutes.  But the benefits so far have been limited to investors and other big players.  Those saving for retirement or who will have to pay for their child's education are benefitting from the use of commodity long positions to stablize pension and endowment funds against falling currencies and protect them against future inflation.  But we still have to take our wages in floating currencies, hold our checking and savings accounts in floating currencies, and pay or be paid our debts in floating currencies.  Can commodity money move from Wall Street to Main Street?\u003Cbr \/\u003E\u003Cbr \/\u003EThere are, alas, great legal barriers to retail commodity money.  While legal barriers often just increase costs by a few basis points for Wall Street, they usually prove insuperable for the man in the street.  To remove these legal barriers, contracts in any part of the economy should be allowed to use commodity index ETFs or other standards of choice as payment terms.  Negotiable instruments law in the U.S. must be changed to allow payments by check, money order, etc. in commodity standards to compete against government currencies on a level playing field.  Legal tender laws requiring an option to pay debts in particular currencies should be eliminated in order to allow payment terms denominated in commodity indices to be as simple as payment terms denominated in dollars.  These kinds of reforms will bring the benefits of stable commodity money from Wall Street to the man in the street. \u003Cbr \/\u003E\u003Cbr \/\u003EIf the Federal Reserve decided to use leading indicators (e.g. commodities) instead of trailing indicators (e.g. the Consumer Price Index, CPI) to fight inflation, or decided to go to a \u003Ci\u003Ede facto\u003C\/i\u003E commodity index or back to the gold standard, and stopped bad practices such as \"printing\" dollars to swap for dubious real estate securities, we would not need to otherwise use commodities for monetary purposes.  If the Federal Reserve or the European Central Bank prove incable of providing a stable currency, commodity money will provide the long-term stability that our floating currencies since 1970 have usually not exhibited. The more governments try to fight the use of commodities for monetary purposes, the more painful the effects of poorly managed floating currencies will be, and the more painful the resulting transition from those floating currencies to commodity money will be."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/5995458569373078956\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/5995458569373078956","title":"6 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/5995458569373078956"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/5995458569373078956"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2008\/06\/commodity-hysteria-overview.html","title":"Commodity hysteria -- an overview"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"6"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-8764851273959524986"},"published":{"$t":"2008-06-23T13:54:00.000-07:00"},"updated":{"$t":"2008-06-25T11:20:36.671-07:00"},"title":{"type":"text","$t":"State vs. anarchy -- the false dichotomy"},"content":{"type":"html","$t":"The false dichotomy between \"state\" (or \"goverment\") and \"anarchy\" can be highlighted every time someone tries to come up with a coherently stated definition of either of these supposed opposites. If we take, for example, Hans-Hermann Hoppe's definition literally, a federalist system of governments like the United States is not a \"state\" at all, nor are a wide variety of other political systems that have or could exist that could hardly be called \"anarchies\".  Here's Hoppe:\u003Cbr \/\u003E\u003Cblockquote\u003ELet me begin with the definition of a state. What must an agent be able to do to qualify as a state? This agent must be able to insist that all conflicts among the inhabitants of a given territory be brought to him for ultimate decision-making or be subject to his final review. In particular, this agent must be able to insist that all conflicts involving himself be adjudicated by him or his agent. And implied in the power to exclude all others from acting as ultimate judge, as the second defining characteristic of a state, is the agent's power to tax: to unilaterally determine the price that justice seekers must pay for his services. [\u003Ca href=\"http:\/\/www.lewrockwell.com\/hoppe\/hoppe18.html\"\u003ESource\u003C\/a\u003E] \u003C\/blockquote\u003EI'm not trying to pick on anarchists like Hoppe here. Statist political scientists and politicians also oversimplify the world of politics and law with this false dichotomy.  This usually takes the form of observing that modern governments have feature X, and by two invalid steps of logic (that X is necessary for government and that without such government there is only lawless anarchy) concluding that anyplace lacking feature X would be a lawless anarchy.  \"Anarchy\" is thus used as a boogyman to justify all sorts of brutality, waste, and other wrongs perpetrated by modern governments.\u003Cbr \/\u003E\u003Cbr \/\u003ELet's start here:\u003Cbr \/\u003E\u003Cblockquote\u003EThis agent must be able to insist that all conflicts among the inhabitants of a given territory be brought to him for ultimate decision-making or be subject to his final review\u003C\/blockquote\u003EThe United States federal government does not \"insist that all conflicts among the inhabitants of a given territory be brought to [it] for ultimate decision-making\", nor even that all disputes are \"subject to [its] final review.\" Most disputes occur under State and local law, and the final arbiters of State law are State supreme courts. Only in the minority of cases where a dispute raises a question of federal law, or involves people from multiple states, do federal courts assert jurisdiction. Nor, of course, do States hold an all-encompassing monopoly of power -- many issues instead come under local or federal jurisdiction. Furthermore, federal, State, and local governments all have overlapping powers of taxation.\u003Cbr \/\u003E\u003Cbr \/\u003ENow it might be argued that some provisions of federal law, for example in the Constitution, are so ambiguous as to effectively allow federal courts to assert jurisdiction whenever they strongly desire to do so.  To the extent that there is merit in this argument, it only creates a conflict of interest because federal courts are able to judge the scope of their \u003Ci\u003Eown\u003C\/i\u003E power:\u003Cbr \/\u003E\u003Cblockquote\u003EIn particular, this agent must be able to insist that all conflicts involving himself be adjudicated by him or his agent.\u003C\/blockquote\u003EHoppe indeed identifies a serious defect in modern constitutions -- they violate the ancient common law maxim that no one should be a judge in his own case. But this defect is readily cured without the kind of radical from-scratch destruction and reconstruction of law and politics that the term \"anarchy\" suggests. The reforms needed to cure this defect (described in more detail \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2008\/03\/comments-on-united-states-constitution_19.html\"\u003Ehere\u003C\/a\u003E) are (1) selecting judges by a method completely independent of the other political branches, so that in no real sense would judges and those in other branches that they judge be agents of the same entity, or one the agent of the other, and (2) by reform of jurisdiction, for example by changing who has jurisdiction over constitutional questions. If federal courts were not selected by Presidents and Senates whose power they then judge, and if federal courts reviewed disputes involving state constitutions, and a super-federal court reviewed disputes involving the federal Constitution, so that they did not have final say over the scope of their \u003Ci\u003Eown\u003C\/i\u003E power, conflicts of interest of the kind that Hoppe rightly criticizes in modern governments would no longer commonly arise.\u003Cbr \/\u003E\u003Cbr \/\u003EWhat Hoppe is really arguing against can more accurately be called \"sovereignty\", the idea of one entity with a monopoly over all coercive powers in a territory, than \"state\" or \"government.\" There are plenty of configurations of coercive power, in fact most such configurations over most of history, that do not involve this kind of sovereignty. In highlighting the problems of sovereignty I quite agree with him, but observe that the United States and many other historical and current polities are or were not \"sovereign\" in this sense, and many historical entities (such as the system of \u003Ca href=\"http:\/\/papers.ssrn.com\/sol3\/papers.cfm?abstract_id=936314\"\u003Epolitical property rights\u003C\/a\u003E over most of English history) were not even close.\u003Cbr \/\u003E\u003Cbr \/\u003EThose of us who would like to greatly reduce the brutal and wasteful powers of modern governments do ourselves a great disservice by adopting the statist term \"anarchist.\"  Anarchy is the boogyman of statists.  A libertarian calling himself an \"anarchist\" is like an agnostic or atheist calling himself a \"Satanist.\"  Seek not for imaginary opposites, but for real alternatives."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/8764851273959524986\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/8764851273959524986","title":"3 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/8764851273959524986"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/8764851273959524986"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2008\/06\/state-vs-anarchy-false-dichotomy.html","title":"State vs. anarchy -- the false dichotomy"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"3"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-4192047033406059785"},"published":{"$t":"2008-06-20T14:13:00.000-07:00"},"updated":{"$t":"2008-06-24T19:32:16.429-07:00"},"title":{"type":"text","$t":"Green beards and master genes"},"content":{"type":"html","$t":"\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEg21FHQrGbdI1xMg486J1k-gZ50h7ByIq25ENDj5aDY-pmaomTHMh39q2SS-3fDKI3VyKXzKtuMtziPs21EJx88vFt9enRCn6vpWe0T3DwTQn4DEQ05BfbUZiJ1VF6I_4LjiumN\/s1600-h\/machoblue.03-06-23.200.jpg\"\u003E\u003Cimg style=\"float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEg21FHQrGbdI1xMg486J1k-gZ50h7ByIq25ENDj5aDY-pmaomTHMh39q2SS-3fDKI3VyKXzKtuMtziPs21EJx88vFt9enRCn6vpWe0T3DwTQn4DEQ05BfbUZiJ1VF6I_4LjiumN\/s400\/machoblue.03-06-23.200.jpg\" border=\"0\" alt=\"\"id=\"BLOGGER_PHOTO_ID_5214083338973654610\" \/\u003E\u003C\/a\u003E There is a sense in which gene expression can be hierarchical: some genes are \"master genes\" that control the expression of many other genes.  In other words, they select which genes to express when.  It is thus entirely possible, and indeed in advanced organisms common, for a genome to encode a wide variety of phenotypes, only some of which get expressed, depending on the alleles of the master gene(s), on environmental cues, or both.   Master genes can control \u003Ca href=\"http:\/\/findarticles.com\/p\/articles\/mi_m1200\/is_n5_v140\/ai_11188084\"\u003Egender\u003C\/a\u003E, \u003Ca href=\"http:\/\/www.nytimes.com\/2005\/06\/03\/science\/03cell.html?_r=1\u0026oref=slogin\"\u003Esexual orientation\u003C\/a\u003E, and a wide variety of other complex structures and behavioral tendencies encoded for by complex assemblies of genes.  \u003Cbr \/\u003E\u003Cbr \/\u003EThe \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2006\/11\/are-green-beards-ubiquitous.html\"\u003Egreen beard effect\u003C\/a\u003E occurs when linked genes produce all three of the following: (1) a signal, (2) recognition of that signal in others, and (3) different behaviors (e.g. altruism) towards those exhibiting that signal.   If the genes can remain linked, organisms expressing the green beard allele can cooperate with each other and spread in the population.  Most evolutionary biologists, studying the genetic evolution of behaviors in animals, have tended to dismiss green beard effects as rare, because they have only rarely been unambiguously observed in the field, and because it's highly unlikely that genes can remain linked in this manner during sexual recombination.\u003Cbr \/\u003E\u003Cbr \/\u003EI strongly suspect that this view is mistaken.  It's hard to distinguish green beard from normal (\u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2006\/11\/are-green-beards-ubiquitous.html\"\u003E\"blue beard\"\u003C\/a\u003E) signalling and recognition systems (such as those involved in kin altruism, mother\/fetus interfaces, sexual selection, gender recognition, etc.)  Green beard effects usually evolve \"parasitically\" on already existing \"blue beard\" signalling systems.  Both of these make it difficult to recognize green beard effects, because they are usually strongly associated with existing \"blue beard\" signalling systems.  Furthermore, strong linkages are not nearly as rare as has been assumed, because of the existence of master genes that control the expression of many other genes.  Alternative alleles of a master gene could, for example, code for the selective expression of alternative strategies encoded in many other genes.  In other words, a wide variety of genes, each existing in all members of a species, could code for two or more complex strategies, with a master gene coding for \u003Ci\u003Ewhich\u003C\/i\u003E of the strategies actually gets expressed.\u003Cbr \/\u003E\u003Cbr \/\u003ENature provides a great example where I believe a master green beard gene is at work: the \u003Ca href=\"http:\/\/www.ucsc.edu\/currents\/02-03\/06-23\/lizards.html\"\u003Eside-blotched lizard\u003C\/a\u003E.  The male lizards have three different strategies for defending mates: dominance, sneakiness, and cooperative mate guarding.   Violating standard theory, these sexual strategies correspond to very distinct throat color patterns: orange, yellow, and blue.   Orange-throated lizards dominate a mate and territory and don't cooperate with other males in this task.  Yellow-throated lizards look and act like females, and sneak around cuckolding orange-throated lizards.  Blue-throated lizards cooperate to detect and fend off yellow lizards, but are weaker and can be defeated by yellow-throated lizards. The result is \u003Cbr \/\u003E\u003Cblockquote\u003Ea kind of \"rock-paper-scissors\" game, where orange defeats blue, blue defeats yellow, and yellow defeats orange. The result is an evolutionarily stable situation in which no single color morph can dominate the population...\u003Cbr \/\u003E\u003Cbr \/\u003EThe remarkable thing about the color morphs of side-blotched lizards is that an enormous range of behavioral, physiological, and life-history traits are correlated with throat color. Genes for different traits can be linked physically if they occur close together on a chromosome, but according to [evolutionary biologist Barry] Sinervo, throat color is linked to far more traits than could possibly be physically linked on the same chromosome.\u003Cbr \/\u003E\u003Cbr \/\u003EIt's almost as if the whole genome is tightly tethered to this one master locus,\" he said. \"In order to be a really 'good' blue, you have to have all these other alleles [of different genes] lined up in the right combination, and the same is true for orange and yellow color morphs. So there is strong selection for these different fitness combinations.\u003Cbr \/\u003E\u003Cbr \/\u003E\"The whole genome crystallizes into three types,\" Sinervo said. \"The alleles for all these different traits should be independent and separated on the chromosomes, yet the genes are interacting through this one locus.\"\u003C\/blockquote\u003EThe lizards, the throat color gene determining orange, yellow, or blue throat splotches seems to be tightly correlated to the rest of a distinct complex strategem. This is inexplicable by traditional arguments against the green beard, which assume that the alternative strategies are coded in three separate sets of alternative alleles, all of which must be expressed to work.  Being broken up and recombined every generation, they cannot stably evolve as distinct and competing sets of genes.  But the cooperation of the blue-throated lizards qualifies as a green beard effect, bringing this assumption into question.  The linkage of throat colors with complex behavioral strategies can be readily explained if \u003Ci\u003Eall three\u003C\/i\u003E strategies are encoded in \u003Ci\u003Eall\u003C\/i\u003E male side-blotched lizard genomes, and there is only one strong linkage, that is between the throat color gene and a gene that controls the expression of many other genes.   Indeed, I wouldn't be surprised if the throat color gene and the master gene were the same gene.\u003Cbr \/\u003E\u003Cbr \/\u003EThere are strong adaptive reasons for master genes to control complex assemblages in this way.  Behavioral strategies, and indeed structures and metabolic pathways, that are too complicated but not ubiquitous in a breeding population are encoded across too many unlinked genes. As a result they cannot survive sexual recombination. All advanced multi-cellular organisms thus have master genes or distinct chromosomes that control the expression of many other genes.  In the case of gender, distinct chromosomes are usually involved, but master genes can behave similarly, producing small sets of complicated  strategies, each strategy very distinct from each other and each a distinct alternative to the other. In information theory terms, there is a large information distance between each of the alternative strategies, just as there are many differences between the genes expressed in the development of a female versus those expressed in a male.  A wide variety of distinct morphological and behavioral traits are bundled into a small number (in the case of genders, typically two) of alternatives. A wide variety of other genes encode the distinct complex structures or strategies, to be invoked by master genes, developmental stages, and environmental cues.   Since the complicated parts of each strategy are encoded in \u003Ci\u003Eevery\u003C\/i\u003E member of the breeding population, there is no problem with sexual recombination breaking linkages between many genes encoding each strategy: each gene of each strategy is still there waiting, in the next generation, to be invoked by the master gene.\u003Cbr \/\u003E\u003Cbr \/\u003EI strongly suspect that master genes and green beard effects analyzed in this manner will shed light on a wide variety of puzzles in evolutionary biology, including sexual selection, sexual orientation, and racial and ethnic preferences that, under the assumption that green beard effects are not important, have long defied analysis or been assumed to be purely environmental."},"link":[{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/4192047033406059785"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/4192047033406059785"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2008\/06\/green-beards-and-master-genes.html","title":"Green beards and master genes"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"media$thumbnail":{"xmlns$media":"http://search.yahoo.com/mrss/","url":"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEg21FHQrGbdI1xMg486J1k-gZ50h7ByIq25ENDj5aDY-pmaomTHMh39q2SS-3fDKI3VyKXzKtuMtziPs21EJx88vFt9enRCn6vpWe0T3DwTQn4DEQ05BfbUZiJ1VF6I_4LjiumN\/s72-c\/machoblue.03-06-23.200.jpg","height":"72","width":"72"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-4252188589337227129"},"published":{"$t":"2008-06-09T16:50:00.000-07:00"},"updated":{"$t":"2008-06-30T15:11:28.912-07:00"},"title":{"type":"text","$t":"Commodities, currencies, and the St. Petersburg paradox"},"content":{"type":"html","$t":"Hal Finney \u003Ca href=\"http:\/\/www.overcomingbias.com\/2008\/06\/the-future-of-o.html?cid=118211992\"\u003Edescribes\u003C\/a\u003E the surprising results of the Hotelling model of nonrenewable commodities: \u003Cbr \/\u003E\u003Cblockquote\u003Eprices become much higher than the costs to produce the resource, the opposite situation from competitive markets in other kinds of commodities. Yet resource owners restrain production without the need for a cartel or any coordination.\u003C\/blockquote\u003EThis occurs because, under the Hotelling assumptions that the commodity is not renewable and cannot be substituted for (and of secure property rights, as David Friedman correctly points out) the commodity producer can choose between producing today or keeping it in the ground to produce tommorrow, with no fear of permanently losing sales to some competitor. Any sales lost to a competitor today draws down the competitor's fixed stores and can be recouped at any time in the future.\u003Cbr \/\u003E\u003Cbr \/\u003EWhat the Hotelling model does not properly account for is that these very characteristics also make these goods great substitutes or hedges for money. Hotelling looks at a \"fixed\" or \"prevailing\" interest rate, but we should really be looking at expectations of future interest rates, taking into account expectations of future inflation. And we should account for changes in these expectations. If we do so, I think we will find the model to have high explanatory power (albeit not high predictive power, since we can't outguess the market about future monetary conditions -- but the search for predictive as opposed to explanatory power in economic models is largely futile anyway).\u003Cbr \/\u003E\u003Cbr \/\u003EImagine a world with two currencies C1 and C2 and two nonrenewable minerals, M1 and M2. C1 money supply outstrips money demand by 10%\/year, and for C2 by 5%\/year (in other words, C1 \"inflates\" or \"falls\" by 10%\/year and C2 by 5%\/year). If the price has not properly increased to account for future expected inflation, people will prefer holding M1 and M2 to holding either of the currencies. They will play \"hot potato\" with the currencies: as soon as they obtain a currency in trade, they will try to purchase M1 or M2 with it. All holders of M1 or M2 will demand a stiff premium to exchange their minerals for falling currencies. What premium will they charge? In theory, the inflation premium is infinite: it is a \"net present value\" calculation of the depreciation of the currency into the infinite future. In practice, (as with the \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/St._Petersburg_Paradox\"\u003ESt. Petersburg paradox\u003C\/a\u003E, and because no commodity is perfectly nonrenewable or perfectly immune to substitution over the long term), the premium will just be very high: not only far higher than the cost of production, but also far higher than the Hotelling model under the assumption of no inflation. Inflation expectations will dominate the prices of M1 and M2 in C1 and C2.\u003Cbr \/\u003E\u003Cbr \/\u003ENow imagine that inflation expectations change. If expectations of inflation in C2 to infinity go down from 5% to zero, we have in theory a change of net present value of revenue streams from M1 and M2 in currency C2 from infinity to zero, and in practice just a very high drop. It takes only a small change in inflation expectations to send the prices of M1 and M2 in C1 and C2 soaring or plummeting.\u003Cbr \/\u003E\u003Cbr \/\u003ESince the standard Hotelling model predicts no abrubt price changes, and the monetary model does, the monetary model is a better choice for explaining the actual dramatic price movements in relatively nonrenewable commodities such as oil that we have observed.\u003Cbr \/\u003E\u003Cbr \/\u003EUnder imperfect information, since we have far better information about geology and technology than we do about future monetary conditions, and since uncertainty in monetary conditions produces far greater price changes than uncertainty about geology and technology, we can again conclude that abrupt changes such as we've seen are due almost entirely to changes in monetary expectations rather than in \"fundamentals\".\u003Cbr \/\u003E\u003Cbr \/\u003EFurthermore, when we see dramatic changes across a wide variety of commodities, being led by the less renewable commodities like oil, Occam's Razor (or equivalently, basic probability) tells us that there are not 100 different explanations for why 100 different commodities have all gone up dramatically. Rather, we need only two quite related explanations: changes in inflation and inflation expectations for the currencies they are priced in.\u003Cbr \/\u003E\u003Cbr \/\u003ETwo commodities that come relatively close to being Hotelling nonrenwable commodities are gold and oil. For gold, the above-ground stockpiles are far greater than the annual production. For oil, the below-ground stockpiles are far greater than the annual production. The price of gold has always historically been dominated by its role as money, monetary substitute, or hedge, or equivalent, and the price of oil is also coming to be so in an age of floating currencies and in the current decade of rising inflation expectations.   When we realize that Hotelling nonrenewable goods make better long-term stores of value than less renewable commodities, we can explain why, while all commodities have dramatically risen over the last three years, the surge in oil has been disproportionately dramatic, and even more dramatic than the rise of gold: the rise in oil combines an increasing use of oil as an inflation hedge (mostly by the producers themselves curtailing production), which effects oil but not gold (which has long been used this way), with increasing inflation expectations (which effect both gold and oil, and other commodities to a lesser extent).\u003Cbr \/\u003E\u003Cbr \/\u003EIt is often noted, in rebuttal to the theory that the falling dollar is mostly responsible for commodity price rises, that the dollar has fallen less gainst the euro, or against a basket of other currencies, than oil and many other commodities have risen in dollar terms. In other words, oil and most other commodities have also risen in euro terms, just less so. There are a number of problems with this argument as a way of dismissing monetary causes.\u003Cbr \/\u003E\u003Cbr \/\u003EThe first problem is that these statistics only record falls relative to other currencies. It assumes there is some currency out there, or some basket of currencies, that is a stable standard of value that we can measure against. But there isn't. It's quite possible, and indeed currently quite probable, that the euro etc. supply has also inflated (relative to demand for the currency), so that all major currencies are falling relative to a hypothetical stable standard of value. They are just falling by on average less than the dollar is falling.  Just because there is no standard to measure them against doesn't mean they can't collectively fall (or equivalently, that they can't all collectively inflate, as defined by greater supply, less demand, or both for the currency).\u003Cbr \/\u003E\u003Cbr \/\u003EAlso important is that the euro is too new and untested by time, and other currencies too small, for them to make good substitutes for the dollar. So when the dollar starts becoming dodgy, people turn to commodities to hedge debt denominated in unreliable currencies (which currently means practically all debt -- not just \"junk\" debt). So we have three monetary factors each causing commodity prices in dollars to rise:\u003Cbr \/\u003E\u003Cbr \/\u003E(1) More dollars chasing the same (in the short term relatively inelastic) supply of commodities. This directly effects only the dollar prices.\u003Cbr \/\u003E\u003Cbr \/\u003E(2) Greater demand for commodities as a substitute or hedge for currency-denominated debt, to hedge against further possible inflation.  Small changes in inflation expectations, as discussed above, can have large impacts on commodity prices. This increases commodity prices in all currencies.\u003Cbr \/\u003E\u003Cbr \/\u003E(3) A flight to safety from the credit crunch, creating more demand for safer forms of debt (e.g. U.S. Treasuries), and thus even more demand for commodities to hedge the currency risk from holding that debt. This increases commodity prices in all currencies.\u003Cbr \/\u003E\u003Cbr \/\u003ENo \"manipulation\" or irrational \"speculation\" is required to explain commodity prices, and there may not even be a bubble (although a bubble could easily arise under such conditions of high uncertainty).   Rising commodity prices, and in particular the disproportionate surge in oil, are mostly or entirely just a rational and efficient response to the poor state of the world's floating currencies and the credit crunch. \u003Cbr \/\u003E\u003Cbr \/\u003E(This post is based on previous comments I have made at other blogs, including in response to Hal's post linked to above)."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/4252188589337227129\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/4252188589337227129","title":"2 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/4252188589337227129"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/4252188589337227129"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2008\/06\/commodities-currencies-and-st.html","title":"Commodities, currencies, and the St. Petersburg paradox"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"2"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-9027778663336534182"},"published":{"$t":"2008-06-09T10:32:00.001-07:00"},"updated":{"$t":"2008-06-09T12:00:12.759-07:00"},"title":{"type":"text","$t":"U.S. Supreme Court breathes new life into first sale rule"},"content":{"type":"html","$t":"The United States Court of Appeals for the Federal Circuit, which usually has the final say on most U.S. patent appeals, and thus the most influence on the development of U.S. patent law, has recently been eroding \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2006\/08\/conservation-of-rights.html\"\u003Econservation of rights\u003C\/a\u003E, the principle that you cannot sell or claim more than you own, and in particular that you can't reclaim it once you sell it.  Under the patent exhaustion rule, which is as old as patent law itself, patent rights are exhausted upon the first sale of an object embodying the patent.  The patent holder is effectively allowed to sell the patent rights once per object, rather than maintaining control shared control over the object with the object's owners and possessors through its entire lifetime.   The patent holder is allowed to collect a royalty only once per object.  Once the first sale occurs, the object reverts from being held in a tangle of intellectual property, with a potential wide variety of \"owners\" imposing a wide variety of restrictions, to being owned outright by a single person or express partnership as traditional (i.e. real or personal) property.\u003Cbr \/\u003E\u003Cbr \/\u003EThe Federal Circuit has eroded this principle in a number of ways: by ignoring foreign sales (so that for example an object first sold in Canada under a Canadian patent, then imported into the U.S., comes under the thrall of the equivalent U.S. patent), by excluding certain kinds of patents from the rule, and by changing the default rule for implied licenses (i.e. ruling that the default implication was that resale was not allowed, effectively extending patent rights beyond the first sale), etc.   In some cases patent rights seem to disappear, but then reappear later on in the lifetime of the object.  In other cases the patent holder maintains a continued shared control of the object over its entire lifetime, despite any changes of normal ownership and possession over the object.  \u003Cbr \/\u003E\u003Cbr \/\u003EThe Supreme Court today in \u003Ci\u003EQuanta Computer v. LG Electronics\u003C\/i\u003E reversed, 9-0, the erosion of the first sale rule via change of default rules and via the exception of certain kinds of patents.  LG Electronics had licensed its patents to Intel, and Intel sold chips it made using that technology to Quanta, and LG sued Quanta for infringement.  The Supreme Court held that all kinds of patents are covered by the first sale rule, and that  the default (implied) patent license terms assume no further rights of the patent holder over the object:\u003Cbr \/\u003E\u003Cblockquote\u003EThe authorized sale of an article that substantially\u003Cbr \/\u003Eembodies a patent exhausts the patent holder’s rights and\u003Cbr \/\u003Eprevents the patent holder from invoking patent law to\u003Cbr \/\u003Econtrol postsale use of the article. Here, LGE licensed\u003Cbr \/\u003EIntel to practice any of its patents and to sell products\u003Cbr \/\u003Epracticing those patents. Intel’s microprocessors and\u003Cbr \/\u003Echipsets substantially embodied the LGE Patents because\u003Cbr \/\u003Ethey had no reasonable noninfringing use and included all\u003Cbr \/\u003Ethe inventive aspects of the patented methods. Nothing in\u003Cbr \/\u003Ethe License Agreement limited Intel’s ability to sell its\u003Cbr \/\u003Eproducts practicing the LGE Patents. Intel’s authorized\u003Cbr \/\u003Esale to Quanta thus took its products outside the scope of\u003Cbr \/\u003Ethe patent monopoly, and as a result, LGE can no longer\u003Cbr \/\u003Eassert its patent rights against Quanta. Accordingly, the\u003Cbr \/\u003Ejudgment of the Court of Appeals [Federal Circuit] is reversed.\u003C\/blockquote\u003ELG Electronics thought it could restrict subsequent use of the chips, and indeed had a cause of action directly against subsequent users of the chips (e.g. Quanta), via its license agreement with \u003Ci\u003EIntel\u003C\/i\u003E.   The Federal Circuit agreed with this pathological reasoning, but the Supreme Court shot them down:\u003Cbr \/\u003E\u003Cblockquote\u003ELGE points out that the License Agreement specifically disclaimed any license to third parties to practice the patents by combining licensed products with other components. But the question whether third parties received implied licenses is irrelevant because Quanta asserts its right to practice the patents based not on implied license but on exhaustion.\u003C\/blockquote\u003EImagine Alice could make a contract with her friend Bob which gave Alice the right to confiscate things that you or anybody else bought from Bob.  If property rights would be confiscated from third parties by contract on ad-hoc basis, there would be no effective property rights.  Contracts should never be able to impose duties on third parties.  Only property law (via deeds, licenses, etc.) can impose duties on subsequent owners or licensees, and these transactions should strictly adhere to conservation of rights and intellectual property exhaustion if they are not to interfere with others' property rights. \u003Cbr \/\u003E\u003Cbr \/\u003EFor property deeds to impose duties on subsequent owners, they must either be clear from the object itself (e.g. a physical object is obviously personal property clearly belongs to somebody) or they must be clearly written and publicly recorded (e.g. liens on personal property, real property deeds that define property boundaries and restrict use of the property, etc.)  Furthermore, there should generally be \u003Ci\u003Eone\u003C\/i\u003E set of restrictions based on \u003Ci\u003Eone\u003C\/i\u003E owner per object, or simple and well-known variations on that (e.g. joint tenancy), not a wide variety of restrictions stemming from a wide variety of people who \"own\" the object in different ways, i.e. intellectual property owners. An intellectual property license, when as here is not clear, should be construed to follow the default rules of intellectual property law, especially those rules like patent exhaustion that preserve a standard sphere of traditional property rights not entangled in a web of intellectual property.\u003Cbr \/\u003E\u003Cbr \/\u003EMy kudos go out to our highest court for defending traditional property rights against further erosion by the Federal Circuit's pathological interpretations of intellectual property law.\u003Cbr \/\u003E\u003Cbr \/\u003EHere is \u003Ca href=\"http:\/\/www.patentlyo.com\/patent\/2008\/06\/supreme-court-d.html\"\u003EDennis Crouch's take\u003C\/a\u003E on the case."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/9027778663336534182\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/9027778663336534182","title":"1 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/9027778663336534182"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/9027778663336534182"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2008\/06\/us-supreme-court-breathes-new-life-into.html","title":"U.S. Supreme Court breathes new life into first sale rule"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"1"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-611036962892003414"},"published":{"$t":"2008-06-04T13:19:00.000-07:00"},"updated":{"$t":"2008-06-04T19:21:46.420-07:00"},"title":{"type":"text","$t":"The war against retirees"},"content":{"type":"html","$t":"\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjfz58ro01fZ0VjDjoQZ8j3MYihhgW5gXIbI6yEvR6WeJ5uPOfCZB6TkpV6sBR7sBGOeCd6TpPR-DIeU1gJgQlkPYFMnEoKFr7hMg0L6qU72Gz57PYi-nJJdlXrcEwCE_D-bvnE\/s1600-h\/CommodityIndexTrading_Vs_CommodityPrices.bmp\"\u003E\u003Cimg style=\"float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjfz58ro01fZ0VjDjoQZ8j3MYihhgW5gXIbI6yEvR6WeJ5uPOfCZB6TkpV6sBR7sBGOeCd6TpPR-DIeU1gJgQlkPYFMnEoKFr7hMg0L6qU72Gz57PYi-nJJdlXrcEwCE_D-bvnE\/s400\/CommodityIndexTrading_Vs_CommodityPrices.bmp\" border=\"0\" alt=\"\"id=\"BLOGGER_PHOTO_ID_5208135382657630498\" \/\u003E\u003C\/a\u003EI am quite chagrined that a number of influential folks have almost reached the same conclusion as I, namely they've concluded that \"speculation\" not fundamentals are driving most of the recent commodities rise, yet they reach a policy conclusion that is utterly insane: restrict or ban much of this \"speculation\".  They stop at the word \"speculation\", repelled in horror by the idea, and don't take it a step farther -- ask why this \"speculation\" is going on. A good clue comes from those responsible for the biggest piece of it -- retirement funds. Retirement funds have long been heavy, relative to other kinds of funds, on less volatile (over \u003C15 year periods) investments like bonds. But bonds are mostly denominated in dollars. With the threat of dollar inflation (apparent from the recent drop in the dollar, from \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2008\/05\/ben-bernanke-plays-john-law.html\"\u003Erecent Fed activity\u003C\/a\u003E, and from the history of the floating dollar in the 1970s) they have a fiduciary responsibility to protect their investors' retirement nest eggs by hedging bond positions with commodities baskets. And that is just what they have been doing.   Besides providing an inflation hedge and a performance comparable to bonds since the dawn of the floating dollar era in 1970, commodities are also \"anti-correlative\", i.e. they tend to move in the opposite direction of stocks and bonds, substantially reducing the risk of the overall portfolio.  To suggest that commodities are not proper vehicles for investment in this era of the floating dollar is stunningly pathological, but that hasn't stopped a number of people who should know better from suggesting this.\u003Cbr \/\u003E\u003Cbr \/\u003E(I suspect a similar explanation is behind much of the high Chinese demand -- but that rather than buying futures they are actually stockpiling commodities, including cutting back on production of the mineral reserves that they own, to hedge their peg to the U.S. dollar, their massive dollar earnings from exports, and their heavy investments in U.S. Treasuries, all of which are vulnerable to dollar drop or inflation -- but I don't know where data on such stockpiling activity might be readily available).\u003Cbr \/\u003E\u003Cbr \/\u003EMany of these retirement funds can be politically influential. I wish, for the sake of the retirees they have a duty to protect, they would defend themselves politically against the insane proposals to restrict or ban commodity index funds. Those seeking to save for retirement have perfectly good and strong reasons for investing in commodity indices: they don't want to see their retirement funds eroded away by inflation, as happened to millions of seniors in the 1970s. More generally, people have a right to be free from ignorant government interference and federal spite when they choose to hold their savings in forms protected from the erosion of the dollar.\u003Cbr \/\u003E\u003Cbr \/\u003ECommodity index exchange traded funds (ETFs) have allowed people to construct, without many of the costs, risks, and complexities of direct purchases of commodity futures, retirement portfolios hedged against inflation.  Portfolios protected against inflation are an exceedingly valuable asset both for the retirees and for the society on which said retirees will be less dependent.  They are also quite valuable for many other kinds of investors, such as college endowments that lower the cost of tuition for future students and fund research that benefits the future of us all.  Instead of attacking the fever by shutting down the immune system, i.e. instead of attacking the commodities indices needed to hedge against inflation, it is the prior main cause of the problem, Federal Reserve monetary policy, that needs to be addressed.  The Fed needs to put a higher priority on preserving the value of the dollar and fighting inflation, and it needs to use leading indicators (e.g. commodity and foreign exchange prices) far more than trailing indicators (e.g. CPI, PPI) in this task. (I understand of course that the recent credit crunch has probably been a very good reason for the Fed to \"print dollars.\" That doesn't change the fact that the Fed is smack dab in the middle of the causal chain that has led to the commodities boom, and that savers have a right, and investment funds a fiduciary duty, to protect their savings against the inflationary effects of Fed policy).\u003Cbr \/\u003E\u003Cbr \/\u003EIt's certainly possible that some of the commodities boom is a bubble. It is often the case that economically efficient bull markets become overextended into wasteful bubbles, it being very hard to tell just how large of a price increase is actually warranted, and we may be seeing some of that now.  (These bubbles are allowed to occur by a \u003Ci\u003Elack\u003C\/i\u003E of available instruments for speculation, especially the transaction costs involved in holding long-term short positions against markets that may rise substantially further before they fall.  The worst way to combat a bubble is to ban the last modicum of imperfect speculative mechanisms such as short sales that \u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiafeNavDRvPFM9WG0y5zAbF5ytKwcjSIvDidWoSbbvR7cpC0jpqbEjl9VhLioxA5j19R-ajQfjafdYLbcefWHEuk9rTuaE6DWlfgKI9_T65JQIt1_4Fsb5W5YGxM4qE3xF07V-\/s1600-h\/ControlOfFoodByGovernment_HerbertHoover.bmp\"\u003E\u003Cimg style=\"float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiafeNavDRvPFM9WG0y5zAbF5ytKwcjSIvDidWoSbbvR7cpC0jpqbEjl9VhLioxA5j19R-ajQfjafdYLbcefWHEuk9rTuaE6DWlfgKI9_T65JQIt1_4Fsb5W5YGxM4qE3xF07V-\/s400\/ControlOfFoodByGovernment_HerbertHoover.bmp\" border=\"0\" alt=\"\"id=\"BLOGGER_PHOTO_ID_5208209145134136786\" \/\u003E\u003C\/a\u003Ecurrently prevent bubbles from getting worse). There is no easy way to gauge just how much retirement funds and others seeking to hedge inflation need to allocate to commodities baskets in order to optimize their portfolios, because it depends greatly on future Fed behavior. On the one hand we know that hyperinflation has sometimes occurred historically with floating currencies, so that dramatic further increases in commodity prices are possible; on the other hand the farther commodity prices go up (and they have gone up very far indeed) without corresponding inflation in other goods and services, the more downside price risk there is in commodities.  Oil next year might be $40 per barrel, or $300 per barrel, or anything in between.  It's certainly true that commodities have become a far riskier, i.e. more volatile, investment than they were three years ago, and that puts a severe limit on the proportion of an investment portfolio it makes sense to devote to commodities.   But that proportion is certainly nowhere near zero as the lunatic anti-\"speculation\" activists would have it.\u003Cbr \/\u003E\u003Cbr \/\u003E(This post is based on a comment I made on a previous post.  \u003Ca href=\"http:\/\/hsgac.senate.gov\/public\/_files\/052008Masters.pdf\"\u003EHere,\u003C\/a\u003E, h\/t to reader \"munin\", is a hedge fund guy who reaches almost the right theory, but the abominable policy conclusion, and is the source of the graph above.  Here is some of my previous writing on this subject: \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2008\/03\/monetary-value-of-liquid-commodities.html\"\u003EThe Monetary Value of Liquid Commodities\u003C\/a\u003E and \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2008\/04\/commodity-derivatives-new-currencies.html\"\u003ECommodity Derivatives: The New Currencies\u003C\/a\u003E).\u003Cbr \/\u003E\u003Cbr \/\u003E[Update: at least we don't have \u003Ca href=\"http:\/\/query.nytimes.com\/mem\/archive-free\/pdf?_r=1\u0026res=9A0CE4DA113BE03ABC4852DFB667838C609EDE\u0026oref=slogin\"\u003Ewar hysteria\u003C\/a\u003E (or click to enlarge the facsimile at left).  Note that Herber Hoover, who many history books still proclaim with preposterous prevarication to have been a free market guy, and who later presided over the start of the Great Depression, was at this time (1917) the head of President Wilson's Food Administration, which came up with this plan for \"Control of Food By Government\".  Hoover's food plan, like the crazy plans to \"fix\" the commodities markets today, was designed by and for the ignorant and the paranoid, targetting \"Evils\" of \"Unreasonable Profits, Speculation, and Hoarding\", i.e. the \"evils\" of people stocking up to ensure own and their customers' future food supply instead of letting the benevolent Herbert Hoover control it for them. Today it is apparently evil to protect your retirement nest egg instead of letting it fall with the dollar]."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/611036962892003414\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/611036962892003414","title":"7 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/611036962892003414"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/611036962892003414"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2008\/06\/war-against-retirees.html","title":"The war against retirees"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"media$thumbnail":{"xmlns$media":"http://search.yahoo.com/mrss/","url":"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjfz58ro01fZ0VjDjoQZ8j3MYihhgW5gXIbI6yEvR6WeJ5uPOfCZB6TkpV6sBR7sBGOeCd6TpPR-DIeU1gJgQlkPYFMnEoKFr7hMg0L6qU72Gz57PYi-nJJdlXrcEwCE_D-bvnE\/s72-c\/CommodityIndexTrading_Vs_CommodityPrices.bmp","height":"72","width":"72"},"thr$total":{"$t":"7"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-1170925696221613472"},"published":{"$t":"2008-05-29T17:27:00.001-07:00"},"updated":{"$t":"2008-05-29T18:59:02.625-07:00"},"title":{"type":"text","$t":"The Coase Theorem is false: contracts depend on tort law"},"content":{"type":"html","$t":"In the Rothbardian ideology of anarcho-capitalism, all law can supposedly be derived from contract, the entry into which is supposed to be voluntary.  \"Social contract\" theories of government also tend, by this euphemism, to suggest that the formation of governments was somehow voluntary, an idiotic idea that anarchists such as the legal scholar Lysander Spooner have easily debunked.  \u003Cbr \/\u003E\u003Cbr \/\u003EDavid Friedman justifies his neoclassical version of anarcho-capitalism by the Coase Theorem, which translated into legal terms is usually understood as the following: in the absence of transaction costs, and regardless of the prior allocation of legal rights, any tort (\"externality\" in economic terms) can be resolved by voluntary bargaining to form a contract, resulting in an economically efficient outcome.\u003Cbr \/\u003E\u003Cbr \/\u003EHere are some places where Friedman relies on the Coase Theorem:\u003Cbr \/\u003E\u003Cblockquote\u003EConsider two [legal protection] firms with somewhat different customer bases, bargaining over what court's legal system to agree on. Firm A prefers one legal system, say one that permits capital punishment for murder. Firm B prefers a different system, one that does not permit it.\u003Cbr \/\u003E\u003Cbr \/\u003EEach firm estimates the value to its customers, and from that the increase it can expect in its revenues, if it can provide them with its preferred legal system. We expect, along conventional Coaseian lines, that they will agree on the system that maximizes their combined benefit. [\u003Ca href=\"http:\/\/www.daviddfriedman.com\/Academic\/Order_without_the_state\/Order_Without_the_State.htm\"\u003ESource\u003C\/a\u003E].\u003Cbr \/\u003E\u003Cbr \/\u003EA still more attractive and more likely solution [to avoid war] is advance contracting between the agencies. Under this scenario, any two agencies that faced a significant probability of such clashes would agree on an arbitration agency to settle them-a private court. Implicit or explicit in their agreement would be the legal rules under which such disputes were to be settled. Under these circumstances, both law enforcement and law are private goods produced on a private market...\u003Cbr \/\u003E\u003Cbr \/\u003EReaders familiar with the economic literature on efficiency may notice that my argument owes more to Coase than to Marshall. I have relied on the idea that parties will negotiate towards efficient contracts, rather than on the conventional analysis of a competitive industry....[\u003Ca href=\"http:\/\/www.daviddfriedman.com\/Academic\/Anarchy_and_Eff_Law\/Anarchy_and_Eff_Law.html\"\u003ESource\u003C\/a\u003E]\u003Cbr \/\u003E\u003C\/blockquote\u003E\u003Cbr \/\u003EThe proof that the Coase Theorem is false is actually quite simple: the assumptions of the Theorem contradict each other.  The assumption that transactions are voluntary contradicts the assumption that \u003Ci\u003Eany\u003C\/i\u003E prior allocation of rights is possible, including rights that allow one party to coerce another.   In  fact, for the Theorem to at all make sense, a very large and crucial set of prior rights allocations must be excluded -- namely any that allow any party to coerce another.\u003Cbr \/\u003E\u003Cbr \/\u003EBut we can't generally solve externalities problems by bargaining under this revised assumption.  Externalities cannot be neatly distinguished from coercive acts, as extending one of Coase's own examples illustrates.  In this example we have a railroad with a train that, passing by a farmer's wheat field, gives off sparks, which may start a fire in the field.  In Coase's account, the prior allocation of rights might give the railroad the right to give off sparks, in which case the farmer must either plant his wheat far enough away from the railroad (wasting land) or buy the right to be free from sparks from the railroad.   The prior allocation might instead already give the farmer the right to be completely free from sparks, in which case the railroad can either buy the right to emit sparks from the farmer or install spark-suppressors.   If these are the two possible prior allocations of rights, Coase concluded that the railroad and the farmer will in the absence of transaction costs bargain to the most economically efficient outcome: if it costs less for the railroad to reduce the sparks than for the farmer to keep an unplanted firebreak, bargaining will achieve this outcome, and if the reverse, bargaining will achieve the reverse outcome, regardless of whether the farmer initially had the right to be free from sparks.  So far, so good -- it seems, on the surface, that if bargaining is costless an efficient outcome will be achieved.  \u003Cbr \/\u003E\u003Cbr \/\u003EThe problem is that these are not the only prior allocations possible.  The Coase Theorem is supposed to work under \u003Ci\u003Eany\u003C\/i\u003E other allocation of prior rights. But it doesn't.  It fails for a  large and crucially important class of prior allocations: namely any that allow one party to coerce another.  Here's an allocation that may or may not allow coercion, depending on your definition of coercion: a prior allocation that gives the railroad the right to emit as many sparks as it wants.  In particular it includes the right of the railroad to emit sparks even if it could costlessly avoid emitting them.   Here's one that is fairly clearly coercive: the right to emit sparks even if emitting them costs the railroad something extra (i.e. giving the railroad the right to purposefully emit sparks to start fires even at some extra cost to the railroad).  Here's another farther down the coercive spectrum: a prior allocation that gives the railroad the right to torch the farmer's entire field with a flamethrower.   \u003Cbr \/\u003E\u003Cbr \/\u003EIt is usually the case with coercion, as here, that it is far cheaper for the coercer to cause harm than for the victim to prevent it.   To increase the threatened harm to the farmer, and thus the revenue it can obtain from extortive bargaining with the farmer, the railroad can spend extra to purposefully threaten the farmer.  Here, it is likely far cheaper for the railroad to install a super spark emitter, or a flamethrower, than for the farmer to defend his fields from these sources.  Indeed, since any prior allocation is possible, why stop with the farmer's fields?  Another possible allocation would give the railroad a right to torch the farmer's barns, and his house, to kidnap his children -- any prior (\u003Ci\u003Eex ante\u003C\/i\u003E) set of rules is supposed to be possible.   In turn, if the \u003Ci\u003Eex ante\u003C\/i\u003E rules allow, the farmer could threaten to tear up the railroad tracks or sabotage them to derail the trains.  Under all these prior allocations of rights that allow coercion, the railroad need not just bargain to avoid the costs of supressing its externality (whether sparks or flamethrowers), nor need the farmer bargain just within this artificially voluntary spectrum of possibilities that Coase and his followers assume. Instead, if the \u003Ci\u003Eex ante\u003C\/i\u003E rules so allow the railroad and farmer will bargain to avoid a negative-sum outcome: harm to the farmer with no direct benefit to the railroad, or vice versa.  Since there are substantial \u003Ci\u003Eex post\u003C\/i\u003E benefits to one party from extorting payments from the other, the party that can threaten the most harm at the least cost to itself has, if the \u003Ci\u003Eex ante\u003C\/i\u003E rules allow, a strong economic incentive to engage in such coercion.  These negative-sum games of coercion and extortion lead to highly inefficient outcomes, and they can only be avoided by carefully crafting the \u003Ci\u003Eex ante\u003C\/i\u003E rules to avoid such coercion and extortion.  These coercive threats that make negative-sum games possible, and that decrease the payoffs of positive-sum games, cannot be neatly distinguished in practice from innocent externalities: any act or omission of one party that harms another, i.e. any externality, doubles as a threat, whether a tiny threat or a large threat, from which an extortion premium, its size depending on the size of the threat, can be extracted.\u003Cbr \/\u003E\u003Cbr \/\u003EIn order to try to distinguish coercion, and the extortion it gives rise to, from an \"innocent\" externality that can be cured by efficient bargaining, there are ways to exclude some of these extreme possibilities from the prior allocation of rights.  And indeed criminal and tort law do this: they distinguish purposeful behavior from negligent, and negligent from the mere unfortunate accident.  But any such \u003Ci\u003Eex ante\u003C\/i\u003E distiction contradicts the claim that the Coase Theorem applies to \u003Ci\u003Eany\u003C\/i\u003E prior allocation of rights.   Voluntary bargaining cannnot give rise to tort and criminal law.  Quite the opposite is true: at least a basic tort law is necessary to make voluntary bargaining possible.   Tort law (and the associated property law which defines boundaries for the tort of trespass) is logically prior to contract law: good contracts depend on good tort and property law.  Without a good tort law already in place, nobody, including the \"protection firms\" posited by anarcho-capitalism, can engage in the voluntary bargains that are necessary for efficient outcomes.   \u003Cbr \/\u003E\u003Cbr \/\u003EThis is not to claim that the polar opposite of anarcho-capitalism must be true, i.e. that \"the government\" along the lines we are familiar with is necessary.  Instead, a system of \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2008\/02\/unbundled-jurisdictions-and-exit-costs.html\"\u003Epolitical property rights\u003C\/a\u003E that is unbundled and decentralized is possible, and may give rise to many of the benefits (e.g. peaceful competition between jurisdictions) promised by anarcho-capitalism.  But political property rights are not based on a Rothbardian assumption of voluntary agreement -- instead, in these systems the procedural law of political property rights, as well as much of substantive property rights and tort law, is prior to contract law, and their origin necessarily involves some degree of coercion.  Political and legal systems have not, do not, and cannot originate solely from voluntary contract.  Both traditional \"social contract\" justifications of the state and the Rothbardian idea that contracts can substitute for the state are false: in all cases coercion is involved, both at the origin and in the ongoing practice of legal procedure.  In both cases the term \"contract\" is used, implying voluntary agreement, when the term \"treaty\", a kind of agreement often forced by coercion, would far more accurately describe the reality. The real task for libertarians and other defenders of sound economics and law is not to try to devise law from purely voluntary origins, an impossible task, but to make sure the \u003Ci\u003Eex ante\u003C\/i\u003E laws make voluntary bargaining possible and discourage coercion and extortion (by any party, including political property rights holders or governments) as much as possible."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/1170925696221613472\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/1170925696221613472","title":"37 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/1170925696221613472"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/1170925696221613472"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2008\/05\/coase-theorem-is-false-contracts-depend.html","title":"The Coase Theorem is false: contracts depend on tort law"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"37"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-5614803674978469821"},"published":{"$t":"2008-05-24T15:10:00.000-07:00"},"updated":{"$t":"2008-05-24T15:42:58.383-07:00"},"title":{"type":"text","$t":"Off-the-shelf seasteading"},"content":{"type":"html","$t":"Every year millions of people spend days or weeks on cruises, but Patri Friedman, Wayne Gramlich, and their fellow Seasteaders want to live on the sea full time.  They want, essentially, to conduct political experiments in mobile communities as free as possible from sovereign jurisdictions.  To do this, they are designing extravagant \u003Ca href=\"http:\/\/seasteading.org\/seastead.org\/commented\/paper\/designs.html#Our_Design\"\u003Enew kinds of structures\u003C\/a\u003E that they believe will withstand the violent storms and other harsh conditions that can occur offshore.\u003Cbr \/\u003E\u003Cbr \/\u003EBesides tourism and jurisdictional arbitrage, there are a variety of other economic incentives to live on the ocean.  Fishing and fish processing often involve employees spending many months at sea.  \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2007\/02\/mining-vasty-deep-i.html\"\u003EOil\u003C\/a\u003E, \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2007\/02\/mining-vasty-deep-ii.html\"\u003Ediamonds\u003C\/a\u003E, and soon a wide variety of \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2007\/09\/mining-vasty-deep-iii.html\"\u003Eother kinds\u003C\/a\u003E of minerals are increasingly being extracted as land-based minerals are slowly depleted.\u003Cbr \/\u003E\u003Cbr \/\u003EGramlich and Friedman have a very admirable goal but are trying to do too many things in parallel.  They seem to have spent far more time in creating futuristic designs from scratch than in figuring out how to retrofit normal ships or mobile offshore oil platforms.  On top of this is their \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2007\/08\/exit-and-freedom.html\"\u003Eimportant\u003C\/a\u003E but novel and ambitious political experiment in lowering exit costs.  While there are some relationships between the politics and the engineering, a better approach is to innovate in one area at a time.  Design novel offshore technology, or design novel offshore communities, but don't try to do too much of both at once.\u003Cbr \/\u003E\u003Cbr \/\u003EFriedman \u003Ca href=\"http:\/\/seasteading.org\/stay-in-touch\/blog\/3\/2008\/05\/12\/otc-2008-trip-report\"\u003Evoices\u003C\/a\u003E a complaint, hardly uncommon in the world of engineering, that he has a hard time communicating with ocean engineers.  I suspect the problem is that Friedman and Gramlich have taken their designs, whether workable or not, far away from the kinds of designs ocean engineers are used to analyzing. If they just started with normal ships and offshore platforms, then used such equipment as building blocks for larger structures, rather than trying to reinvent ocean engineering from scratch, they would not lack for experienced engineers to understand their designs and shops to assemble them.\u003Cbr \/\u003E\u003C!-- a onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEj32cpuZYvFfsC4douSv_C_p7kUdOsstfKJMKhwH2zTWzwUv4EIyVl2b_MHCkIPAHw-Bu5FVaCsD5ozs0XjRfsh5FUFeEK-K8JFpC8_NbqL553xAPitUyZLn9zei1HjJ7jtZ166\/s1600-h\/marinaboats+001.jpg\"\u003E\u003Cimg style=\"float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEj32cpuZYvFfsC4douSv_C_p7kUdOsstfKJMKhwH2zTWzwUv4EIyVl2b_MHCkIPAHw-Bu5FVaCsD5ozs0XjRfsh5FUFeEK-K8JFpC8_NbqL553xAPitUyZLn9zei1HjJ7jtZ166\/s400\/marinaboats+001.jpg\" border=\"0\" alt=\"\"id=\"BLOGGER_PHOTO_ID_5201516111280616802\" \/\u003E\u003C\/a\u003E\u003Ci\u003EA small community of boats moored to an offshore floating dock in a sheltered bay in Lund, British Columbia\u003C\/i --\u003E\u003Cbr \/\u003ESure, such structures seem crude and inefficient compared with the elegant and optimal structures that might be designed in theory.  But they would be a far less expensive way to demonstrate the political and economic viability of seasteading.  And they could be shown to offshore engineers who could quickly recognize most major problems they might have.  The Friedman\/Gramlich approach excites the imagination, but a far more incremental approach is needed to make it work.  To take up Friedman's analogy: if all that exists are military planes, and you want to start the first civilian airline, don't try designing civilian planes and civilian airports from scratch.  Just buy a bomber, yank out the bomb bays and guns, install passenger seats, get permission to use a couple military airports, take a few test flights, and start selling tickets. The first version may well fall very short of the optimal or ideal you have in mind, but it will give you the experience and the revenue needed to improve the design and approach that optimal.\u003Cbr \/\u003E\u003Cbr \/\u003EThe biggest technological hurdle to meeting the requirements of the political experiment is probably the ability to join and separate the floating platforms at low cost.  They must be moored and yet withstand the harshest storms (or alternatively to anticipate the storm, quickly unmoor, ride out the storm separately, and remoor when normalcy returns).   This problem is mentioned briefly \u003Ca href=\"http:\/\/seasteading.org\/seastead.org\/comments\/paper\/designs.html\/The_interconnections_must_be_somewhat_flexible_bec.html\"\u003Ehere\u003C\/a\u003E but as far as I know, Seasteaders have not come up with a good solution for it.\u003Cbr \/\u003E\u003Cbr \/\u003EMooring in rough water is a hard problem -- there are good reasons docks lie in sheltered bays. Ship-to-ship refueling, a common naval procedure, has long been very dangerous in bad weather.  Ships and platforms loosely moored with cables can easily collide, smashed together by wind and wave, with devastating consequences. Friedman and Gramlich believe that their ideal platform will have \u003Ca href=\"http:\/\/seasteading.org\/seastead.org\/commented\/paper\/designs.html#Bobbing\"\u003E\"no\"\u003C\/a\u003E bobbing, lateral movement, or tilting from waves and wind. But oil platforms do exhibit enough such movements that trying to keep them moored together with traditional techniques in a storm would be highly dangerous.  Cables could not prevent the platforms from colliding with high force, whereas a completely rigid mooring that coupled the movements of all the joined platforms would likely fail from strain.\u003Cbr \/\u003E\u003Cbr \/\u003ESome good old Internet searching digs up the fact that folks in the deep sea oil and liquified natural gas (LNG) industries have solved a similar problem -- how to offload fluids offshore, from FPSOs to tankers or from tankers to offshore pipeline terminals.  For example the LNG industry needs to be able to hook up the huge LNG tankers to the offshore offloading terminals even in storms.  One solution to this is the \u003Ca href=\"http:\/\/www.sbmimodco.com\/gbu\/LNGOffloadingSystems.aspx\"\u003Esoft yoke flexible mooring\u003C\/a\u003E.  This is often abbreviated \"SYMO\" for \"soft yoke mooring and offloading\".  It allows ships to moor to each other without the dangers of approaching and colliding in rough wind and water.\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhbXhm8i0nRY9x99W6zRdKtoQ3Ww1asznbZMODvU9FeW9Chg2w0w-mTIrBKpkDLrhkzlAFBlwxc4aK5f_lChTTAs4itVXRlM5zG4pqLr2EP-HShuUX2npijNKIQXnqhZI1FqRoq\/s1600-h\/symo_hoses_FSRU.JPG\"\u003E\u003Cimg style=\"float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEhbXhm8i0nRY9x99W6zRdKtoQ3Ww1asznbZMODvU9FeW9Chg2w0w-mTIrBKpkDLrhkzlAFBlwxc4aK5f_lChTTAs4itVXRlM5zG4pqLr2EP-HShuUX2npijNKIQXnqhZI1FqRoq\/s400\/symo_hoses_FSRU.JPG\" border=\"0\" alt=\"\"id=\"BLOGGER_PHOTO_ID_5201511545730381138\" \/\u003E\u003C\/a\u003E\u003Ci\u003EA soft yoke flexible mooring (SYMO) for yoking ships together, even in rough waves and most storms.  The design allows each ship to ride the waves separately, greatly reducing the strain on the yoke, while keeping them from approaching or dispersing.\u003C\/i\u003E\u003Cbr\u003E\u003Cbr \/\u003EHere's how I might do an experiment in offshore political mobility using off-the-shelf equipment or minor variations on same (this \"mixed\" version, as the Seasteaders would call it, is not terribly original to me, except for including a workable mooring technology):\u003Cbr \/\u003E\u003Cbr \/\u003E(1) Get a few dozen yacht owners to participate as volunteers.  (\"Yacht\" here just refers to any seaworthy boat capable of mooring to other such craft and to larger platforms with SYMOs).\u003Cbr \/\u003E\u003Cbr \/\u003E(2) Set up a system of two or more privately owned offshore anchored moorings: tough cable moorings such as \u003Ca href=\"http:\/\/www.akersolutions.com\/Internet\/IndustriesAndServices\/OilAndGas\/MarineOperations\/MooringSystems\/default.htm\"\u003Ethose\u003C\/a\u003E used by large ships in the oil industry (eg FPSOs).  \u003Cbr \/\u003E\u003Cbr \/\u003E(3) Attach a small old cruise ship or retrofitted oil platform to each anchored mooring. These should be large enough to have most of the infrastructure a small cruise ship would have, and be able to provide basic services to the yachts.\u003Cbr \/\u003E\u003Cbr \/\u003E(4) Yachts moor to the larger ship or platform using SYMOs.  For oil platforms the SYMOs may have to be heavily modified.  Yachts might also moor to each other using SYMOs, but some of the yachts should also be anchor-moored to the ocean floor, unless they don't mind the community drifting.\u003Cbr \/\u003E\u003Cbr \/\u003E(5) Yacht owners choose which of the two or more communities they will join.\u003Cbr \/\u003E\u003Cbr \/\u003E(6) The cruise ships or platforms that form the core of these communities compete to provide various services, amenities, and political systems.\u003Cbr \/\u003E\u003Cbr \/\u003E(7) Yacht owners can either be independently wealthy, or they can make a living by providing services to nearby fishing fleets, fish processors, offshore oil platforms, etc., or by providing temporary quarters for workers of same.\u003Cbr \/\u003E\u003Cbr \/\u003E(8) When a storm comes that may be too much for the small SYMOs to withstand, everybody gets on yachts and disperses until the storm blows over.\u003Cbr \/\u003E\u003Cbr \/\u003EThese communities would look a bit like \u003Ca href=\"http:\/\/bceh.com\/gallery\/v\/BC\/sunshine_coast\/lund\/marinaboats+001.jpg.html\"\u003Ethis offshore floating dock\u003C\/a\u003E in a sheltered bay near Lund, British Columbia -- but much farther offshore, larger, more robust, and more politically independent.\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"http:\/\/photos1.blogger.com\/x\/blogger\/4193\/1738\/1600\/507002\/TankerStorm.jpg\"\u003E\u003Cimg style=\"float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;\" src=\"http:\/\/photos1.blogger.com\/x\/blogger\/4193\/1738\/1600\/507002\/TankerStorm.jpg\" border=\"0\" alt=\"\"id=\"BLOGGER_PHOTO_ID_5201511545730381138\" \/\u003E\u003C\/a\u003E\u003Ci\u003EIf you see this coming, scram.\u003C\/i\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EThere will be big differences between these salty communities and modern towns.  If the local court or zoning board or captain-of-captains won't approve improvements to your yacht, or your desire to set up a gambling house or a stinky fish processing plant, just move your house to another seastead community that will tolerate it.  (I suspect fish processors will retain their own separate communities).  Low exit costs bring freedom. \u003Cbr \/\u003E\u003Cbr \/\u003EOne kind of public nuisance that these seasteads may be in special danger of running into is what I call a \u003Ci\u003Eprovocative externality\u003C\/i\u003E, meaning that besides or instead of being ethically dubious or causing direct harm to the community, they may cause danger to fellow community members by provoking a country to attack the seastead: drug smuggling, money laundering, polygamy, being a haven for terrorists, and so on are examples of activities that could, whether rightly or wrongly, provoke attack.  Since many of these activities might also be quite lucrative, the political issues of whether to ban them may cause great tensions.  Vulnerability to attack by traditional countries limits the degree of substantive liberty seasteads can achieve -- they will not be able to achieve a perfectly voluntary society within even the substantive law, much less within procedural law, which I now turn to.\u003Cbr \/\u003E\u003Cbr \/\u003EThe political and legal designs for Seasteads need even more work than the engineering designs.  It is not enough to just say that all law be based on contract and thus all will be fine.  One must rather tackle crucial issues such as \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2007\/05\/why-legal-procedure-is-central-to.html\"\u003Elegal procedure\u003C\/a\u003E.  As I have written elsewhere, in response to a claim that Seastead government will not be based on coercion:\u003Cbr \/\u003E\u003Cblockquote\u003ENo coercion? In these Seasteads, who does the law enforcement, and who or what gives them the right to commit law enforcement acts that are physically equivalent to torts and crimes? What distinguishes arrest from assault and battery, imprisonment from kidnapping, legal distraint of goods from theft, or a legal search from trespass? I think you will find that these societies will have to deal with the very same problems of coercion and procedure as our own governments. Calling a legal document that defines and allocates rights to commit these coercive acts a \"contract\" instead of a \"constitution\" may be the Rothbard-correct way to do things, but it doesn't actually go very far towards solving the hard problems of living together in a world where people are often coercive.\u003C\/blockquote\u003EIt is even more important for the political and legal designs than it is for the engineering designs to take an off-the-shelf approach.  Pick a country and subdivisions thereof, either a current or a well-document historical politican and legal system (for example the U.S. and a particular state, county, and town), and use its constitution, statutes, and court precedents as basic legal precedents, which can then be modified by local courts (in a common-law manner) and other local political authorities.  If the U.S. is used as a model, I have suggested some \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2008\/03\/comments-on-united-states-constitution_06.html\"\u003Ebasic changes\u003C\/a\u003E to make its constitution less subject to the growth of government power. Low exit costs will also greatly help.  These kinds of macro-political issues will mostly, however, be well beyond the scope of Seasteading unless or until they reach a time when they are large and mature mobile cities.   The first ones will, as with cruise ships today, probably just be based on the \"captain is king\" model that has long dominated sea law.  Friedman has even taken to calling himself \"Captain Patri\".  Perhaps seasteads will revive the old paradigm of \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2008\/02\/unbundled-jurisdictions-and-exit-costs.html\"\u003Epolitical property rights.\u003C\/a\u003E  I wish these projects the best of luck."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/5614803674978469821\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/5614803674978469821","title":"8 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/5614803674978469821"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/5614803674978469821"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2008\/05\/off-shelf-seasteading.html","title":"Off-the-shelf seasteading"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"media$thumbnail":{"xmlns$media":"http://search.yahoo.com/mrss/","url":"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEj32cpuZYvFfsC4douSv_C_p7kUdOsstfKJMKhwH2zTWzwUv4EIyVl2b_MHCkIPAHw-Bu5FVaCsD5ozs0XjRfsh5FUFeEK-K8JFpC8_NbqL553xAPitUyZLn9zei1HjJ7jtZ166\/s72-c\/marinaboats+001.jpg","height":"72","width":"72"},"thr$total":{"$t":"8"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-19877171003826671"},"published":{"$t":"2008-05-19T16:17:00.000-07:00"},"updated":{"$t":"2008-05-19T16:23:31.189-07:00"},"title":{"type":"text","$t":"Unenumerated sells out"},"content":{"type":"html","$t":"It had to happen -- Unenumerated(tm) has become a Capitalist Tool(tm) -- specifically, it is now part of the Forbes.com blog network.  If you are overly annoyed by the ads, would prefer to donate, or have any other general comments about Unenumerated, feel free to leave them here, or you can send them to me at nszabo AT law DOT gwu DOT edu."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/19877171003826671\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/19877171003826671","title":"0 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/19877171003826671"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/19877171003826671"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2008\/05\/unenumerated-sells-out.html","title":"Unenumerated sells out"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"0"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-2556319987139272974"},"published":{"$t":"2008-05-17T12:19:00.000-07:00"},"updated":{"$t":"2008-05-17T12:52:28.218-07:00"},"title":{"type":"text","$t":"Political bubbles"},"content":{"type":"html","$t":"In response to \u003Ca href=\"http:\/\/online.wsj.com\/public\/article\/SB121089412378097011.html?mod=blog\"\u003Ethis\u003C\/a\u003E Wall Street Journal article, describing a number of scholars developing mathematical models of market bubbles, I posted the following comment at Marginal Revolution which is worth reposting here:\u003Cbr \/\u003E\u003Cblockquote\u003EThe scholars quoted in the original article sound like they are just engaging in a fancy form of technical analysis, which purports to capture in mathematics the psychology of the crowd, but in almost all cases turns out to be worthless numerology.\u003Cbr \/\u003E\u003Cbr \/\u003EThe fancy math doesn't explain bubbles any better than [Robert] Schiller's simple driving analogy: there is a big event at an obscure location (let's call it Burning Man, out in the middle of the desert somewhere). People driving to the event are very uncertain of the directions. At a certain intersection, on average 60% of them correctly believe they must turn right and 40% incorrectly believe they must turn left. But they can usually reduce their uncertainty by observing the behavior of others, who are somewhat more likely to be correct than wrong, and altering their [probability estimates] accordingly. Normally this works, but on rare occasions it goes wrong: for example, if the first three cars happen to turn left, the fourth, who had believed with 60% confidence that right was the proper direction, will rationally change his mind and go left. Thus a string of bad luck can make all the cars start going off in the wrong direction, except for those handful of drivers that are strongly confident in their knowledge that one should go right.\u003Cbr \/\u003E\u003Cbr \/\u003EWhere this analogy goes off the rails as public policy analysis is with the tacit hubris that certain academics from sufficiently elite schools are flying above the whole event in a helicopter and can direct traffic, if only their mathematical analysis is fancy enough. Rather academics and policy makers are in the traffic themselves, generally seeing information biased in ways similar to or even more extreme than the information investors see and act on. In many cases mispriced markets create arbitrage opportunities for truly knowledgeable investors, but analogs to such arbitrage opportunities, i.e. the ability to be rewarded for correcting actual misinformation, are much less prevalent in academic and political policy circles. We should thus expect political policy to be much more prone to biased political fads and herd-following than markets are. Both markets and governments may often take wrong directions, but for politics the inability to correct wrong directions may be endemic. Markets tend to correct themselves, usually in the short run and practically always in the long run, depending on the costs of arbitrage, but there is often no easy way to recognize or correct a political bubble.\u003Cbr \/\u003E\u003Cbr \/\u003EThus, applying the same rational uncertainty assumptions to politics as we do to markets, if we give political decisionmakers the power to \"pop\" bubbles they think they recognize, they will probably tend to make genuine market bubbles worse, will prevent markets from sending genuine supply and demand signals, and will introduce other extra transaction costs.\u003C\/blockquote\u003E"},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/2556319987139272974\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/2556319987139272974","title":"2 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/2556319987139272974"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/2556319987139272974"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2008\/05\/political-bubbles.html","title":"Political bubbles"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"2"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-2569224846984698360"},"published":{"$t":"2008-05-13T11:55:00.000-07:00"},"updated":{"$t":"2008-05-13T12:39:35.382-07:00"},"title":{"type":"text","$t":"Ben Bernanke plays John Law"},"content":{"type":"html","$t":"John Law and the Mississippi Bubble are fairly well-known to economic historians, but one wonders whether the supposed economic experts who run the U.S. Federal Reserve remember it.\u003Cbr \/\u003E\u003Cbr \/\u003ETo briefly summarize (and necessarily oversimply), Law was an economist and gambler put in charge of the French central bank in the early 18th century.  The bank issued notes (i.e. paper money) backed primarily reserves of, not gold or silver, nor French sovereign debt, but of stock in the Mississippi Company, which owned huge tracks of recently acquired, but hardly settled, American frontier land.  In other words, the currency was backed by speculative real estate ventures.  After a few good years, the scheme quickly collapsed in hyperinflation and bankruptcy.\u003Cbr \/\u003E\u003Cbr \/\u003EFast forward to today.  The Federal Reserve has traditionally used as reserves, on top of some gold, U.S. federal debt (Treasuries), considered a \"risk free\" investment (actually they are by market measures of risk generally the \u003Ci\u003Elowest\u003C\/i\u003E risk, but not risk-free, as anyone holding Treasuries during periods of dollar inflation can attest to).  Quite recently, however, this has changed:\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"http:\/\/interfluidity.powerblogs.com\/files\/FedTreasSecsGraph3.gif\"\u003E\u003Cimg style=\"float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;width: 640px;\" src=\"http:\/\/interfluidity.powerblogs.com\/files\/FedTreasSecsGraph3.gif\" border=\"0\" alt=\"\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003EWhat has replaced Treasuries in the Fed's hoard?  Here's how Randy Waldman \u003Ca href=\"http:\/\/interfluidity.powerblogs.com\/posts\/1210513606.shtml\"\u003Eputs it:\u003C\/a\u003E\u003Cbr \/\u003E\u003Cblockquote\u003EThe difference, about $475B, represents an investment by the central bank in risky assets of the US financial sector.\u003C\/blockquote\u003EIn other words, the Fed has been replacing the lowest-risk asset, U.S. Treasuries, with assets considered such high risks that trading has often practically halted on them, i.e. the securitized forms of U.S. real estate debt incurred by people who now, we are finding, often cannot or do not pay off their loans.  The Federal Reserve is now backing the dollar with securities that have been found to be full of moral hazard.\u003Cbr \/\u003E\u003Cbr \/\u003EThe Fed does have a tool for eliminating most of this debt problem: inflation.  If the Fed can flood the economy with enough dollars, presumably enough of these will reach debtors that they will be able to continue paying their mortgages.  By investing in shaky debt, Fed has given itself a huge incentive to further inflate the dollar.  It has given itself further incentive to fleece holders of dollar liabilities, including investors in dollar-denominated debt, in order to bail out the real estate market. \u003Cbr \/\u003E\u003Cbr \/\u003EWe have seen a massive runup in commodity prices during the the same period during which real estate debt has replaced Treasuries in the Fed's portfolio.  The dollar has already fallen steeply, and people ranging from retirement funds to second- and third-tie consumers of commodities are hedging against a quite possible further collapse of the dollar.  Commodity producers are betting against the dollar by keeping commodities in the ground instead of ramping up production, and food is being stockpiled in every poor country where the currency is linked to the dollar.  As I recently \u003Ca href=\"http:\/\/www.marginalrevolution.com\/marginalrevolution\/2008\/05\/does-the-high-o.html#comments\"\u003Ewrote:\u003C\/a\u003E\u003Cblockquote\u003EThe dichotomy [most economic commentators have made] between a presumably inefficient \"bubble\" caused by \"speculation\" and fundamental (geological and technological) scarcity presents a false choice.\u003Cbr \/\u003E\u003Cbr \/\u003EThe more likely alternative is that the parallel price rises of practically all commodities (not just oil) are a rational and socially efficient response to the inflation (M3 etc.) of the dollar and to a lesser extent of the euro. The vast increase in \"non-commercial\" or \"speculative\" participation in commodity futures reflects a greatly increased use of commodities over the last 5 years for their monetary qualities, just as Carl Menger and others would predict. See \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2008\/04\/commodity-derivatives-new-currencies.html\"\u003ECommodity Derivatives: the New Currencies\u003C\/a\u003E and \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2008\/04\/hoarding-and-speculation-of-commodities.html\"\u003EThe \"Hoarding\" and \"Speculation\" in Commodities.\u003C\/a\u003E\u003C\/blockquote\u003E"},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/2569224846984698360\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/2569224846984698360","title":"0 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/2569224846984698360"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/2569224846984698360"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2008\/05\/ben-bernanke-plays-john-law.html","title":"Ben Bernanke plays John Law"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"0"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-2510039225405932661"},"published":{"$t":"2008-05-11T14:57:00.001-07:00"},"updated":{"$t":"2008-05-12T10:37:23.803-07:00"},"title":{"type":"text","$t":"Daydreams in passing"},"content":{"type":"html","$t":"Recently I've been both daydreaming and pondering some of the problems that daydreaming can cause.\u003Cbr \/\u003E\u003Cbr \/\u003EI've recently learned that not only do \u003Ca href=\"http:\/\/see.msfc.nasa.gov\/Workshop07\/Hawkes2.zip\"\u003Einterstellar meteors\u003C\/a\u003E rudely hit our lovely planet, but some of them may be quite valuable, e.g. \u003Ca href=\"http:\/\/www.spacedaily.com\/reports\/Geologists_Discover_Origin_Of_Mysterious_Black_Diamonds_999.html\"\u003Eblack diamond\u003C\/a\u003E, which leading researchers believe to be the products of supernovae.   The \u003Ca href=\"http:\/\/www.diamondarticles.com\/articles\/famous-diamonds\/amsterdam-diamond.php\"\u003EAmsterdam diamond\u003C\/a\u003E sold in 2001 for about $52,000 per gram. The fact that multiple black diamonds have been found on earth suggests that there may be many tonnes of such diamonds flying through the solar system at any given time.  By naive extrapolation one tonne of black diamond should be worth $52 billion, but common sense suggests otherwise.  If somebody launched a robot to grab a tonne of black diamond out of the darkness of deep space and fling it into the sea, then cut and polished it up for auction, the resulting gem(s) would almost surely fetch only a tiny fraction of that $52 billion.  This presents the interesting puzzle: what happens when a \u003Ca href=\"http:\/\/szabo.best.vwh.net\/shell.html\"\u003Ecollectible\u003C\/a\u003E, the value of which depends on its stable scarcity, (and thus, its shape of its demand curve depends in part on the shape of its supply curve), suddenly is discovered to be common?  Its price might fall far faster than would be expected for a normal commodity demanded solely for its consumption.  This suggests, too, that the recent rise in the \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2008\/03\/monetary-value-of-liquid-commodities.html\"\u003Euse of commodities for their monetary properties\u003C\/a\u003E may in some cases be quite fragile.  Where new cheap sources or substitutions are discovered for a commodity, the price of that commodity might fall much farther and faster than if consumption alone shaped the demand curve.  This may be a good argument for the gold bugs, if such a breakthrough is less likely for precious metals like gold than for other commodities.  I find it a good argument for diversification across a basket or index of commodities.  Either of these strategies is still vulnerable to a a return to good fiat currency policy by the U.S. Federal Reserve or the European Central Bank.\u003Cbr \/\u003E\u003Cbr \/\u003ESpeaking of daydreaming about space, \u003Ca href=\"http:\/\/www.orlandosentinel.com\/orl-miket1108may11,0,995216.column\"\u003EMike Thomas\u003C\/a\u003E well describes the utter waste NASA has made, and is still trying to make, out of our tax money and our daydreams.   That NASA has talked many space fans into believing that government can successfuly plan for and design infrastructure for hypothetical future business exceeds in idiocy even the old state socialism, which showed time and again (with over a hundred million starved) that central agencies couldn't plan satisfactorily for even present industrial needs. \u003Cbr \/\u003E\u003Cbr \/\u003EAnd now for a nice exercise in pure daydreaming: SETI, the Search for Extraterrestrial Intelligence.  The Drake Equation makes it all sound very scientific, but plausible inputs into the Drake Equation can make its ouptut vary by nearly twenty orders of magnitude.  At one extreme there may be no civilizations in the visible universe except us.  At the other extreme many SETI people believe that each galaxy may be full of millions of rather compressed and cryptic civilizations.  There are plenty of people who find one extreme quite plausible and the other quite implausible, for each extreme, and plenty of plausible arguments for each side, but in fact we just don't know.  SETI is an obvious example of an error that is far too common, if less obviously so, in many other areas of science: too many people who style themselves as scientists present highly uncertain opinions, based on obscure or questionable assumptions, as if they were accurate facts or settled theories.  The precision and confidence of their language often \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Accuracy_and_precision\"\u003Efar exceeds their accuracy.\u003C\/a\u003E  Modern science is so specialized that even the vast majority of fellow scientists often don't have the time to dig in to unearth the hidden assumptions behind their fellows' claims.  They like us come to accept opinions, possibly of a highly uncertain nature, as facts based on the authority of the scientists.\u003Cbr \/\u003E\u003Cbr \/\u003EMistaking precision for accuracy is also one of the big problems with with attempting to predict the future needs of commerce, as NASA has purported to do.   As if exagerated claims to accuracy and the hiding of assumptions weren't bad enough, due to the dominance of one kind of funding, namely government funding, most of the scientists in some fields share common biases, especially political biases to justify expanded government budgets.  Authority increasingly takes the form of political power, funding increasingly requires political power, and political power, rather than facts, has been increasingly the source of \"scientific consensus.\"  Here is more on the \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2007\/03\/trouble-with-science.html\"\u003Ethe trouble\u003C\/a\u003E with modern science."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/2510039225405932661\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/2510039225405932661","title":"1 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/2510039225405932661"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/2510039225405932661"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2008\/05\/daydreams-in-passing.html","title":"Daydreams in passing"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"1"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-3094416535921188913"},"published":{"$t":"2008-04-22T16:12:00.001-07:00"},"updated":{"$t":"2008-04-22T16:40:33.938-07:00"},"title":{"type":"text","$t":"The \"hoarding\" and \"speculation\" in commodities"},"content":{"type":"html","$t":"It is a gross violation of Occam's Razor to attribute the recent very broad-based run-up in dollar commodity prices primarily to the plethora of disparate causes to which they have been attributed: \"peak oil\", the war in Iraq, ethanol subsidies displacing food, and so on. Rises in industrial demand, increases in the costs of transporting commodities due to high oil prices, and so on explain only a small fraction of the rise in other commodity prices, and do not explain at all why precious metal prices have increased alongside those of other commodities. Occam's Razor points us, as it did to wise investors and economists in the 1970s, to the one kind of commodity all these other commodities have in common: the currencies they are priced in.\u003Cbr \/\u003E\u003Cbr \/\u003EIn the 1980s, there were just as many of these disparate bullish factors for commodities as in the 1970s and as today. In the 1980s there was increasing industrial demand in Asia and the developing world, and the Iran\/Iraq war drove insurance rates for oil tankers in the Persian Gulf into the stratosphere, yet commodity prices in dollars and dollar-linked currencies broadly fell, due to the emphasis of the Federal Reserve on fighting inflation throughout the 1980s.\u003Cbr \/\u003E\u003Cbr \/\u003ECommodity prices now reflect more the value of commodities as stores of value and hedges or media of exchange, i.e. their values as money substitutes or hedges, than they reflect demand for their industrial consumption. The trend lines for global industrial demand have not really changed that much -- the increases in Asia are largely offset by slower demand growth in Europe and the U.S., and at today's high prices we will see industrial demand slowly fall in the U.S. and Europe and level off in Asia.\u003Cbr \/\u003E\u003Cbr \/\u003EBut demand for the oft-dreaded but ill-understood \"hoarding\" and \"speculation\", that is storing extra commodities (often off-the-books, or at least not in the officially measured warehouses) and the purchase of extra commodity futures and other commodity derivatives to hedge transactions based on government currencies, will remain strong as long as the Federal Reserve continues to inflate the dollar supply, and as long as many developing countries continue to link their currencies to this dollar. Commodity prices in dollars will level off, and then move back down close to historical trends based largely on just industrial consumption, if or when the Fed stops increasing the supply of dollars faster than the demand for dollars. If the Fed continues trying to inflate its way out of the latest bubble-following slump, commodities will not be the next bubble: instead they will form the basis of the new de facto currencies of high finance. See\u003Cbr \/\u003E\u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2008\/03\/monetary-value-of-liquid-commodities.html\"\u003E\u003Cbr \/\u003EThe monetary value of liquid commodities\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003Eand\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2008\/04\/commodity-derivatives-new-currencies.html\"\u003ECommodity derivatives: the new currencies\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EObviously the euro also plays a big role, but it is important to observe that the euro too has inflated, just to a lesser degree than the dollar. The euro has not developed the track record that would make many international investors think euro-denominated debt does not need to be hedged with commodity derivatives. Some wise investors still remember the hyper-inflations and outright defaults of the late 1920s and early 1930s that made many government bonds almost worthless, the destruction in the value of the U.S. debt in the 1970s from inflation, and many similar episodes. In these circumstances commodities are usually safer than government debt denominated in the fiat currencies of the same governments that owe that debt.\u003Cbr \/\u003E\u003Cbr \/\u003EThat's why the current flight to safety involves commodities as much or more than it involves government debt, and indeed the debts of less robust governments (ranging from municipalities in developed countries to the national debts of less developed countries) are no longer considered safe. It is well known by now that U.S. Treasuries are \"safe deposit boxes\" that pay negative real rates of interest -- i.e. one must pay for the privilege of storing one's wealth in a form backed by the vast future revenues of the IRS. They are a way losing one's wealth with less rapidity and volatility than with many alternative investments, not a way of actually building wealth. Commodities also store rather than build wealth. By contrast to Treasuries, commodities are more volatile, but are not subject to unknown future amounts of fiat currency inflation. A mix of U.S. Treasuries, European debt, and commodity derivatives now forms the ideal safe \"store the cash under your bed\" portfolio. Government debt alone is far too risky during periods when central banks are not strongly committed to reigning in money supplies.\u003Cbr \/\u003E\u003Cbr \/\u003E[The above is based on \u003Ca href=\"http:\/\/www.marginalrevolution.com\/marginalrevolution\/2008\/04\/what-will-happe.html\"\u003Ecomments\u003C\/a\u003E I made at the Marginal Revolution blog]."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/3094416535921188913\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/3094416535921188913","title":"17 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/3094416535921188913"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/3094416535921188913"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2008\/04\/hoarding-and-speculation-of-commodities.html","title":"The \"hoarding\" and \"speculation\" in commodities"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"17"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-6760226780446588929"},"published":{"$t":"2008-04-15T11:18:00.000-07:00"},"updated":{"$t":"2008-04-15T12:05:57.399-07:00"},"title":{"type":"text","$t":"Gas stations grant real options"},"content":{"type":"html","$t":"Imagine if the only place you could refill your gas tank was at home, so that you could never choose to drive farther than one tankful of gas would carry you.   Furthermore, imagine that it usually required most of a tankful to get from one place you want to go to another -- or to get back home.  So you usually could choose to go only one place per trip, and even when you could go more than one place, you had to plan the entire trip well ahead of time and could not deviate from it, no matter how much your needs changed while on the trip.\u003Cbr \/\u003E\u003Cbr \/\u003EThat is largely the situation with space operations today.  You have to plan the entire mission ahead of time.   If in mid-mission you discover that you want to change the plane of your orbit, or extend the life of your satellite, or make any other change that requires more propellant than you long ago planned for, you are out of luck.   If you want to reserve a wide variety of such decisions instead of committing to the entire plan up-front, it won't happen unless you launch a great deal of extra propellant that you will probably never use.\u003Cbr \/\u003E\u003Cbr \/\u003ERefueling capabilities and orbital propellant depots can change that.   They provide choices -- what economists call \u003Ci\u003Ereal options\u003C\/i\u003E.  \u003Cbr \/\u003E\u003Cbr \/\u003ELike financial options, in an uncertain world real options often have substantial value.  The kinds of real options commonly encountered in the business world include input mix options (options to use different inputs to deliver the substantially same output), output mix options (to use the same inputs to deliver different outputs), termination options (to abandon early failing projects or projects that have become unimportant), intensity or scale options (options to increase or decrease output), options to stop and restart, and switching options (the option to abandon one mean or end and change to another).  All of these options can have a substantial operational and financial value that is not captured by traditional analysis of fixed plans.\u003Cbr \/\u003E\u003Cbr \/\u003EPropellant depots don't provide substantially cheaper propellant: it must all, for the near future, still be launched quite expensively from earth.  And propellant depots don't provide an infinite variety of choices.  They won't make it affordable for astronauts headed for Mars to return back home when they discover that they forgot to pack their toothbrushes.  Orbital mechanics is relentless and an option to take on extra, but still expensive, propellant can only change things so much, and you especially won't be able to afford such an option if you're off the beaten path.   But propellant depots and refuelable satellites will allow those operating satellites in common orbits, such as geosynchronous orbit and low polar earth orbit, to change plans during a satellite's lifetime by adding a wide variety of valuable real options, for example:\u003Cbr \/\u003E\u003Cbr \/\u003E* Spy satellites have highly uncertain propellant usage, and often end their lifetimes mostly full of propellant or exhaust their propellant long before any other components have degraded.  Propellant depots will give spy satellites real options to optimize time over certain targets, to avoid a variety of attacks by changing orbits, and add flexibility to respond to other unpredictable challenges.\u003Cbr \/\u003E\u003Cbr \/\u003E* Commercial satellites: depots will extend the lifetimes of satellites that prove to be important, and allow satellites to be relocated over new locations as markets change. (With a few extra features on a depot tanker, propellant already on board a broken satellite, or a satellite that has proved to be unimportant, might be \"siphoned\" back into the tanker and used on a working and important spacecraft).\u003Cbr \/\u003E\u003Cbr \/\u003E* Upper stages and satellites can be checked out to make sure they are in working order on orbit before being fueled.   Immediate systems failure, which is a common failure mode, need no longer result in the waste of expensive propellant.  \u003Cbr \/\u003E\u003Cbr \/\u003EThis short list is probably the tip of the iceberg.   Real options are about the unpredictable, and it's hard to make a list of the unpredictable ahead of time.  On-orbit refueling and orbital propellant depots are not just a technology, they are part of a new paradigm.  They are part of thinking of space activities in terms of real options instead of fixed plans.  This paradigm recognizes uncertainties in space missions and businesses that traditonal fixed space planning has neglected.   Making good use of propellant depots requires not only technology, but the recognition of these uncertainties, and as a result a recognition of the  options that businessmen, militaries, and scientists would like to retain.   Those options can then be brought to reality with refuelable satellites and orbital depots, quite possibly in association with other technologies that enhance mission flexibility in other ways.  It's not propellant depots and refueling capabilities by themselves that will be beneficial, it will be their use to enable a wide variety of new and valuable real options for spacecraft operators and users.   It will be a crucial and lucrative entrepreneurial task to identify these real options and enable them with refuelable satellites, depots, and probably a wide variety of other techniques and services.\u003Cbr \/\u003E\u003Cbr \/\u003EGoing back to our humble earthbound example, real options explain why most commuters prefer cars (with gas stations available in a wide variety of locations) to mass transist.  Mass transist resembles far more the fixed plan -- travel from home to work and back every day, and that's it.   Under the fixed-plan assumption, mass transit is far less expensive and far more energy-efficient than automobiles.  Cars, and the gas stations that refuel them, provide real options -- to pick up kids from baseball today, to go to a class after work tommorrow, to go shopping at one of a wide variety of stores, to visit your doctor or the emergency room when you get sick, to pick up your friend from the airport after work the next day, and so on.   Mass transit and traditional space mission planning both represent the mentality of artificial certainty, the idea that we can simply plot out the future and it will come to fruition just so.  At least space mission planners have the excuse of orbital mechanics, which is highly predictable.   Human beings are not, nor are the vast variety of our needs and desires known to planners.  Economic comparisons between mass transit and automobiles that don't account for the vast number and variety of options made real by the the latter will grossly underestimate the value of automobiles.\u003Cbr \/\u003E\u003Cbr \/\u003ERelated:\u003Cbr \/\u003E\u003Cbr \/\u003EReal options analysis also allows planning for discontinous risk, rather than the artificial assumption that risk is a continuous function that can be modeled simply by adding a risk premium to a risk-free interest rate.  More on that, and the implications for space mission evaluation, \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2007\/09\/real-options-analysis-for-deep-space.html\"\u003Ehere.\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EHere is an \u003Ca href=\"http:\/\/faculty.fuqua.duke.edu\/~charvey\/Teaching\/BA456_2002\/Identifying_real_options.htm\"\u003Eintroduction to mathematical analysis of real options\u003C\/a\u003E, and here is a \u003Ca href=\"http:\/\/selenianboondocks.blogspot.com\/search\/label\/Propellant%20Depots\"\u003Ediscussion\u003C\/a\u003E of orbital depots for propellants that turn into vapors at normal temperatures, and are thus hard to store."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/6760226780446588929\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/6760226780446588929","title":"2 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/6760226780446588929"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/6760226780446588929"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2008\/04\/gas-stations-grant-real-options.html","title":"Gas stations grant real options"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"2"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-7927062823429106409"},"published":{"$t":"2008-04-02T15:49:00.000-07:00"},"updated":{"$t":"2008-04-03T16:58:32.124-07:00"},"title":{"type":"text","$t":"Commodity derivatives: the new currencies"},"content":{"type":"html","$t":"Unable to otherwise explain today's high commodity prices, \u003Ca href=\"http:\/\/www.venerosoassociates.net\/Reserve%20Management%20Parts%20I%20and%20II%20WBP%20Public%2071907.pdf\"\u003EFrank Veneroso\u003C\/a\u003E and others fear we are in a commodity bubble.  Exhibit A is the recent vast increase in the use of commodity derivatives[*]:\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgNSXM7NuQQSudDIzCgbBoyAAu0V2qPsoXrrzlk4RzVeBl26lyOo1Nbr5MtYcYUHZ4JzPpq51_f_gONxy8U6LWZiLTpXLU0WYKY_sLOU3aUA4qCLb5Aal28rE3QJHiiH3tLuDkA\/s1600-h\/CommodityDerivativesGrowth.JPG\"\u003E\u003Cimg style=\"float:center; margin:0 10px 10px 0;cursor:pointer; cursor:hand;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgNSXM7NuQQSudDIzCgbBoyAAu0V2qPsoXrrzlk4RzVeBl26lyOo1Nbr5MtYcYUHZ4JzPpq51_f_gONxy8U6LWZiLTpXLU0WYKY_sLOU3aUA4qCLb5Aal28rE3QJHiiH3tLuDkA\/s400\/CommodityDerivativesGrowth.JPG\" border=\"0\" alt=\"\"id=\"BLOGGER_PHOTO_ID_5184784342437622722\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EHere's how Veneroso observes the unprecedented state of our commodity markets:\u003Cbr \/\u003E\u003Cblockquote\u003EThough the six-fold increase in such positions over a few brief years is dramatic , it is the magnitude of these positions that is most alarming...It is hard to know what to make of this data. But it is noteworthy that several years ago, at the then prevailing lower commodity prices, the entire above ground stock of all commodity inventories was only in the hundreds of billions of dollars. Even if only a fraction of the increase in global commodity derivative aggregates in recent years corresponds to a net long position of investors or speculators, implying speculative and investment positions of a “few trillions of dollars,” it would appear that this increased demand for commodity derivative positions has overwhelmed what have been relatively small markets...\u003Cbr \/\u003E\u003Cbr \/\u003ENo wonder, then, that this cycle’s bull market in commodity prices has gone higher in inflation-adjusted terms [i.e. in terms of the CPI and PPI -- a poor near-term measure of inflation, see below] and for longer than in all prior uninterrupted half-decade cycles in the past.\u003C\/blockquote\u003EI agree with Veneroso that the recent commodities boom has a strong causal link to the recent rise in the amount and variety of commodity derivatives.  But I couldn't disagree with him more about the role of inflation.  Prices, and especially wages, react very slowly to changes in money supply, so that the CPI and PPI are \u003Ci\u003Etrailing\u003C\/i\u003E indicators.   The leading indicators are increases in money supply in excess to increased demand for money and the associated (if disproportionate) increases in commodity prices.  \u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjmBsS-hwLAbpGtZnfKM1rk1bPwN2WuZ_KvOpP5VfAE3WCwkbabbFeJsdbfADjURltFXf3WMG7YDV23pozX67X3hvmt85sdW7y2w1Byv1fhhzKHo35Vza5lWoTycdIQLPM22HpQ\/s1600-h\/m3b_long_term.png\"\u003E\u003Cimg style=\"float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjmBsS-hwLAbpGtZnfKM1rk1bPwN2WuZ_KvOpP5VfAE3WCwkbabbFeJsdbfADjURltFXf3WMG7YDV23pozX67X3hvmt85sdW7y2w1Byv1fhhzKHo35Vza5lWoTycdIQLPM22HpQ\/s400\/m3b_long_term.png\" border=\"0\" alt=\"\"id=\"BLOGGER_PHOTO_ID_5184820978508657618\" \/\u003E\u003C\/a\u003E\u003Ci\u003EM3, an estimate of the supply of dollars (including a reconstructed estimate for recent years).  M3 is increasing at the highest rate since the 1970s, as are to a lesser extent the supplies of euros and other major currencies, resulting in a commodity boom not seen since the 1970s. Source: \u003Ca href=\"http:\/\/www.nowandfutures.com\/key_stats.html\"\u003Enowandfutures.com\u003C\/a\u003E\u003C\/i\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EThe recent vast increase in commodity derivatives, and the resulting commodity boom, is a largely rational response to the vast increase in the supply, relative to demand, for the dollar and to a lesser extent the euro and most other major currencies during most of the last decade.  This despite the fact that commodities prices have in the last year risen (at about 40%\/year) much faster than the growth of money supply (about 15%\/yr).  To see why, observe that one of the most useful but least talked about uses of derivatives is their ability to simulate the economic behavior (primarily risk and return) of one kind of asset based on contracts for another kind of asset or performed in another legal environment.  The classic example is Eurodollars. But let's take a general scenario:\u003Cbr \/\u003E\u003Cbr \/\u003EAlice wants to promise Bob to transfer asset X.  But the risks associated with Bob holding asset X on his balance sheet, or Alice holding liability X on her balance sheet, until actual transfer of the asset, are too high, or the transaction costs of actually transfering X from Alice to Bob are too high, or both.\u003Cbr \/\u003E\u003Cbr \/\u003E(1) Solution for risks of holding asset X on books: derivatives.  Alice has both assets and liabilities on her books.  These have individual and net risks just like an investment portfolio.  If Alice has the same amount of assets and liabilities all denominated in the same currency, her portfolio is balanced.  But if, for example, she imports from Europe (thus creating liabilities in euros) and sells in the U.S. (creating assets in dollars), her portfolio becomes strongly subject to risk of dollar devaluation against the euro.  If a new asset or liability creates such unbalanced risk, it can be hedged with derivatives.\u003Cbr \/\u003E\u003Cbr \/\u003E(2) Solution for transaction cost of transferring asset X from Alice to Bob: use derivatives to create a synthetic asset.  Construct from derivatives and asset Y a synthetic asset that economically behaves like asset X.   These separate derivatives and asset Y that form the synthetic all can be transfered with low transaction costs, thus forming an asset economically equivalent to asset X but that, unlike X, can be transferred from Alice to Bob at low cost.\u003Cbr \/\u003E\u003Cbr \/\u003EThe reason these uses of derivatives are seldom talked about is that the main cause of problem (1) is the instability of government currencies that it is legally necessary (for a variety of reasons) for  contracts to be denominated in.  The cause of problem (2) is usually a legal barrier to a particular transaction -- a tax, exchange control, risk caused by regulation, or risk of confiscation in Bob's jurisdiction are four examples.  People who route around the law tend to do so quietly, explaining their acts by euphemism, even if as here the new route is perfectly legal and is made necessary by deep flaws in the law or the way the law is executed.\u003Cbr \/\u003E\u003Cbr \/\u003EThere are often, in other words, huge discrepencies between the contract terms required or incentivized by law and the most economically efficient contract terms. Partly this is due to political stupidity, and partly to the inevitable profound imperfection of any body of rules.\u003Cbr \/\u003E\u003Cbr \/\u003E(3) A third function of derivatives is simply as a store of value: a way to diversify or hedge inflation risk in an investment portfolio that otherwise contains either (a) debt denominated in a potentially inflating currency, (b) equity in companies with assets consisting mainly of debts denominated in a potentially inflating currency, or (c) both.\u003Cbr \/\u003E\u003Cbr \/\u003EIn performing functions (1) and (2), derivatives usually substitute for or augment currencies as a medium of exchange.  For (3) they substitute for or augment the monetary function of a store of value.  Most derivatives, in other words, perform largely \u003Ci\u003Emonetary\u003C\/i\u003E functions.  They augment or substitute for a flawed method of payment or a flawed store of value.\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgsCyJTCookV5Np9w_bz9wwv-7X1OJJfdrZiYIrKSf4navW_BC5Uq3-Qi6CyhCPVu0_JXYSSKaMMxt5mOGv7aGRgclZrnKUOITo-yLdtn5mKVn8bs2ADgWjyb1YnAFYCpUJR92A\/s1600-h\/global_liquidity_cofer_base.png\"\u003E\u003Cimg style=\"float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgsCyJTCookV5Np9w_bz9wwv-7X1OJJfdrZiYIrKSf4navW_BC5Uq3-Qi6CyhCPVu0_JXYSSKaMMxt5mOGv7aGRgclZrnKUOITo-yLdtn5mKVn8bs2ADgWjyb1YnAFYCpUJR92A\/s400\/global_liquidity_cofer_base.png\" border=\"0\" alt=\"\"id=\"BLOGGER_PHOTO_ID_5184824367237854178\" \/\u003E\u003C\/a\u003E\u003Ci\u003EGold prices in dollars (and, not pictured here, the dollar prices of many other commonly traded commodities) roughly follow changes in the global monetary base of dollars. Source: \u003Ca href=\"http:\/\/www.nowandfutures.com\/key_stats.html\"\u003Enowandfutures.com\u003C\/a\u003E\u003C\/i\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EIn a climate where one or more commonly used currencies are inflating (and by \"inflation\" I simply mean rise in money supply without concurrent rise in demand for that currency, not the CPI or any particular and usually trailing measure of inflation), derivatives, if they can be analyzed and traded at low cost, are very much in demand.   Furthermore, if all of the currencies practically available for contractual payment terms are inflating, these derivatives will come to be increasingly based, not on currency-denominated debt, but on commodities, especially commodities for which supply and demand are relatively inelastic in the short and medium terms.\u003Cbr \/\u003E\u003Cbr \/\u003EWhy is it rational, rather than reflecting a bubble, for the recent rise in commodity prices to outpace the recent rise in money supply?  The rise in commodity prices reflects the increase not just in supply of dollars per unit of commodity, but greatly increased demand for a commodity \u003Ci\u003Eas money\u003C\/i\u003E, i.e. for the monetary functions it serves either directly or indirectly via derivatives, on top of the relatively steady demand for consumption.  As I have argued elsewhere, this increase is broad-based: all commodities that can be traded with low transaction costs on modern markets, and that exhibit short- and medium-term inelasticity of supply and consumption demand, are useful for and are being used as reserves for the new derivative currencies.  Where computerized analysis lowers mental transaction costs, as with modern derivatives, it pays to diversify one's books, portfolios, and hedges among multiple currencies.\u003Cbr \/\u003E\u003Cbr \/\u003EOf course, the traditional use of commodities futures and derivatives by commodity producers and consumers to hedge the assets and liabilities of the commodity sales and purchases inherent in their business continues.  But these don't account for the vast majority of commodity derivatives use in recent years.\u003Cbr \/\u003E\u003Cbr \/\u003EBefore modern computers, networks, and software engineering, the cost of such derivatives was usually prohibitive.   In the last period of monetary inflation and the resulting commodity boom, the 1970s, derivatives were available to few and only the very simplest hedges or synthetic assets could be understood, and even then very imperfectly.  Today derivatives, and their use in very complex hedges and synthetic assets, are much better understood by most of their users, thanks to computerized game tree analysis, and are available to many.  They can be designed, simulated, and traded electronically with very low transaction costs.  Computerized derivatives are  \u003Ca href=\"http:\/\/szabo.best.vwh.net\/smart.contracts.html\"\u003Esmart contracts\u003C\/a\u003E that \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2006\/04\/smart-contracts-reduce-mental.html\"\u003Elower mental transaction costs.\u003C\/a\u003E So much so, that they've created a vast new world of contractual relationships completely impossible with the brain alone.\u003Cbr \/\u003E\u003Cbr \/\u003ESpeaking perhaps a bit metaphorically, we are witnessing the rise of new and privately issued fractional reserve currencies.  They need not and effectively cannot legally be called \"money\" by their \"issuers\", nor can they effectively be used directly in most contracts for payments.  But they can be used indirectly to hedge payment terms or investments denominated in flawed, that is in inflating or otherwise unstable, government currencies in which normal contracts and instruments are generally denominated.  The results are synthetic \"currencies\" that, in their economic behavior, may be almost indistinguishable from a tradtional commodity-backed and privately issued fractional reserve currency.\u003Cbr \/\u003E \u003Cbr \/\u003ENo wonder the Federal Reserve and other central banks are moving hard to usurp jurisdiction over derivatives (per, for example, the recently announced Paulsen plan here in the U.S. to consolidate a variety of financial regulation under the Federal Reserve).  To effectively regulate derivatives, for better or worse, the Fed will have to understand them first.  But they do not have this knowledge.  Indeed no human brain holds this knowledge.  The knowledge needed to understand the dizzying variety of derivatives exists mainly in the form of computer simulations.   \u003Cbr \/\u003E\u003Cbr \/\u003EDerivatives, the money of the digital era, perform monetary functions in competition with the Federal Reserve's dollars, an increasingly primitive holdover of the paper era.  By regulating derivatives the Federal Reserve regulates its competition.  This creates a profound conflict of interest.  It's like putting Rust Belt executives in charge of Silicon Valley. Such regulation may cause, not the popping of a commodity bubble, but the destruction of a nascent economic order made necessary by the prediliction of the Federal Reserve and other central banks to inflate their fiat currencies. Whether ignorance or conflict of interest will play the greater role in the destruction of the new currencies, or whether one will cancel the other out leaving the derivatives markets in relative freedom, remains to be seen.\u003Cbr \/\u003E\u003Cbr \/\u003E[Obligatory Wikipedia links: \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Eurodollars\"\u003EEurodollars\u003C\/a\u003E, \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Price_elasticity_of_supply\"\u003Eelasticity\u003C\/a\u003E]\u003Cbr \/\u003E\u003Cbr \/\u003E[H\/T: I learned of Venero's paper from Byrne Hobart]\u003Cbr \/\u003E\u003Cbr \/\u003E[Here's a prior \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2008\/03\/monetary-value-of-liquid-commodities.html\"\u003Eexplanation\u003C\/a\u003E of mine giving a broader overview of why commodity prices reflect demand for their monetary functions as well as for their consumption, but not explaining the role of derivatives].\u003Cbr \/\u003E\u003Cbr \/\u003E[*] These numbers are a bit stale -- it would be great to see to what extent this growth has continued.  If any reader has data on commodity derivative use through 2007, please let me know.\u003Cbr \/\u003E\u003Cbr \/\u003E[UPDATE: here is more straightforward \u003Ca href=\"http:\/\/businessweek.com\/lifestyle\/content\/apr2008\/bw2008041_945564.htm\"\u003Earticle\u003C\/a\u003E that gets the basic facts right: production up, inventories up, consumption down, prices up -- inexplicable if consumption is the only major source of demand -- but gets the explanation wrong, replacing the rational and efficient use of commodity derivatives as money that I have described here with the typical speculations about \"speculation\" resulting in a \"bubble\"].\u003Cbr \/\u003E\u003Cbr \/\u003E[Ad: I am now providing \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2008\/04\/consulting-services.html\"\u003Econsulting services.\u003C\/a\u003E]"},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/7927062823429106409\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/7927062823429106409","title":"14 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/7927062823429106409"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/7927062823429106409"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2008\/04\/commodity-derivatives-new-currencies.html","title":"Commodity derivatives: the new currencies"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"media$thumbnail":{"xmlns$media":"http://search.yahoo.com/mrss/","url":"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgNSXM7NuQQSudDIzCgbBoyAAu0V2qPsoXrrzlk4RzVeBl26lyOo1Nbr5MtYcYUHZ4JzPpq51_f_gONxy8U6LWZiLTpXLU0WYKY_sLOU3aUA4qCLb5Aal28rE3QJHiiH3tLuDkA\/s72-c\/CommodityDerivativesGrowth.JPG","height":"72","width":"72"},"thr$total":{"$t":"14"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-7885333370282572484"},"published":{"$t":"2008-04-02T15:11:00.000-07:00"},"updated":{"$t":"2008-04-04T11:03:57.578-07:00"},"title":{"type":"text","$t":"Consulting services"},"content":{"type":"html","$t":"I am now publicly offering my consulting services.  Besides topics I regularly blog about, my expertise includes technology product management (especially for e-commerce and wireless products and services), \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Smart_contracts\"\u003Esmart contracts\u003C\/a\u003E, financial engineering, software architecture and engineering, and computer\/network security.  I can travel just about anywhere.\u003Cbr \/\u003E\u003Cbr \/\u003EPlease contact me at nszabo AT law DOT gwu DOT edu for rates, availability, resume\/CV, etc.  Please describe or link to a description of your project and describe the services you need."},"link":[{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/7885333370282572484"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/7885333370282572484"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2008\/04\/consulting-services.html","title":"Consulting services"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}]},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-2269083489482464479"},"published":{"$t":"2008-03-28T13:55:00.000-07:00"},"updated":{"$t":"2008-03-28T14:16:29.727-07:00"},"title":{"type":"text","$t":"Laches"},"content":{"type":"html","$t":"Laches is the common-law name for the concept more commonly known as \"the statute of limitations.\"[*]  The idea is that, if a wrong has been done, or there is otherwise a dispute, we put a limit on the time within which the victim or the victim's estate can file charges or sue for damages.  Laches or statutes of limitations apply to practically all kinds of wrongs of any nature.   There are three strong reasons for setting time limits on redressing wrongs:\u003Cbr \/\u003E\u003Cbr \/\u003E(1) Memories fade, witnesses die, and evidence is degraded or destroyed, rendering the rights and wrongs of the case increasingly uncertain and susceptible to biased propaganda.\u003Cbr \/\u003E\u003Cbr \/\u003E(2) Security, confidence in, and stability of legal rights are crucial to a civilized legal system.  But if we go back far enough, the \"chain of title\" for almost every legal right we have (including our political as well as economic rights) can be plausibly argued to be illegitimate due to some kind of unredressed wrong: some commission of force or fraud that was never remedied.   Without a time limit, hardly any legal right of almost any kind could be held with legal security.\u003Cbr \/\u003E\u003Cbr \/\u003E(3) Having the estate of one person be responsible to the estate of another person for a wrong committed by the ancestor of one to the ancestor of the other gets us too far away from the individual responsibility and the shaping of behavior through incentives that is at the core of law.\u003Cbr \/\u003E\u003Cbr \/\u003ELaches should also be a core political principle.  Allowing some classes of citizens to extract \"reparations\" from other classes of citizens for harms done by some or many of the ancestors of members of one class to some or many of the ancestors of another class, without setting any time limits, renders the legal rights of all persons insecure.   Evaluations of ancient wrongs are susceptible to very distorted propaganda.  Punishments of individuals who did not commit the wrongs do not deter the recurrence of such wrongs in the future, and indeed are themselves wrongs that foster further resentment and breed more future claims for redress.  The moral imperative holding the members of one very imperfectly defined class, rather than persons who actually committed the wrongs, for the wrongs committed to some of the members or ancestors of another class, already doubtful, becomes increasingly doubtful as time goes by, as does the power of such laws or other political acts to shape behavior to desirable ends through incentives. \u003Cbr \/\u003E\u003Cbr \/\u003E[*]  Technically, the term \"statute of limitations\" applies where a statute expressly sets a time limit, and the doctrine of laches applies where no such statute exists."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/2269083489482464479\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/2269083489482464479","title":"5 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/2269083489482464479"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/2269083489482464479"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2008\/03\/laches.html","title":"Laches"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"5"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-866017624305592576"},"published":{"$t":"2008-03-26T16:04:00.000-07:00"},"updated":{"$t":"2008-03-27T13:11:17.043-07:00"},"category":[{"scheme":"http://www.blogger.com/atom/ns#","term":"Commerce Clause"},{"scheme":"http://www.blogger.com/atom/ns#","term":"Constitution"},{"scheme":"http://www.blogger.com/atom/ns#","term":"federal"},{"scheme":"http://www.blogger.com/atom/ns#","term":"libertarian"},{"scheme":"http://www.blogger.com/atom/ns#","term":"United States"}],"title":{"type":"text","$t":"How our frog was boiled"},"content":{"type":"html","$t":"Libertarians have long observed with regret the radical expansion of the power of the United States federal government over its original scope under the Constitution of 1789. Lovers of freedom tend to blame two chief culprits for this expansion: President Abraham Lincoln, who instigated our Civil War, and President Franklin Delano Roosevelt with his New Deal. And indeed, these Presidents did instigate some noxious precedents: Abraham Lincoln the draft and income tax, FDR the advocacy of positive substantive rights and the birth of practically unlimited regulatory power of federal government. Some cite villains from the Progressive Era, such as Theodore Roosevelt and Woodrow Wilson.\u003Cbr \/\u003E\u003Cbr \/\u003EHowever, these theories oversimplify U.S. history to the point where the real and fixable sources of our loss of freedom cannot be identified. They make it sound like if we could simply go back in history and remove a handful of powerful villains, or avoid a handful of crises, then we would be living in a much freer society today. That is very far from the reality.\u003Cbr \/\u003E\u003Cbr \/\u003EThe consequences of even Lincoln and FDR were not unmixed. Lincoln damaged some freedoms, but he also greatly increased freedom by ending slavery. The Civil War Amendments, especially the 14th Amendment, eventually led to a great increase in the enforcement of unenumerated rights (hence the name of this blog!) and the Bill of Rights against the states (and, for reasons I relate \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2008\/03\/comments-on-united-states-constitution_19.html\"\u003Ehere\u003C\/a\u003E, hence also against the federal government). Among the leading countries in the middle of the evil 20th century, the United States despite FDR was the most free. FDR destroyed the threat of fascism and appointed most of the Justices who ended forced and unequal segregation by race. One can easily argue, especially in the case of FDR, that the curses outweighed the blessings, but one cannot seriously portray even these powerful Presidents as unmixed enemies of freedom. It's great fun, and may be morally imperative, to blaspheme these great gods in the pantheon of government worship, but criticisms of these particular actors don't get us to the core of why, in the face of a Constitution that outline a strictly enumerated set of powers, the adherents of that religion were able burst far beyond those bounds and render them nugatory.\u003Cbr \/\u003E\u003Cbr \/\u003EThe expansion of power of the U.S. federal government was not primarily due to villians, crises, or revolutions, but far more resembled the proverbial boiling frog: it mostly happened by small and obscure steps that were not widely noted by lovers of freedom at the time, and have seldom been noted by us since. The slow rot of Constitutional protections against federal power stemmed from subtle but endemic flaws in the original frame of our federal government, the rise of an economy where large numbers of people earned income from auditable corporations (making the income tax, the most lucrative tax in history, practical), and the disappearance of frontiers of free land to which the overtaxed or overregulated could flee. This article focuses primarily on the first, the clearest and most fixable cause, the procedural flaws in our Constitution.\u003Cbr \/\u003E\u003Cbr \/\u003EThe U.S. Constitution lists a number of enumerated powers, beyond which Congress was granted no power to legislate. In other words, the U.S. Congress was supposed to have a small, close-ended list of powers, and this is still recognized by the Supreme Court as theoretically true today. If this had remained true in practice, as well as legal theory, the U.S. federal government would be a radically libertarian entity today. That it is no longer practically true, is, more than any other factor, due to the long series of usurpations of power by Congress under the Commerce Clause, which in its words gives the Congress the power to regulate “commerce among the States.” At the time, this power was thought to be limited to power to regulate the transport of goods and persons across State boundaries, and indeed in the first century of the Constitution it was largely in practical fact so limited. (There are a number of other causes, such as the 16th Amendment of 1913 legalizing the income tax, but the Commerce Clause is the way in which Congress has most expanded its power to regulated, and an extremely vast expansion it has been).\u003Cbr \/\u003E\u003Cbr \/\u003EIt’s fairly obvious why Congress, by itself, has not and would not seriously let any kind of Constitutional text limit its own power. Less obvious is why the Supreme Court, which has the final word on interpreting Congressional power to legislate under the Constitution, would allow Congress to so greatly expand its powers. But that is just what it did, by many slow and incremental steps.\u003Cbr \/\u003E\u003Cbr \/\u003EUnder Chief Justice Marshall, there were a number of cases restricting the power of States to regulate what Marshall argued was interstate commerce, and thus under federal jurisdiction. In immediate effect these were libertarian decisions, since they overturned often burdensome State laws. The Marshall Court, and the Story Court that followed it, refused to find, even once, any limits on the federal Commerce Clause power. Although it was generally agreed that “commerce among the States” was limited to the transport of goods and persons across state lines, Marshall refused to define it in this manner, or indeed define any clear outer limited to the Commerce power. Indeed, in dicta (sentences in a legal opinion that are not legally binding, because they are not logically necessary for reaching the verdict), Marshall suggested that any activity that “effects” such transport might be regulated. Although Marshall’s nationalist ideology set the tone, overturning state laws and ignoring federal laws, this pattern of limiting state usurpations but ignoring federal usurpations was largely continued by future courts, for reasons of bias or conflicts of interest caused by court selection and structure which I describe \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2008\/03\/comments-on-united-states-constitution_19.html\"\u003Ehere.\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EAlthough there were a handful of cases limiting the Commerce Clause in very narrow and specific ways at the end of the 19th century, the \u003Ci\u003ESwift v. U.S.\u003C\/i\u003E case in 1905 greatly expanded the Clause’s scope to cover manufacturing, not just the transport of goods or persons across State borders, on the theory that the manufactured goods would end up in interstate commerce. This was part of the so-called “Progressive” movement, the rise of the modern religion of \"the government\", an omnipotent deity called upon by the national press to solve any major problem deemed to be national in scope. This era saw the greatest expansions of federal power in U.S. history, including its basic tools of financial power, the Federal Reserve system and the 16th Amendment in 1913 legalizing the income tax. During this era, in which states also greatly expanded their powers, the Supreme Court was again far more active at limiting the states than limiting federal power. The “Progressive Era” was a very broad and general ideological movement, and most of it cannot be pinned on any particular politician. Drivers of the movement included the steam press and news wire agencies, which promulgated a national view (that vague godlike phrase, “the government”, came to refer to the federal rather than state government during this era). Under this new media system information transfer became dominated by the press releases of powerful governments and corporations. The spread of government-mandated education, again inculcating a very nationalist view, in the latter half of the 19th century also played a large role. The end of free arable land on the Western frontier and the rise of the auditable corporation also played crucial roles in facilitating much greater levels of taxation. During this era, except for a handful of minor victories, the federal courts did not prevent Congress and the President under the impetus of this movement from usurping vast powers not granted them under the original meaning of the Constitution.\u003Cbr \/\u003E\u003Cbr \/\u003EAfter this, the New Deal simply delivered the \u003Cem\u003Ecoup de grace\u003C\/em\u003E. In \u003Ci\u003EWickard v. Fillburn\u003C\/i\u003E, the Court proved it had no desire to limit the federal government in any serious way, using Marshall’s “effects” dicta to justify its holding that growing wheat on your own small farm for your own consumption is “commerce among the States.\" Quite recently, the Supreme Court reconfirmed this absurdity: growing marijuana in your house is also “commerce among the States.” And thus the frog has been boiled. To this day our amphibian does not realize that it has already been cooked. The idea that the U.S. Supreme Court, given this long history of precedents, and the same kinds of selectional and operational biases it has always operated under, will ever seriously limit federal power again, just because that is what the Constitution says it must do, is far-fetched. Our courts as currently structured will only protect certain narrow rights of persons under the Bill of Rights from otherwise omnipotent governments. The idea that “We the People” will somehow elect a Congress or President that will voluntarily waive their own powers is even more absurd. Libertarians are playing a game with a very stacked deck, and that deck is stacked by the Constitution itself, the very same Constitution that in its original meaning was, substantively, radically libertarian, but that included procedural incentives for Congress and the Courts to slowly aggrandize federal powers."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/866017624305592576\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/866017624305592576","title":"2 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/866017624305592576"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/866017624305592576"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2008\/03\/how-our-frog-was-boiled.html","title":"How our frog was boiled"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"2"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-913994146560925940"},"published":{"$t":"2008-03-24T15:55:00.001-07:00"},"updated":{"$t":"2008-04-01T14:10:12.643-07:00"},"title":{"type":"text","$t":"The monetary value of liquid commodities"},"content":{"type":"html","$t":"In modern commodity markets one can exchange money for commodities at almost zero transaction costs. These markets thus reflect not just the supply and demand of the commodity, but also the supply and demand of the currency they are priced in.\u003Cbr \/\u003E\u003Cbr \/\u003EBecause they combine liquidity with short- and medium-term supply inelasticity, mineral commodities are a good way to hedge a falling currency. When the supply of money increases or is expected to increase, whether because of lower nominal or real interest rates, because the bank that issues the currency is buying government treasury bonds or (like John Law of Mississippi Bubble infamy) mortgage-backed securities[*], or for any other reason, a disproportionate amount of the expected or surprise increase in money supply is soaked up by commodities.  Indeed the commodities with the most liquid markets and inelastic supply, such as oil and gold, tend to move in lock-step with each other. Such price movement is strong evidence for the movement being primarily a phenomenon of changing money supply or demand rather than of changing supply or demand for particular commodities. If oil prices were rising primarily due to rising industrial demand for oil, or primarily because oil was getting more expensive technologically to produce (e.g. \"peak oil\" theory), we'd expect them to move quite differently than gold, which is demanded for primarily non-industrial reasons and has a vastly greater  inventory\/production ratio on the supply side than oil.  That's not what we see -- we see oil and gold moving together, and indeed the price of oil in terms of gold and silver has been practically flat in the recent commodity boom.  This is almost entirely due to expected or actual increases in the supplies of the currencies they are traded in (and especially recently in the weak dollar) rather than to \"real\" factors.\u003Cbr \/\u003E\u003Cbr \/\u003EThis inflation only slowly percolates into price rises in other goods and services, which tend to be far more rigid than commodities. Wages are particularly rigid. Because the U.S. Federal Reserve and most other central banks regulate their money supplies based on trailing indicators of inflation(e.g. consumer price indices) rather than leading indicators (commodity prices), it is no surprise that their decisions tend to produce boom-and-bust cycles in commodities, and that to a lesser and more delayed extent they cause both general inflation and recessions. No uncommon demand from China or the like is needed to explain the recent commodity boom, just as no such rise in demand or long-term fall in supply was needed to explain the very similar commodity boom in the 1970s. But since most people judge supply and demand of a commodity by nominal price, both in the 1970s and now we get a lot of irrational hysteria about \"running out\", \"peak oil\", how our energy industries and consumption are \"unsustainable\", etc. I'll believe that when oil per barrel doubles or more with respect to gold and silver. When they move together, we're just being fooled by monetary instability, and most of the current disproportionate increase in investment in energy supplies and conservation, whether traditional or renewable, is malinvestment in response to highly distorted nominal price signals, as is the accompanying political bubble of \"energy security\", conservation enforced through idiotic micro-regulations (e.g. banning traditional light bulbs), and so on.\u003Cbr \/\u003E\u003Cbr \/\u003EAnother way of putting this is that, when currencies become unreliable as a store of value, commodities take on part of that monetary role. Both oil and gold increase in value by performing this monetary function better than the currency against which they are being traded, better than credit instruments denominated in that currency, and even better, in the short term, than stocks of companies that do business primarily in that currency.  The joint movements in oil and gold reflect their value, relative to the currency they are priced in, performing the monetary function of a store of value. Global supplies and industrial demands for minerals are far less volatile than the change in their value in this monetary role. It's the \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2008\/03\/logical-emergence-of-money-from-barter.html\"\u003Elogical emergence of money from barter\u003C\/a\u003E, but this emergence goes on every day that liquid commodities act as a better store of value than the currency in which they are priced. Contrariwise, as the currency becomes a better store of value than the commodity, these commodities move back down towards just being commodities valued only for their consumption. Thus their exaggerated moves, both upward and downward, in reaction to changing expectations of future increases or decreases in money supply. \u003Cbr \/\u003E\u003Cbr \/\u003EDue to their exaggerated moves and the relative rigidity of most non-commodity prices, commodities themselves are an imperfect store of value. They react far more than the general level of prices to both increases and decreases in money supply, or changing expectations of same. If the Fed stops playing John Law and desists from buying bad mortgages, if others besides the Fed soak up all the new Treasuries produced by large federal budget deficits, ifcounterparty risk in credit markets subsides, the Fed can raise rates, sell securities and retire the money, and otherwise take steps to lower the money supply and stanch inflation. In such a case, commodities will react disproportionately on the downside, as they did in the 1980s.   If the Federal Reserve can't do these things, dollars and dollar-denominated securities will continue to decline and people will increasingly turn to commodities to protect their nest eggs. All the ads I see and hear for gold these days suggests the peak of a commodity bubble is near, but on the other hand credit markets may worsen due to the continued crashing of the previous bubble (the housing\/mortgage bubble), federal deficits may continue to increase, and the Fed may thus buy even more securities, making commodities even more attractive. I'm thus afraid that I have no buy or sell recommendations for you, dear readers.  :-)\u003Cbr \/\u003E\u003Cbr \/\u003E[This comment is based on a comment I recently made at the Marginal Revolution blog].\u003Cbr \/\u003E\u003Cbr \/\u003E* [Obligatory Wikipedia links: \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/John_Law_%28economist%29\"\u003EJohn Law\u003C\/a\u003E, \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Mississippi%20Bubble\"\u003EMississippi Bubble\u003C\/a\u003E, \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Bear_Stearns\"\u003EBearStearns bailout\u003C\/a\u003E]\u003Cbr \/\u003E\u003Cbr \/\u003E[UPDATE: reader Byrne Hobarth has linked to \u003Ca href=\"http:\/\/www.venerosoassociates.net\/Reserve%20Management%20Parts%20I%20and%20II%20WBP%20Public%2071907.pdf\"\u003Ethis\u003C\/a\u003E excellent analysis of the commodities market.  This study debunks the theories that trends in supply or consumption demand, very steady over the last century, have greatly changed over the last decade.  In particular, increased demand for many commodities such as copper in China has been offset by slows in growth or declines in demand in Europe and the U.S. \u003Cbr \/\u003E\u003Cbr \/\u003EThe studies' thesis is that the commodity runup is largely just a bubble.  The study shows the spectacular rise in commodity derivatives.  These represent far more contractual liability or asset than the underlying commodities.  Treating commodities as money, this to me looks like a new emergent form of fractional reserve banking, but reconstructed in the investment rather than the banking sector.  These derivatives, on this view, act essentially as private fractional reserve currencies, backed by a variety of commodities.  The report views all this as evidence of a bubble.  It points out we haven't yet seen the consumer inflation of the previous commodity bull.  I emphasize \u003Ci\u003Eyet\u003C\/i\u003E.  Consumer prices are a \u003Ci\u003Etrailing\u003C\/i\u003E indicator, and I believe the commodity markets are more rational in anticipating and reacting to money supply increases than they were in the 1970s thanks to the dominance of derivatives.  The development of these new kinds of currencies, though prone to the risks and errors of novelty, are largely rational.]"},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/913994146560925940\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/913994146560925940","title":"8 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/913994146560925940"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/913994146560925940"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2008\/03\/monetary-value-of-liquid-commodities.html","title":"The monetary value of liquid commodities"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"8"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-9020485903589769961"},"published":{"$t":"2008-03-22T14:28:00.000-07:00"},"updated":{"$t":"2008-03-22T15:28:37.672-07:00"},"title":{"type":"text","$t":"Representation distance"},"content":{"type":"html","$t":"An agent (or representative) is a person authorized by his principal (or constituent) to act on behalf of that principal.   The task of the agent, ideally, is to implement the will, interests, or preferences of that principal.  The degree of communication and control of the principal over the agent varies greatly.   Examples of principal\/agent relationships include employer\/employee, shareholder\/management, and voter\/representative.   Agency law and principles can be applied, metaphorically or actually, to all such relationships.   Economists study the “agency problems” that occur when the agent’s behavior is influenced by other interests, especially his own.  A contract in which, when rules are not specified, one person is legally or morally expected to learn and implement the preferences of the other, or at least to maximize an abstract measure representing the preferences of another, is an agency contract.  \u003Cbr \/\u003E\u003Cbr \/\u003EAgency contrasts sharply with a grant of property rights.  The grantee, the person to whom property is granted, is bound by the rules of the grant, not by the will of the grantor.   A grantor can cause his interests to be represented only through specifying, before the grant is made, the conditional rules under which the grant is made.   Within the grant condition and boundary rules, the owner of property is legally expected to act solely in his own interests.  With political property rights, the “boundaries” are rules of legal procedure which the owner may not breach.   A similar but temporary effect can sometimes be achieved with a contract that details all of the rules of the relationship, with the legal and moral understanding that all else about the relationship is simply a matter of personal preference rather than of one party learning and implementing the preferences of the other.\u003Cbr \/\u003E\u003Cbr \/\u003ERepresentation distance estimates the degree of loss of information, control, or both in a principal\/agent relationship.  In other words, it estimates the degree to which the agent fails to know or implement the true preferences of the principal(s).   In a representative democracy or republic, representation distance estimates the degree to which the representative actually represents the interests (basically equivalent to economic preferences, but in politics they might also include preferences to coerce others) of his constituents rather than others. \u003Cbr \/\u003E\u003Cbr \/\u003ERepresentation distance generally grows with the size of group represented.  Since even any two people communicate imperfectly, and have conflicts of interest between them, it's not even possible for one person to perfectly represent another, albeit such representation can far more accurately represent any interests than representing a group.  One can think of this distance as being minimal, call it 1, when a person is acting for himself. When one principal delegates duties to one carefully chosen and monitored agent (a.k.a. representative), the distance is some greater value, perhaps 2. Representation distance is further compromised by majority vote, which leads to two losses: (1) the interests become increasingly general and vague, rather than the specific and concrete interests the voters actually have, as the number of voters increase and (2) the interests of minorities tend to be neglected.   These numbers are purely illustrative (perhaps we should start at zero), and the function whereby representation distance increases with the size of the group represented is unknown.\u003Cbr \/\u003E\u003Cbr \/\u003EA similar effect occurs in shareholder\/management relationships.  Shareholder interests vary greatly.   Their time preferences for dividends or capital gains vary greatly.  They sometimes have non-monetary interests, as in \"socially conscious\" investing.  But the duty of management to shareholders usually gets stripped down to a very simple one, a fiduciary duty to maximize profit.\u003Cbr \/\u003E\u003Cbr \/\u003EThere may also be efficiency measures proportional to representation distance. For example, the efficiency of investment in public goods (where the \"public\" is just the population of voters) may be some function of the number of voters. On the other hand, larger representation distance may have a good effect in decreasing the ability of some voters to coerce or oppress other voters via the representative.  \u003Cbr \/\u003E\u003Cbr \/\u003EVast amounts of money are put into  \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2006\/03\/why-are-wages-flat-and-inequality.html\"\u003EK Street\u003C\/a\u003E lobbying, primarily by corporations and government employee labor unions.  This is readily explained by representation distance: the relationships between lobbyists and Congressmen, and even more between lobbyists and unelected but influential bureaucrats, often have a much shorter representation distance than those between voter and Representative.  (The much shorter physical distance, which greatly facilitates face-to-face relationships, greatly helps to shorten the representation distance, but these are otherwise independent ideas).  We can thus expect persons with sufficient resources at stake, such as corporations and government employee unions, to put far more effort into lobbying than they or others do into mere voting.\u003Cbr \/\u003E\u003Cbr \/\u003ESince a political representative represents not the only normal economic preferences of voters, but also preferences to coerce others, large representation distance is not necessarily a bad thing.  An effectively infinite representation distance is effective independence, which is often a good thing.   (We can’t achieve perfectly infinite representation distance, of course).  We want the legislative, executive, and judicial branches to operate independently, for example, not for one to represent the other.   However political property rights, or contracts where when the rules are unspecified on party is not expected to learn or implement the preferences of the other, are usually a far better way than pseudo-representation to achieve independence or infinite representation distance. Political property rights turn at least putatively will-based (a representative is supposed to represent the will of his principal(s)) system into a rule-based system (the owner must operate within the procedural bounds of his property right, and is expected within those rules to learn and follow only his own preferences).  Pseudo-representation -- the use of the language of agency depsite a very large representation distance -- may, however, provide an illusion of participation sufficient to satisfy the naive that their interests are actually being represented.\u003Cbr \/\u003E\u003Cbr \/\u003ETo summarize, no group is truly homogenous, so it's not possible to perfectly represent any group. Since even any two people communicate imperfectly, and have conflicts of interest between them, it's not even possible for one person to perfectly represent another, albeit such representation can far more accurately represent any interests than representing a group. Thus representation distance grows with the size of group represented.   Much politics can be explained by problems caused by representation distances that are too long or too short, or by poor estimates of representation distance made by naive participants.\u003Cbr \/\u003E\u003Cbr \/\u003E[These comments are based on my comments on a \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2008\/03\/unpredictable-elections.html\"\u003Eprevious post\u003C\/a\u003E, and thanks to \"anonymous\" for reminding me about my old idea of representation distance, and for the idea that bribery of a representative by a third party increases representation distance from the principal].\u003Cbr \/\u003E\u003Cbr \/\u003EHere are some links to learn about \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Agency_%28law%29\"\u003Eagency law\u003C\/a\u003E, the \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Principal-agent_problem\"\u003Eprincipal\/agent problem\u003C\/a\u003E, and \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2008\/02\/unbundled-jurisdictions-and-exit-costs.html\"\u003Epolitical property rights.\u003C\/a\u003E"},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/9020485903589769961\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/9020485903589769961","title":"5 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/9020485903589769961"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/9020485903589769961"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2008\/03\/representation-distance.html","title":"Representation distance"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"5"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-4020174014943010263"},"published":{"$t":"2008-03-20T17:53:00.000-07:00"},"updated":{"$t":"2008-03-20T18:37:23.480-07:00"},"title":{"type":"text","$t":"Unpredictable elections"},"content":{"type":"html","$t":"Elections create a big public choice problem.  People contribute money or other favors to candidates in exchange for political favors.  This is economically indistinguishable from bribery.  The problem with bribery is not that people can buy votes -- one can buy votes in corporations, and there's nothing corrupt about it -- but that there is a wasteful lobbying, a spending of both money and time, to purchase not votes but particular political outcomes.   Arthur contributes to Bob's election, or flies Bob around in his corporate jet, or runs some \"independent\" ads or news stories favorable to Bob, and Bob sends some special pork barrel goodies Arthur's  way, or gives him a special dispensation from a regulation that will hurt his competitors, or gets him a government job.   Some of the more overt forms of this election-phase bribery can be banned or minimized by law, but for every overt form there are a dozen or more subtle or novel forms that cannot effectively be regulated.\u003Cbr \/\u003E\u003Cbr \/\u003EHere in the U.S. the notorious McCain-Feingold law is an attempt to curb this problem.   It is notorious because it does so by restricting free speech.  In particular, it restricts who can spend how much on what kinds of speech running up to an election.   Inevitably, it and similar laws are both full of loopholes and contrary to the spirit, if not the letter, of our First Amendment.\u003Cbr \/\u003E\u003Cbr \/\u003EThere is a far better solution that does not have significant loopholes and does not regulate any speech: make elections unpredictable.  If would-be purchasers of political favors cannot predict who will win, or even who might win with substantial probability, they cannot purchase any favors prior to an election.   A perfectly unpredictable election would be bribe-free.\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEh9AfPICiSiZQAzMWU7cOgLkaNI0av237RrpUprhtxHzS57838lzBer7DmIywPwslTYQzVadifMELFJ8G0bGQGZDhw2kQoqJHlMAimu2B3DF5vkM5NZxVkSqjdaGASpfS4sdNqp\/s1600-h\/Venice_GrandCouncil.jpg\"\u003E\u003Cimg style=\"float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEh9AfPICiSiZQAzMWU7cOgLkaNI0av237RrpUprhtxHzS57838lzBer7DmIywPwslTYQzVadifMELFJ8G0bGQGZDhw2kQoqJHlMAimu2B3DF5vkM5NZxVkSqjdaGASpfS4sdNqp\/s400\/Venice_GrandCouncil.jpg\" border=\"0\" alt=\"\"id=\"BLOGGER_PHOTO_ID_5179993675786122162\" \/\u003E\u003C\/a\u003E\u003Ci\u003EThe Grand Council Chamber in Venice\u003C\/i\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EWe can't make elections perfectly unpredictable, but we can get pretty close.  There are historical and even contemporary precedents.  For example, we choose jurors by lot from a pool much larger than the twelve jurors selected.  This prevents wealthy plaintiffs, defendants, or governments from buying jurors through the selection process.  (After selection, there are a number of legal and physical sequestering mechanisms that can be used to isolate a jury from contact with favor purchasers.  As for political office, this article deals only with bribery during the selection process).  \u003Cbr \/\u003E\u003Cbr \/\u003EIn ancient Athens, not only juries but many office-holders were selected by lot.  But the most intriguing unpredictable election process was probably that of the medieval Venetian Republic.   This republic helped turn a \u003Ca href=\"http:\/\/szabo.best.vwh.net\/history.html\"\u003Esecure island\u003C\/a\u003E into Europe's wealthiest trading empire.  In Venice, many political offices were selected by a repeated cycle of lottery, vote, .... lottery, vote.   The final lottery and vote, at least, were held one after the other in the same room, giving favor purchasers no time or privacy to do their business.  The leading office in Venice, the Doge, was selected by a Great Council of about 2,000 members from those members, through a process that can be diagrammed as follows:\u003Cbr \/\u003E\u003Cblockquote\u003E2,000 --\u003E L30 --\u003E L9 --\u003E E40 --\u003E L12 --\u003E E25 --\u003E L9 --\u003E E45 --\u003E 11L --\u003E E41 --\u003E ED \u003C\/blockquote\u003E\u003Ca href=\"http:\/\/www.amazon.com\/Controlling-State-Constitutionalism-Ancient-Athens\/dp\/0674009770\/ref=sr_1_43?ie=UTF8\u0026s=books\u0026qid=1206060739\u0026sr=8-43\"\u003EScott Gordon\u003C\/a\u003E describes this process as follows:\u003Cbr \/\u003E\u003Cblockquote\u003EL refers here to selection by lot; E to selection by election [voting].   In the Great Council, by the drawing of balls from an urn, 30 members of the Council were selected; a further drawing reduced these to 9 who met to elect 40 men.  This 40 was reduced by lot to 12 who proceeded to elect 25, and so on until the final election selected 41 nominators, who submitted their choice to the Great Council [i.e. made the final vote for Doge]. \u003C\/blockquote\u003EThe process is loosely similar to the confusion\/defusion cycles of encryption or the repeated \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Mix_networks\"\u003Emixing\u003C\/a\u003E phases used for securely anonymous Internet communications.  The Venetians alternated a randomizing step with a debate-and-voting step.  It's not clear what, if any, function was served by the particular number choices or some of the other detailed structure.    Each elector presumably had a substantial but fixed number of votes, so that there would exist a top 40, 25,  45, or 41 of vote getters despite being only 9, 12, 9, or 11 electors respectively.\u003Cbr \/\u003E\u003Cbr \/\u003EI suggest the following leaner structure.  A modern congressional election, for example, might look like this:\u003Cbr \/\u003E\u003Cblockquote\u003E600,000 voters \/ 100 candidates --\u003E E23 --\u003E  L7 --\u003E E19 --\u003E L11 --\u003E E17 --\u003E L7 --\u003E E19 --\u003E EM\u003C\/blockquote\u003EThus the top 23 vote-getters (by the 600,000 voters) are selected, from whom 7 are chosen by lot.   These lucky candidates, who now serve as electors, then elect from among all the candidates except themselves 19 electors, who are whittled down by lot to 11.   These elect 17 electors from the candidates except themselves, who are whittled down by lot to 7.   These final seven then elect 19 final electors except themselves, who proceed to elect the Representative from among all the candidates except themselves.\u003Cbr \/\u003E\u003Cbr \/\u003EThis should probably be done online at a scheduled time, if an online election can be made secure, rather than trying to get all the elector\/candidates to meet physically at one or more scheduled times.  The last two steps at least need to proceed quickly enough that no deals can be done between or during them.   With reliable connections and good user interface design it should go quite fast.   The preceeding election steps should usually include time and communications channels for debate and research, but not enough time to forge the social relationships often necessary for reliable favor purchase.\u003Cbr \/\u003E\u003Cbr \/\u003EI've used prime numbers based on a possibly superstitious analogy to the use of prime numbers in cryptography or by \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Cicada\"\u003Ecicadas\u003C\/a\u003E, i.e. on the hunch that prime numbers will make each step less predictable than with factorable numbers.  The process of signing up to be a candidate must be very easy, so that we can get large numbers of people signing up to run in even small elections.   The fact that they double as both electors and candidates who might get elected to office increases the motivation to become an elector\/candidate.  A further benefit is that electors, themselves elected, can prevent a demagogue from being chosen, while the election cycles make it less likely than in a pure lottery for a whacko or incompetent to be chosen."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/4020174014943010263\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/4020174014943010263","title":"8 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/4020174014943010263"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/4020174014943010263"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2008\/03\/unpredictable-elections.html","title":"Unpredictable elections"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"media$thumbnail":{"xmlns$media":"http://search.yahoo.com/mrss/","url":"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEh9AfPICiSiZQAzMWU7cOgLkaNI0av237RrpUprhtxHzS57838lzBer7DmIywPwslTYQzVadifMELFJ8G0bGQGZDhw2kQoqJHlMAimu2B3DF5vkM5NZxVkSqjdaGASpfS4sdNqp\/s72-c\/Venice_GrandCouncil.jpg","height":"72","width":"72"},"thr$total":{"$t":"8"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-3416380559928724743"},"published":{"$t":"2008-03-19T12:34:00.000-07:00"},"updated":{"$t":"2008-03-19T13:18:47.272-07:00"},"title":{"type":"text","$t":"Comments on the United States Constitution (iii)"},"content":{"type":"html","$t":"Our Constitution, while admirable in many respects, has some \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2008\/03\/comments-on-united-states-constitution_06.html\"\u003Edeep flaws\u003C\/a\u003E, especially the federal court structure.  But given the flawed court structure, it has developed one very redeeming feature: the Incorporation Doctrine.  Under this doctrine, said by the Supreme Court to be implied from the 14th Amendment clause requiring States to respect due process, the federal Bill of Rights is applied as a limitation on States.   This doctrine has allowed federal courts to enforce many individual rights against state governments, which state courts have far less incentive to do, even though similar or the same rights are written into most state constitutions.  Combined with the doctrine that the Bill of Rights means the same thing when applied to States as they do when applied against the federal government, (the Same-Scope Doctrine -- an assumption that on original meaning grounds is \u003Ca href=\"http:\/\/volokh.com\/posts\/1205953061.shtml\"\u003Eperhaps flawed\u003C\/a\u003E), it has also given the federal courts far more incentive to enforce the Bill of Rights against the federal government itself.\u003Cbr \/\u003E\u003Cbr \/\u003EA brief further explanation of the basic flaws in both federal and state courts are in order.  These courts are selected by the legislatures and executive whose power they interpret.  This gives a strong selection bias (similar to adverse selection in economics, but involving the choices of third parties).   When on the bench, operational bias (analogous to moral hazard in economics) biases verdicts towards increasing both federal power and the rights of other parties as narrow exceptions to those powers in order to increase the number and importance of disputes, and thereby increase the importance of the federal courts.  The same logic applies to state courts interpreting the powers of state legislatures and executives under state constitutions. \u003Cbr \/\u003E\u003Cbr \/\u003EAn example of selection bias at work: you will almost always see Senators ask judicial nominees their opinion on the Commerce Clause.  To be approved, the nominee cannot declare an intention to overturn preposterous interpretation by which \"commerce among the States\" includes growing marijuana or wheat in your own backyard for your own consumption.  If a nominee does not declare allegience to this legal monstrosity, which has vastly increased the power of the President and Senate, most Presidents and Senates will not allow him on the federal bench.  (The occassional joker, like Justice Thomas, does slip past both the President and Senate, but it's very rare).\u003Cbr \/\u003E\u003Cbr \/\u003EBefore the Incorporation Doctrine and the same-scope assumption, federal courts rarely enforced the Bill of Rights against the federal government.  They enforced the small handful of limitations on the States in the original Constitution far more zealously.   The combination of selection and operational biases produces this result -- the federal courts want to inrease their influence by enforcing rights, but have to commit to Senators (and often the President) who select them to not enforce them strongly against federal legislative or executive acts.  They don't need to commit to States -- the States are not a source of selection bias -- so they can exercise their power freely by enforcing rights against the States.\u003Cbr \/\u003E\u003Cbr \/\u003EThus the federal courts have always been eager to enforce individual rights against the States, but very reticent to do so against the federal government.  The Incorporation Doctrine and the same-scope assumption cause the federal courts to enforce the Bill of Rights against the federal government, going against their selection bias, as a price they are willing to pay to enforce a larger set of rights against the States.\u003Cbr \/\u003E\u003Cbr \/\u003EA much better solution for keeping governmental powers in check and rights protected would be to have federal courts interpret state constitutions, and set up a new super-federal court, selected completely independently of federal politicians, to interpret the U.S. Constitution.  Until such radical modification, the Incorporation and Same-Scope doctrines are crucial to incentivizing federal courts to enforce the Bill of Rights today."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/3416380559928724743\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/3416380559928724743","title":"3 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/3416380559928724743"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/3416380559928724743"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2008\/03\/comments-on-united-states-constitution_19.html","title":"Comments on the United States Constitution (iii)"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"3"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-8747553635337082707"},"published":{"$t":"2008-03-12T17:09:00.000-07:00"},"updated":{"$t":"2008-03-12T17:54:12.848-07:00"},"title":{"type":"text","$t":"Logic and Legal Drafting 101"},"content":{"type":"html","$t":"In common English, \"or\" and \"and\" are often ambiguous.  \"Or\" can mean either inclusive or exclusive or, among other things.  \"And\" often means set union, which might correspond to either inclusive or exclusive \"or\" \u003Cspan style=\"font-style:italic;\"\u003Eor\u003C\/span\u003E logical \"and.\" For example, \"choose from a box containing X and Y\" might mean \"choose X or Y\" (inclusive), \"choose  X or Y\" (exclusive), or \"choose X and Y\" -- depending on whether you get to choose once, once or twice, or you must make two choices.  There are any number of other ambiguities that arise when trying to deduce the logic, if any, behind many plain English uses of \"and\" and \"or.\"\u003Cbr \/\u003E\u003Cbr \/\u003ENevertheless, it's not hard for a legal drafter to make the logic of a legal document clear. This should be Legal Drafting 101, a class which should be required in all law schools: use \"X or Y, but not both\" for exclusive or, \"X or Y, or both\" for inclusive or, \"both X and Y\" for logical and.  It would probably save billions of dollars and many erroneous decisions per year if lawyers followed these three simple drafting tips.   For that matter, technical writers and any other writers trying to make logical relationships clear might benefit from this advice.\u003Cbr \/\u003E\u003Cbr \/\u003ELink \u003Ca href=\"http:\/\/volokh.com\/posts\/1205277114.shtml\"\u003Ehere\u003C\/a\u003E for a hilarious thread of some of America's smartest lawyers trying to decipher a Supreme Court opinion and decide whether it breaks one of De Morgan's Laws --  not (A or B) = not A and not B (where the \"or\" is inclusive).  It may depend on what the meaning of \"or\" is."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/8747553635337082707\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/8747553635337082707","title":"3 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/8747553635337082707"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/8747553635337082707"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2008\/03\/logic-and-legal-drafting-101.html","title":"Logic and Legal Drafting 101"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"3"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-7338333124286766010"},"published":{"$t":"2008-03-06T16:10:00.000-08:00"},"updated":{"$t":"2008-03-06T17:28:36.792-08:00"},"title":{"type":"text","$t":"Comments on the United States Constitution (ii)"},"content":{"type":"html","$t":"The United States Constitution is often lauded as the epitome of freedom.  And indeed, the U.S. has for most of its history sat far towards the \"more free\" end of the spectrum of actual governments.  The original Colonies, Articles of Confederation, and the first hundred years of the United States Constitution were, with some glaring exceptions, among the most libertarian of governments in human history, and far more libertarian than the modern United States.  The actual text of our Constitution, read straightfowardly under standard English definitions, or read as most lawyers read it when enacted, is (with the exception of the Sixteenth Amendment, the income tax) a fringe libertarian document.  Of all the 2008 Presidential primary candidates only the libertarian Ron Paul could credibly base his platform on the actual text and original meaning of the Constitution.   The positions of all the other major candidates, as well as the interpretations of most of our Supreme Court justices, depart very far from the actual text in its original meaning.  \u003Cbr \/\u003E\u003Cbr \/\u003EBut our Constitution is nevertheless deeply flawed.  In a number of ways it facilitates our slow slide into socialism and tyranny.  It is rather easy for Congressmen, Presidents, and federal justices who wish to interpret it as granting broad powers and narrow rights to do so, and they have been doing so ever since the Constitution was enacted.  A wide variety of other constitutional mechanisms and institutions would do a far better job at slowing and reversing the death of liberty in the modern world.\u003Cbr \/\u003E\u003Cbr \/\u003EMuch of the early liberty of the American Colonies and the early United States was, as Adam Smith observed, due to low exit costs.  Farming was the dominant economic activity, and the availability of free land out West made it relatively easy for a farmer to move if the local conditions got too oppressive.  Officials had to preserve liberty to keep their populations.  Nevertheless, our Constitution among other factors kept the U.S. more libertarian than Russia, which also had a large frontier.  Our Constitution slowed, but did not stop, the aggrandizement of power into effectively unaccountable and increasingly oppresive forms.   While there are many more ways to make it worse than to make it better, and this author does not recommend constitutional convention or military coup, those trying to set up new constitutions, or amend their old ones, should observe that there are a number of crucially important ways in which the U.S. Constitution can be improved upon.\u003Cbr \/\u003E\u003Cbr \/\u003ESpeaking very broadly, the general problem with our Constitution is that it allows the rise of a fully sovereign and monolithic federal power.   Such an entity inevitably aggrandizes its power and ultimately cannot make credible commitments to protect property or any other rights or powers that it covets for itself.  This is a common flaw of modern constitutions, but there are a number of protective mechanisms which these constitutions do not employ, or employ incorrectly, that could be brought to bear to correct this general problem.\u003Cbr \/\u003E\u003Cbr \/\u003EA bit more specifically, here are most of the major flaws in the U.S. Constitution:\u003Cbr \/\u003E\u003Cbr \/\u003E(1) The legislative branch is too powerful: several of the grants of power in Article I are too broadly worded and the rules for interpreting them are insufficiently strict.  Once legislatures have achieved broad powers, they can hardly be expected to vote to give those powers up.   It's a one-way ratchet towards socialism and tyranny.\u003Cbr \/\u003E\u003Cbr \/\u003E(2) The executive branch is too powerful: executive duties are not well defined and the non-delegation doctrine is not enforced, allowing the rise of permanent unelected lawmaking bureaucracies.   (In many practical ways the real constitution the post-New Deal U.S. operates under is the \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Administrative_Procedure_Act\"\u003EAdministrative Procedures Act\u003C\/a\u003E, augmented by things like \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Chevron_deference\"\u003EChevron deference\u003C\/a\u003E).\u003Cbr \/\u003E\u003Cbr \/\u003E(3) There is far too much use of elections and far too little use of lotteries.  A number of officials should be chosen by lottery (as in ancient Athens) or by a sequential election\/lottery cycle (as in the Venetian Republic).   Lotteries can be very good at solving public choice problems, such as the problem of concentrated lobbying during elections which trump widely distributed preference.\u003Cbr \/\u003E\u003Cbr \/\u003E(4) One of the two gravest defects lies in how courts are structured with respect to the constitutions they interpret.   A basic design pattern for good government is that officials should not be interpreters of their own power.  Allowing federal courts to interpret federal powers and state courts to interpret state powers has led to inevitable aggrandizement of the powers of both: to broad interpretations of power-granting clauses.  Vague constitutional language, which is practically inevitable, would not lead to tyranny if the judiciaries who have final say interpreting these clauses did not have incentives to expand these powers.   This effect is exacerbated by allowing the legislature and executive to choose the judges.   I am  afraid that, for example, \u003Ca href=\"http:\/\/www.cato-unbound.org\/2008\/02\/27\/randy-e-barnett\/whats-libertarian-to-root-for-now\/\"\u003EProfessor Barnett's proposal\u003C\/a\u003E for convincing federal courts to (in many ways return to) libertarian interpretations of our Constitution, desirable as such interpretions are, is nevertheless futile.  Incentives operate to select judges who profess broad interpretations of power, and while sitting on the court for judges to further aggrandize governmental power.  Our judicial structure is another one-way ratchet towards tyranny.\u003Cbr \/\u003E\u003Cbr \/\u003EA much better (but hardly the only better) proposal for selecting judges: select judges for lower courts by lottery from among lawyers who have scored in the upper percentile on the state bar exam and have been practicing for at least 5 years.  Select judges for higher courts by a lottery over the judges of lower courts who have at least five years experience on the bench.  Judges can still be impeached and removed for by legislatures or independent tribunals for egregious illegal behavior, but the executive and legislature play no role in selecting judges in the first place.  This makes the judiciary far more independent of the executive and legislative branches.\u003Cbr \/\u003E\u003Cbr \/\u003EThe basic structure of courts in the American colonies was far better than our structure under the Constitution.  There, the Privy Council, not colonial courts, had the final say in interpreting colonial charters.  Being more dependent on Parliament and the Crown than on the colonial legislature, it had no incentive to aggrandize the power of the colonial legislatures.   There were also a number of flaws in colonial government, including deep flaws in the British constitution that allowed the rise of Parliamentary sovereignty, which both compromised the independence of the Privy Council and trespassed on colonial legislative powers.  There was also the practical problem of distance that made appeals to the Privy Council in London far too infrequent.   But the basic appeals structure was far superior to that of our current Constitution.    The colonial court structure will work far better now without the delay problem and if the highest court is not itself tied to a legislature.\u003Cbr \/\u003E\u003Cbr \/\u003E(5) The other of the two gravest defects is the lack of \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2008\/02\/unbundled-jurisdictions-and-exit-costs.html\"\u003Eunbundled political property rights. \u003C\/a\u003E  Federalism and separation of functions are two very good, indeed crucial, features of the Constitution, but they are insufficient for protecting liberty.   Unbundled rights to engage in narrow forms of coercive legal procedure are  often a far better way to distribute power than hierarchical federalism and separation of powers in an entity that is supposed to be in totality sovereign.   The \u003Cspan style=\"font-style:italic;\"\u003Egothi\u003C\/span\u003E of medieval Iceland, often cited by anarcho-capitalists, were an example of a political property right.   Medieval and Renaissance England was a world full of polycentric, or highly distributed,  political property rights, but these were swallowed up by legislative powers in colonial America.  We must revive this very important and legally mature method of distributing political powers.  Many legislative, executive, and judicial functions should be granted to private entities as political property rights, with the jurisdictional boundaries and procedural standards defined in those rights to be enforced by an extraordinary court independent of all other governmental entities.\u003Cbr \/\u003E\u003Cbr \/\u003E(6) Insufficient protection is given to, and scope allowed for, choice-of-forum and choice-of-law clauses.   Much, though by no means all, law could be entered into by contractual agreement, allowing for healthy forms of legal competition in certain areas, such as contract and family law."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/7338333124286766010\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/7338333124286766010","title":"10 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/7338333124286766010"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/7338333124286766010"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2008\/03\/comments-on-united-states-constitution_06.html","title":"Comments on the United States Constitution (ii)"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"10"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-2873613360307024496"},"published":{"$t":"2008-03-05T16:08:00.000-08:00"},"updated":{"$t":"2008-03-05T18:19:13.577-08:00"},"title":{"type":"text","$t":"Logical emergence of money from barter"},"content":{"type":"html","$t":"The ever entertaining and informative Mencius Moldbug presents a useful but flawed \u003Ca href=\"http:\/\/unqualified-reservations.blogspot.com\/2008\/02\/return-to-castle-goldenstein-gold.html\"\u003Eaccount\u003C\/a\u003E of the logical origins of money.   By \"logical origins\" he means the following:\u003Cbr \/\u003E\u003Cblockquote\u003EThe basic problem with Menger's approach, from my perspective, is that he's concerned with the \u003Ci\u003Ehistorical\u003C\/i\u003E origin of money, whereas I am concerned with its \u003Ci\u003Elogical\u003C\/i\u003E origin. What Menger wanted to know is how money actually happened. What I want to know is how it \u003Ci\u003Ecan\u003C\/i\u003E happen.\u003C\/blockquote\u003EWhatever his intentions, Menger's account today has much more value as a logical than a historical account of the origins of money.  Thanks to modern archaeology we now know that money (or at least goods that before the rise of coinage were valued primarily as intermediate goods, which I call \"collectibles\", the main example being bead jewelry) emerged long before the efficient markets that Menger assumes.   Humankind thus did not, with the exception of certain short and exceptional situations during the colonial era, ever pass through a stage of efficient barter markets that is Menger's setup.  Indeed so long ago (more than 100,000 years ago) did collectibles start being used that they probably played an important role in the evolution of human cooperation, as I describe \u003Ca href=\"http:\/\/szabo.best.vwh.net\/shell.html\"\u003Ehere.\u003C\/a\u003E   \u003Cbr \/\u003E\u003Cbr \/\u003EBut let's get back to the logic of whether and how money will emerge in a voluntary and efficient barter market.  Moldbug first gives a great description of why money is not like a normal commodity:\u003Cbr \/\u003E\u003Cblockquote\u003E...since buying and selling any good cannot fail to affect its price - ie, its exchange rate against other goods - we have a feedback loop. The herd selects an intermediate good based on its predicted exchange rate. But the exchange rate cannot be predicted without knowing the herd's selection. Problem!\u003C\/blockquote\u003EMoldbug describes his setup world of Nitropia, in which the storage and transport costs on which Menger based his analysis are eliminated:\u003Cbr \/\u003E\u003Cblockquote\u003Eanyone can trade with anyone, anywhere, by teleporting goods. In addition, we'll assume that all goods can be stored perfectly without any overhead. \u003Cbr \/\u003E\u003C\/blockquote\u003EMoldbug calls this an equilibrium where there is no money, just barter.  I don't agree -- given the mental transaction cost assumption (see below), money could emerge even here, in the complete absence of storage and transport costs.  I'll explain why below.\u003Cbr \/\u003E\u003Cbr \/\u003EMoldbug then breaks this barter equilibrium by introducing a good with a storage cost, fish, which rots if not soon eaten.   Sven the fisherman wants to fish, sell the fish, save the income, and when he's saved up enough buy a Cadillac.\u003Cbr \/\u003E\u003Cbr \/\u003EMoldbug claims that this eliminates the coincidence-of-wants problem from his scenario, but I don't buy it.  A coincidence of wants problem is just what we have here: customers want to eat the fish while it's still fresh but Sven does not want to purchase the Cadillac until he has saved up enough income for it (he apparently prefers delaying gratification to incurring the interest costs of credit).  \u003Cbr \/\u003E\u003Cbr \/\u003ESince the storage and transport costs of intermediate commodities are still zero, these provide no reason for Sven to choose one particular such commodity over another as a currency.  But because as Moldbug says, \"[t]ranslating between standards is a pain in the butt,\" out of these intermediate commodities a single monetary standard will emerge.   In other words, Nitropia assumes transaction costs that create an incentive to converge on one currency.   Since Nitropia has costless storage and transport, this is just what I have called \u003Ca href=\"http:\/\/szabo.best.vwh.net\/micropayments.html\"\u003Emental transaction costs\u003C\/a\u003E -- the costs involved in making buying and selling decisions.  These include the costs of keeping books and otherwise tracking and comparing prices, and the costs of mentally mapping preferences to budgets via prices.\u003Cbr \/\u003E\u003Cbr \/\u003EBut mental transaction costs are a problem even if there are no commodities like fish with storage costs.   A world of pure barter has O(N^2) prices for N commodities, and the mental transaction costs in such a world are correspondingly much higher than a world with a single currency and O(N) prices.   So even a market with no transport or storage costs for any commodity whatsoever, but with sufficiently high mental transaction costs, will converge on a single currency.   \u003Cbr \/\u003E\u003Cbr \/\u003ENot even the elimination of all storage and transport costs eliminates all coincidence of wants problems.  If Sven's customers want the fish Sven caught today because they are hungrier today than they expect to be ten years from now, they will prefer to buy it today even if Sven could costlessly store the fish to be sold with equal freshness ten years from now.   Even with zero storage and transport costs, time preferences for production and consumption create noncoincidences of wants, and these mismatches combined with mental transaction costs give rise to a currency standard.\u003Cbr \/\u003E\u003Cblockquote\u003EMenger's analysis does not and cannot show that the coincidence-of-wants effect is the only force that can result in standardized money. Perhaps there is another? Indeed there is.\u003C\/blockquote\u003EI disagree. What Moldbug's argument, properly corrected, shows is that some of the costs that arise from the noncoincidence of wants occur even if there are no transport or storage costs, but only mental transaction costs.  This contrasts with Menger's analysis, which defined the costs caused by the coincidence wants in terms of transport and storage costs.\u003Cbr \/\u003E\u003Cblockquote\u003ESuppose Sven is choosing between only two possible intermediate goods - Ia or Ib. Say Ia is palladium, and Ib is rhodium. What is Sven's algorithm?  It's actually quite simple. All Sven cares about is the change in the exchange rate between palladium and rhodium, across the time window T1 - T0 of the transaction. If (Ia\/Ib)@T1 is greater than (Ia\/Ib)@T0, he prefers palladium. If it is smaller, he prefers rhodium. In other words, he will prefer the I which will appreciate more across his monetary time window...\u003Cbr \/\u003E\u003Cbr \/\u003E[Now consider a population of Svens, each choosing an intermediate commodity].  Let's separate this herd into two strategies, by eye color. If Svens have blue eyes, they follow their proper MBA reflexes and diversify, buying equally priced lots of palladium and rhodium. But if they have brown eyes, they buy only rhodium.\u003Cbr \/\u003E\u003Cbr \/\u003EWho does better? The brown-eyed Svens. Why? Because [the introduction of a commodity that can't be costlessly stored [but as I observed above this is not really necessary; what we need to introduce are coincidences of wants and mental transaction costs -- NS]] has created new demand for both palladium and rhodium. There was no monetary demand before we broke the equilibrium - now there is. Ceteris paribus, the price must go up.\u003C\/blockquote\u003ERhodium emerges as our standard, its price reflects its value as money on top of its value as an industrial commodity, and the price of palladium goes back to its mere value as an industrial commodity.   Given the vagaries of markets, our blue-eyed MBAs would have bought palladium too high (anticipating the possible increase in its value as money if it would have become a monetary standard) and sold too low (as glut and bust will follow this monetary bubble), while the brown-eyed colluders reap the full benefits of investing early in the money standard that actual emerged.\u003Cbr \/\u003E\u003Cbr \/\u003EBut if we take this analysis further, our blue-eyed MBAs don't come off nearly as bad as Moldbug's scenario suggests.  If mental transaction costs, in addition to storage and transport costs, are sufficiently low there is no convergence on a single currency, because in a world of sufficiently unpredictable and volatile prices and risk aversion a party indeed benefits from stockpiling multiple currencies, just as they teach MBAs about investments.  \u003Cbr \/\u003E\u003Cbr \/\u003EIn Moldbug's competition of blue eyes versus brown, the dice were loaded: the agreement between brown-eyed Svens to standardize on rhodium, and the lack of any attempt to set up a competing standard, allowed parties who knew about the agreement to predict ahead of time which standard would win.  If the outcome is significantly predictable, it pays to invest completely in the most likely winner.   But let's add a third group: green-eyed Svens that use just palladium as their intermediate commodity.   Green and brown eyes being of the same expected financial size (or of a completely unpredictable financial size), there is a 50% chance that palladium and green eyes will win, while brown eyes lose everything (except the original non-monetary value of the commodity, presumably negligible), and 50% chance of the reverse.   For the blue eyes, if they diversified evenly it's basically a wash.   The risk-neutral expected value of all three groups is the same, but if our players are risk-averse our blue-eyed MBAs have the strategy of highest expected value.   50\/50 diversity is thus the optimal initial position when it cannot be predicted which of two commodities will gain value as money.   But since it's impossible to discover a perfect 50\/50 diversification, and mental transaction costs are sufficiently high, the equilibrium is unstable and will coverge to a single currency.   Once one commodity starts to be favored, the optimal strategy is to move to that currency.   So we have shown that sufficiently high mental transaction costs are sufficient to cause the emergence of a currency standard, even in the absence of storage and transport costs.\u003Cbr \/\u003E\u003Cbr \/\u003EReminder: we are neglectling coercive means such as legal tender laws and operating in a completely voluntary market.  But Moldbug's scenario also explains why larger governments usually end up controlling the currency, even in the absence of legal tender laws.   Markets will tend to standardize on whatever the dominant transactor, the party that controls the largest plurality of cash flow, standardizes on, and in most historical societies the dominant transactions were tax collection and the payment of those taxes to soldiers.  More recently government bonds and even more recently welfare payments have joined the fray, biasing the outcome still further.   By standardizing on its own currency, a large government can gain revenue from an \"inflation tax.\"  This process is far easier for the government with a fiat currency than a currency based on natural unforgeable costliness (such as a precious metal).  Before the advent of modern currencies, inflation and the resulting revenue could only be obtained tediously via the slow substitution of less scarce for more scarce metals in the government coinage.  With paper the physical process is trivial, and only the matter of how the new money enters the economy is at issue.\u003Cbr \/\u003E\u003Cbr \/\u003EAll the foregoing assumed sufficiently high mental transaction costs.   This has been the historical norm, because trying to shop or otherwise do business in a world of multiple currencies, much less of pure barter, has always led to confusion, error, and overly complex accounting, and would do so even given the costless teleportation of Nitropia.  But with sufficiently low mental transaction costs and sufficiently unpredictable exchange rates, it pays to hang on to multiple currencies, and a world of multiple currencies is the equilibrium.  At the extreme of zero mental transaction costs, zero storage costs, and zero transport costs, we have a pure barter market, with no need for money at all.\u003Cbr \/\u003E\u003Cbr \/\u003ENow for a more radical claim: in some cases, computers can drastically reduce the mental transaction costs of comparing prices in multiple currencies, which along with the \"costless teleportation\" of online markets allows multiple currencies or in some cases even barter to become the equilibrium.  I'm quite a bit more fuzzy on just what those circumstances are, or just what software with what user interfaces said computers must be running, but you can see some of my ideas \u003Ca href=\"http:\/\/szabo.best.vwh.net\/scarce.html#MarketTranslator\"\u003Ehere\u003C\/a\u003E and \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2007\/06\/nanobarter.html\"\u003Ehere.\u003C\/a\u003E  The general idea is that most of the mental costs of mapping of preferences to budgets via prices, in order to make buying or selling decisions, are offloaded onto a software agent, via a user interferface and a complier that translates high-level preferences to detailed \"binary\" contracts."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/2873613360307024496\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/2873613360307024496","title":"10 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/2873613360307024496"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/2873613360307024496"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2008\/03\/logical-emergence-of-money-from-barter.html","title":"Logical emergence of money from barter"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"10"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-6099077650655556525"},"published":{"$t":"2008-03-01T13:02:00.000-08:00"},"updated":{"$t":"2008-03-01T14:57:11.324-08:00"},"title":{"type":"text","$t":"Comments on the United States Constitution (i)"},"content":{"type":"html","$t":"This is the first of a series of comments on the United States Constitution, with some riffs thrown in about U.S. history generally.\u003Cbr \/\u003E\u003Cbr \/\u003EWe start on the eve of the American Revolution.   England had colonized a wide variety of places on the globe under three general models: proprietary, corporate, and royal.  All three occured on the East Coast of North America in the original thirteen colonies that became the United States.\u003Cbr \/\u003E\u003Cbr \/\u003ERoyal colonies were technically part of the royal administrative hierarchy, but they were the least common type.  The most common type was the corporate.  Corporations ranged from Church organizations (like abbeys) to municipalities (\"boroughs\") to, most important for our purposes, the colonial corporations.  The East India Company, one of the first joint stock companies, is the most famous and powerful example of a colonial corporation, but most other English colonies and a number of the American colonies were also granted in this form.  Proprietary colonies were modelled after Counties Palatine: counties that were, except for a handful of narrow \"extraordinary writs\", immune from the jurisdiction of King and Parliament.  \u003Cbr \/\u003E\u003Cbr \/\u003EUnlike modern economic corporations, both corporate and proprietary colonies were granted political property rights.    These are rights to exercise coercive police powers: to collect taxes, to make and enforce certain kinds of laws.  Traditional political property rights, called franchises, were narrow grants to exercise very particular kinds of police powers.   The grants to colonial corporations were often much broader and vaguer, granting rights of \"government\" or \"internal police\" while reserving \"the rights of Englishmen\" to colonists.  Furthermore, the distance of their operation from the Crown and Parliament, and absentee colonial governors often lent colonists a free hand in governing, which they tended to do through legislatures elected by owners of real property.  Although under long English legal precedent corporate charters, and especially charterted political powers, are to be interpreted narrowly, the broad wording of many of the colonial charters made this hard to do.\u003Cbr \/\u003E\u003Cbr \/\u003ESome colonies (such as Virginia and the Carolinas) lost their corporate or proprietary status through \u003Ci\u003Equo warranto\u003C\/i\u003E forfeiture proceedings and became royal colonies.  Others through \u003Ci\u003Equo warranto\u003C\/i\u003E had their charters reissued in new forms.  In both cases, governors usually came to be appointed by the Crown and local legislatures gained broad powers of lawmaking on the subject of the \"internal police.\"  But, as long as the charters were considered political property rights, no entity was sovereign -- neither the Crown, nor Parliament, nor the legislatures could exercise political power at will, but had to respect the political property rights; i.e. had to operate according to the colonial charter.\u003Cbr \/\u003E\u003Cbr \/\u003EThe Romanist worldview is an ancient and pernicious one, and its reassertion in the 18th century in English politics led among many other things to the American Revolution.   The Romanist view dates back to the Roman Empire, and came to the modern world via the Code of the Empereror Justinian.   This Code was revived in the West by the new law schools (later universities) of the 12th century and became the standard law taught at Continental medieval universities.   England's universities, by contrast, did not teach the standard English law (common law) until the middle of the 18th century.  Instead, the standard English legal education occurred at the Inns of Court, and taught a legal and political structure radically different to Justinian's, one unintelligible to the typical university legal scholar or political philosopher.  Even though real law by that time differed widely from the Justinian Code, the Code has exerted an influence that slowly caused, first Continental, and then worldwide, political philosophy and then law to coverge on its model.   The Napoleonic Code and most other modern European codes are modelled after Justinian's.\u003Cbr \/\u003E\u003Cbr \/\u003EFrom the Justinian Code we get two totalitarian superstitions: first, that there must be a locus of power, a \"sovereign\", somewhere in any political system.  In Justinian's Empire, this locus was the emperor himself, whose word was law.  From this philosophy came the view of the sovereign king or dictator espoused by Bodin and Hobbes.  In this model the king is the \"head\" and the rest of the \"body politic\" is controlled by the king, just as our brains control our bodies.   Under Rosseau and Bentham, this locus was switched to \"the people\" or to, in practice, a parliament that supposedly represented \"the people.\"   Under the extreme sovereigntist view, separation of powers, federalism, and political property rights are all an illusion -- all power is just a revocable delegation from a supreme locus of sovereignty.\u003Cbr \/\u003E\u003Cbr \/\u003EActual English law and political structure were very different.   Under this law, royal power was actually divided among the King, the King's counselors, Parliament, and justices.  None of these entities was the \"locus\" of power but all played crucial roles.  Furthermore, much of this power had been granted to other entities -- nobles, lords proprietor, municipal and colonial and church corporations, guilds, and so on -- in the form of largely irrevocable political property rights.  Under the sovereigntist view, taught in universities, all such property grants were merely revocable delegations.  But under the actual common law, taught to the actual lawyers and judges of the time in the Inns of Court (institutions completely independent of universities, and thus largely uninfected by Roman Law), these delegations were property rights forfeitable back to the grantor -- and the original grantor was the Crown -- only under extreme breach of grant conditions under a \u003Ci\u003Equo warranto\u003C\/i\u003E proceeding.\u003Cbr \/\u003E\u003Cbr \/\u003EThe substantive law of Justinian's Code is quite valuable, containing a purely economic view of property championed by, among others, Adam Smith, and giving rise to our efficient modern capitalist economies.  But its procedural law is utterly totalitarian and helped give rise, first to the totalitarian Kings and Czars, then to Napoleon, and then to the communist and fascist dictators of the 20th century.  The English legal world largely avoided this fate, but the freedoms of its peoples have been undermined by its own creeping Romanism in the form of legislative sovereignty.   The political philosophies and \"political science\" of universities have always been dominated by the sovereigntist paradigm, which pits sovereign government versus \"anarchy\" as our only political alternatives.  When the Inns of Court gave way to universities in teaching English law, English legal philosophy and political structure too became increasingly Romanist.\u003Cbr \/\u003E\u003Cbr \/\u003EOf the legal claims made by the American Revolutionists, the strongest and most credible was their argument that the novel assertions of parliamentary sovereignty under Lord North violated the colonial charters.  But by that time American colonists, too, were under the spell of Rosseau's doctrine of legislative sovereignty.  \u003Ca href=\"http:\/\/www.humanitiesweb.org\/human.php?s=s\u0026p=h\u0026ID=1764\"\u003ESamuel Adams reported\u003C\/a\u003E on the eve of the Revolution, trying to square the circle, that is to reconcile the supposed \"supreme power\" (sovereignty) of Parliament with the political property rights granted by the charters:\u003Cbr \/\u003E\u003Cblockquote\u003E[Governor Hutchinson arguing on behalf of Parliament] although ... there must be one supreme authority [Parliament] ... , this constitution [Massachusett's colonial charter] will admit of subordinate powers, with legislative and executive authority, greater or less, according to local and other circumstances.\" \"This is very true,\" the council [per Samuel Adams] replied, \"and implies that the legislative and executive authority granted to the subordinate powers, should extend and operate, as far as the grant allows; and that, if it does not exceed the limits prescribed to it, and no forfeiture be incurred, the supreme power has no rightful authority to take away or diminish it, or to substitute its own acts, in cases wherein the acts of the subordinate power can, according to its constitution, operate. To suppose the contrary, is to suppose, that it has no property in the privileges granted to it; for, \u003Ci\u003Eif it holds them at the will of the supreme power, ... it can have no property in them....\u003C\/i\u003E But, as in fact, the two powers are not incompatible, and do subsist together, each restraining its acts to their constitutional objects, can we not from hence, see how the supreme power may supervise, regulate, and make general laws for the kingdom, without interfering with the privileges of the subordinate powers within it? [emphasis added]\u003C\/blockquote\u003E\u003Cbr \/\u003ESince the sovereignty of Parliament was unacceptable to the colonists (\"no taxation without representation\"), and centuries of Romanist propaganda had by then extinguished almost all knowledge and recognition of political property rights beyond the Inns of Court, distribution of powers survived in the United States in only two forms: federalism (the nesting of larger and smaller territories, each with separate jurisdictions) and separation of powers (per Montisque, the separation between executive, judicial, and legislative powers).  \"Sovereignty\" still had to be located somewhere.   At first, during the Articles of Confederation period, colonies were dubbed \"States\" and declared by many to be sovereign.  But even under the Articles of Confederation this was a fiction -- the Congress, not the States, sent diplomats abroad, and the \"States\" had delegated military authority to a confederate army led General Washington.  As we shall see, the United States Constitution would render any talk of state sovereignty completely a matter of fiction, and it rivalled another fiction that would dominate in the long run -- that it was not any real entity, but a romantic fiction called \"The People\" that were sovereign.  Using this fiction, the nature of the United States Constitution as a fictional grant of political property rights can be elucidated.  Here is the preface to the Constitution, not legally binding, but illuminating of its nature:\u003Cbr \/\u003E\u003Cblockquote\u003EWe the People  of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.\u003C\/blockquote\u003E\u003Cbr \/\u003EThe Constitution proceeds to list a number of legally binding Articles, just as in a corporate charter.  \"We the People\" was in fact a small cabal of delegates sent from state legislatures, who had only authority to amend the Articles of Confederation, not to unilaterally rewrite the rules under which said Articles could be amended such that they effectively scrapped them and started over.  But with concepts like \"We the People\" blazing across the mental sky, who needs legal propriety?\u003Cbr \/\u003E\u003Cbr \/\u003ENevertheless, this nice fiction allowed the United States to avoid creating a real locus of sovereignty by creating a fictional sovereignty to satisfy the Romanists.  Sovereignty, under this doctrine, is vested in \"We The People.\"  Some of this political power is granted, charter-like, to the United States federal government.  The rest is granted (per the 10th Amendment) \"to the States, or to the people, respectively\" -- that is to each State and to individuals.   In reality, political power is distributed amongst the federal government, states, counties, and munipalities, with a variety of enumerated and unenumerated rights that these governments may not infringe being retained by private persons.  Meanwhile, though, political property rights, which had been central to the colonial charters on which the United States Constitution was modelled, had been forgotten here, and indeed in England outside of the Inns of Court and the now-obscure passage on franchises in Blackstone's \u003Ci\u003ECommentaries\u003C\/i\u003E.  The three main safeguards against totalitarianism in the United States would be federalism, separation of powers, and the Bill of Rights."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/6099077650655556525\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/6099077650655556525","title":"3 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/6099077650655556525"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/6099077650655556525"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2008\/03\/comments-on-united-states-constitution.html","title":"Comments on the United States Constitution (i)"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"3"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-760669559320943064"},"published":{"$t":"2008-02-22T15:40:00.001-08:00"},"updated":{"$t":"2008-02-22T17:15:17.290-08:00"},"category":[{"scheme":"http://www.blogger.com/atom/ns#","term":"common law"},{"scheme":"http://www.blogger.com/atom/ns#","term":"law"},{"scheme":"http://www.blogger.com/atom/ns#","term":"legal positivism"},{"scheme":"http://www.blogger.com/atom/ns#","term":"legal realism"},{"scheme":"http://www.blogger.com/atom/ns#","term":"natural law"}],"title":{"type":"text","$t":"The discovery of law"},"content":{"type":"html","$t":"Justice John Paul Stevens has riled up law professors everywhere by reiterating the traditional doctrine of the common law, namely that the case-by-case decisionmaking that has given rise to the common law, as well as other precedent-based law such as interpretation of the United States Constitution, \u003Ca href=\"http:\/\/supremecourtus.gov\/opinions\/07pdf\/06-8273.pdf\"\u003Eis a process of discovering something that already, in a Platonic sense, exists:\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Cblockquote\u003E[T]he source of a \"new rule\" is the Constitution itself, not any judicial power to create new rules of law. Accordingly, the underlying right necessarily pre-exists our articulation of the new rule. \u003C\/blockquote\u003E\u003Cbr \/\u003EThis contradicts the modern academic dogma of \"positivism\" in which the common law is made, not discovered, and therefore cannot be said to exist in any sense until the decision comes down.  This is associated with another dogma, \"realism\", in which judicial decisions are largely just, as with legislation, exercises in political power.\u003Cbr \/\u003E\u003Cbr \/\u003ELegal academics make far too much out of the \"made\" vs. \"discovered\" dichotomy.  We can see that by looking at the supposed distinction between \"discovering\" a law of science and \"inventing\" a new piece of technology.  If it's possible to make a strong and important distinction between \"discovering\" and \"making\", we should be able to do so here. Yet our patent system would not have been able to transition so smoothly to being able to patent new breeds of plant or new strands of DNA if this distinction were so clear.   In patent law the distinction between a \"discovered\" law and a \"made\" invention can be as trivial as the distinction between a \"discovery\" that a high level of a certain hormone correlates with a high risk of a certain disease and the \"invention\" of a test that allows one to detect the high hormone level and algorithmically (or perhaps even mentally -- it's unresolved law) conclude that one is at serious risk of the disease.  In other words, no serious difference at all -- the test apparatus and the mental or algorithmic step was how the discovery was made.  To make the discovery is to make the invention, and vice versa, and the idea that there is an strong and important distinction between the two here is risible.\u003Cbr \/\u003E\u003Cbr \/\u003EThere are thus cases in which the distinction between making and discovering is trivial.  But we can readily and fruitfully think of all invention as discovery.   What was more important to inventing the first automobile: the physical making and combining of its parts, or the discoveries of ways make and combine them (in this case, discovering what are the better and worse ways to combine an internal combustion engine with a carriage)?  One can discover better and worse ways of making things just as one can discover new continents or planets.  That, and not whether the physical machine has actually been built, and thus can be said to now physically \"exist\", lies at the heart of invention.   Furthermore, there is a Platonic sense in which these better or worse designs already exist, because the basic laws by which they operate already exist: the designs be deduced from the laws of physics and the history of the part of the universe in which it is desired that they operate.  In practice, it this process of discovery requires its own empirical tests: build the machine, try it in the various desired environments, tweak the machine to make it work better.  As with discovery those laws themselves, inventors hypothesize which designs are better or worse and test them against reality.  They don't exercise their will and arbitrarily decide which machines will work better and which will not.\u003Cbr \/\u003E\u003Cbr \/\u003ESo too, common law is a painstaking way of discovering and making better law, case by case, dispute by dispute, piece of evidence by piece of evidence.  For machines there is a Platonic \"environment space\", the set of environments we desire those machines to work in.   As we explore new environments we discover new ways to make machines work better in them.    In common law, there is a \"facts space\", a Platonic space of possible unique disputes, each with its own unique set of facts.   It is not possible to explore more than a miniscule fraction of the facts space.  \u003Cbr \/\u003E\u003Cbr \/\u003EInstead of the hubristic exercise of waving one's hands calling for \"Change\" and then drafting broad legislation, the ultimate consequences of which are usually unknown, common law judges tweak the common law.  In each case they are discovering a better way in which the law can be made.   Just as there are empirically better and worse machines, so there are empirically better and worse laws.    If the law applied to the facts of this case is unjust, it needs to be tweaked.  Not repealed or overruled, as the absolutist minds of positivists would have -- but tweaked -- by a shade of meaning or an exception for a new situation.  To repeal a rule of common law insults the combined wisdom of several previous courts and a variety of cases with their own large bodies of evidence not before the current court.   It's like an octopus declaring that, based on his discovery that wheeled vehicles don't work on the ocean, that they won't work on land either, despite many landlubbers who've reported that wheeled vehicles work on land just fine.   The principles of precedent or \u003Ci\u003Estare decisis\u003C\/i\u003E allow the law to evolve towards worker better in an ever wider variety of disputes, even though only the facts of one case can be observed at a time.\u003Cbr \/\u003E\u003Cbr \/\u003ESo there is no dichotomy -- judges both make law and discover law.   By not doing so in broad brushstrokes, they can avoid doing the broad unintended harms that legislation usually causes.  Legislation purposefully disrupts previously existing legal rights and duties wholesale.  Proper common law precedent -- any precedent that should be respected -- never should do this.   Instead it should be clarifying the nature of previously unexplored territories of the facts space, the space of possible disputes, and tweak the law so that it works better in the newly explored part of the facts sapce.   Incremental discovery of better law justifies the prohibition against \u003Ci\u003Eex post facto\u003C\/i\u003E laws applying to legislation in a way that it does not apply to common law making.\u003Cbr \/\u003E\u003Cbr \/\u003EN.B.: the fact that scientific discoveries are called \"laws\", by metaphor to human laws, should clue us in as to what people generally thought about the nature of law at the time of the scientific revolution, i.e. from the Renaissance through the Enlightenment, and including the drafting and ratification of the U.S. Constitution."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/760669559320943064\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/760669559320943064","title":"2 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/760669559320943064"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/760669559320943064"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2008\/02\/discovery-of-law.html","title":"The discovery of law"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"2"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-8298689932118500273"},"published":{"$t":"2008-02-22T14:01:00.000-08:00"},"updated":{"$t":"2008-02-22T15:31:16.357-08:00"},"title":{"type":"text","$t":"Unbundled jurisdictions and exit costs"},"content":{"type":"html","$t":"Standard political \"science\", on which both academic and popular modern views of politics are now based, has beat into our heads a false dichotomy: \"government\" vs. \"anarchy.\"  The first, it is assumed, is sovereign government: it has a \"monopoly of force.\"   The second is often viewed as either an imaginary world of violent lawlessness or an imaginary world of purely voluntary relationships.  \u003Cbr \/\u003E\u003Cbr \/\u003EBut this excludes what much of the politics and law of England and its colonial offshoots, among many other examples, were for most of their history: divided, non-sovereign governments.  Law enforcement with no monopoly of force. There are a number of kinds of such division -- the most familar being federalism and the separation of powers. But the most interesting of all is the unbundling of political property rights.\u003Cbr \/\u003E\u003Cbr \/\u003EI have explained why \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2007\/05\/why-legal-procedure-is-central-to.html\"\u003Elaw generally cannot be enforced by purely voluntary relationships.\u003C\/a\u003E  Sure, most rules, formal and informal, of society can be and are followed in a largely voluntary fashion.  Reputation and other factors can provide incentives to follow many kinds of rules.  But when either the threat or the response become violent or overly fraudulent real law, i.e. law based on local initiations of force, is generally required.   Murray Rothbard's fallacy was to try to extend a general principle that succinctly summarizes the substantitve common law -- non-initiation of force -- to the procedural law, which it does not properly summarize and where it mostly does not belong.\u003Cbr \/\u003E\u003Cbr \/\u003EDefining \"government\" as any relationship that is not purely voluntary, what forms of such \"government\" maximize liberty by \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2007\/08\/exit-and-freedom.html\"\u003Eminimizing exit costs?\u003C\/a\u003E  Unbundled political property rights put the lie to the \"monopoly of force\" by unbundling the use of force into a wide variety of specialized forms -- each owned by a particular organization or individual.   Here, for example, are some examples of \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2006\/06\/jurisdiction-as-property-and-peer-to.html\"\u003Epolitical property rights from medieval and Renaissance England\u003C\/a\u003E:\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Cblockquote\u003EThere were dozens of standard jurisdictional franchises. For example, \"infangthief\" enabled the franchise owner to hang any thief caught red-handed in the franchise territory, whereas \"outfangthief\" enabled the owner to chase the thief down outside the franchise territory, catch him red-handed, and then hang him. \"Gallows\" enabled the owner to try and punish any capital crime, and there were a variety of jurisdictions correponding to several classes of lesser offenses. \"View of frankpledge\" allowed the owner to control a local militia to enforce the law. \"The sheriff's pleas\" allowed the owner to hear any case that would normally be heard in a county court. There were also franchises that allowed the collection of various tolls and taxes.\u003C\/blockquote\u003E\u003Cbr \/\u003EModern remnants of such jurisdictions include the shopkeeper's privilege to arrest and imprison shoplifters, \"stand your ground\" statutes which recapitulate the traditional political property right, \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2006\/09\/semaynes-case-liberty-of-house.html\"\u003Eliberty of house,\u003C\/a\u003E citizen's arrest, and so on.   Even such a behemoth as the United States has nothing resembling a \"monopoly of force.\"\u003Cbr \/\u003E\u003Cbr \/\u003EPolitical property rights are narrowly defined rights to initiate force -- in very specific ways and in response to specific events and no others.  Their legal exercise generally requires the owner to scrupulously follow specific procedures.  Unbundled political property rights can reduce exit costs far more than sovereign governments, because they don't come bundled with the power to exclude normally associated with sovereignty and real property (much let the power to prevent people from leaving exercised by the more tyrranous sovereigns).   It is thus possible to have a wide variety of jurisdictions enforcing law without any restrictions on the freedom of travel of those acting within the law.  But unbundled political property rights do radically violate the nonsensical poli-sci dichotomy of sovereign government vs. anarchy that is taught in schools.   Unbundled political property rights are neither sovereign government nor purely voluntary.  But they are a crucial part of a world that maximizes liberty.\u003Cbr \/\u003E\u003Cbr \/\u003E(This post is expanded from comments I made at \u003Ca href=\"https:\/\/www.blogger.com\/comment.g?blogID=7958140996781104565\u0026postID=8650279650222522032\"\u003EUnqualified Reservations\u003C\/a\u003E)."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/8298689932118500273\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/8298689932118500273","title":"13 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/8298689932118500273"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/8298689932118500273"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2008\/02\/unbundled-jurisdictions-and-exit-costs.html","title":"Unbundled jurisdictions and exit costs"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"13"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-2485164382229750995"},"published":{"$t":"2008-02-12T17:27:00.001-08:00"},"updated":{"$t":"2008-02-12T18:25:53.337-08:00"},"title":{"type":"text","$t":"Political arguments from extreme examples are extremely bad"},"content":{"type":"html","$t":"In our recent years of paranoia, which we slowly seem to be recovering from, one has often heard arguments that political policies or laws should be changed based on the failure of current policies or laws to address extreme cases. \u003Ca href=\"http:\/\/www.americanthinker.com\/2005\/01\/torture_can_we_handle_the_trut.html\"\u003EHere's\u003C\/a\u003E a recent example:\u003Cbr \/\u003E\u003Cblockquote\u003ESuppose you knew for a fact that your family was in imminent danger of being murdered in a plot masterminded by bin Laden or some other homicidal psycho? Suppose, further, that you knew a confession from him would save the lives of your family. Would you be willing to have the authorities use torture to obtain it? \u003C\/blockquote\u003E\u003Cbr \/\u003Eor, if that doesn't make you sufficiently afraid,\u003Cbr \/\u003E\u003Cblockquote\u003EPicture this: There's a guy in police custody who knows the location of a bomb that's set to explode in an elementary school building that holds 500 children. Threats and intimidation have failed to make him reveal the address of the school and the location of the device. You suspect that torture would loosen his tongue and save all those innocent lives. What would you do?\u003C\/blockquote\u003E\u003Cbr \/\u003EThere are several flaws in this argument, one being that we rarely \"know for a fact\" events that have not happened yet, another being the dubious missing link in the logic here, that the information extracted would be reliable and thus help law enforcement prevent the danger rather than provide them with misinformation that distracts them from the real target.  But there is a more basic problem with these kinds of arguments when applied to any argument over what any law should be.\u003Cbr \/\u003E\u003Cbr \/\u003EThe use of extreme examples preys upon the widespread ignorance in modern societies of how our legal systems work.  It assumes that our legal system executes laws as if it were a robot: law goes in, facts go in, defendant goes in, from the legal code and the facts the robot logically concludes that the defendant violated law, defendant goes to jail, period.  But that's not how our legal system works.  Rather it is set up to assume, properly, that no language can describe just outcomes in all cases.  It is set up so that when legal rules cause obvious injustices, those injustices can be avoided.   In the United States and Commonwealth countries, at least three different groups can exercise discretion to prevent obvious injustice to technical lawbreakers: prosecutors, grand juries, and trial juries.\u003Cbr \/\u003E\u003Cbr \/\u003EIn the case of the torturer of an obvious terrorist who in fact saves many lives, it's highly likely that prosecutors would exercise their discretion to not prosecute.  They'd get overwhelming political support in doing so.   Even if they prosecuted, they would be unlikely to get a grand jury to indict.  And even if a grand jury indicted the life-saving torturer, it's extremely unlikely that a trial jury would convict.  Thus, despite violating the words of the law, our life-saving torturer would be hailed as a hero, get millions of dollars worth of book contracts, and face no serious risk of jail time.  Strong anti-torture laws, with no exceptions written in to the language of the law, would prevent the gross injustice and inhumanity of torture in the vast majority of cases where officials would be tempted to torture -- cases where the dangers posed by the torture victim or his pals are more pedestrian or less clear than the extreme scenarios put forth by proponents of legalizing torture.  In such cases the importance of not stooping to the barbarity of torture, and the extremely horrific possibility that torture might become standard law enforcement and military practice, should trump uncertain or everyday security considerations. Strong and absolutely worded anti-torture laws would not punish a torturer who clearly saved many lives in the extremely rare circumstances so often portrayed by these proponents."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/2485164382229750995\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/2485164382229750995","title":"7 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/2485164382229750995"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/2485164382229750995"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2008\/02\/political-arguments-from-extreme.html","title":"Political arguments from extreme examples are extremely bad"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"7"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-1342245351261395087"},"published":{"$t":"2008-02-01T15:34:00.000-08:00"},"updated":{"$t":"2008-02-01T17:06:03.096-08:00"},"category":[{"scheme":"http://www.blogger.com/atom/ns#","term":"borders"},{"scheme":"http://www.blogger.com/atom/ns#","term":"boundaries"},{"scheme":"http://www.blogger.com/atom/ns#","term":"emigration"},{"scheme":"http://www.blogger.com/atom/ns#","term":"exit costs"},{"scheme":"http://www.blogger.com/atom/ns#","term":"franchise"},{"scheme":"http://www.blogger.com/atom/ns#","term":"immigration"},{"scheme":"http://www.blogger.com/atom/ns#","term":"monarchy"},{"scheme":"http://www.blogger.com/atom/ns#","term":"property"}],"title":{"type":"text","$t":"Borders in the franchise system"},"content":{"type":"html","$t":"Under the franchise philosophy, jurisdictions and other organs of government large and small \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2008\/01\/jurisdiction-as-property-makes-ssrn-top.html\"\u003Eare property\u003C\/a\u003E.  In a monarchic franchise system ownership of jurisdictional properties tends to be by individuals, whereas in a republican franchise system ownership of such properties tends to be by corporations.   There is no such thing as sovereignty or \"the\" government, but instead a wide variety of property rights to exercise specific political powers that may be bundled, or not, in a wide variety of ways.   The rights, duties, powers, and so on of persons in franchise systems are defined in property deeds, often called \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2006\/03\/property-in-everything-some-background.html\"\u003Echarters.\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EIn a franchise system, it follows that jurisdictional boundaries are a kind of property boundary.   This does not, however, mean that these boundaries should be treated in the same was as the popularly understand generic property in land is treated today.  For example, it does not automatically follow that one of their features should be a strict right of exclusion.\u003Cbr \/\u003E\u003Cbr \/\u003EPopularly we treat property in land as if it all came in one generic variety, but in fact properties (called in law \"estates\") can come in a wide variety of forms. There can be estates, sub-estates, and so on. There's no contradiction between having boundaries of larger properties and also having boundaries of smaller properties contained within them. And these boundaries can mean different things depending on the kind of estate involved. A jurisdictional estate can encompass a number of economic estates, for example, and the borders of each have different legal consequences.\u003Cbr \/\u003E\u003Cbr \/\u003EThere is nothing more important to liberty than \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2007\/08\/exit-and-freedom.html\"\u003Ereducing exit costs.\u003C\/a\u003E As Daniel Nagy points out in the debate at this link, this also argues towards reducing entrance costs -- although I do draw a distinction between the two.  Restrictions on their residents or guests leaving the property should be highly discouraged, and indeed generally constitute kidnapping. This should apply at any scale. Thus all forms of serfdom and national citizenship with restrictions on emigration that tie people to a territory, whether economic or jurisdictional, are highly destructive of liberty.\u003Cbr \/\u003E\u003Cbr \/\u003EThe right of an owner to exclude people, on the other hand, should be very high for smaller properties and less so far larger (jurisdictional) properties. A jurisdictional property that restricts entrance also restricts the freedom of association of the jurisdiction's inhabitants. If a family desires to live and raise their children among \"their own kind\", whatever kind that is, the property policies or deeds that implement these associational preferences should be implement far more at a local level (for example with restrictive property deeds) than at a national level. Thus for example I favor the right to enforce discriminatory covenants on single lots and neighborhoods that the U.S. Supreme Court has struck down under the fraudulent theory that these constitute \"government action\" and thus violate the Equal Protection Clause.  But on the scale of a large \"nation\" such as the United States, I am for open borders, unless the border restriction is due to a compelling reason of security that cannot be handled on a local scale.\u003Cbr \/\u003E\u003Cbr \/\u003E(This text is based on a comment I made in a prior post)."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/1342245351261395087\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/1342245351261395087","title":"4 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/1342245351261395087"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/1342245351261395087"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2008\/02\/boundaries-in-franchise-system.html","title":"Borders in the franchise system"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"4"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-8758553524114003882"},"published":{"$t":"2008-02-01T14:22:00.000-08:00"},"updated":{"$t":"2008-02-07T19:11:03.868-08:00"},"title":{"type":"text","$t":"Some Ron Paul bits"},"content":{"type":"html","$t":"\"Super Tuesday\" here in the United States is coming up next week and the primaries are still undecided and exciting.  My favorite candidate, Ron Paul, finished second in the Nevada caucus, has picked up at least 6 convention delegates so far, and is now one of four major candidates remaining in the Republican race, albeit trailing the other three in most states.  He has outlasted Tom Tancredo, Duncan Hunter, Fred Thompson, and Rudy Guliani.  He will likely continue his pattern of doing better in most caucus states than in primary states, reflecting the higher energy of his supporters.   Here are some \u003Ca href=\"http:\/\/www.youtube.com\/watch?v=2WLGMLpA-20\"\u003Evideo highlights\u003C\/a\u003E of Paul at the recent debate at the Ronald Reagan Library.   Here is a chart \u003Ca href=\"http:\/\/www.knowbeforeyouvote.com\/\"\u003Ecomparing his major positions\u003C\/a\u003E to the other candidates.\u003Cbr \/\u003E\u003Cbr \/\u003EDr. Paul has recently picked up a wide variety of endorsements: contrast \u003Ca href=\"http:\/\/www.statesman.com\/blogs\/content\/shared-blogs\/washington\/washington\/entries\/2008\/01\/29\/arlo_backs_paul.html\"\u003EArlo Guthrie \u003C\/a\u003Ewith \u003Ca href=\"http:\/\/www.amconmag.com\/2008\/2008_02_11\/feature.html\"\u003EAmerican Conservative\u003C\/a\u003E magazine, for example.   His new book, \u003Ca href=\"http:\/\/www.amazon.com\/Revolution-Manifesto-Ron-Paul\/dp\/0446537519\/ref=pd_ts_b_3\/102-7866495-8361719?ie=UTF8\u0026s=books\"\u003E\u003Ci\u003EThe Revolution: A Manifesto\u003C\/i\u003E\u003C\/a\u003E, is now near the top of the Amazon \u003Ca href=\"http:\/\/www.amazon.com\/gp\/bestsellers\/books\"\u003Ebest-seller\u003C\/a\u003E list.   \u003Cbr \/\u003E\u003Cbr \/\u003EPaul has introduced many more people to the ideas of liberty than we could have hoped for even a few months ago.   Go Ron Go!\u003Cbr \/\u003E\u003Cbr \/\u003E[Update 2\/2\/08 -- here is video of a good \u003Ca href=\"http:\/\/www.9news.com\/news\/article.aspx?storyid=85630\"\u003Espeech\u003C\/a\u003E Paul just gave in Colorado, and Paul is currently tied for second with John McCain in today's \u003Ca href=\"http:\/\/www.wmtw.com\/politics\/15202138\/detail.html?taf=port\"\u003EMaine caucus.\u003C\/a\u003E]\u003Cbr \/\u003E\u003Cbr \/\u003E[Update 2\/7\/08 -- On \"Super Tuesday\" Paul did much better in caucuses than in primaries, as I predicted.  He did particularly well in northern state caucuses.  In Montana he placed 2nd with 25% of the vote.  In North Dakota he got 21%, in Alaska 17%, and Minnesota 16%.  Paul won well over a dozen counties outright, including (ironically) Lincoln and Roosevelt counties and (fittingly) Madison county in Montana.  His campaign reports that he now has at \u003Ca href=\"http:\/\/ronpaul2008.typepad.com\/ron_paul_2008\/2008\/02\/ron-paul-nation.html\"\u003Eleast 42 delegates\u003C\/a\u003E to the Republican national convention.  This corresponds to hundreds of delegates at the local level who will influence Republican party politics for years into the future.  Even Mitt Romney has now dropped out of the race, but Ron Paul keeps plugging away.  Here [\u003Ca href=\"http:\/\/www.youtube.com\/watch?v=-oaD9oM4xQo\"\u003E1\u003C\/a\u003E,\u003Ca href=\"http:\/\/www.youtube.com\/watch?v=SWlUc8ip5hc\"\u003E2\u003C\/a\u003E,\u003Ca href=\"http:\/\/www.youtube.com\/watch?v=SGaZsAeMKFo\"\u003E3\u003C\/a\u003E] is video of Ron Paul's excellent speech at CPAC, wonderfully \u003Ca href=\"http:\/\/www.youtube.com\/watch?v=8l8AIuJJRZo\"\u003Eintroduced\u003C\/a\u003E by Bob Barr."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/8758553524114003882\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/8758553524114003882","title":"0 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/8758553524114003882"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/8758553524114003882"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2008\/02\/some-ron-paul-bits.html","title":"Some Ron Paul bits"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"0"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-6709216729588846063"},"published":{"$t":"2008-01-09T13:18:00.001-08:00"},"updated":{"$t":"2008-01-09T13:37:00.574-08:00"},"title":{"type":"text","$t":"\"Jurisdiction as Property\" makes the SSRN Top Ten List"},"content":{"type":"html","$t":"I'm happy to announce that my paper \u003Ca href=\"http:\/\/papers.ssrn.com\/sol3\/papers.cfm?abstract_id=936314\"\u003E\"Jurisdiction as Property\"\u003C\/a\u003E made the \u003Ca href=\"http:\/\/papers.ssrn.com\/sol3\/topten\/topTenResults.cfm?groupingId=948066\u0026netorjrnl=ntwk\"\u003Etop 10 list\u003C\/a\u003E for all time most dowloaded papers in legal history on the Social Science Research Network, the standard site for posting scholarly legal papers here in the U.S.  Alas, the number of downloads is not quite as overwhelming as this suggests -- academic interest in the crucially important area of legal history is depressingly small -- but then again they are not counting the larger number of downloads of the paper from my own web site.  Here's my brief description of the paper:\u003Cbr \/\u003E\u003Cblockquote\u003EIn medieval and renaissance England jurisdictions were often held as property. Relationships between these jurisdictions were property relations. The basic laws of jurisdiction were trespass and title. Infringement of a jurisdiction was a trespass, and abuse of a defendant by a court could be a trespass. In addition, the king could use his writ of right to challenge title to a franchise. In determining title, a crucial idea was seisin, which for franchises generally meant proper and continual use, and for jurisdictions in particular came to mean the following of proper procedure. Defense of trespass by and seisin of a franchise court came to imply obligations of protecting individual rights and serving the public good as well as private gain. Thus the property relations between franchises played a significant role in the development of English jurisdictional and procedural law.\u003C\/blockquote\u003E"},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/6709216729588846063\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/6709216729588846063","title":"2 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/6709216729588846063"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/6709216729588846063"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2008\/01\/jurisdiction-as-property-makes-ssrn-top.html","title":"\"Jurisdiction as Property\" makes the SSRN Top Ten List"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"2"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-6159341851030365926"},"published":{"$t":"2008-01-05T12:07:00.000-08:00"},"updated":{"$t":"2008-01-07T16:11:13.402-08:00"},"title":{"type":"text","$t":"Ron Paul, Internet culture, and the new generation gap"},"content":{"type":"html","$t":"Ron Paul scored a respectable, if hardly leading, 10% among Republicans in the Iowa caucus,and will probably garner an even higher share of the vote in New Hampshire.  (For my overseas readers, the United States is currently in the \"primary elections\" which determine the nominees of each party for the next President of the United States). Yet, at one extreme, traditional media has rarely mentioned Paul, considering him to be an unthinkably fringe candidate, while judging from the Internet buzz you'd think that Ron Paul was the leading Republican candidate. \u003Ca href=\"http:\/\/www.google.com\/trends?q=%22Ron+Paul%22%2C+Huckabee%2C+Giuliani%2C+%22Fred+Thompson%22%2C+McCain%2C+%22Mitt+Romney%22\u0026ctab=0\u0026geo=all\u0026date=ytd\u0026sort=0\"\u003EGoogle trends\u003C\/a\u003E shows that \"Ron Paul\" (A, in light blue) has for the last few months been  searched for on the Internet more than any of the other major Republican candidates, and \"Huckabee\"(red) the second most:\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiEt6G8Xrr2rKjwB-lEk6ZUa2WvBP0zrrHR1M_NDnKEo_yNfBYfWiKlAD6lRV9Dvkv-IjK6oxjsCxlzlT9AbNZB52qcC19F_J9relxv304bmClRu3xqlYYR2jpdLUPdkw_QGaEV\/s1600-h\/RonPaulTrends.png\"\u003E\u003Cimg style=\"float:left; margin:10px 20px 20px 10px;cursor:pointer; cursor:hand;\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiEt6G8Xrr2rKjwB-lEk6ZUa2WvBP0zrrHR1M_NDnKEo_yNfBYfWiKlAD6lRV9Dvkv-IjK6oxjsCxlzlT9AbNZB52qcC19F_J9relxv304bmClRu3xqlYYR2jpdLUPdkw_QGaEV\/s400\/RonPaulTrends.png\" border=\"0\" width=\"600px\" alt=\"\"id=\"BLOGGER_PHOTO_ID_5152090255495399026\" \/\u003E\u003C\/a\u003E\u003Cp\u003E\u003Cbr \/\u003EThe large Internet presence of Ron Paul and Mike Huckabee is confirmed by the number of mentions as indicated by Yahoo search results:\u003Cbr \/\u003E\u003Cbr \/\u003E\"Ron Paul\"    52.5 million\u003Cbr \/\u003E\"Mike Huckabee\"    32.4 million\u003Cbr \/\u003E\"Mitt Romney\"    28.6 million\u003Cbr \/\u003E\"John McCain\"    26.5 million\u003Cbr \/\u003E\"Rudy Giuliani\" (+ \"Rudolph\")  22.5 million\u003Cbr \/\u003E\"Fred Thompson\"           18.3 million\u003Cbr \/\u003E\u003Cbr \/\u003EThis vast discrepancy between Paul's Internet presence and his traditional media presence has given rise to all sorts of conspiracy theories, for example that the mainstream media's polls are rigged against Paul, or that the Ron Paul effect is just a spam campaign being run by some eccentric millionaire. (In fact, while there may be a bias against cellphone-only young voters from doing landline polls, the 7.3% mean of polls was within the margin of error of Paul's actual 10%, and Google and Yahoo to protect their ad revenues go to great lengths to prevent spam from rigging search results). But there is something interesting, and far bigger than any particular candidate or ideology, going on.   \u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"http:\/\/www.cnn.com\/ELECTION\/2008\/primaries\/results\/epolls\/#val=IAREP\"\u003ECNN entrance polls\u003C\/a\u003E from Iowa showed the following vote distribution among 17-29 yearolds: Huckabee 40%, Romney 22%, Paul 21%, McCain 7%, Giuliani 5%, Thompson 4%. Paul garnered more than twice the support of this demographic than he did among older age groups. I expect Paul to come in second among the under-29s in New Hampshire, behind Romney but ahead of Huckabee and McCain, but to rank below most of these candidates in older age groups. \u003Cbr \/\u003E\u003Cbr \/\u003EHere's a very oversimplified theory, but one worth thinking about: mainstream media is Baby Boomers and old people, and Internet is young people. By \"is\" I mean both the producers and the consumers of the media. And, as with the \"generation gap\" in the 1960s, they mostly don't talk to each other. (Along the same lines, the 1960s generation gap may have had much to do with television. But that's a story for another day). Furthermore, as with the monk's scribal culture versus the new \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2006\/08\/book-consciousness.html\"\u003Eprint culture\u003C\/a\u003E during the Renaissance and Reformation, and as with pre-1960s versus post-1960s culture, traditional media culture and Internet culture are very different cultures with very different views of the world. (Ironically, Ron Paul himself is an old codger like John McCain and Fred Thompson. He seems to be as surprised as anybody else about his support, which seems from the point of view of traditional media culture to have come out of nowhere).\u003Cbr \/\u003E\u003Cbr \/\u003EOne could have used Internet search and result figures months ago to predict stronger showings by Huckabee and Paul than polls then showed, and especially to predict their relative strength among youth.  The Fox\/talk radio axis ignore Paul and dump on Huckabee, not so much intentionally (they do have some reasons of self-interest to do so, but that's beyond the scope of this post) as  out of habitual cultural and generational differences and the simple fact that they and their audiences are not very aware of Internet culture and the fading of their mass media culture as being representative of conservatism.   \u003Cbr \/\u003E\u003Cbr \/\u003EMass media, both left and right, have long assumed their overwhelming influence on elections from selecting politicians for coverage.  Although that influence remains very strong, the desertion of the young to the Internet is starting to erode that king-making power, and will erode it further in future elections.   Paul's message of extremely small federal government, in particular, is very threatening to federal government employees and the journalists who habitually socialize with those employees and depend on them for stories.  In the past this has been evidenced by the mainstream media coverage given to the Libertarian Party (to which Paul's message most closely hews) -- i.e. by the practically complete lack of any such coverage.  In the past Paul's message of adhering to the U.S. Constitution's enumeration of a handful of federal powers, which include neither welfare handouts nor wars undeclared by Congress, though entirely mainstream in terms of U.S. history, would have achieved no media coverage except being the butt of occasional jokes about \"whackos\".  Now not only have the \"whacko\" yuks greatly increased and gotten shrill (\u003Ca href=\"http:\/\/shakespeare.mit.edu\/hamlet\/full.html\"\u003Emethinks\u003C\/a\u003E they protest too much!), but some serious coverage of Paul has started to occur as well.   (Most of the latter, though, has been from left wing journalists who consider Paul's anti-war message to be mainstream). As for Huckabee, his southern Baptist evangelism, perceived by non-evangelists to be uncompromsising, is very alien and threatening to the owners, advertisers, and journalists in right-wing media, very few of whom are southern Baptists.  (There is much evidence of this religious war within the right wing -- another example was the right wing media attack on the Harriet Myers nomination to the Supreme Court -- but that thread is beyond the scope of this post).\u003Cbr \/\u003E\u003Cbr \/\u003EAdmittedly, there are also other things going on with the Internet results, such as Paul's popularity among technology entrepreneurs and workers who, along with young people, are more likely to use the Internet for political discussion and to learn about the candidates. But the growing gap between Internet and mass media cultures, which is also in part a generation gap, should not be underestimated. Fueled by the Internet, I expect these gaps to grow more severe, and political ideologies and other cultural norms to trend more towards the developing Internet culture, in the coming years."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/6159341851030365926\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/6159341851030365926","title":"1 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/6159341851030365926"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/6159341851030365926"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2008\/01\/ron-paul-internet-culture-and-new.html","title":"Ron Paul, Internet culture, and the new generation gap"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"media$thumbnail":{"xmlns$media":"http://search.yahoo.com/mrss/","url":"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiEt6G8Xrr2rKjwB-lEk6ZUa2WvBP0zrrHR1M_NDnKEo_yNfBYfWiKlAD6lRV9Dvkv-IjK6oxjsCxlzlT9AbNZB52qcC19F_J9relxv304bmClRu3xqlYYR2jpdLUPdkw_QGaEV\/s72-c\/RonPaulTrends.png","height":"72","width":"72"},"thr$total":{"$t":"1"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-4687130654394154674"},"published":{"$t":"2008-01-03T15:45:00.000-08:00"},"updated":{"$t":"2008-01-03T16:03:36.060-08:00"},"title":{"type":"text","$t":"In what ways does your vote count?"},"content":{"type":"html","$t":"In what ways does your vote count?  Should you vote for the candidate you most agree with or for the least objectionable candidate who can win?  I can't put it any better than \u003Ca href=\"http:\/\/volokh.com\/posts\/1199296568.shtml#309368\"\u003Ethis comment\u003C\/a\u003E by Mark Bahner, which deserves its own blog post:\u003Cbr \/\u003E\u003Cblockquote\u003E...I don't \u003Cb\u003Ethink\u003C\/b\u003E my one vote can't change the course of a presidential election, I \u003Cb\u003Eknow\u003C\/b\u003E it can't, to greater than 99.99+ percent certainty.\u003Cbr \/\u003E\u003Cbr \/\u003ESo why vote? For the same reason that some people (I admit I'm not one of them) agree to respond to Nielson TV-watching polls.\u003Cbr \/\u003E\u003Cbr \/\u003EIt's a poll. And for the president, your one vote can't possibly change who gets elected. (This is in contrast to local politics, in which a school bond in my parents town actually finished with a tie, with some 10,000+ votes cast.)\u003Cbr \/\u003E\u003Cbr \/\u003EThat's why it makes sense (if you're going to vote at all) to vote for the presidential candidate who is closest to your political views. If you are a libertarian, there is only one libertarian running in either party. That's Ron Paul. Mitt Romney is not even in the same league, stadium, or country as Ron Paul, as a libertarian. Ron Paul is a libertarian. Mitt Romney is not. And neither is any other other Democratic and Republican candidate. \u003Cbr \/\u003E\u003C\/blockquote\u003E\u003Cbr \/\u003EThe main thing you do with a vote is send a signal to political players about your views.  The second thing you do with a vote is create a power bloc with which other candidates may have to negotiate and compromise.   Very far down on the list of things your vote might be good for is changing who wins.   Only for this last inconsequential reason to vote is the \"they can't win\" argument relevant.   If you are not voting for the candidate you most agree with, regardless of their chances of winning, you truly are throwing away your vote."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/4687130654394154674\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/4687130654394154674","title":"0 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/4687130654394154674"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/4687130654394154674"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2008\/01\/in-what-ways-does-your-vote-count.html","title":"In what ways does your vote count?"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"0"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-246735681273563602"},"published":{"$t":"2007-12-22T13:26:00.000-08:00"},"updated":{"$t":"2007-12-22T15:35:57.210-08:00"},"title":{"type":"text","$t":"Ron Paul for President"},"content":{"type":"html","$t":"This blog has never before expressed an opinion about a specific political election.   Unenumerated takes a long view and electioneering is generally not the most effective means of political action.  Occasionally, however, there is a remarkable exception.  Ron Paul's candidacy for President of the United States is the most remarkable such exception of our era.\u003Cbr \/\u003E\u003Cbr \/\u003EAmong the makeup-encrusted crop of TV-hyped politicians, Ron Paul stands alone in working, not to propagate mass media mythologies, but to preserve and restore our genuine freedoms and our highly evolved traditions.  Where other politicians go on and on about \"freedom\" in order to justify wars and suppressions that deprive people of their lives, liberties, and properties, Ron Paul throughout his long career has labored to preserve and restore our freedoms.   Ron Paul has worked to heal the wounds to liberty and the damages to our essential institutions that were inflicted by barbaric politics over the last century:  the wars, the ethnic cleansings, the nationalizations, and the corruptions that have worked in tandem to destroy many of the freedoms our forefathers held dear.   From property rights to privacy, the rights to bear arms and defend ourselves and our loved ones, rights to speak freely via technology old and new, rights to be free from false arrest and torture, the list of freedoms we once held but are now losing is long.   Without a libertarian surge, a rising of people to rebuke the evils of the century now thankfully over, the barbarity of that century will have become fixed as the only reality we know, and we will be plunged into a long dark age.\u003Cbr \/\u003E\u003Cbr \/\u003EBecause Ron Paul is the only presidential candidate who puts a high priority on preserving and restoring property rights, the bedrock institution of modern economies, it is no surprise that he recently raised more money in a single day than any other person in U.S. political history.  Ron Paul is the only presidential candidate in touch both with our highly evolved past and our networked future.   He has moved beyond the mass-media prejudices that caused the twentieth century to march lock-step into genocidal wars and nationalization.  So it is no surprise that Ron Paul's main strength is on the Internet and his main weakness is in the mass media.\u003Cbr \/\u003E\u003Cbr \/\u003EEven if, as mass media polls currently imply, Ron Paul does not win the 2008 Republican nomination, his staying power and independence give him the potential to exert a libertarian influence on United States politics far beyond recent experience.   Even if he doesn't win a single state, Paul is demonstrating that he has a substantial and loyal following.  He will stay in the race to the very end, and Republicans will have to make valuable concessions to prevent him from becoming an independent candidate who would throw the election.   No one man can heal the many injuries that freedom has suffered, nor the many damages that have been done to our highly evolved institutions.  But Ron Paul's success will inspire many more lovers of our once and future liberties to step forward and make that future.\u003Cbr \/\u003E\u003Cbr \/\u003EUnited States politics is delicately balanced between the traditional poles of right and left and may only need a small shove to push it in the orthogonal libertarian direction.    This is particularly true with respect to the institution with the most impact on our freedoms: the Supreme Court.   If Paul falls short of becoming the Republican candidate I recommend to him that he request one or more Supreme Court nominees of his choice as the price of his support for the non-libertarian Republican candidate.   On  the Supreme Court there are four justices on the traditional left and four on the traditional right.  As a result the one moderate justice, Justice Kennedy, exerts an overwhelmingly disproportionate influence.   Four years of libertarian influence on the Presidency, with two or three seats on the Court up for grabs, could tilt the Court quite heavily towards a restoration of our libertarian Constitution, a restoration of life, liberty, and property rights in the United States.  \u003Cbr \/\u003E\u003Cbr \/\u003EUniquely among mainstream politicians, Ron Paul thinks beyond mass media hype.  He remembers and cares about the basic institutions that have made the United States a bastion of world liberty for most of the last 231 years, and will make it a \"Shining City on a Hill\" again in the future if we work to make it so.   For those who love our once and future freedoms, now is the time to strike.   Work and vote to elect Ron Paul for President in 2008."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/246735681273563602\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/246735681273563602","title":"4 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/246735681273563602"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/246735681273563602"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2007\/12\/ron-paul-for-president.html","title":"Ron Paul for President"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"4"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-834394717930213236"},"published":{"$t":"2007-10-19T12:19:00.000-07:00"},"updated":{"$t":"2007-10-19T12:32:44.366-07:00"},"title":{"type":"text","$t":"Calveley nukes Amazon one-click patent"},"content":{"type":"html","$t":"Peter Calveley has succeeded in getting the U.S. Patent and Trademark Office (USPTO) to throw out most of the claims in Amazon's infamous one-click patent, including the broadest claims.  Amazon now has an opportunity to respond and convince the USPTO to change its mind, but its prospects are dim.   From Peter's report:\u003Cbr \/\u003E\u003Cblockquote\u003EIn a recent office action, the USPTO has rejected the claims of the Amazon.com one-click patent following the re-examination request that I filed on 16 February 2006. \u003Cbr \/\u003E\u003Cbr \/\u003EMy review resulted in the broadest claims of the patent being ruled invalid.\u003Cbr \/\u003E\u003Cbr \/\u003EIn its Office Action released 9 October 2007, the Patent Office found that the prior art I found and submitted completely anticipated the broadest claims of the patent, U.S. Patent No. 5,960,411.\u003Cbr \/\u003E\u003Cbr \/\u003EI had only requested the USPTO look at claims 11, 14, 15, 16, 17, 21 and 22 but the Office Action rejects claims 11-26 and claims 1-5 as well!\u003Cbr \/\u003E\u003C\/blockquote\u003E\u003Cbr \/\u003E\u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2005\/12\/new-zealander-challenges-amazon-one.html\"\u003EI reported\u003C\/a\u003E on this soon after it got started and am proud to have assisted Peter in this endeavor.   \u003Ca href=\"http:\/\/igdmlgd.blogspot.com\/2007\/10\/amazon-one-click-patent-rejected-by-us.html\"\u003EHere\u003C\/a\u003E is Peter's full report."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/834394717930213236\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/834394717930213236","title":"3 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/834394717930213236"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/834394717930213236"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2007\/10\/calveley-nukes-amazon-one-click-patent.html","title":"Calveley nukes Amazon one-click patent"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"3"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-8166822582787995703"},"published":{"$t":"2007-10-09T15:15:00.000-07:00"},"updated":{"$t":"2007-10-19T12:33:03.428-07:00"},"title":{"type":"text","$t":"The new gigaprojects"},"content":{"type":"html","$t":"A new era of commercial gigaprojects is upon us, and the source is almost entirely our insatiable demand for hydrocarbons.  Despite high political risks, global warming and \"peak oil\" fears, and \u003Ca href=\"http:\/\/www.kwrintl.com\/library\/2006\/LaborShortages.htm\"\u003Eshortages of skilled employees\u003C\/a\u003E, there are dozens of energy-related projects in the works or on the drawing boards in the multi-billion dollar range, with several topping $10 billion.  Is it the sign of a petroleum bubble, or does it simply reflect the new reality of a long-term higher worldwide demand for hydrocarbons?   Here are some of the more interesting projects.  Note that  the dollar cost of these projects is often a bit higher than quoted here because of depreciation of the dollar versus most currencies since the cost quotes in my sources were made.\u003Cbr \/\u003E\u003Cbr \/\u003EOne of the biggest expansions into relatively new territory is that of tar sands.  It is estimated that \u003Ca href=\"http:\/\/www.kwrintl.com\/library\/2006\/LaborShortages.htm\"\u003Eover $100 billion \u003C\/a\u003Ewill be invested in Canadian tar sands projects over the next decade.   Two of these projects are Petro-Canada's Fort Hills Project($25 billion) and the Chinese\/Canadian Northern Lights Project ($4.5 billion).\u003Cbr \/\u003E\u003Cbr \/\u003EMany of the biggest projects are to extract natural gas (methane).  $11 billion of investment was recently completed for \u003Ca href=\" http:\/\/www.energybulletin.net\/3677.html\"\u003EQatargas II\u003C\/a\u003E, and China is cooperating with Iran on the $16 billion project to develop the Iranian North Pars field.  Woodside Corp.'s $9 billion investment in the \u003Ca href=\"http:\/\/peakenergy.blogspot.com\/2007\/08\/mining-moon.html\"\u003EPluto\u003C\/a\u003E project is expected to eventually top out at over $30 billion.  \u003Ca href=\"http:\/\/www.corpwatch.org\/article.php?id=13626\"\u003ESakhalin 2\u003C\/a\u003E is a $20 billion project of Shell and Gazprom to extract oil and gas from beneath the coast of Sakhalin Island, along the east coast of Russia.\u003Cbr \/\u003E\u003Cbr \/\u003EOil tends to be a bit more dispersed than natural gas, and consequently inidividual oil projects tend to be smaller.  But in total, \u003Ca href=\"http:\/\/au.biz.yahoo.com\/070303\/33\/14k6f.html\"\u003EOPEC countries\u003C\/a\u003E have projects underway or plans for $254 billion worth of oil field development and expansion.   The largest projects tend to be pipelines: a proposed pipeline from Siberia to China and the Sea of Japan for $12-$16 billion, Malaysia wants to build a $7 billion pipeline to save oil tankers from the troubles and risks of sailing through the Straits of Malacca, and a $4 billion pipeline is being built between Chad and Cameroon.   But other oil-related gigaprojects are in the works.  Kuwait is planning a $14 billion monster oil refinery.  CONOOC and Shell have agreed to build a $4.3 billion plastics (ethylene and propylene) \u003Ca href=\"http:\/\/www.redorbit.com\/news\/science\/386444\/chinas_largest_sinoforeign_investment_project_goes_into_operation\/index.html?source=r_science\"\u003Efactory\u003C\/a\u003E in Guandong Province, China.   Investors have ponied up more than $1 billion \u003Ca href=\"http:\/\/www.scoopit.co.nz\/story.php?title=Billion-dollar-oil-gas-search-gets-green-light\"\u003Esimply to search\u003C\/a\u003E for oil in New Zealan's Great South Basin.  And oil revenues have allowed Saudi Arabians to dream of building a \u003Ca href=\"http:\/\/www.breitbart.com\/article.php?id=051220165102.rfmm4n2n\u0026show_article=1\"\u003Ecity from scratch\u003C\/a\u003E for a cool $26 billion.   But topping our list of gigaprojects, the overall cost of developing the Kashagan fields in Kazakhistan is now estimated at $136 billion, which may make it economically unviable.\u003Cbr \/\u003E\u003Cbr \/\u003EMeanwhile, there are also numerous offshore oil operations being developed in the $500 million - $2 billion range, with a few such projects (such as the Hebron field off Newfoundland, $5.6 billion) surpassing that range. More on deep sea projects -- now including not just oil, but diamonds and other minerals -- \u003Ca href=\"http:\/\/szabo.best.vwh.net\/miningthevastydeep.html\"\u003Ehere.\u003C\/a\u003E"},"link":[{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/8166822582787995703"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/8166822582787995703"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2007\/10\/new-gigaprojects.html","title":"The new gigaprojects"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}]},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-3619708103140176679"},"published":{"$t":"2007-09-28T12:01:00.000-07:00"},"updated":{"$t":"2007-10-09T16:03:42.333-07:00"},"title":{"type":"text","$t":"Secure time broadcast"},"content":{"type":"html","$t":"From my article \u003Ca href=\"http:\/\/szabo.best.vwh.net\/distributed.html\"\u003EAdvances in Distributed Security:\u003C\/a\u003E\u003Cbr \/\u003E\u003Cblockquote\u003EBroadcasts using sound or radiation, from sources such as bell towers, radio towers, satellites, and pulsars, must send out the same value to every receiver. A remote beacon such as a pulsar has perfect security: the access structure is any party, and its complement, the attack structure, is the empty set. For human controlled broadcasts, the attack structure consists only of the broadcaster and the access structure is any receiver.\u003Cbr \/\u003E\u003Cbr \/\u003ENatural broadcasts are thus immune to the problem, described in the discussion of the Byzantine Generals problem below, of a transmitter sending different values to different receivers. Indeed, as we will see below, distributed researchers have gone to great lengths just to recreate this simple property on the Internet with logical broadcast protocols.\u003Cbr \/\u003E\u003Cbr \/\u003ENature provides clocks that are oblivious to the malicious intentions of any outside parties. In the case of a remote high-energy system such as a pulsar, this means anybody. Pulsars are many orders of magnitude more accurate than random delays that face attackers on the Internet. If critical Internet servers were synchronized to natural clocks in a secure and timely fashion, they would be immune to attacks that relied on uncertainties in timing.\u003C\/blockquote\u003E\u003Cbr \/\u003E\u003Ca href=\"http:\/\/szabo.best.vwh.net\/distributed.html\"\u003EMore here.\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EDetecting pulsars is still, alas, a difficult process, but not so hard that amateurs have had no success doing so.   Amateurs have had some success tracking pulsars with  \u003Ca href=\"http:\/\/www.moetronix.com\/pulsar\/index.htm\"\u003Esoftware defined radio\u003C\/a\u003E and \u003Ca href=\"http:\/\/www.radiosky.com\/rspplsr.html\"\u003Equagi antennas combined with digital signal processing\u003C\/a\u003E."},"link":[{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/3619708103140176679"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/3619708103140176679"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2007\/09\/secure-time-broadcast.html","title":"Secure time broadcast"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}]},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-5480784689596664839"},"published":{"$t":"2007-09-19T19:01:00.000-07:00"},"updated":{"$t":"2007-09-27T15:10:37.883-07:00"},"title":{"type":"text","$t":"Real options analysis for space projects"},"content":{"type":"html","$t":"For the purposes of estimating the value of a project, risk has for simplicity often been treated as spread out evenly over the life of a project.  For normal projects these risks can usually be fairly approximated by estimating risk per unit time.   This occurs in, for example, the net present value (NPV) formula for estimating the value of a project where a constant interest rate risk premium is used.  In a typical space mission, however, risk tends to be concentrated at particular events such as launches, burns, flybies and landings.  Just floating out in space is relatively quite low risk, which is why we can fly to Jupiter and Saturn with failure rates not significantly greater than missions to the moon or Mars.   All four of the spacecraft that have so far intentionally been flown beyond Saturn -- Pioneers 10 and 11, and Voyagers 1 and 2 -- had many initial glitches.  But since passing beyond Saturn they have travelled on for nearly two decades, far beyond Pluto, with no substantial and unexpected failure.  The Voyagers continue to send back valuable data on the very edge of the solar system, where the solar wind gives way to the interstellar influence -- more than 80 times as far from the sun as our own earth.\u003Cbr \/\u003E\u003Cbr \/\u003EThere is a small risk of component failure that tends to obey a Poisson distribution that grows over time.   But the risk in even earth-orbiting satellites is dominated by launch and orbit-insertion failures, and other failures at the start of the satellite's lifetime, which are unrelated to the satellite's expected lifetime.  \u003Cbr \/\u003E\u003Cbr \/\u003EThus the vast majority of the risk of most space projects does not grow exponentially with their duration, and indeed is usually not closely correlated to their duration in any way.  We would thus get an exponentially wrong answer by a line of reasoning that estimated the risk of a generic deep space mission as X%\/year, and deduce by plugging that risk into the net present value (NPV) equation that, for example, an 8 year mission is substantially costlier (due to a risk that grows exponentially over time) than a 2 year mission.  An example of this fallacy is NPV analysis that assumes a constant risk premium for comparison of futuristic lunar and asteroid mining scenarios.   All such papers that I've seen (e.g. \u003Ca href=\"http:\/\/www.spacefuture.com\/archive\/the_technical_and_economic_feasibility_of_mining_the_near_earth_asteriods.shtml\"\u003Ethis one\u003C\/a\u003E) fall victim to this fallacy.  To use NPV properly we need to account for the risks of particular events in the mission (in the mining scenario primarily launches, burns, and mining operations) to estimate a total risk, and divide that total risk by the duration of the mission to get a risk premium.   The risk premium per year for the longer mission will thus probably be substantially lower than for a shorter mission (implying an overall risk slighly higher for the longer mission, all other things being equal).   \u003Cbr \/\u003E\u003Cbr \/\u003EAn even more accurate method for evaluating risk in space projects is called real options analysis.  It has changed valuation from the old static NPV model to a dynamic model based on specific risks.  One improvement this brings is removing the assumption of constant risk, which we've seen is wildly inappropriate for deep space missions.  Another idea real options brings us is that designing a project to postpone choices adds value to the project when there will be better information in the future.  A science mission example: if a scientific event could occur at either target A or target B, it's best to postpone the choice of target until we know where the event is going to occur.  If that's possible, we now have a scientifically more valuable mission.\u003Cbr \/\u003E\u003Cbr \/\u003EOrbital planning for deep space missions tends to plan for a fixed mission ahead of time.  Real options analysis says that the project gains value if we design in options to change the project's course in the future.  For orbital mechanics that means designing the trajectory to allow retargeting at certain windows, even at some cost of delta-v and time.  (Whether the tradeoff is worth it can be analyzed using real options mathematics, if we can make comparison estimates of different scientific targets using a common utilitarian scale).\u003Cbr \/\u003E\u003Cbr \/\u003EIn the context of an Jupiter orbiter swinging by various Jovian moons, such options might include hanging around an interesting moon longer or changing the trajectory to target.  The idea is instead of plotting a single trajectory, you plot a tree of trajectories, with various points where the mission controllers can choose trajectory A or trajectory B based on mission opportunies.\u003Cbr \/\u003E\u003Cbr \/\u003EA shorthand way to think of real options analys is that the project is modeled as a  game tree with each node on the tree representing a choice (i.e. a real option) that can be made by the project managers.   The choices  are called \"real options\" because the math is the same as for financial options (game trees, Black-Scholes, etc.)  but they represent real-world choices, for example  the option of a vineyeard to sell its wine this year or let it age at least another year, the option of a mine to open or close, or expand  or shrink its operations, etc.\u003Cbr \/\u003E\u003Cbr \/\u003EThe orbital planning I've seen tends to plan for a fixed mission ahead  of time.  Real options analysis says that the project may gain value  if we design in options to change the project's course in the future.   For orbital mechanics that means designing the trajectory to allow  retargeting at certain windows, even at some cost of delta-v and time.  (Whether the tradeoffs between delta-v, time, and particular real options are worth it can be analyzed using real options mathematics,  if we can compare different scientific targets using a common  utilitarian scale).\u003Cbr \/\u003E\u003Cbr \/\u003EIn the context of the Jovian moons project, such options might include  hanging around Europa longer if a volcano is going there (like the one discovered on the similar moon Enceladus) or if some  evidence of life is found (or leaving it sooner if not), or changing  the trajectory so that the next target is Europa instead Ganymede if a volcano suddenly springs up on Europa, or to Io if an interesting volcano springs up there.  The idea is instead of  plotting a single trajectory, we plot a tree of trajectories, with  various points where the mission controllers can choose trajectory A  or trajectory B (sometimes with further options C, D, etc.) based on  mission opportunities.   Other trajectory options might include  hanging around a particular moon for longer or changing the view angle  to the target.   We may trade off extra delta-v, extra time, or both  in order to enable future changes in the trajectory plan. \u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"http:\/\/faculty.fuqua.duke.edu\/~charvey\/Teaching\/BA456_2002\/Identifying_real_options.htm\"\u003EHere\u003C\/a\u003E is more on real options analysis.  Real options analysis is also quite valuable for the \u003Ca href=\"http:\/\/www.decisioneering.com\/stories\/boeing_ro.html\"\u003Eresearch and developoment\u003C\/a\u003E phase of a project.   \u003Ca href=\"http:\/\/staff.washington.edu\/paymana\/papers\/aero05_1.pdf\"\u003EHere\u003C\/a\u003E is a good paper on real options analysis for space mission design.  My thanks to \u003Ca href=\"http:\/\/www.esm.vt.edu\/~sdross\/\"\u003EShane Ross\u003C\/a\u003E and Mark Sonter for their helpful comments on space project evaluation and planning.\u003Cbr \/\u003E\u003Cbr \/\u003EUPDATE: This post is featured in the \u003Ca href=\"http:\/\/wanderingspace.net\/?cat=64\"\u003ECarnival of Space #22.\u003C\/a\u003E"},"link":[{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/5480784689596664839"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/5480784689596664839"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2007\/09\/real-options-analysis-for-deep-space.html","title":"Real options analysis for space projects"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}]},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-6067103846788202256"},"published":{"$t":"2007-09-16T14:12:00.000-07:00"},"updated":{"$t":"2007-09-16T14:21:51.022-07:00"},"title":{"type":"text","$t":"Tamper evident numbers"},"content":{"type":"html","$t":"From \u003Ca href=\"http:\/\/szabo.best.vwh.net\/seals.html\"\u003EThe Playdough Protocols:\u003C\/a\u003E\u003Cbr \/\u003E\u003Cblockquote\u003EEvolving beyond clay tokens, accounting was the first use of the external marks and started to take a familiar form. Along with the tamper evident clay, the Sumerians developed a kind of virtual tamper evidence. It took the form of two sets of numbers. On the front of the tablet, each group of commodities would be recorded separately -- For example on the front would be recorded 120 pots of wheat, 90 pots of barley, and 55 goats. On the reverse would simply be recorded \"265\" -- the same objects counted gain, probably in a different order, and without bothering to categorize them. The scribe, or an auditor, would then verify that the sum was correct. If not, an error or fraud had occured. Note the similarity to tamper evident seals -- if a seal is broken, this meant that error or fraud had occured. The breaker of the seals, or the scribe who recorded the wrong numbers, or the debtor who paid the wrong amounts of commodities would be called on the carpet to answer for his or her discrepancy.\u003Cbr \/\u003E\u003Cbr \/\u003EChecksums still form the basis of modern accounting. Indeed, the principle of double entry bookeeping is based on two sets of independently derived numbers that must add up to the same number. Below, we will see that modern computers, using cryptographic methods, can now compute unspoofable checksums.\u003C\/blockquote\u003E"},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/6067103846788202256\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/6067103846788202256","title":"3 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/6067103846788202256"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/6067103846788202256"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2007\/09\/tamper-evident-numbers.html","title":"Tamper evident numbers"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"3"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-4565536352786440549"},"published":{"$t":"2007-09-09T15:47:00.000-07:00"},"updated":{"$t":"2007-09-09T16:17:16.277-07:00"},"title":{"type":"text","$t":"Mining the vasty deep (iii)"},"content":{"type":"html","$t":"In the first two parts of this series I described undersea \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2007\/02\/mining-vasty-deep-i.html\"\u003Eoil\u003C\/a\u003E and \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2007\/02\/mining-vasty-deep-ii.html\"\u003Ediamond\u003C\/a\u003E mining operations. In addition at least two startup companies, \u003Ca href=\"http:\/\/www.neptuneminerals.com\/\"\u003ENeptune Minerals\u003C\/a\u003E and \u003Ca href=\"http:\/\/www.nautilusminerals.com\/s\/Home.asp\"\u003ENautilus Minerals\u003C\/a\u003E, are moving into mining the seafloor for metals. They're planning to dig into extinct black smokers for copper, and possibly also zinc, gold, silver, and other minerals.  David Heydon, CEO of Nauilus Minerals, says of the remarkably high quality of the ores, \"we haven’t seen these types of mineral deposits since the beginning of modern mining.\"\u003Cbr \/\u003E\u003Cbr \/\u003ENautilus and Neptune don't plan to mine live black smokers, which would be dangerous (black smokers are hot springs with temperatures well above 200 centigrade, although not boiling because at high pressure) and environmentally questionable (live black smokers team with exotic chemosynthetic life). Rather, they plan to mine the probably far greater number of extinct and lifeless black smokers that populate the oceans.\u003Ca href=\"http:\/\/photos1.blogger.com\/x\/blogger\/4193\/1738\/1600\/19041\/NautilusMinerals_ROVCutSample2.jpg\"\u003E\u003Cspan style=\"color: rgb(255, 255, 255);\"\u003E\u003Cimg style=\"margin: 10px 10px 0px;\" alt=\"\" src=\"http:\/\/photos1.blogger.com\/x\/blogger\/4193\/1738\/400\/59274\/NautilusMinerals_ROVCutSample2.jpg\" align=\"left\" border=\"0\" \/\u003E\u003C\/span\u003E\u003C\/a\u003E\u003Cbr \/\u003E\u003Cem\u003E\u003Cspan style=\"color: rgb(255, 0, 0);\"\u003E\u003Cspan style=\"color: rgb(255, 255, 255);\"\u003Eautilus paydirt:\u003C\/span\u003E \u003C\/span\u003E\u003Cbr \/\u003ECutting of an extinct black smoker at 1,600 meters.\u003C\/em\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EGeologist Steven Scott, a longtime advocate of sea mining, \u003Ca href=\"http:\/\/www.cseg.ca\/conferences\/2000\/2000abstracts\/727.PDF\"\u003Edescribes the geology\u003C\/a\u003E of seafloor massive sulfides (SMS's). \"These deposits are essentially metalliferous mud formed from hot, dense brines.\" They form within and around black smokers, the famous deep-sea vents discovered in 1979. Black smokers deposit \"sinter-like mounds and chimneys of metal sulfides, oxides, silica and sulfates. Veins, disseminations and stockworks of relatively low metal grade impregnate the underlying lavas.\"\u003Cbr \/\u003E\u003Cbr \/\u003ECuriously, we may already be mining black smokers: billion-year-old, long-extinct black smokers whose remains now lie on dry land. \"The [current live black smoker] deposits have similarities to so-called volcanogenic massive sulfide ores being mined on land in Canada and elsewhere and which formed in ancient oceans as much as 2700 million years ago. Elements of potential commercial interest in both the modern and ancient deposits are copper, zinc, lead, silver, gold and barium. About 150 seafloor sites are known, most of which lie between 1500 and 3500 meters water depth.\" \u003Ch4\u003E\u003C\/h4\u003E\u003Cp\u003E\u003C\/p\u003E\u003Cp\u003E\u003Ca href=\"http:\/\/photos1.blogger.com\/x\/blogger\/4193\/1738\/1600\/584829\/NeptuneMinerals_ShinySmokerOre.jpg\"\u003E\u003Cimg style=\"margin: 0px 10px 10px;\" alt=\"\" src=\"http:\/\/photos1.blogger.com\/x\/blogger\/4193\/1738\/400\/451158\/NeptuneMinerals_ShinySmokerOre.jpg\" align=\"right\" border=\"0\" \/\u003E\u003C\/a\u003E \u003Cem\u003ENeptune paydirt, topside.\u003C\/em\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EBoth Neptune and Nautilus recently performed assays of several promising extinct smokers.  Nautilus' assay was performed by two methods: a drill based on a ship (but dropped through 1600 meters of water) and a remotely operated vehicle (ROV) that took cutting samples.  \u003Ca href=\"http:\/\/www.nautilusminerals.com\/s\/Projects-Solwara.asp\"\u003EHere\u003C\/a\u003E are at least some of the results.  Heydon observes that \"with 97% of the ocean floor yet to be extensively explored, it is likely that numerous deposits remain undiscovered.\"\u003Cbr \/\u003E\u003Cbr \/\u003EHere is more from \u003Ca href=\"http:\/\/www.terradaily.com\/reports\/Deep_Ocean_Mining_In_Prospect.html\"\u003ESteven Scott.\u003C\/a\u003E\u003Cbr \/\u003E\u003Ch4\u003EBusiness Plans\u003C\/h4\u003ENautilus estimates that it could cost as much as $300 million to ramp up to full-scale mining.  Its plans include a $120 million specialized mining ship, the \u003Ci\u003EJules Verne\u003C\/i\u003E.  This ship is similar to the \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2007\/02\/mining-vasty-deep-i.html\"\u003EFPSO\u003C\/a\u003E used for deep sea oil, but will separate ore from sludge and water rather than oil from water.  A large ROV, based on the trencher ROV used to lay pipes in the deep sea oil industry, but adding a large rotating drum scraper like those used in coal mining, will scrape the smokers creating sludge which will be pumped up to the \u003Ci\u003EJules Verne\u003C\/i\u003E and processed.  Since the most expensive FPSOs can cost upwards of $800 million, the $120 million is a relative bargain. Indeed, the basic mothership\/ROV setup is taken straight from the deep sea oil industry FPSO\/ROV methodology.\u003Cbr \/\u003E\u003Cblockquote\u003ENautilus will contribute $120 million to develop undersea tools, including pumps, pipes and two subsea crawler-miners. It will also partner with a group of engineering companies with expertise in drilling and geophysics. If \u003Ci\u003EJules Verne\u003C\/i\u003E is in place by 2009, it could stay at the Papua New Guinea site until 2014, before moving on to exploit other deposits. Nautilus estimates that it will be able to mine 6000 tonnes a day from its target site.\u003Cbr \/\u003E\u003Cbr \/\u003EAlthough there are technological hurdles to be overcome, ... 'the technology already exists; it just hasn't been integrated in this way. One beauty of the sea floor model is that a floating equipment production chain is our one main investment. Once we have the chain we can easily bring it up and redeploy it to another area.' \u003C\/blockquote\u003E (More on Nautilus' plans \u003Ca href=\"http:\/\/www.rsc.org\/chemistryworld\/Issues\/2007\/January\/TreasuresDeep.asp\"\u003Ehere\u003C\/a\u003E).\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"http:\/\/photos1.blogger.com\/x\/blogger\/4193\/1738\/1600\/645355\/NautilusMinerals_RockCuttingROV.jpg\"\u003E\u003Cimg style=\"margin: 0px 10px 10px;\" alt=\"\" src=\"http:\/\/photos1.blogger.com\/x\/blogger\/4193\/1738\/400\/645248\/NautilusMinerals_RockCuttingROV.jpg\" align=\"right\" border=\"0\" \/\u003E\u003C\/a\u003E \u003Cem\u003ENautilus' ROV with cutting arm to take samples.\u003C\/em\u003E\u003Cbr \/\u003E\u003Cbr \/\u003ELike many start-ups, Nautilus has a speculative and risky business plan, but the payoff could be vast:\u003Cbr \/\u003E\u003Cblockquote\u003E[Nautilus] doesn't expect to reach first-scale production until 2009. There's no comparable traditional mining business model, since many of the individual deposits underwater are too small to be economically viable if they were on land. But because offshore drilling operations can move, whereas mines on land are stuck, the combined value of deposits in a wider area makes the operation worthwhile.\u003Cbr \/\u003E...\u003Cbr \/\u003EThe worth of the oil, gas and minerals in the world's oceans is estimated to be in the trillions of dollars. If Mr. Heydon's estimates are correct, deep sea mining could have the potential to supply the world's growing demand for gold, copper and silver, among other metals. The resulting revenue could be in the billions of dollars for deep sea mining companies, of which only two currently exist.\u003Cbr \/\u003E...\u003Cbr \/\u003EDisputes over who owns what in the ocean have been a fact of global politics for decades. For reasons of security, potential resources and sometimes just pride, countries are constantly claiming control over new chunks of underwater property. As an indicator of just how rare it is to be able to mine hassle-free in the ocean, the exploration licence Papua New Guinea granted Nautilus was a world first.\u003Cbr \/\u003E\u003C\/blockquote\u003EMore \u003Ca href=\"http:\/\/www.minesandcommunities.org\/Action\/press1077.htm\"\u003Ehere. \u003C\/a\u003E See also \u003Ca href=\"http:\/\/www.wired.com\/wired\/archive\/15.03\/undersea_pr.html\"\u003Ehere.\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EIn forthcoming posts in this series, we will look at some of the technological, environmental, political, and legal considerations involved in this new endeavor."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/4565536352786440549\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/4565536352786440549","title":"3 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/4565536352786440549"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/4565536352786440549"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2007\/09\/mining-vasty-deep-iii.html","title":"Mining the vasty deep (iii)"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"3"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-3316161419266236367"},"published":{"$t":"2007-09-08T15:39:00.000-07:00"},"updated":{"$t":"2007-09-10T16:47:20.835-07:00"},"title":{"type":"text","$t":"Partial and total orders"},"content":{"type":"html","$t":"From \u003Ca href=\"http:\/\/szabo.best.vwh.net\/distributed.html\"\u003EAdvances in Distributed Security:\u003C\/a\u003E\u003Cbr \/\u003E\u003Cblockquote\u003EA basic issue of security and fault tolerance that must be resolved is the secure determination of which order events occured in. If a contract specifies a deadline and it goes down to the wire, how can a relying party or third party adjudicator determine whether the deadline was met? The outcome itself, and its fairness, may rest on fairly deciding who came first. If Alice tries to double-spend a piece of digital cash [C82], only the recipient who checks with the bank first is entitled to its value. But if the bank servers are replicated, which of the two recipients Bob or Charles checked with the bank first? In the case of a \u003Ca href=\"http:\/\/szabo.best.vwh.net\/securetitle.html\"\u003Ereplicated property title service\u003C\/a\u003E [S98] we have a similar problem -- if Alice transfers her title to two other owners, which new owner actually received the deed? If property is homesteaded on a first-come first-serve basis, which of two or more \"land rushers\" competing for a lucrative parcel is entitled to the land? \u003Ch4\u003ELamport (Causal) Order\u003C\/h4\u003E Imagine a network where computers don't know how to keep time very well -- they are always getting out of synchronization. (Alas, all you have to really think of here is the actual Internet with PCs). Such a network, called an \u003Ci\u003Easynchronous\u003C\/i\u003E network, lacks an accurate and secure global clock time by which computers can determine the order in which events, which might be messages sent or instructions executed on a particular local machine, have happened. Lamport [L78] was among the first to tackle the problem of how to determine the order of events in such a network. \u003Cp\u003E A partial order means that we know in what order some of the elements are, but we aren't sure about some of the others, or some of the others may be equal. An example is the \"less than or equal to\" relationship among a group of integers, some of which can repeat. Some of the integers we know are less than some others, but an integer paired with itself is equal. A total order, on the other hand, is like the \"less than\" relationship among unique integers -- we can always tell when one integer is less than another -- there is no ambiguity left. In the case of events, a partial order means for some pairs of events we know whether one occured before another, and for some others we don't know. We use the same symbols as we would use for the analogous case of the integers, so that \"x \u003C= y\" means \"x either occured before y or we don't know whether it occured before or after y\". In a total of events, we know for any two events which one happened first.   We write \"x \u003C y\" meaning \"x occured before y.\"\u003Cbr \/\u003E \u003C\/p\u003E\u003Cp\u003E Lamport's answer to the event ordering problem was to show that parties (or, we use the terms equivalently here, nodes on the network) can agree on a partial order of events based on causal relationships between these events -- or at least the subset of events where we can determine that causation could occur. On a network, parties influence each other by talking to each other -- in other words, by sending each other messages. Lamport used these messages as the basic building block for constructing his partial order, according to the following rules: \u003C\/p\u003E   \u003Cp\u003E    \u003C\/p\u003E   \u003Cul\u003E \u003Cli\u003E 1.  If an event is local to node P, every nonfaulty node agrees on P's opinion of it. \u003C\/li\u003E\u003Cli\u003E2.  Every correct node agrees that every message was sent before it was received. \u003C\/li\u003E\u003Cli\u003E3. If we agree that event A occured before event B and that event B occured before event C, then we agree that event A occured before event C. In other words, this partial order is transitive. \u003C\/li\u003E   \u003C\/ul\u003E     \u003Cp\u003E    \u003C\/p\u003E   \u003Ch4\u003EBreaking Ties -- Creating a Fair Total Order\u003C\/h4\u003E The partial order leaves us with the need to agree on how to break ties -- how to resolve the ambiguities where we can't agree which event took place first -- and thus create a total order of events. We want to do so in a way that is \u003Ci\u003Efair\u003C\/i\u003E, in other words, in a way that cannot be manipulated to the advantage of any particular party.    \u003Cp\u003E An unfair way to create a total order would be to impose a certain predictable rule for breaking ties. For example, we could decide on a total order for the processes and break ties in the causal order by referring to this total order. \u003C\/p\u003E   \u003Cp\u003E However, such a procedure creates a bias that may, depending on the application, favor certain servers over others, and therefore allow those servers to favor certain clients over others. \u003C\/p\u003E   \u003Cp\u003E One way to break ties fairly is have the participants toss fair coins -- in other words, generate random numbers in a way that cannot be manipulated and then assign those random numbers to events. There are several ways to toss fair coins over a network and we describe one such way below. \u003C\/p\u003E Another way to break ties fairly is to have the participants agree to a global clock time that is more accurate than the message delays faced by those who would manipulate timing in favor of some party. This entails using a network with very predictable message lag for the clock synchronization protocol and a less predictable one for the other services.\u003Cbr \/\u003E\u003C\/blockquote\u003E\u003Ca href=\"http:\/\/szabo.best.vwh.net\/distributed.html\"\u003EMore here.\u003C\/a\u003E"},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/3316161419266236367\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/3316161419266236367","title":"3 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/3316161419266236367"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/3316161419266236367"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2007\/09\/partial-and-total-orders.html","title":"Partial and total orders"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"3"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-3848058642572499262"},"published":{"$t":"2007-09-06T18:28:00.000-07:00"},"updated":{"$t":"2007-09-06T18:45:54.542-07:00"},"title":{"type":"text","$t":"Institutional changes prerequisite to the industrial revolution"},"content":{"type":"html","$t":"In the ongoing debate at Marginal Revolution over Gregory Clark's new book \u003Ci\u003EA Farewell to Alms\u003C\/i\u003E -- which I highly recommend, despite my criticisms -- he wrote the following:\u003Cbr \/\u003E\u003Cbr \/\u003E\"The widespread impression that between 1300 and 1800 England experienced significant institutional improvements is just wrong. There were changes, yes. But not improvements.\"\u003Cbr \/\u003E\u003Cbr \/\u003ETo which I responded:\u003Cbr \/\u003E\u003Cblockquote\u003ESome important institutional changes -- some of them arguably radical improvements -- in England between 1300 and 1800:\u003Cbr \/\u003E\u003Cbr \/\u003E* The mechanical clock, 14th century. The resulting rise of \u003Ca href=\"http:\/\/szabo.best.vwh.net\/synch.html\"\u003Eclock culture\u003C\/a\u003E and the time wage may have slowly but radically improved the coordination and work habits of Europeans. Earlier adaptation to clock culture, a process that may take centuries to evolve, may explain the large discrepencies between European and many non-European laborer work habits that Clark cites.\u003Cbr \/\u003E\u003Cbr \/\u003E* The printing press and the rise of book consciousness, which radically decreased \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2006\/02\/roundhead-revolution.html\"\u003Ethe costs of teaching economically important knowledge \u003C\/a\u003Eto both children and adults. The rise of book consciousness, reflected in the literacy and book cost data Clark graphs, explains the most prominent puzzle revealed by Clark's data: the fact that skills and innovation rose dramatically even as the rewards to skills were stagnant or declined.\u003Cbr \/\u003E\u003Cbr \/\u003E* Nationalization the Church in England and secularization of family law, 16th century.\u003Cbr \/\u003E\u003Cbr \/\u003E* The incorporation of the Lex Mercatoria into the common law, and the resulting rise of modern contract law, 18th century. Indeed, much of this occured in the same decades as the start of the industrial revolution.\u003Cbr \/\u003E\u003Cbr \/\u003E* The \"Romanization\" of property law, rendering land more freely saleable, divisible, and mortgageable, which Adam Smith noted was an important improvement still in process at his time.\u003Cbr \/\u003E\u003Cbr \/\u003E* The rise of marine insurance (e.g. Lloyd's of London) and the associated rise of colonialism and world trade, 17th-18th century.\u003Cbr \/\u003E\u003Cbr \/\u003E* The decline of guilds and monopolies, 16th-18th centuries. Medieval England was certainly not a highly competitive market economy. Commerce in goods was dominated rather by monopolies and a variety of price and quality controls instituted by guilds and towns.\u003C\/blockquote\u003E\u003Ca href=\"http:\/\/www.marginalrevolution.com\/marginalrevolution\/2007\/09\/a-farewell-to-a.html?cid=81880661#comment-81880661\"\u003EHere\u003C\/a\u003E is more of the debate at MR."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/3848058642572499262\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/3848058642572499262","title":"2 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/3848058642572499262"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/3848058642572499262"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2007\/09\/institutional-changes-precedent-to.html","title":"Institutional changes prerequisite to the industrial revolution"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"2"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-2254865181508910837"},"published":{"$t":"2007-09-04T17:26:00.000-07:00"},"updated":{"$t":"2007-09-09T15:37:26.922-07:00"},"title":{"type":"text","$t":"Secure property titles"},"content":{"type":"html","$t":"From \u003Ca href=\"http:\/\/szabo.best.vwh.net\/securetitle.html\"\u003ESecure Property Titles with Owner Authority\u003C\/a\u003E:\u003Cbr \/\u003E\u003Cblockquote\u003EIn all cases of property rights there is a defined space, whether a namespace or physical space, and the task is to agree on simple attributes of or rights to control subdivisions of that space. In some cases a name or other symbol corresponds to a person or object owned or controlled by that person. For example, Internet users must agree on which domain name corresponds to which web site operator. In other cases we are simply concerned with control over a subdivision of the space. With real estate we must agree on who owns various rights (to occupy the surface, to mine the minerals under, etc.) to a piece of land. With radio spectrum we must agree on who owns what range of frequencies and in what physical space (or transmitting power as an easily observed approximation of physical space used).\u003Cbr \/\u003E\u003Cbr \/\u003E...all such [multiparty problems of] control over the semantics of symbols, to be made and respected across trust boundaries, are problems of agreeing on and maintaining property rights...\u003Cbr \/\u003E\u003Cbr \/\u003E...New advances in replicated database technology will give us the ability to securely maintain and transfer ownership for a wide variety of kinds of property, including not only land but chattels, securities, names, and addresses. This technology will give us public records which can \"survive a nuclear war\", along the lines of the original design goal of the Internet. While thugs can still take physical property by force, the continued existence of correct ownership records will remain a thorn in the side of usurping claimants...\u003Cbr \/\u003E\u003Cbr \/\u003EThe ideal title database would have the following properties:\u003Cbr \/\u003E\u003Cbr \/\u003E(1) Current owner Alice should be able transfer her title to only a single relying counterparty (similar to the \"double spending\" problem in digital cash)\u003Cbr \/\u003E\u003Cbr \/\u003E(2) Servers should not be able to forge transfers\u003Cbr \/\u003E\u003Cbr \/\u003E(3) Servers should not be able to block transfers to or from politically incorrect parties.\u003Cbr \/\u003E\u003Cbr \/\u003E...Using these results [of Byzantine quorum systems] it looks like we can approach our ideal title database as follows:\u003Cbr \/\u003E\u003Cbr \/\u003E(1) Alice signs the title and Bob's public key, and sends this message to 2f+1 servers, committing her to transfer title to Bob. Bob checks at least 2f+1 servers before relying on Alice's transfer.\u003Cbr \/\u003E\u003Cbr \/\u003E(2) No collusion of servers can forge Alice's signature (we achieve at least this property ideally!)\u003Cbr \/\u003E\u003Cbr \/\u003E(3) A conspiracy of \u003E=(1\/4)n servers can block a transfer. Alice's recourse is to use some other channels to broadcast her intention, demonstrating that the registry did not follow her wishes, and hoping the alternative channels are more reliable. Bob only has similar recourse if he signed a document with Alice demonstrating their intentions to transfer title from Alice to Bob. The most basic recourse is a correct subset of servers which exits the property club and establishes a new one, then advertises its correctness (and proves the incorrectness of its rival group) as described above.\u003C\/blockquote\u003E\u003Cbr \/\u003E\u003Ca href=\"http:\/\/szabo.best.vwh.net\/securetitle.html\"\u003EMore here.\u003C\/a\u003E"},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/2254865181508910837\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/2254865181508910837","title":"1 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/2254865181508910837"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/2254865181508910837"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2007\/08\/secure-property-titles.html","title":"Secure property titles"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"1"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-5330968587291529965"},"published":{"$t":"2007-09-02T15:31:00.000-07:00"},"updated":{"$t":"2007-09-02T16:30:58.666-07:00"},"title":{"type":"text","$t":"Bilinear group cryptography"},"content":{"type":"html","$t":"An important recent development in public key cryptography is the bilinear group, which for abstract algebra wonks is defined as follows (if you're not into abstract algebra feel free to skip to below):\u003Cbr \/\u003E\u003Cblockquote\u003EBilinear groups are a set of three abstract algebraic groups, G1, G2 and GT , together with a deterministic function e, called a bilinear map, that takes as input one element from G1 and one element from G2 and outputs an element in GT . Suppose all three groups have order Q, element g1 generates group G1, and element g2 generates group G2. Then, one special property called bilinearity of the map e is that for all a, b \u003C Q, we have that e(g1^a , g2^b) = e(g1, g2)^ab. This new element, e(g1, g2)^ab, is in group GT . The key observation is what happens to the exponents, a and b, during the mapping: they are multiplied. The group GT is distinct from both G1 or G2; thus the output of the mapping cannot be fed back into the map e as input.\u003C\/blockquote\u003EElliptic curves are generally used for the groups, although bilinear schemes in at least some other algebras are also possible.\u003Cbr \/\u003E\u003Cbr \/\u003ETwo of the main applications of bilinear groups are proxy re-signatures and proxy re-encryption.  In proxy re-signatures, a semi-trusted party transforms Alice's public key signature into Bob's.   The proxy does not have, cannot derive, and thus cannot sign with either Bob's secret key or with Alice's, but can only transform Alice's signature into Bob's.  The proxy re-signer is thus \"semi-trusted\" -- it is trusted with some things we normally would trust a proxy signer with, but not with others.  For example it is not trusted with either Alice's or Bob's private key, only with a special key that allows the signature transformation.\u003Cbr \/\u003E\u003Cbr \/\u003EThe target signature could also be a \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Group_signature\"\u003Egroup signature\u003C\/a\u003E.   Thus, for example, Alice could sign her e-mail with her own digital signature, and a proxy re-signer sitting on the corporate e-mail firewall could re-sign the e-mail with the corporate group signature.  \u003Cbr \/\u003E\u003Cbr \/\u003EProxy re-signers can be chained in a series, so that signature A is transformed by proxy AB into signature B, which is transformed by proxy BC into signature C, and so on.   The last signature Z proves that the message was signed by each proxy in the chain in order.  Proxy re-signers can also be chained together in a tree or \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/directed_acyclic_graph\"\u003Edirected acyclic graph\u003C\/a\u003E.  (Note that \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Threshold_cryptosystem\"\u003Ethreshold signatures\u003C\/a\u003E by contrast do not require or prove that the signatures took place in a particular order).\u003Cbr \/\u003E\u003Cbr \/\u003EProxy re-encryption is the same idea for public key encryption, with the added bonus that the re-encryptor can't read the message.   So, for example, we could have the following scheme to restrict the distribution of content:\u003Cbr \/\u003E\u003Cbr \/\u003E(1) Content owner Alice encrypts her content with her public key and publishes it to proxies P1, P2, etc., along with re-encryption keys AC1, AC2, etc. for each customer.  \u003Cbr \/\u003E\u003Cbr \/\u003E(2) Proxy allows customer to access the content only if paid.  When paid, the proxy re-encrypts to the customer using the re-encryption key for that customer.\u003Cbr \/\u003E\u003Cbr \/\u003EThe proxies themselves are trusted neither with an ability to view the content nor with the discretion to distribute to additional customers not desired by content owner Alice.  The proxy is trusted only to restrict access to a customer. (I present this scheme mainly just to illustrate what proxy re-encryption does.  As an application, this particular content distribution scheme seems to me to only be useful if it somehow lowers transaction costs to route all payments through proxies rather than paying Alice directly, the latter which could be done by normal public-key cryptography, and of course it doesn't protect against a cheating customer re-publishing the content to the world).\u003Cbr \/\u003E\u003Cbr \/\u003EI suspect proxy re-encryption could simplify the design of digital mix schemes like \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Onion_routing\"\u003Eonion routing\u003C\/a\u003E -- this is left as an exercise for the cryptographically inclinded reader.\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca href=\"http:\/\/groups.csail.mit.edu\/cis\/theses\/hohenberger-phd-thesis.pdf\"\u003EThis thesis\u003C\/a\u003E is my source for most of this blog post; it discusses bilinear group cryptography for proxy re-encryption, proxy re-signing, and for reducing the trust needed for blinded offline digital cash.\u003Cbr \/\u003E\u003Cbr \/\u003ELegal caveat: many, if not most protocols based on bilinear groups seem to have been recently patented."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/5330968587291529965\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/5330968587291529965","title":"7 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/5330968587291529965"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/5330968587291529965"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2007\/09\/bilinear-group-cryptography.html","title":"Bilinear group cryptography"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"7"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-1854991033672480239"},"published":{"$t":"2007-08-30T16:12:00.000-07:00"},"updated":{"$t":"2007-09-04T16:17:18.589-07:00"},"title":{"type":"text","$t":"Money and the problem of cooperation"},"content":{"type":"html","$t":"From \u003Ca href=\"http:\/\/szabo.best.vwh.net\/shell.html\"\u003E\"Shelling Out: The Origins of Money\"\u003C\/a\u003E:\u003Cbr \/\u003E\u003Cblockquote\u003EEvolutionary psychology starts with a key mathematical discovery of John Maynard Smith [D89]. Using models of populations of co-evolving genes, from the well-developed area of population genetics, Smith posited genes that can code for strategies, good or bad, used in simple strategic problems (the \"games\" of game theory). Smith proved that these genes, competing to be propagated into future generations, will evolve strategies that are \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Nash_equilibria\"\u003ENash equilibria \u003C\/a\u003E to the strategic problems presented by the competition.  These games include the \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Prisoners_Dilemma\"\u003Eprisoner's dilemma\u003C\/a\u003E, a prototypical problem of cooperation, and \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Hawk-Dove_game\"\u003Ehawk\/dove\u003C\/a\u003E, a prototypical problem of aggression and its mitigation.\u003Cbr \/\u003E\u003Cbr \/\u003ECritical to Smith's theory is that these strategic games, while played out between phenotypes proximately, are in fact games between genes at the ultimate level -- the level of competition to be propagated. The genes -- not necessarily the individuals -- influence behavior as if they were boundedly rational (coding for strategies as optimal as possible, within the limits of what phenotypes can express given the biological raw materials and previous evolutionary history) and \"selfish\" (to use Richard Dawkins' metaphor). Genetic influences on behavior are adaptations to the social problems presented by genes competing through their phenotypes. Smith called these evolved Nash equilibria \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Evolutionarily_stable_strategy\"\u003E \u003Ci\u003Eevolutionary stable strategies\u003C\/i\u003E.\u003C\/a\u003E.\u003Cbr \/\u003E\u003Cbr \/\u003EThe \"epicycles\" built on top of the earlier individual selection theory, such as sexual selection and kin selection, disappear into this more general model which, in a Copernican manner, puts the genes rather than individuals at the center of the theory. Thus Dawkins' metaphorical and often misunderstood phrase, \"selfish gene\", to describe Smith's theory.\u003Cbr \/\u003E\u003Cbr \/\u003EFew other species cooperate on the order of even Paleolithic humans. In some cases -- brood care, the colonies of ants, termites, and bees, and so forth, animals cooperate because they are kin -- because they can help copies of their \"selfish genes\" found in their kin. In some highly constrained cases, there is also ongoing cooperation between non-kin, which evolutionary psychologists call reciprocal altruism. As Dawkins describes it [D89], unless an exchange of favors is simultaneous (and sometimes even then), one party or the other can cheat. And they usually do. This is the typical result of a game theorists call the Prisoner's Dilemna -- if both parties cooperated, both would be better off, but if one cheats, he gains at the expense of the sucker. In a population of cheaters and suckers, the cheaters always win. However, sometimes animals come to cooperate through repeated interactions and a strategy called Tit-for-Tat: start cooperating and keep cooperating until the other party cheats -- then defect yourself. This threat of retalation motivates continued cooperation.\u003Cbr \/\u003E\u003Cbr \/\u003EThe situations where such cooperation in fact occurs in the animal world are highly constrained. The main constraint is that such cooperation is restricted to relationships where at least one of the participants is more or less forced to be in the proximity of the other. The most common case is when parasites, and hosts whose bodies they share, evolve into symbiotes. If the interests of the parasite and the host coincide, so that both working together would be more fit than either on their own, (i.e. the parasite is also providing some benefit to the host), then, if they can play a successful game of Tit-for-Tat, they will evolve into symbiosis -- a state where their interests, and especially the exit mechanism of genes from one generation to the next, coincides. They become as a single organism. However, there is much more than cooperation going on here -- there is also exploitation. They occur simultaneously. The situation is ananalogous to an institution humans would develop -- tribute -- which we will analyze below.\u003Cbr \/\u003E\u003Cbr \/\u003ESome very special instances occur that do not involve parasite and host sharing the same body and evolving into symbiotes. Rather, they involve non-kin animals and highly constrained territory. A prominent example Dawkins describes are cleaner fish. These fish swim in and out of the mouths of their hosts, eating the bacteria there, benefiting the host fish. The host fish could cheat -- it could wait for the cleaner to finish its job, then eat it. But they don't. Since they are both mobile, they are both potentially free to leave the relationship. However, the cleaner fish have evolved a very strong sense of individual territoriality, and have stripes and dances that are difficult to spoof -- much like a difficult to forge brand logo. So the host fish know where to go to get cleaned -- and they know that if they cheat, they will have to start over again with a new distrustful cleaner fish. The entrance costs, and thus the exit costs, of the relationship are high, so that it works out without cheating. Besides, the cleaner fish are tiny, so the benefit of eating them is not large compared to the benefit of a small number of, or even one, cleaning.\u003Cbr \/\u003E\u003Cbr \/\u003EOne of the most pertinent examples.is the vampire bat. As their name suggests, they suck the blood of prey mammals. The interesting thing is that, on a good night, they bring back a surplus; on a bad night, nothing. Their dark business is highly unpredictable. As a result, the lucky (or skilled) bats often share blood with the less lucky (or skilled) bats in their cave. They vomit up the blood and the grateful recipient eats it.\u003Cbr \/\u003E\u003Cbr \/\u003EThe vast majority of these recipients are kin. Out of 110 such regurgitations witnessed by the strong-stomached biologist G.S. Wilkinson, 77 were cases of mothers feeding their children, and most of the other cases also involved genetic kin. There were, however, a small number that could not be explained by kin altruism. To demonstrate these were cases of reciprocal altruism, Wilkinson combined the populations of bats from two different groups. Bats, with very rare exception, only fed old friends from their original group. [D89]. Such cooperation requires building a long-term relationship, where partners interact often, recognize each other, and keep track of each other's behavior. The bat cave helps constrain the bats into long-term relationships where such bonds can form.\u003Cbr \/\u003E\u003Cbr \/\u003EWe will see that some humans, too, chose highly risky and discontinuous prey items, and shared the resulting surpluses with non-kin. Indeed, they accomplished this to a far greater extent than the vampire bat. How they did so is the main subject of our essay. Dawkins suggests, \"money is a formal token of delayed reciprocal altruism\", but then pursues this fascinating idea no further. We will.\u003Cbr \/\u003E\u003Cbr \/\u003EAmong small human groups, public reputation can supercede retaliation by a single individual to motivate cooperation in delayed reciprocation. However, reputational beliefs can suffer from two major kinds of errors -- errors of about which person did what, and errors in appraising the value or damages caused by that act.\u003Cbr \/\u003E\u003Cbr \/\u003EThe need to remember faces and favors is a major cognitive hurdle, but one that most humans find relatively easy to overcome. Recognizing faces is easy, but remembering that a favor took place when such memory needs to be recalled can be harder. Remembering the specifics about a favor that gave it a certain value to the favored is harder still. Avoiding disputes and misunderstandings can be improbable or prohibitively difficult.\u003Cbr \/\u003E\u003Cbr \/\u003EThe appraisal or \u003Ca href=\"http:\/\/www.blogger.com\/measuringvalue.html\"\u003Evalue measurement\u003C\/a\u003E problem is very broad. For humans it comes into play in any system of exchange -- reciprocation of favors, barter, money, credit, employment, or purchase in a market. It is important in extortion, taxation, tribute, and the setting of judicial penalties. It is even important in reciprocal altruism in animals. Consider monkeys exchanging favors -- say pieces of fruit for back scratches. Mutual grooming can remove ticks and fleas that an individual can't see or reach. But just how much grooming versus how many pieces of fruit constitutes a reciprocation that both sides will consider to be \"fair\", or in other words not a defection? Is twenty minutes of backscratching worth one piece of fruit or two? And how big a piece?\u003Cbr \/\u003E\u003Cbr \/\u003EEven the simple case of trading blood for blood is more complicated then it seems. Just how do the bats estimate the value of blood they have received? Do they estimate the value of a favor by weight, by bulk, by taste, by its ability to satiate hunger, or other variables? Just the same, measurement complications arise even in the simple monkey exchange of \"you scratch my back and I'll scratch yours\".\u003Cbr \/\u003E\u003Cbr \/\u003EFor the vast majority of potential exchanges, the measurement problem is intractible for animals. Even more than the easier problem of remembering faces and matching them to favors, the ability of both parties to agree with sufficient accuracy on an estimate of the value of a favor in the first place is probably the main barrier to reciprocal altruism among animals.\u003Cbr \/\u003E\u003Cbr \/\u003EJust the stone tool-kit of even early Paleolithic man that has survived for us to find was in some ways too complicated for brains of our size. Keeping track of favors involving them -- who manufactured what quality of tool for whom, and therefore who owed whom what, and so on -- would have been too difficult outside the boundaries of the clan. Add onto that, quite likely, a large variety of organic objects, ephemeral services (such as grooming), and so on that have not survived. After even a small fraction of these goods had been transferred and services performed our brains, as inflated as they are, could not possibly keep track of who owed what to whom. Today we often write these things down -- but Paleolithic man had no writing. If cooperation occured between clans and even tribes, as the archaeological record indicates in fact occured, the problem gets far worse still, since hunter-gatherer tribes were usually highly antagonistic and mutually distrustful.\u003Cbr \/\u003E\u003Cbr \/\u003EIf clams can be money, furs can be money, gold can be money, and so on -- if money is not just coins or notes issued by a government under legal tender laws, but rather can be wide variety of objects -- then just what is money anyway? And why did humans, often living on the brink of starvation, spend so much time making and enjoying those necklaces when they could have been dong more hunting and gathering? Nineteenth century economist Carl Menger [M1892] first described how money evolves naturally and inevitably from a sufficient volume of commodity barter. In modern economic terms the story is similar to Menger's.\u003Cbr \/\u003E\u003Cbr \/\u003EBarter requires a coincidence of interests. Alice grows some pecans and wants some apples; Bob grows apples and want some pecans. They just happen to have their orchards near each other, and Alice just happens to trust Bob enough to wait between pecan harvest time and apple harvest time. Assuming all these conditions are met, barter works pretty well. But if Alice was growing oranges, even if Bob wanted oranges as well as pecans, they'd be out of luck -- oranges and apples don 't both grow well in the same climate. If Alice and Bob didn't trust each other, and couldn't find a third party to be a middleman [L94] or enforce a contract, they'd also be out of luck.\u003Cbr \/\u003E\u003Cbr \/\u003EFurther complications could arise. Alice and Bob can't fully articulate a promise to sell pecans or apples in the future, because, among other possibilities, Alice could keep the best pecans to herself (and Bob the best apples), giving the other the dregs. Comparing the qualities as well as the quantities of two different kinds of goods is all the more difficult when the state of one of the goods is only a memory. Furthermore, neither can anticipate events such as a bad harvest. These complications greatly add to the problem of Alice and Bob deciding whether separated reciprocal altruism has truly been reciprocal. These kinds of complications increase the greater the time interval and uncertainty between the original transaction and the reciprocation.\u003Cbr \/\u003E\u003Cbr \/\u003EA related problem is that, as engineers would say, barter \"doesn't scale\". Barter works well at small volumes but becomes increasingly costly at large volumes, until it becomes too costly to be worth the effort. If there are \u003Cb\u003En\u003C\/b\u003E goods and services to be traded, a barter market requires \u003Cb\u003En^2\u003C\/b\u003E prices. Five products would require twenty-five prices, which is not too bad, but 500 products would require 250,000 prices, which is far beyond what is practical for one person to keep track of. With money, there are only \u003Cb\u003En\u003C\/b\u003E prices -- 500 products, 500 prices. Money for this purpose can work either as a medium of exchange or simply as a standard of value -- as long as the number of money prices themselves do not grow too large to memorize or change too often. (The latter problem, along with an implicit insurance \"contract\", along with the lack of a competitive market may explain why prices were often set by long-evolved custom rather than proximate negotiation).\u003Cbr \/\u003E\u003Cbr \/\u003EBarter requires, in other words, coincidences of supply or skills, preferences, time, and low transaction costs. Its cost increases far faster than the growth in the number of goods traded. Barter certainly works much better than no trade at all, and has been widely practiced. But it is quite limited compared to trade with money.\u003Cbr \/\u003E\u003Cbr \/\u003EPrimitive money existed long before large scale trade networks. Money had an even earlier and more important use. Money greatly improved the workings of even small barter networks by greatly reducing the need for credit. Simultaneous coincidence of preference was far rarer than coincidences across long spans of time. With money Alice could gather for Bob during the ripening of the blueberries this month, and Bob hunt for Alice during the migration of the mammoth herds six months later, without either having to keep track of who owed who, or trust the other's memory or honesty. A mother's much greater investment in child rearing could be secured by gifts of unforgeable valuables. Money converts the division of labor problem from a prisoner's dilemma into a simple swap.\u003Cbr \/\u003E\u003Cbr \/\u003EThe proto-money used by many hunter-gatherer tribes looks very different from modern money, now serves a different role in our modern culture, and had a function probably limited to small trade networks and other local institutions discussed below. I will thus call such money \u003Ci\u003Ecollectibles\u003C\/i\u003E instead of money proper. The terms used in the anthropological literature for such objects are usually either \"money\", defined more broadly than just government printed notes and coins but more narrowly than we will use \"collectible\" in this essay, or the vague \"valuable\", which sometimes refers to items that are not collectibles in the sense of this essay.\u003Cbr \/\u003E\u003Cbr \/\u003EReasons for choosing the term collectible over other possible names for proto-money will become apparent. Collectibles had very specific \u003Ca href=\"http:\/\/szabo.best.vwh.net\/shell.html#Attributes%20of%20Collectibles\"\u003Eattributes\u003C\/a\u003E. They were not merely symbolic. While the concrete objects and attributes valued as collectible could vary between cultures, they were far from arbitrary. The primary and ultimate evolutionary function of collectibles was as a medium for storing and transfering wealth. Some kinds of collectibles, such as wampum, could be quite functional as money as we moderns know it, where the economic and social conditions encouraged trade. I will occasionally use the terms \"proto-money\" and \"primitive money\" interchangeably with \"collectible\" when discussing pre-coinage media of wealth transfer.\u003Cbr \/\u003E\u003C\/blockquote\u003E\u003Ca href=\"http:\/\/szabo.best.vwh.net\/shell.html\"\u003EMore here.\u003C\/a\u003E"},"link":[{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/1854991033672480239"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/1854991033672480239"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2007\/08\/money-and-problem-of-cooperation.html","title":"Money and the problem of cooperation"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}]},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-7828850903800217093"},"published":{"$t":"2007-08-28T16:53:00.000-07:00"},"updated":{"$t":"2007-08-28T18:13:55.433-07:00"},"title":{"type":"text","$t":"Why the industrial revolution?"},"content":{"type":"html","$t":"There is currently a hot debate at Marginal Revolution and elsewhere over Gregory Clark's new book, \u003Ci\u003EA Farewell to Alms\u003C\/i\u003E.  I can't do Clark justice with a short explanation, but in brief he posits that the rich outbred the poor so quickly in medieval England that a eugenic effect occurred, giving the English traits of temperament such as harder work, longer time preferences, etc. that made the industrial revolution possible.  I find the political incorrectness of Clark's explanation refreshing, but I'm not convinced, given that the rich tended to outbreed the poor during most eras and in most cultures of history prior to the industrial revolution.   Even worse, Clark's theory can't explain why England fell behind most of the rest of Western Europe, and later most of the rest of the industrial world, in industrial and later economic progress after about 1870.  Genetic change doesn't work nearly that fast.\u003Cbr \/\u003E\u003Cbr \/\u003EI've argued that the printing press, combined with a free market in books and the resulting spread of literate culture and the rise of national languages, gave Europe an institutional superiority over other cultures of that era that is now hard to fathom.   As the term \"literate culture\" does not connote the radical shift in our very thought processes that occurred, I call this effect \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2006\/08\/book-consciousness.html\"\u003E\"book consciousness.\"\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EThis led, in the first instance, to Western European conquest of the world's seas and colonization all over the planet -- a conquest that has been substantially reversed and \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2006\/08\/colonialism-just-aint-what-it-used-to.html\"\u003Ecould not be duplicated today \u003C\/a\u003Ebecause now most of the world shares book consciousness. It also led to a radical change in the way work skills were taught to children, which along with the scientific revolution and other fruits of the printing press led to the industrial revolution.  \u003Cbr \/\u003E\u003Cbr \/\u003EClark's own data on wages and productivity can best be explained, I believe, by the radical changes in child investment strategy reflected in \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2006\/02\/roundhead-revolution.html\"\u003EProtestant Reformation\u003C\/a\u003E and a central aspect of book consciousness.\u003Cbr \/\u003E\u003Cbr \/\u003EFinally, the industrial revolution occurred first in England rather than other parts of Western Europe due to  the \u003Ca href=\"http:\/\/szabo.best.vwh.net\/history.html\"\u003Esecurity advantages\u003C\/a\u003E of being an island.   Not at all coincidentally, England was by 1800 the leading colonial power. England was protected at low cost by its navies from most of the organized violence that ravaged the continent.  This allowed it to develop a more secure regime of property rights, which in turn lowered the risks of the large capital outlays needed for industrialization.  For a similar reason Japan initially outpaced its continental Asian rivals in industrialization.\u003Cbr \/\u003E\u003Cbr \/\u003EHere's \u003Ca href=\"http:\/\/www.marginalrevolution.com\/marginalrevolution\/2007\/08\/farewell-to-a-1.html\"\u003Ea link\u003C\/a\u003E to the debate at Marginal Revolution."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/7828850903800217093\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/7828850903800217093","title":"6 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/7828850903800217093"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/7828850903800217093"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2007\/08\/why-industrial-revolution.html","title":"Why the industrial revolution?"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"6"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-7131985815321834510"},"published":{"$t":"2007-08-28T14:54:00.000-07:00"},"updated":{"$t":"2007-09-04T16:17:51.538-07:00"},"title":{"type":"text","$t":"Mutually private computation"},"content":{"type":"html","$t":"From my article, \u003Ca href=\"http:\/\/www.theiia.org\/ITAudit\/index.cfm?act=itaudit.archive\u0026fid=216\"\u003EThe God Protocols:\u003C\/a\u003E\u003Cbr \/\u003E\u003Cblockquote\u003E\u003Cp\u003EImagine the ideal protocol. It would have the most trustworthy third party imaginable — a deity who is on everybody's side. All the parties would send their input to this god. God would reliably determine the results and return the output. In addition, God, being the ultimate in confessional discretion, would ensure that no party would learn anything more about the other party's input than they could learn from their own input and the output.\u003Cbr \/\u003E\u003Cbr \/\u003EAlas, in our temporal world we deal with humans rather than deities. Yet, too often we are forced to treat people in a nearly god-like manner because our infrastructure lacks the security needed to protect ourselves.\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"http:\/\/szabo.best.vwh.net\/mutually.gif\"\u003E\u003Cimg style=\"MARGIN: 0pt 10px 10px 0pt; WIDTH: 560px; CURSOR: pointer\" alt=\"\" src=\"http:\/\/szabo.best.vwh.net\/mutually.gif\" border=\"0\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003ETo an astonishing extent, network security theorists have recently solved this problem. They have developed protocols that create virtual machines between two or more parties. Multi-party secure computation allows any number of parties to share a computation, each learning only what can be inferred from their own input and the output of the computation. These virtual machines have the exciting property that each party's input is held in strict confidence from the other parties. The program and the output are shared by the parties. \u003C\/p\u003E\u003Cp\u003E\u003Cbr \/\u003E\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"http:\/\/szabo.best.vwh.net\/virtual.gif\"\u003E\u003Cimg style=\"MARGIN: 0pt 0pt 10px 10px; WIDTH: 560px; CURSOR: pointer\" alt=\"\" src=\"http:\/\/szabo.best.vwh.net\/virtual.gif\" border=\"0\" \/\u003E\u003C\/a\u003E\u003Cbr \/\u003EFor example, we could run a spreadsheet across the Internet on this virtual computer. We would agree on a set of formulas and set up the virtual computer with these formulas. Each participant would have their own input cells, which remain blank on the other participants' computers. The participants share output cell(s). Each participant inputs their own private data into their input cells. Alice could only learn as much about the other participants' input cells as she could infer from her own inputs and outputs. \u003C\/p\u003E\u003Cp\u003EI go on to briefly describe applications such as confidential auditing and auctions with private bids, \u003Ca href=\"http:\/\/www.theiia.org\/ITAudit\/index.cfm?act=itaudit.archive\u0026amp;fid=216\"\u003Ehere.\u003C\/a\u003E\u003C\/p\u003E\u003Cp\u003ERelated articles: \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2007\/02\/confidential-auditing.html\"\u003Econfidential auditing\u003C\/a\u003E, \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2006\/01\/secure-timestamping-and-confidential.html\"\u003Esecure time-stamping\u003C\/a\u003E, \u003Ca href=\"http:\/\/szabo.best.vwh.net\/distributed.html\"\u003Eadvances in distributed security.\u003C\/a\u003E\u003C\/p\u003E\u003Cp\u003ESome outside links to papers: \u003Ca href=\"http:\/\/www.adastral.ucl.ac.uk\/~helger\/crypto\/link\/timestamping\/\"\u003Esecure time-stamping\u003C\/a\u003E, \u003Ca href=\"http:\/\/privacy.cs.cmu.edu\/dataprivacy\/papers\/multipartycomputation\/\"\u003Emultiparty secure computation.\u003C\/a\u003E\u003C\/p\u003E\u003C\/blockquote\u003E"},"link":[{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/7131985815321834510"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/7131985815321834510"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2007\/08\/mutually-private-computation.html","title":"Mutually private computation"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}]},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-2374372829320615"},"published":{"$t":"2007-08-24T13:39:00.001-07:00"},"updated":{"$t":"2007-08-24T14:11:01.989-07:00"},"title":{"type":"text","$t":"Blind signatures"},"content":{"type":"html","$t":"The following, from a \u003Ca href=\"http:\/\/szabo.best.vwh.net\/bearer_contracts.html\"\u003Elarger article\u003C\/a\u003E of mine, serves as an introduction to the idea of blind signatures and their use in digital cash and other digital bearer certificates:\u003Cbr \/\u003E\u003Cblockquote\u003E\u003Ch4\u003EIntroduction\u003C\/h4\u003EMeet the greatest simple equation since e=mc\u003Csup\u003E2\u003C\/sup\u003E:\u003Cpre\u003E\u003Cspan style=\"font-size:130%;\"\u003EgSf(m) = S(m)\u003C\/span\u003E\u003C\/pre\u003E S is a digital signature, f is the blinding function, and g an unblinding function. The blinding functions are usually based on a secret random number called the \"blinding factor\". m is another random number, a unique identifier which can, for example, refer to an instance of some object.\u003Cbr \/\u003E\u003Cbr \/\u003EThe idea is very clever but very simple. It may be counterintuitive because the simplest physical world metaphor of this highly useful e-commerce primitive sounds worse than useless: Alice can get Carol to sign a blank check! Here's how:\u003Cbr \/\u003E\u003Cbr \/\u003E(1) Alice generates m and blinds it. \"Blinding\" is just a one-time-pad encryption to oneself, f(m). She sends this to Carol. This is like taking a piece of paper and sealing it inside an envelope which Carol can't open or see through.\u003Cbr \/\u003E\u003Cbr \/\u003E(2) Carol signs it: Sf(m), and sends this back to Alice.   This is like Carol signing the outside of the envelope.\u003Cbr \/\u003E\u003Cbr \/\u003E(3) Alice unblinds it: gSf(m) = S(m).   Carol has also signed the paper Alice put inside the envelope!\u003Cbr \/\u003E\u003Cbr \/\u003EThe genius behind this discovery: cryptography  guru David\u003Cbr \/\u003EChaum.  The brilliance lies in step 3: Chaum discovered that\u003Cbr \/\u003Esome signatures have the property of being \"commutative\"\u003Cbr \/\u003Ewith the blinding functions: Alice can strip off the blinding\u003Cbr \/\u003Ein the reverse order which the blinding and signature\u003Cbr \/\u003Ewere applied, leaving just Alice's signature of n.  It is as if\u003Cbr \/\u003EAlice put a piece of  carbon paper inside the envelope.\u003Cbr \/\u003E\u003Cbr \/\u003EIn particular for RSA signatures, with public key (pq, e)\u003Cbr \/\u003Eand private key d, the blind signature functions are the following\u003Cbr \/\u003Emodulo pq:\u003Cpre\u003E\u003Cspan style=\"font-size:130%;\"\u003ES(x) = x\u003Csup\u003Ed\u003C\/sup\u003E\u003Cbr \/\u003Eg(x) = xk\u003Csup\u003E-1\u003C\/sup\u003E\u003Cbr \/\u003Ef(x)= xk\u003Csup\u003Ee\u003C\/sup\u003E\u003C\/span\u003E\u003C\/pre\u003EWe can check that the blind signature property holds:\u003Cpre\u003E\u003Cspan style=\"font-size:130%;\"\u003EgSf(m) = (m(k\u003Csup\u003Ee\u003C\/sup\u003E))\u003Csup\u003Ed\u003C\/sup\u003E * k\u003Csup\u003E-1\u003C\/sup\u003E\u003Cbr \/\u003E       = m\u003Csup\u003Ed\u003C\/sup\u003E * k * k\u003Csup\u003E-1\u003C\/sup\u003E\u003Cbr \/\u003E= m\u003Csup\u003Ed\u003C\/sup\u003E\u003C\/span\u003E\u003C\/pre\u003E which is the valid RSA signature of private key d on m.\u003Cbr \/\u003E\u003Ch4\u003EUnlinkable Transfers\u003C\/h4\u003EDistinguish between either a counter or third party tracing one person's true name, via lack of or weak \u003Ca href=\"http:\/\/world.std.com\/%7Efranl\/crypto\/chaum-acm-1981.html\"\u003Ecommunications mix\u003C\/a\u003E, and a third party linking two entities (whether nyms, use-more-than-once-addresses, account numbers, or true names) as being involved in the same transaction. By unlinkability herein we mean the latter. The goal where true names are used (this occurs, for example, when using true name accounts or not using good communications mixes), is to prevent third party linking of two people doing business with each other. Where nyms are used the goal is to minimize the release of traffic information, to prevent the unwanted accumulation of unique behavior patterns, which could be used to link nyms (including to their true names), or could augment other means of breaching privacy. Blinding especially helps where rights holders want to keep third party or public accounts denominated in generic rights. In that case a communications mix doesn't even in principle give us what blinding does.\u003Cbr \/\u003E\u003Cbr \/\u003EBesides protecting against the transfer agent, Chaum's transferor-, transferee-, and double-blinding protocols protect against collusion of a party with a transfer agent to identify the countparty account or nym.\u003Cbr \/\u003E\u003Cbr \/\u003EUnlinkability can be provided by combining a list of cleared certificates with blind signatures and a delay-mixing effect. Enough instances of a standardized contract [or specifically with digital cash, standard denominations of money] are issued over a period of time to create a mix. Between the issuing and clearing of a certificate, many other certificates with the same signature will be cleared, making it highly improbable that a particular clearing can be linked to a particular issue via the signature. There is a tradeoff between the mixing effect and the exposure to the theft of a \"plate\" for a particular issue: the smaller the issue, the smaller the exposure but the greater the linkability; a larger issue has both greater exposure and greater confidentiality.\u003Cbr \/\u003E\u003Cbr \/\u003EBlind signatures can be used to make certificate transfers unlinkable via serial number. Privacy from the transfer agent can take the form of transferee- unlinkability, transferor-unlinkability, or \"double blinded\" where both transferor and transferee are unlinkable by the transfer agent or a collusion of a transfer agent and counterparty.\u003Cbr \/\u003E\u003Cbr \/\u003EA use-once-address communications mix plus foreswearing any reputation gain from keeping accounts, in theory also buys us unlinkability, but a communications mix is weak and very expensive.\u003Cbr \/\u003E\u003Cbr \/\u003EBearer certificates come in an \"online\" variety, cleared during every transfer, and thus both verifiable and observable, and an \"offline\" variety, which can be transferred without being cleared, but is only verifiable when finally cleared, by revealing any the clearing name of any intermediate holder who transferred the object multiple times (a breach of contract).\u003Cbr \/\u003E\u003Cbr \/\u003EThis unlinkability is often called \"anonymity\", but the issue of whether accounts are issued to real names or pseudonyms, and whether transferor and transferee identify themselves to each other, is orthogonal to unlinkability by the transfer agent in the online model. In the off-line model, account identification (or at least a highly reputable and\/or secured pseudonym) is required: passing an offline certificate a second time reveals this identity. Furthermore, communications channels can allow Eve to link transferor and transferee, unless they take the precaution of using an anonymous remailer. Online clearing does make lack of identification a reasonable option for many kinds of transactions, although common credit and warrantee situations often benefit from or even require identification.\u003Cbr \/\u003E\u003Cbr \/\u003EWhen confronting an attempted clearing of a cleared serial number, we face an error-or-fraud dilemma similar to the one we encountered above in double entry bookkeeping. The ecash(tm) protocol from DigiCash actually takes advantage of on purpose to recover from a network failure. When certificates are lost over the net it is not clear to the transferor whether they have been received and cleared by the transferee or not. Second-transferring directly with the transfer agent resolves the ambiguity. This only works with the online protocol. The issue of distinguishing error from fraud is urgent in the offline protocol, but there is as yet no highly satisfactory solution. This problem is often intractable due to the subjectivity of intent.\u003Cbr \/\u003E\u003Cbr \/\u003EWith ideal two-way anonymous communications between use-once keys, and completely accountless clearing, unlinkability via blind signatures becomes redundant. This ideal case has yet to be even closely approached with implemented technology, and necessarily involves long communications delays which are often intolerable. Real imperfect communications mixes and less expensive blinded tokens complement each other.\u003C\/blockquote\u003E"},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/2374372829320615\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/2374372829320615","title":"11 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/2374372829320615"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/2374372829320615"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2007\/08\/blind-signatures.html","title":"Blind signatures"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"11"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-7880342421043278364"},"published":{"$t":"2007-08-22T11:33:00.000-07:00"},"updated":{"$t":"2007-08-24T13:38:34.839-07:00"},"title":{"type":"text","$t":"Personal jurisdiction before sovereignty"},"content":{"type":"html","$t":"Today the concept of personal jurisdiction -- the freedom of a government to take action against a particular person for the purposes of enforcing a law -- is largely based around the idea that a \"sovereign state\" has personal jurisdiction over the persons and activities within its territory. But in many times and places this has not been so. Under the system of political property rights in most of medieval Western Europe, for example, the kings had their political property rights, and the lords had theirs. Both were governed by the same basic laws of property, including laws of right (title), trespass, and inheritance. The result was a sophisticated system of jurisdiction based on property rights rather than sovereign rule.\u003Cbr \/\u003E\u003Cbr \/\u003EBoth kings and lords had an incentive to respect each other's political and economic property. This is illustrated by a speech that Shakespeare puts into the mouth of Duke of York in \u003Ci\u003ERichard II\u003C\/i\u003E, when King Richard is threatening to (under somewhat dubious legal arguments) confiscate the exiled Duke of Hereford's estates and franchises (i.e. both his economic and political property rights). Indeed, a major theme of the tragedy is that since the king failed to respect political property rights, his own end up being overturned. Note that \"royalties\" and \"franchises\" are synonyms used for political property rights -- they are the same kinds of property rights as the king himself holds, and alliterative redundant pairs like (e.g. \"royalties and rights\") were common in legal language as well as in Shakespeare:\u003Cbr \/\u003E\u003Cblockquote\u003E\u003Cbr \/\u003EO my liege,\u003Cbr \/\u003EPardon me, if you please; if not, I, pleased\u003Cbr \/\u003ENot to be pardon'd, am content withal.\u003Cbr \/\u003ESeek you to seize and gripe into your hands\u003Cbr \/\u003EThe royalties and rights of banish'd Hereford?\u003Cbr \/\u003E....\u003Cbr \/\u003ETake Hereford's rights away, and take from Time\u003Cbr \/\u003EHis charters and his customary rights;\u003Cbr \/\u003ELet not to-morrow then ensue to-day;\u003Cbr \/\u003EBe not thyself; for how art thou a king\u003Cbr \/\u003EBut by fair sequence and succession?\u003C\/blockquote\u003E\u003Cbr \/\u003EThe king's own rights to his realm are, in other words, based on the same property law as the jurisdictions of the dukes, burghers, and other franchise owners. Abrogate the law for others and it could easily be abrogated for the king. But the long era of political property rights would end with the coming of republicansim and democracy because Parliament and other legislatures do not share this coincidence of interests. Only the dawn of an independent court saved economic property rights in England and America -- but it was insufficient to save political property rights, especially those of jurisdiction which the \"sovereign\" courts seized for themselves.\u003Cbr \/\u003E\u003Cbr \/\u003EThe late medieval English case of \u003Ci\u003EUpton v. Le Mazerer\u003C\/i\u003E provides a great illustration of personal jurisdiction based on political property rights rather than sovereignty. To get the most out of the following you should have a basic idea what a \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Life_estate\"\u003Elife estate\u003C\/a\u003E and \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Reversion\"\u003Ereversion\u003C\/a\u003E are. The basic issue of the case is whether the the tenant holds property of the lord as a \"sokeman\" tenant (in which case the lord has jurisdiction) or whether the lord had granted the tenant a release from jurisdiction, making the tenant a \"frank\" tenant which meant the king had jurisdiction. The meanings of all these will become clearer as you read through the following description of the case, taken from my paper \u003Ca href=\"http:\/\/szabo.best.vwh.net\/JurisdictionAsProperty.pdf\"\u003E\"Jurisdiction as Property.\"\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EOur cast has several players:\u003Cbr \/\u003E\u003Cbr \/\u003E(1) Lord Hugh, ancestor of the current lord.\u003Cbr \/\u003E\u003Cbr \/\u003E(2) Hugh, a tenant of the Lord Hugh. As the curtain opens on the facts of the case, Hugh is a sokeman tenant of Hugh the lord, and thus Hugh the lord starts with personal jurisdiction over Hugh the tenant.\u003Cbr \/\u003E\u003Cbr \/\u003E(3) The current lord, heir of Lord Hugh.\u003Cbr \/\u003E\u003Cbr \/\u003E(4) The current tenant, heir of Hugh the tenant.\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Cblockquote\u003EIn Upton v. Le Mazerer a “writ of right according to the custom of the manor,” a dispute over lands of the manor, was removed...from the manorial court because the tenant party claimed to hold in frank-fee rather than as a sokeman of the lord of the manor. If this was the case the king, not the lord of the manor had personal jurisdiction over the tenant.\u003Cbr \/\u003E\u003Cbr \/\u003EThe agreed facts were that Hugh, ancestor of the current lord, had granted to Hugh, a sokeman tenant (i.e. a tenant then under the jurisdiction of Hugh the lord), the same lands that Hugh already held of his lord, but in “frank,” thus releasing Hugh the tenant from the lord’s to the king’s jurisdiction. The current tenant, a successor to the tenant Hugh, claimed the grant was frank-fee, i.e. [in the king's jurisdiction] “for all time”, while the current lord, an heir to Hugh the lord, agreed that it was a grant of freedom from the lord’s jurisdiction but argued that the grant was only for “a term of life.” The current lord, heir of Hugh the lord, argued that “we are claiming these tenements as ancient demesne from the seisin of [our] ancestor, which is higher in time than this deed” In modern terms, the lord of the manor was claiming that the tenant now held only the reversion of the life estate, which was just the original sokeman fee held of the lord of the manor, and thus that the lord of the manor had regained jurisdiction over the tenant. The outcome of the case thus hinged on whether the grant adding to the tenancy freedom from the lord’s jurisdiction was for a term of life or a perpetual fee. The outcome of this factual issue was not reported, but the reporter observed that “if it be found that Hugh [the tenant] had fee, the original writ, which remained in the lord’s court, would abate...[a]nd if it be found that he only had for a term of life, then the parties shall go back to the lord’s court, and plead with regard to the original etc.” The personal jurisdiction of each court was entirely contingent on the outcome of the property issue: as one Scrope (either a justice favorable to the lord, or one of the lord’s barristers) observed, “[t]he scope of the averment is only to determine whether the tenements ought to be tried here or sent back to the lord’s court.” The reporter also noted main property law issue on which jurisdiction hinged: “[w]hen a man recovers tenements from his ancestor’s seisin, he shall recover the tenements in the state wherein his ancestors held them, and all deeds made in the meantime between the ancestor’s recovery and the seisin will be defeated by this recovery.”\u003Cbr \/\u003E\u003C\/blockquote\u003E"},"link":[{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/7880342421043278364"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/7880342421043278364"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2007\/08\/personal-jurisdiction-before.html","title":"Personal jurisdiction before sovereignty"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}]},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-1820612132063562172"},"published":{"$t":"2007-08-20T13:15:00.000-07:00"},"updated":{"$t":"2007-08-20T15:01:48.450-07:00"},"title":{"type":"text","$t":"Smart contracts watch"},"content":{"type":"html","$t":"Cell phones can be used to monitor and pay for parking.  \u003Ca href=\"https:\/\/www.park-by-phone.com\/HowTos\/FlowCharts\/FlowChart_files\/FlowChart_frames.htm\"\u003EThis system\u003C\/a\u003E and \u003Ca href=\"http:\/\/abcnews.go.com\/Technology\/story?id=851485\u0026page=1\"\u003Ethis one\u003C\/a\u003E are pretty clumsy in terms of all the gratuitous user input required, but as has occurred with prepaid cell phones I expect this to become quite a bit more user-friendly in the future. It will be very nice to be able to top up the parking meter without having to return to the car.\u003Cbr \/\u003E\u003Cbr \/\u003EAs usual remember that any information recorded (here, where and when you park) \"can and will be used against you.\" For example it can generally be subpoenad for use in court, as also occurs with credit card records, phone records, and \u003Ca href=\"http:\/\/news.yahoo.com\/s\/ap\/20070810\/ap_on_re_us\/e_z_divorces\"\u003Eautomated toll systems.\u003C\/a\u003E  My old boss \u003Ca href=\"http:\/\/www.informatik.uni-trier.de\/%7Eley\/db\/indices\/a-tree\/c\/Chaum:David.html\"\u003EDavid Chaum\u003C\/a\u003E, his student \u003Ca href=\"http:\/\/www.idcorner.org\/\"\u003EStefan Brands\u003C\/a\u003E, and others in the advanced cryptography community have designed many protocols that would preserve privacy in these scenarios, but the deployers of these technologies are usually not terribly interested in your privacy. Your recourse -- keep using physical cash, and take the trouble to go back to your car to check and stuff your parking meter.\u003Cbr \/\u003E\u003Cbr \/\u003EIn my original writing on \u003Ca href=\"http:\/\/szabo.best.vwh.net\/smart.contracts.html\"\u003Esmart contracts\u003C\/a\u003E I talked about trading derivatives and constructing synthetic assets with low transaction costs:\u003Cbr \/\u003E\u003Cblockquote\u003EVery complex term structures for payments (ie, what payments get made when, the rate of interest, etc.) can now be built into standardized contracts and traded with low transaction costs, due to computerized analysis of these complex term structures. Synthetic assets allow us to arbitrage the different term structures desired by different customers, and they allow us to construct contracts that mimic other contracts, minus certain liabilities. As an example of the latter, synthetic assets have been constructed that mimic the returns of stocks in German companies, without requiring payment of the tax foreigners must pay to the German government for capital gains in German stocks. \u003C\/blockquote\u003EA bit later I figured out that the primary barrier to such activity is \u003Ca href=\"http:\/\/szabo.best.vwh.net\/micropayments.html\"\u003Emental transaction costs.\u003C\/a\u003E These costs throw a monkey wrench into what is otherwise the very good idea of consumer derivatives. One can imagine a wide variety of consumer derivatives, such as buying \u003Ca href=\"http:\/\/gregcohn.com\/blog\/business-models\/2007\/01\/farecasts-groundbreaking-new-product\/\"\u003Einsurance against air fare changes\u003C\/a\u003E and the growing business of selling sports tickets based on \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Personal_Seat_License\"\u003Epersonal seat licenses\u003C\/a\u003E (PSLs).   I have sketched some possible solutions to the mental transaction problem, such as the \u003Ca href=\"http:\/\/szabo.best.vwh.net\/scarce.html#MarketTranslator\"\u003Emarket translator.\u003C\/a\u003E The main problem is designing an automated agent that can figure out user preferences without bothering the user -- usually by recording and analyzing the user's normal behavior. If this can be fully automated the bottom drops out, so to speak, and even \u003Ca href=\"http:\/\/unenumerated.blogspot.com\/2007\/06\/nanobarter.html\"\u003Enanobarter\u003C\/a\u003E becomes possible.\u003Cbr \/\u003E\u003Cbr \/\u003ESmart contracts, based on digital property, open up a vast new space of possibilities. Many of the digital machines you own can obtain good information about your usage and their own status, from which they could at least crudely estimate what you want to buy. Take parking, for example. A suitably smart car and parking meter system should be able to figure out where you want to park and how much you want to pay for it, with minimal user intervention. I'm not talking anything like \"AI\" here, just computerized cars and parking meters that have sufficient sensors, can communicate with each other, and use known algorithms.  As you are driving down the street, you tell your car that you want to find a parking place.  The price of open parking spots ahead starts popping up on your dashboard. You choose and agree to pay the fee by simply parking in the spot.\u003Cbr \/\u003E\u003Cbr \/\u003EAlong with this future urban lifesaver, parking spot derivatives would be very useful. For the same reasons as stadium owners sell PSLs -- to receive revenue up-front to help pay the cost of building the infrastructure -- owners of parking spaces could sell parking space licenses (PSL again, oops :-). The owner of the PSL, in turn -- or said owner's car acting as his agent -- could sell the hours or minutes that the car is not using. You could buy a PSL and thereby reserve that sweet spot right next to your downtown office for the year. Then sell off the parking rights for the weekends. You could reserve a spot next the your favorite club and sell off all the times except Thursday through Saturday night. And if you are away from the office or staying in for the evening, your car's market translator can price and offer the space and it will become open and start popping up on driver's dashboards.\u003Cbr \/\u003E\u003Cbr \/\u003EThis kind of thing is just the tip of the iceberg as far as the potential of smart contracts is concerned.\u003Cbr \/\u003E\u003Cbr \/\u003EFinally I will report on a \u003Ca href=\"http:\/\/www.epointsystem.org\/~nagydani\/ICETE2005.pdf\"\u003Edigital cash\u003C\/a\u003E system from no less than our frequent commentor Daniel Nagy.  Nagy makes the following observation:\u003Cbr \/\u003E\u003Cblockquote\u003EWhile everyone with a cellular or a touch-tone telephone, a web-browser or email client in its readily available, out-of-box configuration is able to transmit short messages (up to a few hundred bits), performing complex calculations involving strong asymmetric cryptography requires additional tools which not everyone possesses or can afford to run. The fact that it is impossible to transact without performing complex calculations in real time is a far more serious obstacle than the need to contact the issuer for each transaction.\u003C\/blockquote\u003EThis is an interesting approach, but I suspect may be correct only in the limited sense that these devices and software don't come built-in with the particular cryptographic protocols needed for strongly private cash (e.g. Chaumian blinding). But they don't come built-in with digital cash software either. Thus, the main advantage of Nagy's scheme, which may or may not make up for its reduced privacy features, comes from the ability to use it without having to install any extra software at all -- to just, for example, cut and paste the cash from an e-mail where you received it from one person to an e-mail where you pay it to another. Your word processor can be your wallet. If this is an important use-case, then Nagian cash may succeed where Chaumian cash failed.\u003Cbr \/\u003E\u003Cbr \/\u003EAnother payment system of note is WebMoney, which recently started up a \u003Ca href=\"https:\/\/newsblog.wmtransfer.com\/asp\/active.asp?blogID=6\u0026amp;onpage=10#9432\"\u003Egold-backed currency\u003C\/a\u003E, a competitor to the troubled \u003Ca href=\"http:\/\/blog.e-gold.com\/\"\u003Ee-gold.\u003C\/a\u003E (HT: \u003Ca href=\"http:\/\/www.financialcryptography.com\/\"\u003EFinancial Cryptography\u003C\/a\u003E)"},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/1820612132063562172\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/1820612132063562172","title":"12 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/1820612132063562172"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/1820612132063562172"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2007\/08\/smart-contracts-watch.html","title":"Smart contracts watch"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"12"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-6780275119822608973"},"published":{"$t":"2007-08-16T20:32:00.000-07:00"},"updated":{"$t":"2007-08-17T14:54:04.989-07:00"},"title":{"type":"text","$t":"Exit and freedom"},"content":{"type":"html","$t":"Why did the early United States have much stronger property rights and far lower taxes than today, even though it is nominally governed by the same political form and a constitution that has undergone only a few amendments?  Why do Hong Kong and Singapore currently \u003Ca href=\"http:\/\/www.heritage.org\/research\/features\/index\/chapters\/htm\/index2007_chap4.cfm\"\u003Elead the world\u003C\/a\u003E in economic freedom? Why did the fall of the Berlin Wall spell the end of European communist states? What political changes or changes to our own lives would give us stronger property rights and lower taxes?\u003Cbr \/\u003E\u003Cbr \/\u003EWhat stands out about Singapore and Hong Kong --and other entities that have the most economic freedom in their region, such as Bahrain in the Arab Middle East -- is that they specialize in international trade. To encourage business travel, they must put few restrictions and tax penalties on travel. Large proportions of their population have strong international social ties. Large proportions of the population of these countries could easily move out of the country if their local rights were violated.  Strong international personal and business ties allow them to quickly reestablish themselves in a different, but not so foreign, country.\u003Cbr \/\u003E\u003Cbr \/\u003EIn other words, when a small country specializes in mediation of international trade, the exit costs for the people from whom it collects most of its tax revenue is low.  To maintain their tax revenues they must maintain a productive international trade business, and to maintain international trade these governments must thus maintain low exit costs for a large proportion of their population.\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"http:\/\/markbyron.typepad.com\/photos\/econ_graphs\/laffer_and_gdp_curve.GIF\"\u003E\u003Cimg style=\"margin: 0pt 10px 10px 0pt; float: left; cursor: pointer; width: 400px;\" src=\"http:\/\/markbyron.typepad.com\/photos\/econ_graphs\/laffer_and_gdp_curve.GIF\" alt=\"\" border=\"0\" \/\u003E\u003C\/a\u003E\u003Ci\u003ELaffer curve of tax rate versus tax revenue (black) and corresponding curve of GDP (green). When governments maximize tax revenue the prosperity and economic freedom of their taxpayers suffer. Credit: \u003Ca href=\"http:\/\/markbyron.typepad.com\/\"\u003EMark Byron.\u003C\/a\u003E\u003C\/i\u003E\u003Cbr \/\u003E\u003Cbr \/\u003EGovernments of almost any form try to maximize their tax revenues, and government employees also often gain personal satisfaction from being able to control the lives and property of others (this goes under various euphemisms, such as the ambitions to \"change the world\" and \"make a difference.\") This process is facilitated primarily by high exit costs and is limited almost only by limits on governmental ability to increase exit costs. The maximum point on theLaffer curve -- the most tax that a government can collect -- is lower and occurs at a lower percentage tax rate in countries where exit costs are low. Thus the tax rates inHong Kong, Singapore, and Bahrain are lower than among their culturally similar neighbors that do not specialize in as internationalimermediaries.\u003Cbr \/\u003E\u003Cbr \/\u003EAt the other end of the spectrum from Hong Kong and Singapore are countries with isolated populations, with poor access to world communications and travel. Add to this countries where tax revenues can be gained from taxing agricultural land or minerals rather than potentially mobile \"human capital.\" These countries tend to have the fewest freedoms. Even among highly developed countries, those with more homogeneous populations that speak a tongue seldom spoken outside the country -- and thus far stronger internal than international social ties -- tend to tax their \"human capital\" the most, e.g. the Scandinavian countries.\u003Cbr \/\u003E\u003Cbr \/\u003EIn other words:\u003Cbr \/\u003E\u003Cbr \/\u003E(1) the governments of Singapore and Hong Kong have to encourage free travel to and from many other countries, to encourage the constant human interchange that is essential to international trade, making it impractical to set up onerous travel restrictions,\u003Cbr \/\u003E\u003Cbr \/\u003E(2) most residents of Singapore and Hong Kong have strong social ties -- both business and personal -- outside the country, and\u003Cbr \/\u003E\u003Cbr \/\u003E(3) the vast majority of residents of almost all other countries are tied to their territories by strong internal social networks and the lack of external social networks that could support them if they needed to escape. That makes it easy for governments to tax, regulate, and control the residents, for the same reason that it's easy for prison guards to abuse inmates -- it's hard to escape.\u003Cbr \/\u003E\u003Cbr \/\u003EThe American colonies and the early American republic both had remarkably strong property rights and very low taxes by our standards, despite sharp changes in the form of government. With few changes in the form of government since, taxes have risen almost tenfold and property rights often now mean little more than the right to keep after-tax capital gains.\u003Cbr \/\u003E\u003Cbr \/\u003EThe answer to this American puzzle is again exit costs. Farmland was the dominant form of wealth in the 18th and early 19th century, and practically free yet very good farmland was available in America on the western frontier. Any oppression, any high taxes or other violations of property rights could be countered by pulling up stakes and moving west. If you didn't want your local farmers to leave you had to respect their rights, in sharp contrast to the traditional form of agriculture where serfs were stuck on the land. On the other hand, black slaves in the U.S. provide a sharp contrast to the remarkably free white farmers -- a condition explained by state and federal fugitive slave laws, which spread a virtual Iron Curtain for slaves across the entire vast expanse of the United States, in free states as well as slave states.\u003Cbr \/\u003E\u003Cbr \/\u003EHuman capital is very easy to tax when it gathers in large organizations, such as modern corporations, as these organizations must be audited, and auditing provides the information needed for the income tax, by far the most lucrative form of tax ever developed.   When America's frontier disappeared, when the good agricultural land was claimed and industrial wealth became more important than agricultural wealth, and industrial wealth was flowed in easily audited forms through corporations and to their employees, taxes rose and property rights for all started to erode, a process that continues to this day.\u003Cbr \/\u003E\u003Cbr \/\u003ECountries that depend on human capital, as almost every country these days does, often throw up legal barriers to exit. Countries that worry about \"brain drain\" sometimes charge extortionate \u003Ca href=\"http:\/\/www.iadb.org\/res\/publications\/pubfiles\/pubWP-572.pdf\"\u003Epassport fees.\u003C\/a\u003E These are examples of countries erecting virtual Berlin walls in order to raise the exit costs of their countries, suppress jurisdictional competition, and thus increase their tax revenues.  Another form of this are long-arm statutes, especially when used to\u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/International_Shoe\"\u003E collect taxes\u003C\/a\u003E on companies that have only \"minimal contacts\" with a jurisdiction.\u003Cbr \/\u003E\u003Cbr \/\u003EWhy are governments imposed on us rather than chosen? Why can't we shop for countries like we shop for cars?  Why has progress in jurisdiction shopping movements such as the \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Free_State_Project\"\u003EFree State Project\u003C\/a\u003E been so slow?  Because interstate travel is considered a fundamental right under U.S. law, the exit costs imposed by law on moving from state to state are very low.   The slow progress of the Free State Project points up several factors:\u003Cbr \/\u003E\u003Cbr \/\u003E(1) that many, if not most, taxes and other violations of property rights considered onerous come from federal rather than local governments, and moving just from state to state within the United States does not avoid these,\u003Cbr \/\u003E\u003Cbr \/\u003E(2) that no state, not even New Hampshire, is so remarkably better than any other state to motivate many people to move, and\u003Cbr \/\u003E\u003Cbr \/\u003E(3) that local social ties -- whether for personal or business relationships -- are much more expensive for most people to break than the gains to be had from increased economic freedom between one state and another.\u003Cbr \/\u003E\u003Cbr \/\u003EIn the United States and today in most of the world, exit costs are imposed primarily by the ways we live our lives -- and in particular by our personal and business networks -- not by artificial Berlin wall like barriers. Modern deprivations of liberty have much more to do with this fact than with the oftenexaggerated differences in forms of government or with supposedly crucial rights such as the right to vote. Today, never in the United States have so many people had the right to vote, yet never in the United States have we had so high taxes and so few property rights.\u003Cbr \/\u003E\u003Cbr \/\u003EWith the fall of communism, for most people in the world government restrictions on exit are no longer the dominant barrier to exit.   Our lack of liberty has rather to do with the fact that the vast majority of our strong social ties lie within a territory monopolized by a nation-state. Any form of large modern nation-state that we can practically expect to encounter, as well as any state of any size that restricts emigration, will engage in extortionate deprivations of property that many people in many earlier times and places, such as colonial America, did not tolerate.\u003Cbr \/\u003E\u003Cbr \/\u003EHow, then, can one best protect one's rights?  By living one's life in a way that makes exit costs low:\u003Cbr \/\u003E\u003Cblockquote\u003EBe prepared to vote with your feet. Add interstate and international diversity to your social networks -- both personal and business. Lower your costs of exiting, if the need should arise, the jurisdictions that impose on the territories wherein you reside. Repeatedly in history -- from the old American frontier to the fall of the Berlin Wall to modern jurisdictions that specialize in international trade -- low exit costs have not only enabled liberty for the individual and the small group, but they have more than any other factor motivated the larger jurisdiction to provide the most important rights and freedoms for those who stay put. Grow interpolitical roots so that no single polity can chop down your tree. The good news is that modern communications, travel, and standardization of international languages (mostly on English) have made diversifying our social networks -- growing international roots - far easier than ever before in history.\u003C\/blockquote\u003EDespite the closing of physical frontiers, which has had an extremely deleterious impact on freedom, other trends may be bringing about the lowering of exit costs. International communications networks and the international standardization on a few languages (and perhaps even just one, which quite fortunately for my readers is the one I'm currently writing in), combined with low international travel costs, are leading to the development of more strong personal and business social ties that cross borders. \u003Ca href=\"http:\/\/szabo.best.vwh.net\/multi.small.html\"\u003EMultinational small businesses\u003C\/a\u003E are joining multinational corporations in developing cross-border business ties.\u003Cbr \/\u003E\u003Cbr \/\u003EBut there are also many threats by governments to re-establish or increase exit costs by throwing up virtual Berlin walls and fugitive taxpayer networks.  Extraterritorial assertions of jurisdiction, especially of tax jurisdiction, threaten to throw up enforcement networks akin to the old fugitive slave laws in the antebellum United States.   Freedom of travel is being threatened by paranoid responses to the overblown threat of terrorism -- but at least one good\u003Cspan style=\"text-decoration: underline;\"\u003E \u003C\/span\u003E\u003Ca href=\"http:\/\/www.freetotravel.org\/\"\u003Egroup\u003C\/a\u003E is fighting to counter this threat. To counteract these threats, basic freedoms must be protected by our courts from encroachment by other governmental branches. The U.S. Supreme Court counts both voting and interstate travel as fundamental rights. Of these fundamental rights, travel -- but especially \u003Ci\u003Einternational\u003C\/i\u003E travel -- the right to pass through the airports and Brandenburg Gates and Checkpoint Charlies of the world -- is by far the more important."},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/6780275119822608973\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/6780275119822608973","title":"14 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/6780275119822608973"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/6780275119822608973"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2007\/08\/exit-and-freedom.html","title":"Exit and freedom"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"14"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-2824160197998825756"},"published":{"$t":"2007-08-15T12:01:00.000-07:00"},"updated":{"$t":"2007-08-16T19:49:27.377-07:00"},"title":{"type":"text","$t":"Our new omniscient savior"},"content":{"type":"html","$t":"\u003Cobject height=\"350\" width=\"425\"\u003E\u003Cparam name=\"movie\" value=\"http:\/\/www.youtube.com\/v\/h3xepwid_sY\"\u003E\u003Cparam name=\"wmode\" value=\"transparent\"\u003E\u003Cembed src=\"http:\/\/www.youtube.com\/v\/h3xepwid_sY\" type=\"application\/x-shockwave-flash\" wmode=\"transparent\" height=\"350\" width=\"425\"\u003E\u003C\/embed\u003E\u003C\/object\u003E\u003Cbr \/\u003E\u003Cbr \/\u003E\"I hear from so many people that realize that they're just invisible to their government ... but they won't be invisible to me.\"\u003Cbr \/\u003E\u003Cbr \/\u003EHillary sees me!  All hail Clinton, full of grace.\u003Cbr \/\u003E\u003Cbr \/\u003EUPDATE: This is, of course, \u003Ca href=\"http:\/\/econotrix.com\/archives\/000624.html\"\u003Enothing new.\u003C\/a\u003E"},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/2824160197998825756\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/2824160197998825756","title":"3 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/2824160197998825756"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/2824160197998825756"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2007\/08\/our-new-omniscient-savior.html","title":"Our new omniscient savior"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"3"}},{"id":{"$t":"tag:blogger.com,1999:blog-17908317.post-2500280022934921469"},"published":{"$t":"2007-08-12T14:10:00.000-07:00"},"updated":{"$t":"2008-03-27T13:07:01.509-07:00"},"title":{"type":"text","$t":"Ten ways to make a political difference"},"content":{"type":"html","$t":"\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e){}\" href=\"http:\/\/img.timeinc.net\/time\/daily\/special\/berlin\/images\/main.jpg\"\u003E\u003Cimg style=\"margin: 0pt 10px 10px 0pt; float: left; cursor: pointer; width: 320px;\" src=\"http:\/\/img.timeinc.net\/time\/daily\/special\/berlin\/images\/main.jpg\" alt=\"\" border=\"0\" \/\u003E\u003C\/a\u003ETen ways to be an effective political activist, in  a roughly decreasing order of importance:\u003Cbr \/\u003E\u003Cbr \/\u003E1. Be prepared to vote with your feet. Add interstate and international diversity to your social networks -- both personal and business. Lower your costs of exiting, if the need should arise, the jurisdictions that impose on the territories wherein you reside. Repeatedly in history -- from the old American frontier to the fall of the Berlin Wall to modern jurisdictions that specialize in international trade -- low exit costs have not only enabled liberty for the individual and the small group, but they have more than any other factor motivated the larger jurisdiction to provide the most important rights and freedoms for those who stay put. Grow interpolitical roots so that no single polity can chop down your tree. The good news is that modern communications, travel, and standardization of international languages (mostly on English) have made diversifying our social networks -- growing international roots -- far easier than ever before in history.\u003Cbr \/\u003E\u003Cbr \/\u003E\u003C!-- a onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"http:\/\/www.futureswatch.org\/TELS_Course\/Module_2\/Mod2_Images\/Berlin_Wall.JPG\"\u003E\u003Cimg style=\"margin: 0pt 10px 10px 0pt; float: left; cursor: pointer; width: 320px;\" src=\"http:\/\/www.futureswatch.org\/TELS_Course\/Module_2\/Mod2_Images\/Berlin_Wall.JPG\" alt=\"\" border=\"0\" \/\u003E\u003C\/a --\u003E\u003Cbr \/\u003E2. Influence our law in action. Serve on a jury and insist on protecting those who have not been proven to harm or intend to harm another.\u003Cbr \/\u003E\u003Cbr \/\u003E3. Make your own law. For starters draft your own contracts, wills, prenuptial agreements, and property deeds. Even better if you can do this as a service for other people, but for that you will generally need to be a member of the appropriate legal guild. To draft law usefully, whether for yourself or others, you will need to learn the real law they don't normally teach in public schools: contracts, property, trusts and estates, and torts for starters, or else (often a second best choice to learning law yourself) retain the services of a sympathetic lawyer. Learn actual law -- don't turn into a whacko running around putting liens on other people's property based on interpretations of the UCC quite remote from what any judge would contemplate. But do start to make your own law. You cannot be free if you cannot make your own law.\u003Cbr \/\u003E\u003Cbr \/\u003E4. Influence our law in action. Donate to or get involved with the \u003Ca href=\"http:\/\/www.ij.org\/\"\u003EInstitute for Justice\u003C\/a\u003E and other organizations of politically and legally savvy people defending our most important rights and freedoms in the courts.\u003Cbr \/\u003E\u003Cbr \/\u003E\u003Ca onblur=\"try {parent.deselectBloggerImageGracefully();} catch(e) {}\" href=\"http:\/\/www.ij.org\/images\/homepage\/title.gif\"\u003E\u003Cimg style=\"margin: 0pt 10px 10px 0pt; float: right; cursor: pointer; width: 320px;\" src=\"http:\/\/www.ij.org\/images\/homepage\/title.gif\" alt=\"\" border=\"0\" \/\u003E\u003C\/a\u003E5. Make your own law: use strong security to protect the people, relationships, property, and data you value. Learn to defend yourself and your loved ones with weaponry. Write and use cryptography, \u003Ca href=\"http:\/\/en.wikipedia.org\/wiki\/Smart_contracts\"\u003Esmart contracts\u003C\/a\u003E, \u003Ca href=\"http:\/\/rpow.net\/\"\u003Ebit gold\u003C\/a\u003E, \u003Ca href=\"http:\/\/anoncvs.aldigital.co.uk\/lucre\/\"\u003Edigital cash\u003C\/a\u003E, and other security protocols made possible by computer science.\u003Cbr \/\u003E\u003Cp\u003E6.  Tell us about your good research and good ideas: write a blog, comment on a blog, write papers.\u003Cbr \/\u003E\u003Cbr \/\u003E7.  Start a \u003Ca href=\"http:\/\/szabo.best.vwh.net\/multi.small.html\"\u003Emultinational small business.\u003C\/a\u003E\u003Cbr \/\u003E\u003Cbr \/\u003E8. Vote with your pocketbook -- buy and sell the goods, services, stocks\u003Cbr \/\u003Eand bonds that promote liberty, and boycott those that promote its\u003Cbr \/\u003Eviolation.\u003Cbr \/\u003E\u003Cbr \/\u003E9. Get involved in a lobbying group or political campaign where you can make a difference: usually a local campaign, but on rare occasions a \u003Ca href=\"http:\/\/www.ronpaul2008.com\/\"\u003Enational\u003C\/a\u003E one.\u003Cbr \/\u003E\u003Cbr \/\u003E10. Vote for and against politicians, but don't be fooled -- of all these\u003Cbr \/\u003Eten ways to make a political difference, voting in a political election makes the\u003Cbr \/\u003E\u003Ci\u003Eleast\u003C\/i\u003E difference.\u003C\/p\u003E"},"link":[{"rel":"replies","type":"application/atom+xml","href":"https:\/\/unenumerated.blogspot.com\/feeds\/2500280022934921469\/comments\/default","title":"Post Comments"},{"rel":"replies","type":"text/html","href":"https:\/\/www.blogger.com\/comment\/fullpage\/post\/17908317\/2500280022934921469","title":"5 Comments"},{"rel":"edit","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/2500280022934921469"},{"rel":"self","type":"application/atom+xml","href":"https:\/\/www.blogger.com\/feeds\/17908317\/posts\/default\/2500280022934921469"},{"rel":"alternate","type":"text/html","href":"https:\/\/unenumerated.blogspot.com\/2007\/08\/ten-ways-to-make-difference.html","title":"Ten ways to make a political difference"}],"author":[{"name":{"$t":"Nick Szabo"},"uri":{"$t":"http:\/\/www.blogger.com\/profile\/16820399856274245684"},"email":{"$t":"noreply@blogger.com"},"gd$image":{"rel":"http://schemas.google.com/g/2005#thumbnail","width":"16","height":"16","src":"https:\/\/img1.blogblog.com\/img\/b16-rounded.gif"}}],"thr$total":{"$t":"5"}}]}}