July 5, 2014
Richard Grossman
Professor of Economic
Economics Department
Public Affairs Center 314
860 685 2356
Wesleyan University
45 Wylyw Avenue
Middletown, CT 06459
rgrossman@wesleyan.edu
Dear Professor:
I have read and greatly enjoyed your book Wrong (Oxford University Press, New York 2013) as I enjoyed your presentation this past reunion. I hope the book gets the wide recognition it deserves. Before I get to the point (I share E. A. Poe’s irritating habit of rambling before getting to work) a couple things strike me. One is how much I agree with your general principle that there is no single rule for making economic decisions. Even the much praised free trade notion failed to ameliorate the Irish famines.
During your address you mentioned that, as I remember, there were no general financial panics in the US between 1936 and 1976. You said banks were regulated in such a way as to make it impossible. The question was asked, “Why don’t we do it that way again?” I think you may have said, “It would be impossible. It would not be possible to increase the money supply.” My understanding is that over those 40 years our gross domestic product went from about a trillion to 5.7 trillion in constant dollars. At that rate, it would be 32.5 trillion by 2016. Last year it was 16 trillion. I don’t think it’s going to double in three years. Well it’s your field, not mine and off the point, but it does seem to me that stability is good for business and good for people trying to plan out their lives.
Third point: I’m a radiologist. I’m sorry one of my brother radiologists sent you hate mail. If you like, this may be your chance for a return salvo. I’ll post it on my web site if I can get you that riled.
My modest suggestion is: it’s all demographic, and it all has to do with genetic, or at least ancestral, diversity.
No, don’t start writing that hate mail yet. It gets worse.
If I were to say, “It snows in the winter,” I would expect you to make the mental reservation, “Not only, not everywhere, not always, but what’s your point?” Give me such a chance now.
You know that at some level my suggestion is true. When the babies stop coming, within a few decades there will be no economy. There will be no people. Imagine a world without war, poverty, plague, crime, alienation, spiritual vacuity or annoying letters. We seem to be headed that way now, but the question is whether at some point shy of that halcyon promise demographics can seize the economic wheel.
In The Son Also Rises Gregory Clark introduces a concept “general social competence;” if you have a lot of it, you will become very rich or very high status in some other way. Clark produces evidence that the quality is genetically determined. That may seem controversial, but he makes a persuasive case that the quality rises and falls quite slowly over generations. If you lose your socially competent population, you are not going to replace it anytime soon. I must struggle to stifle my inner anarchist, but it seems quite likely that socially capable people are not just parasites on the backs of the working masses; they may actually be useful to the rest of us. If their numbers are insufficient, bad things are going to happen.
Among the most easily recognized bad things is the “regime change.” That’s when the new power lines up the remnants of the former elite and kills them. You are thinking of the French Revolution. You may also be thinking of more recent world events. You are probably not thinking of the regime change that brought the Nazi’s to power – a blood bath – or the regime change that deposed them – we’re still hunting them down and killing them. Some regime changes cover their tracks. When the Nazi’s left Paris the people turned on those who had been in the Vichy puppet government, killed them, threw them into the Marne, where the bodies rafted up and choked the bridges. Anybody who went to pull them out was judged a sympathizer and was also killed and tossed in. I have this from an eye witness. The only other reference I have ever encountered was a Sad Sack cartoon in which an American soldier, having fought all the way to Paris dreaming of nights of wine and mirth found the city off limits to American troops.
Closer to home, there was the First American War of Independence. As you make quite clear, it wasn’t really England’s fault. The colonies were doing reasonably well under the rule of the crown. But notice that you never seem to run into descendants of the Tories. A few are to be found in the Marsh Harbor region of the Bahamas. They fled thither for their lives. It was a typical regime change local to the US.
For years I have accumulated evidence in support of the fact that excess diversity of ancestors results in infertility. By now it seems to me to be incontrovertible. Here’s a link to my hoard of evidence:
http://www.nobabies.net/A%20January%20summary.html
What is not included is a paper I published showing the effect in fruit flies nor the study by a man named Calhoun that showed it in mice. His mouse colony never reached a thousand despite adequate room, food, bedding material, food and water. The last live birth was on day 600. What is included in the summary is the experience of an isolated valley of Anasazi, whose number similarly never reached a thousand.
That translates to ten generations to extinction in the absence of sufficient matings between cousins, or about 300 years. Indeed regimes do seem to face a brick wall at three hundred years, literally much of the time.
As it turns out, populations doomed by ancestral diversity can follow two time courses. Either they rise and collapse in five generations or rise and decline over five generations, rise again and die out at ten. My current belief is that if the population is diverse to begin with, the rise will be limited, the fall serious but not catastrophic and then there will be a second rise as cousins begin to be the only mating prospects. There is no recovery from the second cycle because by then a different mechanism of infertility as taken hold. I would be happy to go on, and will elaborate if you like. But the issue I have is: it’s all demographic. Let’s see if that plays out.
1776 involved a regime change. 150 years later it’s 1926. We should expect to see a problem associated with a decline in birth rate as the socially competent begin to die out. The socially competent of course tend not to marry cousins; they have a broad social horizon. Does it sound like the Great Depression to you? The date is pretty close. You could date the regime change to 1779 if you wanted it to be closer.
So my question is, this: is there any other historic economic disaster that followed at 150 or 300 years after the establishment of a regime? If so, I should be happy to know about it.
Indeed I would be delighted to know your response. If you buy into the notion, tell me it is for you as it is for me the single focus of your life. After all 2076 is coming along; if you know a child, you are looking into the eyes of someone who will see it, or at least see that wall real up close. If you do not buy into it, please explain. I defy you to produce a retort so vicious, so obscene, and so dreadful that I dare not post it with my thanks.
Sincerely,
M. Linton Herbert MD
There have been 60 visitors over the past month.