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From Poverty to Progress

Blog Post | Energy & Environment

From Poverty to Progress

How division will stifle US prosperity.

This article originally appeared in the Washington Examiner on August 10, 2023.

Why isn’t everyone in dire poverty, hungry, diseased, illiterate, missing teeth, eking out a subsistence existence in the wilderness, and making do with Stone Age technology? After all, that’s how we started. Penury is the default state of humanity, as is a lack of technology. In fact, advanced technology and widespread prosperity are relatively recent innovations.

What has allowed all the progress we’ve experienced to date to take place? And what stands in the way of further advancement? In his valuable bookFrom Poverty to Progress: Understanding Humanity’s Greatest Achievement, Michael Magoon seeks to explain progress’s origins and enemies.

First, Magoon offers a sweeping overview of how the world has changed into a place where an increasing number of people enjoy prosperity, peace, advanced medicine, and other wonders of modern life. With graphs and data, Magoon demonstrates the historical and ongoing transformation of the human experience “from poverty to progress.” Magoon provides a valuable service in painstakingly recording the many ways in which our ancestors would envy modern life.

Magoon then explains the origins of the metamorphosis. He dispels popular but mistaken ideas about the roots of progress, such as the fallacy that progress comes from the government — he writes, “Throughout history governments have done far more to hinder progress than they have done to promote it” — or from politicians or top-down policies by brilliant planners. “Rather than flowing down from politics and government, progress bubbles up from society,” he notes.

Magoon then shows how that occurs. His theorized five keys of progress are food, trade, decentralization, industry, and energy.

A “highly efficient food production and distribution” system is a prerequisite for progress, he claims. The next two keys are the ability to engage in trade, mutually beneficial exchange, and decentralization of power, freeing humanity from the restrictions that come with a controlling central authority and fostering nonviolent competition.

Another key to societal advancement is developing at least one high-value-added industry that exports, he claims. As he notes, plentiful energy promotes progress. Historically, obtaining such energy has involved the use of fossil fuels.

With these five keys in hand, humans unlock new solutions and copy solutions others have achieved.

To unlock further progress, I would add an economic liberty key ensuring all of a society’s people can participate in the market processes of innovation and exchange. I might also add a communications technology key involving written language, without which transmitting ideas over time or across distances is difficult. Still, Magoon’s list holds considerable explanatory power.

The preconditions for progress that he names are relatively recent and rare in the grand sweep of history. Moreover, transitions toward attaining the keys to progress have not occurred everywhere at once and have only been achieved unevenly. Magoon thus recognizes that societies across history and the globe often differed dramatically in their tendency to stifle or foster innovation. He discusses many types of societies, such as hunter-gatherer societies, agrarian societies, herding societies, industrial societies, and commercial societies. He sees each society type as a logical adaptation to a particular environment.

The book concludes with an examination of the current constraints on progress, including geography, extractive institutions, geographic and cultural distance separating poor countries from rich ones and discouraging the former from copying the latter, monopolies stifling competition, historical legacies inhibiting change, and identity-based rationales for stagnation. (“We have our own ways.”) But he says the biggest threat to progress, which could unravel the conditions for innovation in the rich countries, is divisive ideologies.

Because society primarily comes from self-organizing, experimenting with solutions, and then copying the solutions that work, a centralized government driven by ideology inherently attacks the very foundations of progress.

Divisive ideologies split people into groups of good and evil, often along class, racial, religious, or urban/rural divides. Magoon notes that the ideology called “critical theory” (also often known as “wokeness”) may be a particular threat to progress because of its current spread in the United States, a major innovation center.

A thought-provoking and extraordinarily wide-ranging book, From Poverty to Progress is a must-read for anyone interested in the history, and future, of progress.

Blog Post | Conservation & Biodiversity

Can Finance Save the Wolves?

Economics informs us that unsolvable societal disputes don’t have to become political wrestling matches.

Most people have quite the dire view of finance and markets. Unscrupulous bankers and pompous hedge funds place unsound bets on obscure and risky investments; greedy businessmen jack prices and fire workers at the first sight of recessions caused by their own avarice. Money rules the world, goes the trope. But that also means that financial incentives have the power to align behavior more powerfully than most appeals to morals, kindness, or the good of the community.

Yale University finance professor William Goetzmann opens his book Money Changes Everything: How Finance Made Civilization Possible with the observation that “finance is the story of a technology: a way of doing things. Like other technologies, it developed through innovations that improved efficiency. It is not intrinsically good or bad.” Markets, especially those for financial assets and property, are a way to rearrange reality’s unavoidable risks, benefits, and payoffs; they are “by, for, and about people’s lives.”

One fascinating way that modern financial engineering helps make the world a better place is through counterintuitive payments, such as in global forestry. Making money by chopping down trees is a model that everyone understands—get chainsaws and harvesters, hire some laborers, chop trees, and sell the wood for profit.

Another way is to make money by not chopping down trees, courtesy of resourceful financiers and carbon sequestration markets. In efforts to reduce their carbon emissions, major corporations routinely pay forest owners to keep more trees in the ground for longer. This “negative logging” is made possible by financial flows from those who want more trees to those who manage them.

In 2021, the World Bank paid nine districts in Mozambique’s Zambézia province for keeping forests intact. When in power, Brazil’s ex-president Jair Bolsonaro routinely tried to shake down the international community for cash payments in exchange for not deforesting the Amazon. Think what you will of this controversial political figure and his policies, but the economic mechanism his government proposed here was sound – rich Westerners want flourishing rainforests and an end to global deforestation, and poor farmers and loggers want to use economically unproductive land to better their standards of living. A deal naturally presented itself.

Well-structured financial payments can also solve another pickle that routinely devolves into political mudslinging: wildlife. City-dwellers often have a romanticized view of nature and ecologic systems, like the idea of healthy wolf populations. Ranchers and pastoralists who bear the visible costs of livestock killed usually have a different view. Cue unsolvable political showdowns.

In Sweden, where ecological concerns usually reign supreme, rural constituents and an anti-wolf lobby have recently gotten the upper hand. This summer, the government announced that it wanted to reduce the already inbred and endangered wolf population by half. The policy is based on no scientific evidence whatsoever. It is a political measure to reduce concentrated economic damages among a loud constituency.

It seems that only one group can be satisfied. The groups who favor more wolves and those favoring fewer can’t both have their way. When management over common-pool resources devolves into political disputes, policy usually pinballs between various interests as they wrestle control over the political apparatus.

Finance and Markets Can Align Mutually Incompatible Interests

Economics informs us that unsolvable societal disputes don’t have to become political wrestling matches. Instead, we need financial instruments and payoffs that have city-dwellers paying rural communities for the unavoidable death caused by having thriving predator populations.

If city-dwellers’ desire to have large or growing wolf populations in their countries is genuine, they should be willing to pay extra for cattle meat sourced from wolf territories, the livestock most at risk for wolf attacks.

Ecologic systems, like economic systems, are dynamic – changes to them don’t impact just one thing. When wolves return to areas where they were hunted to extinction during the 20th century, they unfortunately attack livestock or domestic animals. But they also keep the population of boars, deer, or elk in check, which reduce the damage to agriculture and gardens, cars, and people. Insurance companies could play a role by supporting conservation efforts for large predators—or offer reduced premiums for customers that do—since more wolves means fewer and/or more skittish deer and elk, which dramatically reduce vehicle collisions with wildlife.

Another way to achieve the same reshuffling of economic value is to have (generally wealthier) city-dwellers pay lavishly for ecotourism trips into areas where wolves are plentiful—like these projects in Spain’s Sierra de la Culebra. Some of the revenue streams should make it back to shepherds losing livestock to attacks or farmers who can credibly show the presence of wolves on their grounds (say, through wildlife cameras capturing their movements).

In Scandinavia, these conflicts become overwhelmingly political not only out of a lack of financial engineering but also because most compensation schemes are run by bureaucrats and financed by taxpayers. Vultures circle around political payouts as well as fresh carcasses.

Modeling by Anders Skonhoft at the Norwegian University of Science and Technology suggests that ex-ante payments for predator presence yield better outcomes than ex-post reimbursement of livestock damages. This is the animal husbandry equivalent to paying for not cutting down trees.

In the 1990s, the Swedish government introduced such an ex-ante scheme for the Sámi population and the reindeer they manage. Sámi herders routinely lose some 20 percent of their animals to carnivore attacks every year. By tying reimbursement to the presence of lynx and wolverine offspring rather than exact reindeer attacks, the scheme turns those most posed to disapprove of predators into their greatest defenders.

With the introduction of ecotourism in Africa and the Amazon, the same financial incentives have flipped loggers and poachers into guides, the enemies of predators becoming their greatest protectors. On a larger scale, the right financial structures—payouts, markets, and assets—can align the interest of unsolvable political enemies.

BBC | Agriculture

The Turbo-Charged Plants That Could Boost Farm Output

“Prof Long and his team have used powerful computers to build a digital twin of the photosynthesis process. It can tweak that process in millions of ways. From those millions of options the software can identify those that will make the biggest improvements.

“We then engineered these into crops, and if that results in an improvement in the glasshouse, then we take it to our experimental farm and test it in a real-world environment,” says Prof Long.

That’s already had promising results. Changes to the mechanism of photosynthesis in soybean plants have resulted in yield improvements of more than 20% in controlled environments, with field trials now underway.”

from BBC.

Blog Post | Science & Technology

What’s Your Beef with 3D-Printed Steaks?

The benefits of 3D-printed meat, from increasing affordability to reducing animal suffering, will be considerable.

On Twitter, I mean “X,” everyone is bound to touch someone’s third rail at some point. Well, it finally happened to me. Lots of folks did not like my tweet in which I enthused about an Israeli company that, quelle horreur, 3D-prints a steak in one minute and a grouper fillet in three. The Israeli PM, Benjamin Netanyahu, tasted the product and seemed impressed. Many who saw my tweet were not. Turns out, folks are very particular about beef and feel that their steaks should originate within Daisy in Texas or Betty in Oklahoma. Well, 3D-printed beef does that and more. The process starts with extracting a few cells from a living, breathing animal, which are then grown and multiplied in a sterile environment, and finally printed to resemble the ribeye on a shelf at Wholefoods.

If this innovation takes off, the benefits of 3D-printed meat will be considerable. First, the need for animal suffering will diminish. We will need fewer cows, so we will raise and kill fewer of the beasts. Second, we will need less land for cattle, thus returning land to the wild ­– a goal long sought by environmentalists. We will also use less water and animal fodder – which should please the last of the deluded Malthusians. Third, 3D-printed meat may well turn out to be cleaner and healthier; animals on farms or in the wild are constantly exposed to viruses and parasites, which need to be medically treated before the meat becomes fit for human consumption. In a sterile lab environment, such problems will be minimized or eliminated.

[Some of the above applies to fish as well. Thanks to their more primitive nervous systems, fish don’t suffer as much as cows. However, since the oceans are being overfished due to a lack of proper property rights (i.e., the tragedy of the commons), it is more ecologically sensible to eat farmed fish, and even better to eat 3D-printed fish meat, which uses less space, water, and fish feed and gets around the problem of waste and disease.]   

Traditional cattle ranchers will remain in the same economic niche as fancy Italian shoemakers. Yes, you can still go to Milano and have bespoke shoes made for $5,000. But most of us order Johnson and Murphy’s’ for $250 from Amazon. And so, the cognoscenti may go on enjoying the normal beef, while others switch to 3D-printed steaks. Ultimately, it is the market that will decide. The taste, texture, and price will have to be right. Once they are, most normal meat will go the way of cotton spinning, which was replaced by spinning jenny – much to the chagrin of the Luddites.

Affordability depends on mass production, and mass production depends on mechanization. Mechanize the process, and a poor manual laborer in Brazil might be able to have a proper steak dinner for the first time in his life. As for the rest of us, we will be able to stop pretending that a plant-based burger comes anywhere close to the real thing. What’s not to like? A lot, apparently. As far as I can tell, the critics’ objections are as follows:

  1. You can take my steak out of my cold dead hands.

    I need not do that because I do not want to ban normal meat. I welcome 3D-printed meat as an expansion of customer choice, not as a replacement for normal meat. In a free market, some people will eat 3D-printed meat due to ethical considerations, such as animal welfare (in the same way that some customers prefer locally grown produce to food transported from afar). Others will eat 3D-printed meat because it becomes cheaper than normal meat. Some will eat it because they want to try a Wagyu steak but could never afford an organic one. After all, 3D-printed Wagyu steaks will benefit from the same efficiency gains as any other type of beef. Still others will eat 3D-printed meat because it becomes healthier than normal meat.

  2. It is unnatural.

    Just about everything in the modern world – from the corn we eat to the planes we fly – is unnatural. Humans suffer and die in natural environments (i.e., from viruses, bacteria, deadly fungi, heat, cold, dark, poisonous snakes, malarial mosquitos, lions, etc.) and thrive in unnatural environments (e.g., air-conditioned homes and offices, pizza delivery). Just because something is natural does not make it good – just think of earthquakes, tsunamis, volcanos, solar flares, and so on. In the past, nature dominated humans, and we died by the millions. Today, we tend to dominate nature for better (i.e., improved human survival) and for worse (i.e., some degree of environmental degradation). For more, see the naturalistic fallacy.

  3. You are conspiring with Klaus Schwab.

    I am doing the exact opposite. Schwab believes that the world cannot feed 8 billion humans and, consequently, we need to limit procreation and consumption. And yes, his Malthusianism makes him weirdly obsessed with eating bugs. (No way, Jose!) Moreover, neither Schwab nor the Davos crowd trust the market and freedom of choice. Their vision is one of a planned society presided over by a technocratic elite. In contrast, I believe that technological progress can make the lives of ever more people ever more bountiful (i.e., no limits on consumption), safer, healthier, and more interesting. If technological progress can result in environmental benefits, so much the better. The point is, human flourishing (call it anthropocentrism, if you will) is central to my thinking. I hope the kind of steak you eat will always be up to you.