Interesting stuff

  1. Can your coffee fix the planet? (Maybe, if you use paper cups?)
  2. Good news! Climate change denial is “out”. Bad news: We have to adapt like crazy to the chaos we’ve created. The rich? They are making other plans
  3. If You Want Peace, Study War
  4. A crazy biofuel scam
  5. Are antiracists the new racists?
  6. Can we just print money to fix all our problems (MMT)? Will that money go to special interests or commoners?
  7. Plant-based “junk food” is good for the planet but maybe not (any healthier) for you
  8. What stupid crypto is next? I vote for Driverfy. Bonus: Some good analysis of bitcoin
  9. WTF San Francisco, with the school names? SMH.

H/Ts to BZ, GS and PB

Rent of land

Book 6, Chapter 9

§1. The returns to land ownership depend on some fixed elements (e.g., sunshine or rain) as well as variable elements (e.g., effort to improve output). Taxes on the former will not affect effort as much (at all?) compared to taxes on the latter.

§2. Land use improvements will continue as long as marginal gains outpace marginal costs. They will ignore existing (sunk) gains and costs, but they can vary by crop, skill, etc.

§3. A rise in the value of the produce of land vis-a-vis labor (wages are falling) might reflect overpopulation (labor losing purchasing power) whereas a general rise (a stable relationship) due to, say, technical progress, can result in higher wages.

§4. The value of land (its producer surplus) is not due to Nature’s bounty, but land’s limited supply. An increase in production (due to, say, technology) will lower surplus by increasing supply of produce in the face of level demand. Land value also depends on distance to (or difficulty in reaching) markets. Rich land without road, rail or canal access to markets is worth less than poor but convenient land. Some land value reflects past improvements but some of those “improvements” might be subtracting value today.

§5. The “English system” of charging rents in proportion to average surplus benefits renters who are more productive (they keep more profit) and encourages less-productive renters to leave before they lose more money. This system of free enterprise encourages efficient land use, for the benefit of all English.

This post is part of a series in the Marshall 2020 Project, i.e., an excuse for me to read Alfred Marshall’s Principles of Economics (1890 first edition/1920 eighth edition), which dominated economic thinking until Van Neumann and Morgenstern’s Theory of Games and Economic Behaviour (1944) and Samuelson’s Foundations of Economic Analysis (1946) pivoted economics from institutional induction to mathematical deduction.

Interesting stuff

  1. Read: A scientist who took climate change seriously found himself trapped between a future truth that contradicted present reality.
  2. Read: The Dunning-Kruger Effect is not real: It’s a data artifact.
  3. Watch: The Lock-picking lawyer wants better locks!
  4. Read: Fascinating (but predictable): migrant Eastern Europeans are returning home
  5. Listen: The founder of Belligcat describes how the “detective collective” catches Russians (and others) responsible for crimes, assassinations, etc.
  6. Read: Meanwhile, the US government is losing masses of top secret data to state-supported hackers from China, Iran, North Korea, Russia and others.
  7. Read: “Without a coherent response from local government, cities lashed by climate change will gradually lose their populations. The demise won’t be spectacular, even if the storms are monstrous. Instead, people will leave in dribs and drabs, and the exodus could take generations.”
  8. The Japanese culture of “cleaning up”
  9. DNA-ancestry services trace your roots back to your neighbors, not your origins
  10. Explore: Amsterdam’s air quality improved under COVID:

Profits of capital and business power, continued

Book 6, Chapter 8

§1. Profits in small and large businesses need to be calculated on a like-for-like basis. Small business owners often forget to deduct their “implied wages” from profits, which may actually be lower. Profits are smaller when it’s easy for competing firms to enter the market and larger when it is harder (e.g., lots of capital investment or expertise needed).

§2. The profits accruing to management will be greater if the labor/capital ratio is high (= more “management”), risk is high (= needs to be managed), or the manager is more skilled than average (= payment for “excess” returns). Profits are lower in high-capital, low-risk, commodified businesses.

§3. Average profits per annum will be similar across different industries. High turnover, low-profit/transaction industries can make the same annual returns as low turnover, high-profit/transaction industries.

§4. Some industries have “traditional” rates of profit, but these figures usually apply to profits on turnover (high or low), not annual profits.

§5. (A lack of) skill and/or (bad) luck can result in deviations from “normal” profits.

§6. Profits vary by more than prices or wages, since they are residual to income and expenses. A small price increase can heavily boost profits, just as a small price decrease can lead to big losses.

§7. Average profits in trade will hide the gains from those few who succeed and often miss the losses from those who fail (survivor bias).

§8. Profits from heavy (prior) capital investments are not the same as profits of (current) labor or (ongoing) natural talent.

§9. Higher profits to one participant in a static industry means lower profits to another participant. Profits can only rise for all if the industry is expanding in scope, scale or efficiency.

§10. The shares of profits between owners and workers (capital and labor) will depend on their relative bargaining powers.

This post is part of a series in the Marshall 2020 Project, i.e., an excuse for me to read Alfred Marshall’s Principles of Economics (1890 first edition/1920 eighth edition), which dominated economic thinking until Van Neumann and Morgenstern’s Theory of Games and Economic Behaviour (1944) and Samuelson’s Foundations of Economic Analysis (1946) pivoted economics from institutional induction to mathematical deduction.

Interesting stuff

  1. Read: How to blow up a pipeline (and why that’s necessary)
  2. Listen: Truth vs lies (information “warfare” among countries)
  3. Listen: Discussing climate chaos with the author of There is no Planet B
  4. Read: A brief history of peanut butter (steak-replacement!)
  5. Read: The War on Professionalism (led by populists)
  6. Read: Central banks are pumping up asset bubbles. Next stop: the bubble bursts (they cut off the cheap money) or inflation (they don’t)
  7. Read: A good summary of r/wallstreetbets vs Wall Street and excellent advice for FOMO n00bs annnnd a great debate on winners and losers.
  8. Read: Get control of your todo lists (hint: set aside chunks of time for big projects)
  9. Read: A scary story of online slander that makes me agree that Section 230 (a US law that protects platforms from liability for their content) needs to be revised.
  10. Read: UC Davis decides its best defence against COVID is to protect its surrounding community… for free. Related: Another case of universities doing it right.

Review: A Sand County Almanac

Aldo Leopold’s daughter published this book (subtitled “…and sketches here and there“) in 1949, just after he died from a heart-attack at the age of 61.

The book has a strong reputation in the environmentalist community, but this reputation only came in the 1970s (Earth Day, etc), which is why Rachel Carson’s Silent Spring (1962) is credited with sparking the environmental movement.

Leopold’s book is not as pointed or lyrical as Carson’s, but it’s well written, insightful, and yes — decades ahead of its time.

The book’s 226 pages fall into three parts: an “almanac” reflecting on 12 months of natural and human phenomena around the Leopolds’ Wisconsin farm (located in a region with sandy soils); “sketches” from Leopold’s travels in North America; and the “upshot” of what it all means. Leopold’s daughter chose the mix of topics and their order for the book. I found the contrast of different times and places (followed by a call for new thinking) to be a natural progression.

The book opens with Aldo’s main point: The rate of “progress” is slowing as  human increase their burden on Nature. Leopold’s claim was a minority view in 1949, and it is perhaps a minority view today, but I see it as extremely perceptive. Although many people think our environmental problems began with the Industrial Revolution (true if you’re talking about fossil fuel consumption), I date them to the post-WWII surge in destruction (courtesy of modern machines) and consumption (courtesy of excess prosperity). Leopold ends with a call for more nature and less artificial, more wild and free, and less tame and confined. Sadly, 70 years of loss and negligence confirm his worries.


The struggle for survival delivers balance. The “circular economy” is a zero-waste system because resources are fought over and completely consumed. Every death brings new life. He reminds city folk that food and wood do not just appear in stores. Farmers know that food comes from struggle. Wood is precious to those who spend hours cutting, chopping, hauling and stacking. Wildlife chasing scarce resources will migrate to survive, spreading diversity and connecting distant places. A fisherman must work the waters and take his chances. For the fish, it’s life and death, so it’s only fair if your hunger endures because a fish’s life continues.

Leopold trained in forestry as a means of studying wildlife, and he quantifies his hunches. He compares, for example, the variety of flower species on his (weekend) “backward farm” to the (weekday) suburbs and campus. The farm has roughly double the species count throughout the year, mostly due to its open, unmanaged (“backwards”) spaces.

Leopold is sly:

Getting up too early is a vice habitual in horned owls, stars, geese, and freight trains. Some hunters acquire it from geese, and some coffee pots from hunters. It is strange that of all the multitude of creatures who must rise in the morning at some time, only these few should have discovered the most pleasant and least useful time for doing it… Early risers feel at ease with each other, perhaps because, unlike those who sleep late, they are given to understatement of their own achievements. (p 59)

The shovel giveth and the axe taketh away, which is why the thoughts of the axe-wielder are so important: Is the chop going to improve or deface the land?


Cranes and other birds were cousins of the dinosaurs. They have evolved with ecosystems over millennia eons, and their intricate adaptations to ecological niches are rightly confused with miracles. The paradox, notes Leopold, is that we, in our fascination with wilderness, are often the cause of its destruction. He is no fan of economists. Obsessed with marginal gains, they are blind to the efficiency of the messy chaotic system. (This perception is generally true today — and made worse by over-specialisation within and across academic disciplines.*)

Leopold’s descriptions of man’s interruption of circularity and ham-handed attempts to replace it are poetic but sad:

The old prairie lived by the diversity of its plants and animals, all of which were useful because the sum total of their co-operations and competitions achieved continuity. But the wheat farmer was a builder of categories; to him only wheat and oxen were useful. He saw the useless pigeons settle in clouds upon his wheat, and shortly cleared the skies of them. He saw the chinch bugs take over the stealing job, and fumed because here was a useless thing too small to kill. He failed to see the downward wash of over-wheated loam, laid bare in spring against the pelting rains. When soil-wash and chinch bugs finally put an end to wheat farming, Y [an atom] and his like had already traveled far down the watershed. 

When the empire of wheat collapsed, the settler took a leaf from the old prairie book: he impounded his fertility in livestock, he augmented it with nitrogen-pumping alfalfa, and he tapped the lower layers of the loam with deep-rooted corn. But he used his alfalfa, and every other new weapon against wash, not only to hold his old plowings, but also to exploit new ones which, in turn, needed holding.

So, despite alfalfa, the black loam grew gradually thinner. Erosion engineers built dams and terraces to hold it. Army engineers built levees and wing-dams to flush it from the rivers. The rivers would not flush, but raised their beds instead, thus choking navigation. So the engineers built pools like gigantic beaver ponds, and Y landed in one of these, his trip from rock to river completed in one short century. (pp 107-8)

Leopold traversed the Colorado River Delta in 1922 and vowed never to go back, for fear of the loss he would see. He was right. In 1922, the Colorado River Compact divided its waters among US states, without any reserve for the river itself. In 1935 Hoover Dam opened, its hydropower used to push water to Los Angeles via the Colorado River Aqueduct (opened in 1941). In 1938, Imperial Dam and All-American Canal opened, diverting a majority of the river’s remaining water to irrigators in the desert. “Since 1963, the only times when the Colorado River has reached the ocean have been during El Niño events in the 1980s and 1990s.

Speaking of *disciplines:

There are men charged with the duty of examining the construction of the plants, animals, and soils which are the instruments of the great orchestra. These men are called professors. Each selects one instrument and spends his lifetaking it apart and describing its strings and sounding boards. This process of dismemberment is called research. The place for dismemberment is called a university. A professor may pluck the strings of his own instrument, but never that of another, and if he listens for music he must never admit it to his fellows or to his students. (p153)

…and another comment on “progress”:

The marshlands that once sprawled over the prairie from the Illinois to the Athabasca are shrinking northward. Man cannot live by marsh alone, therefore he must needs live marshless. Progress cannot abide that farmland and marshland, wild and tame, exist in mutual toleration and harmony. So with dredge and dyke, tile and torch, we sucked the combelt dry, and now the wheatbelt. Blue lake becomes green bog, green bog becomes caked mud, caked mud becomes a wheatfield. (p162)


Part three generalises from earlier examples. Leopold contrasts a “conservation esthetic” to a drive-by attitude that has choked natural areas with a ring of car parks (in 1949!) and valuations that favor spending on gasoline, diners and tents rather than Nature’s priceless value.

Crowd-pleasing commodification favours hatchery trout over migratory birds, even if that means replacing webs of natural species with “managed” single-species. Staff are paid to create artificial habitats and manage fish hatcheries. Ecosystems that provided diversity free of charge are replaced by landscapes that can be counted and collated in reports.

Rather than reflecting over the causes of failures, managers double down on interventions. Fences fail to limit pests whose population explodes without natural predators. Simplified managed spaces replaces ecosystems diverse with uncountable species. Businesses encourage the spread of roads and trails that will bring more cars to parking lots. Farmers do not “husband” the landscape for their descendants; they follow theoretical guidelines written at a distance and collect subsidies for chasing errant targets.

Hunters shoot many animals to get the 12-point buck whose head hangs on their wall. The rest of the animals rot. Secret hunting, fishing and camping places are overrun by tourists visiting guidebook highlights. Economists contribute to these problems by measuring known knowns and ignoring the unknown unknowns that make the knowns possible.

For the first time in the history of the human species, two changes are now impending. One is the exhaustion of wilderness in the more habitable portions of the globe. The other is the world-wide hybridization of cultures through modern transport and industrialization. Neither can be prevented, and perhaps should not be, but the question arises whether, by some slight amelioration of the impending changes, certain values can be preserved that would otherwise be lost. (p 188)

Shrinking ecosystems collapse roads and development encroach on food chains stressed by missing keystone species and voracious invasives.

The disappearance of plants and animal species without visible cause, despite efforts to protect them, and the irruption of others as pests despite efforts to control them, must, in the absence of simpler explanations, be regarded as symptoms of sickness in the land organism. (p 194)

Leopold calls for a science of land health to replace failing land management. This science would begin by understanding (and protecting) wilderness areas that have evolved and persisted for millions of years. The contrast with the “sick” lands humans are trying to save cannot be clearer:

In 1909, when I first saw the West, there were grizzlies in every major mountain mass, but you could travel for months without meeting a conservation officer. Today there is some kind of conservation officer ‘behind every bush,’ yet as wildlife bureaus grow, our most magnificent mammal retreats steadily toward the Canadian border. (p 198)

Leopold is known for espousing (inventing?) a “land ethic”, which “simply enlarges the boundaries of the community to include soils, waters, plants, and animals, or collectively: the land… a land ethic changes the role of Homo sapiens from conqueror of the land-community to plain member and citizen of it. It implies respect for his fellow-members, and also respect for the community as such” (p204).

In calling for such equality he (rightly) criticises alternative value systems:

One basic weakness in a conservation system based wholly on economic motives is that most members of the land community have no economic value. Wildflowers and songbirds are examples. Of the 22,000 higher plants and animals native to Wisconsin, it is doubtful whether more than 5 per cent can be sold, fed, eaten, or otherwise put to economic use. Yet these creatures are members of the biotic community, and if (as I believe) its stability depends on its integrity, they are entitled to continuance.

When one of these non-economic categories is threatened, and if we happen to love it, we invent subterfuges to give it economic importance. At the beginning of the century song- birds were supposed to be disappearing. Ornithologists jumped to the rescue with some distinctly shaky evidence to the effect that insects would eat us up if birds failed to control them. The evidence had to be economic in order to be valid.

Leopold’s land ethic replaces corrupt and poorly functioning extrinsic motivators (regulations, subsidies) with the intrinsic motivation (respect for the entire ecosystem) necessary to respect and protect the wholeness of ecosystems:

To sum up: a system of conservation based solely on economic self-interest is hopelessly lopsided. It tends to ignore, and thus eventually to eliminate, many elements in the land community that lack commercial value, but that are (as far as we know) essential to its healthy functioning. It assumes, falsely, I think, that the economic parts of the biotic clock will function without the uneconomic parts (p 214)

These days, Leopold’s ideas are echoed in the concepts of “spaceship earth,” industrial ecology, the circular economy, and so on:

Land, then, is not merely soil; it is a fountain of energy flowing through a circuit of soils, plants, and animals. Food chains are the living channels which conduct energy upward; death and decay return it to the soil. The circuit is not closed; some energy is dissipated in decay, some is added by absorption from the air, some is stored in soils, peats, and long-lived forests; but it is a sustained circuit, like a slowly augmented revolving fund of life (p 216)

Sadly, most people are not just ignorant of this miracle of sustainability; they actively avoid contemplating or respecting it:

Your true modem is separated from the land by many middlemen, and by innumerable physical gadgets. He has no vital relation to it; to him it is the space between cities on which crops grow. Turn him loose for a day on the land, and if the spot does not happen to be a golf links or a ‘scenic’ area, he is bored stiff. If crops could be raised by hydroponics instead of farming, it would suit him very well. Synthetic substitutes for wood, leather, wool, and other natural land products suit him better than the originals. In short, land is something he has ‘outgrown.’

These words are over 70 years old! Leopold’s perceptions were far ahead his time and his warnings have only grown more relevant. His wise recommendations have only grown more urgent. The sad thing is that he has been so right while most of humanity has continued on paths that are so wrong. We cannot claim “we did not know.” We were warned by Leopold and others (all five of his children became academics devoted to sustainability), but we have ignored those warnings. A land ethic would not just save nature in all its glory, but also save humanity. But we have continued to trash, shrink and ignore ecosystems that have brought us so much joy and prosperity. Humanity’s futures is now threatened, and we only have ourselves to blame.

I give this book FIVE STARS. Read it — and appreciate what we’ve lost and what remains.

Here are all my reviews.

Profits of capital and business power

Book 6, Chapter 7

§1. “Business power” relies on capital (prior chapter), managerial talent, and an organization that combines inputs into outputs. In cases of “beating the trodden path,” the returns to talent will be proportional to their social value but not so for innovators, as they will rarely be able to capture the entire value of good ideas that diffuse to competitors nor share the risks of failures. Economists to this day are interested in this problem of public goods and/or positive externalities (Paul Romer won the 2018 Nobel for his work on “endogenous innovation”).

§2. The ratio of supervisors to “floor” employees will depend on their wages as well as their contribution to overall productivity. A supervisor who boosts employee productivity should be paid in proportion to that gain. One who does not should perhaps be replaced by workers.

§3. The owner’s role depends on their ability to manage, since they need to create enough value to pay the cost of supervising others rather than being directly productive. If they lack such skills, then they should not grow the firm, because that’s not profitable.

§4. Larger firms might have access to cheaper inputs and capital but smaller firms have fewer managers to pay.

§5. New entrepreneurs are often willing to work harder, for lower rewards, than incumbents. In fast-moving industries, these newcomers can succeed, but they will have a hard time when turnover is slow, much capital is needed, and incumbents with cheaper capital prefer the profits of work over the price they’d receive by selling out.

§6. Joint-stock [publicly traded] companies have elaborate (costly) relations among managers, shareholders and directors but they can dominate in businesses where professional management, heavy capital requirements and slow change are more useful than nimbleness.

§7. There is no “correct” mix of large and small companies, old or new, since success can flow from different mixes of inputs. The business “ecosystem” (not Marshall’s term) will therefore be evolving and complex like a natural ecosystem, as profits and opportunities are revealed, exploited and lost. For most participants, it’s hard to see the whole, let alone understand their relative position, besides ongoing existence.

This post is part of a series in the Marshall 2020 Project, i.e., an excuse for me to read Alfred Marshall’s Principles of Economics (1890 first edition/1920 eighth edition), which dominated economic thinking until Van Neumann and Morgenstern’s Theory of Games and Economic Behaviour (1944) and Samuelson’s Foundations of Economic Analysis (1946) pivoted economics from institutional induction to mathematical deduction.