Category: Review

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.

Almanac

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?

Sketches

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)

Upshot

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.

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Here are all my reviews.

Friedrich Hayek (1899-1992) published this book in 1988 as his last word in opposition to socialism. I read it to “update” myself on his thinking since The Road to Serfdom (1944) and “The use of knowledge in society” (1945) — an article I regularly recommend to students.

This book is full of insights on how individuals with distributed knowledge coordinate their actions (so this “review” will be long with his words), but Hayek also throws out the baby (the importance of social management of collective goods) with the bathwater (the dangers of centralized, “rational” social control). Given my interest and the global importance of the commons and environment (both social, or non-excludable goods), I think that Hayek — like Milton Friedman — could have delivered a sharper message. But most of this review focuses on what Hayek gets right.

Chapter 1: Between instinct and reason

This book argues that our civilisation depends, not only for its origin but also for its preservation, on what can be precisely described only as the extended order of human cooperation, an order more commonly, if somewhat misleadingly, known as capitalism. To understand our civilisation, one must appreciate that the extended order resulted not from human design or intention but spontaneously: it arose from unintentionally conforming to certain traditional and largely moral practices, many of which men tend to dislike, whose significance they usually fail to understand, whose validity they cannot prove, and which have nonetheless fairly rapidly spread by means of an evolutionary selection – the comparative increase of population and wealth – of those groups that happened to follow them. The unwitting, reluctant, even painful adoption of these practices kept these groups together, increased their access to valuable information of all sorts, and enabled them to be ‘fruitful, and multiply, and replenish the earth, and subdue it’ (Genesis 1:28). This process is perhaps the least appreciated facet of human evolution.

Socialists take a different view of these matters. They not only differ in their conclusions, they see the facts differently. That socialists are wrong about the facts is crucial to my argument, as it will unfold in the pages that follow… If it were for instance true that central direction of the means of production could effect a collective product of at least the same magnitude as that which we now produce, it would indeed prove a grave moral problem how this could be done justly. This, however, is not the position in which we find ourselves.

[snip]

The main point of my argument is, then, that the conflict between, on one hand, advocates of the spontaneous extended human order created by a competitive market, and on the other hand those who demand a deliberate arrangement of human interaction by central authority based on collective command over available resources is due to a factual error by the latter about how knowledge of these resources is and can be generated and utilised (pp 6-8).

These opening paragraphs focus on the main issue, which is not morality but prosperity. Socialists who fail to understand this difference often suggest that equal access to the means of production will lead to equal outcomes from the fruits of production (“From each according to his ability, to each according to his needs“) when (a) that doesn’t happen and (b) capitalism’s job is to create wealth while the state’s job is to redistribute it (so-called “mixed economies”).

Why are (would-be) socialists or those sympathetic to socialism so often mislead? Hayek points the finger at our limited capacity to comprehend our complex social systems:

They [human instincts] were adapted to life in the small roving bands or troops in which the human race and its immediate ancestors evolved during the few million years while the biological constitution of homo sapiens was being formed. These genetically inherited instincts served to steer the cooperation of the members of the troop, a cooperation that was, necessarily, a narrowly circumscribed interaction of fellows known to and trusted by one another… The primitive individualism described by Thomas Hobbes is hence a myth. The savage is not solitary, and his instinct is collectivist. There was never a ‘war of all against all’. (pp 11-12)

Hayek calls our collective and innate instincts natural morality, defining “morality” as “those non-instinctive rules that enabled mankind to expand into an extended order” (p. 12). Hayek places morality between natural morality (a non-scaleable concern for one’s tribe) and rationality (a non-scaleable assumption that one can design the mechanism for converting resources into desired outcomes). Hayek’s morality allows us to compete with strangers (as we would not with “family”) in ways that convert our greed into gains (“as if guided by an invisible hand”) that we would never (in a tribe) knowingly share with other strangers:

In our economic activities we do not know the needs which we satisfy nor the sources of the things which we get. Almost all of us serve people whom we do not know, and even of whose existence we are ignorant; and we in turn constantly live on the services of other people of whom we know nothing. All this is possible because we stand in a great framework of institutions and traditions – economic, legal, and moral – into which we fit ourselves by obeying certain rules of conduct that we never made, and which we have never understood (p. 14).

How did these morals develop? As Joseph Heinrich explained in The Secret of Our Success (2015), they emerged as cultural evolution favored tribes willing to exchange with non-blood relatives over tribes held back by kin loyalty (Hayek cites much older sources). As a result, we created context-dependent loyalties:

If we were to apply the unmodified, uncurbed, rules of the micro-cosmos (i.e., of the small band or troop, or of, say, our families) to the macro-cosmos (our wider civilisation), as our instincts and sentimental yearnings often make us wish to do, we would destroy it. Yet if we were always to apply the rules of the extended order to our more intimate groupings, we would crush them. So we must learn to live in two sorts of world at once. To apply the name ‘society’ to both, or even to either, is hardly of any use, and can be most misleading (p. 18, emphasis in original).

In those two worlds, it is necessary to Think Fast and Slow (2011) in discriminating between instincts (Type 1 thinking) and learnt rules (Type 2 thinking), and competition drove this process: “Competition is a procedure of discovery, a procedure involved in all evolution, that led man unwittingly to respond to novel situations; and through further competition, not through agreement, we gradually increase our efficiency” (p. 19). To Hayek, the most important word in that description is “unwittingly,” which refers both to the unintentional way that humans have improved their condition and the difficulty of wittingly designing improvements (the “fatal conceit”) — a concern at the center of Scott’s brilliant Seeing Like a State (and more recent Two Cheers for Anarchism).

And out of this concern, Hayek harkens to an old-fashioned (think Burke vs Paine) version of conservatism:*

Learning how to behave is more the source than the result of insight, reason, and understanding. Man is not born wise, rational and good, but has to be taught to become so. It is not our intellect that created our morals; rather, human interactions governed by our morals make possible the growth of reason and those capabilities associated with it. Man became intelligent because there was tradition – that which lies between instinct and reason – for him to learn. This tradition, in turn, originated not from a capacity rationally to interpret observed facts but from habits of responding. It told man primarily what he ought or ought not to do under certain conditions rather than what he must expect to happen.

[snip]

It is less accurate to suppose that thinking man creates and controls his cultural evolution than it is to say that culture, and evolution, created his reason. In any case, the idea that at some point conscious design stepped in and displaced evolution substitutes a virtually supernatural postulate for scientific explanation. So far as scientific explanation is concerned, it was not what we know as mind that developed civilisation, let alone directed its evolution, but rather mind and civilisation which developed or evolved concurrently.

[Thus…]

Just as instinct is older than custom and tradition, so then are the latter older than reason: custom and tradition stand between instinct and reason – logically, psychologically, temporally (pp. 21-23).

Hayek then repeats the oft-forgotten fact that Darwin read Smith’s Wealth of Nations before he came up with a theory of evolution. Darwin borrowed from Smith’s ideas of undirected, beneficial social evolution (“as if guided…”) when looking at the much-longer process of natural selection. Sociologists, likewise, claim “group selection” explains why some cultures succeed over others, without guidance, in continuously changing circumstances, i.e., “biological and cultural evolution… rely on the same principle of selection: survival or reproductive advantage… Not only does all evolution rest on competition; continuing competition is necessary even to preserve existing achievements,” regardless of what we consider fair or rational: “I do not claim that the results of group selection of traditions are necessarily ‘good’ – any more than I claim that other things that have long survived in the course of evolution, such as cockroaches, have moral value” (pp. 26-27).

…and that’s the first chapter. If you’ve made it this far, I suggest taking a short break to think over these ideas, since they underpin the rest of the book.

2: The origins of liberty

Liberty was not given as much as taken by the Mediterranean merchants who would leave oppressive for welcoming ports, taking their custom with them. In this early (pre-Roman) period, private property was synonymous with individual freedom. Slaves lived the difference. Traders knew the difference. Tribes did not know the difference, so their members were caught in a collective, protective — and stifling — safety net. Some Greek philosophers (Aristotle, Plato) disliked private property, and their influence might explain how the Greeks lost out to pro-property, pro-market Rome.

There is a tension between ruler’s desire to tax and control and their subjects’ desire to protect their money and autonomy. Individual and state prosperity suffered when the state was too strong. Paradoxically, strength came from weakness:

The revival of European civilisation during the later Middle Ages… owes its origins and raison d’être to political anarchy. It was not under the more powerful governments, but in the towns of the Italian Renaissance, of South Germany and of the Low Countries, and finally in lightly-governed England, i.e., under the rule of the bourgeoisie rather than of warriors, that modern industrialism grew. Protection of several property, not the direction of its use by government, laid the foundations for the growth of the dense network of exchange of services that shaped the extended order (p 33).

From these experiences, philosophers such as Locke argued that private property, justice and freedom went hand-in-hand, since the right to property could be interpreted to include oneself as well as one’s land, possessions and ideas (The Declaration of Independence very nearly said “life, liberty and property”). More recent examinations of “property rights” have veered into novel but important areas, e.g., Coase’s “Nature of the Firm” (where does control start and stop) and “Problem of Social Costs” (the right to pollute — or not be polluted).

Hayek thinks the application of property rights to ideas, patents, and copyright slows their exchange and thus learning and innovation.

3. The evolution of the market

“Modern archaeology confirms confirms that trade is older than agriculture or any other sort of regular production” (p39) — read my review of Jacobs (1969) for more support of Hayek’s rejection of the conventional wisdom of agriculture preceding trade or towns. From trade came norms of hospitality (and protection) for strangers, an appreciation of different ideas, and specializations in sourcing raw materials and crafted goods. Crossroads grew into towns and towns into cities. Cooperation was expected. Surpluses allowed more people to live better lives.

Rebels added bridging social capital to the bonding social capital of their home communities:

In any case, some individuals did tear away, or were released, from the hold and obligations of the small community, and began not only to settle other communities, but also to lay the foundations for a network of connections with members of still other communities – a network that ultimately, in countless relays and ramifications, has covered the whole earth (p. 42).

Historians and archaeologists can be biased by evidence, crediting rulers and bureaucrats (who left behind buildings, laws and records) instead of individuals for successes. Their informal, bottom up actions left few traces but delivered more prosperity. Rulers, sadly, preferred their control over people’s prosperity:

What led the greatly advanced civilisation of China to fall behind Europe was its governments’ clamping down so tightly as to leave no room for new developments, while… Europe probably owes its extraordinary expansion in the Middle Ages to its political anarchy (p. 45). 

…and China has not changed: President Xi’s need for control is more important than freedom (and prosperity) in Hong Kong — something I worried about on my first (and last) visit to HK in 2018.

Aristotle admired oiknomia (home economics) but not markets. He preferred autarky (self-sufficiency), so he was not an economist. His (surviving) writings omit discussion or understanding of evolution or self-organizing phenomena. His insistence that nature and human activities must be organized (via taxonomy) before they could be accepted or understood left him and his followers blind to most evolutionary successes.

Aristotle (and many religions) opposed interest, free prices, and profits. Rulers who embraced the insights of Hume and Smith (“one can serve another without kind intentions”) gave space for undirected but mutually beneficial trade. The move from feudalism and tribalism towards bourgeois dignity and a “propensity to truck barter and exchange” created wealth that was distributed through a self-organized system that no individual could understand, explain or control.

4. The revolt of instinct and reason

Enlightenment thinkers such as Decartes raised the profile of reason at the expense of tradition, sometimes pursuing “scientism” to the point of discarding “irrational” but functional institutions in favour of rational but dysfunctional replacements. Rousseau opposed rationalism with admiration for the “noble savage” but his admiration of “animal instinct” and “the will of the people” discarded thousands of years of tradition that had delivered — without design — the civilisation that supported Rousseau and others.

It’s hard to be an individualistic noble savage if you don’t have freedom for yourself or your property, but that “bug” was a “feature” to those — like Rousseau — who favoured collectivism over property. Academics and intellectuals (e.g., Marx) mythologize the past as they espoused flawed ideologies on putting humanity on the socially engineered path to a workers paradise.

One’s initial surprise at finding that intelligent people tend to be socialists diminishes when one realises that, of course, intelligent people will tend to overvalue intelligence, and to suppose that we must owe all the advantages and opportunities that our civilisation offers to deliberate design rather than to following traditional rules, and likewise to suppose that we can, by exercising our reason, eliminate any remaining undesired features by still more intelligent reflection, and still more appropriate design and ‘rational coordination’ of our undertakings. This leads one to be favourably disposed to the central economic planning and control that lie at the heart of socialism. Of course intellectuals will demand explanations for everything they are expected to do, and will be reluctant to accept practices just because they happen to govern the communities into which they happen to have been born (pp. 53-54).

Hayek’s complaint here echoes that of Vincent and Elinor Ostrom, both of whom spent their careers understanding and explaining how informal institutions emerged, evolved and prevented “common pool situations” from turning into “common pool dilemmas” (or tragedies).

Hayek lists four ideas (rationalism, empiricism, positivism and utilitarianism) that “scientific” people implicitly accept before delving into the presuppositions that support those ideas, i.e.,

1. The idea that it is unreasonable to follow what one cannot justify scientifically or prove observationally (Monod, Born).
2. The idea that it is unreasonable to follow what one does not understand (Popper).
3. The related idea that it is unreasonable to follow a particular course unless its purpose is fully specified in advance (Einstein, Russell, Keynes).
4. The idea, also closely related, that it is unreasonable to do anything unless its effects are not only fully known in advance but also fully observable and seen to be beneficial (the utilitarians).

“To what purpose tradition, suffering or obedience?” Hayek answers:

…intellectuals from Rousseau to such recent figures in French and German thought as Foucault and Habermas regard alienation as rampant in any system in which an order is ‘imposed’ on individuals without their conscious consent…

On a less sophisticated level than the argument against ‘alienation’ are the demands for ‘liberation’ from the burdens of civilisation – including the burdens of disciplined work, responsibility, risk-taking, saving, honesty, the honouring of promises, as well as the difficulties of curbing by general rules one’s natural reactions of hostility to strangers and solidarity with those who are like oneself – an ever more severe threat to political liberty.

Everywhere, in the name of liberation, people disavow practices that enabled mankind to reach its present size and degree of cooperation because they do not rationally see, according to their lights, how certain limitations on individual freedom through legal and moral rules make possible a greater – and freer! – order than can be attained through centralised control (pp. 64-65).

5. The fatal conceit

Traditions, institutions and beliefs…  may be seen, as is especially fashionable today, as sources of alienation and oppression, and of ‘social injustice’. After such objections, the conclusion is reached that there is an urgent need to construct a new, rationally revised and justified morality which does meet these requirements (p. 67). 

What’s the danger of pursuing rationality?

If we stopped doing everything for which we do not know the reason, or for which we cannot provide a justification in the sense demanded, we would probably very soon be dead  (p. 68). 

Economists’ models of “rational” behaviour, expectations and so on, contribute to problems because they are used to argue for bad policies, such as those that contributed to the 2007+ financial crisis (read more and more).

Hayek explains how the “extended order” in which we live and which contributes so much to our prosperity is “transcendent”, i.e., beyond our understanding and thus immune to rationalist design and control. Those who ignore such orders are counterproductive (“decimal time” in revolutionary France) or dangerous (the Khmer Rouge killed ~2 million citizens in their quest to reset society to Year 0).

Turning to the opposite side of “it must fit in my brain box”, Hayek warns against an obsession with “moral” rules. Many people do good things for reasons outsiders cannot understand: “As if guided by an invisible hand” applies in markets as well as social situations. A requirement to “justify your actions” is not just a waste of time but a version of petty fascism. Who cares why consenting adults — whether they know each other or not — do what they do. (I give “reddit gold” anonymously to strangers whose ideas and words I like; they don’t need to know why.)

Civilisation is not only a product of evolution – it is a process; by establishing a framework of general rules and individual freedom it allows itself to continue to evolve. This evolution cannot be guided by and often will not produce what men demand. Men may find some previously unfulfilled wishes satisfied, but only at the price of disappointing many others. Though by moral conduct an individual may increase his opportunities, the resulting evolution will not gratify all his moral desires. Evolution cannot be just (p. 74). 

…and that means that the impacts of actions and choices, structures and relations should not — and cannot — be judged ex-ante or even ex-post, as impacts are partially felt and unevenly distributed days, years and centuries later. Hayek’s statement of this perspective is famous for those of us who play the Econtalk drinking game:

If we had deliberately built, or were consciously shaping, the structure of human action, we would merely have to ask individuals why they had interacted with any particular structure. Whereas, in fact, specialised students, even after generations of effort, find it exceedingly difficult to explain such matters, and cannot agree on what are the causes or what will be the effects of particular events. The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design (p. 76). 

I often think of this curious task when teaching, as one of my main jobs is convincing students that “it’s not as easy as you think.” That said, way back in 1995, I remember sitting in Sienna as a 25-year old with ambitious plans for government reform. (My plans, sadly, are lost. Government will have to struggle without me.)

Hayek then explains how decentralised information recommends decentralised  decisions in markets and politics (what the Ostrom’s called “polycentricity” [pdf]). Hayek reinforces these points by citing long human childhoods (necessary for understanding social norms), different sets of moral rules (allowing experimentation and adaptation), and diversification (individuals coming together to exchange based on their several talents, ideas and assets).

In calling for such humility, Hayek attracts opposition, i.e., “the individual can no longer know whose needs his efforts do or ought to serve… Directing his productive efforts altruistically thus becomes literally impossible for him… for intellectuals generally, the feeling of being mere tools of concealed, even if impersonal, market forces appears almost as a personal humiliation” (pp. 81-82). These words remind me of Peter Singer’s (utilitarian) quest to shame people for prioritising care for neighbours over the distant, anonymous poor. I think Singer is misguided. Hayek would probably call him dangerous.

Turning against Hayek, I think he misses an important role for the bureaucrats he despises: “Attempts to intervene in spontaneous order rarely result in anything closely corresponding to men’s wishes, since these orders are determined by more particular facts than any such intervening agency can know” (p. 84). I am not sure where he would stand on correcting market failures (such as pollution) via regulations and/or taxes, but I think those interventions are necessary and useful.

Hayek ends with an appeal to respect institutions that distribute power to those possessing the local and tacit knowledge needed to make good decisions.

6. The mysterious world of trade and money

A “primitive minds” distrusts a win-win transaction (e.g., I sell you a hamburger) because it is accustomed to simple win-lose interactions among peers (more meat for you means less meat for others) rather than mutually beneficial, impersonal exchanges based on comparative advantage. When I teach economics, I must always explain the differences among cost, price and value — concepts that many assume are interchangeable.

Trade – regarded as real work or not – brought not only individual but also collective wealth through effort of brain rather than of muscles. That a mere change of hands should lead to a gain in value to all participants, that it need not mean gain to one at the expense of the others (or what has come to be called exploitation), was and is nonetheless intuitively difficult to grasp (p. 93). 

Many people still prefer “honest” physical labor over the “alchemy” of ideas, innovations and value gradients. Marx’s obsession with the labor theory of value blinded him to the means in which capital multiplied the value of labor as well as the gains from trade arising from differences in talent, resources and taste. These fears only multiply when the marketplace under consideration expands beyond a few vendors or small-scale manufacturers to larger markets and longer supply chains that no individual (due to the knowledge problem) can ever hope to understand. For some people, it is fine to believe in an almighty, all-seeing god (who plays no role in our daily lives) but totally wrong to believe in the “magic of markets” delivering goods made by some strangers for the benefit of other strangers. Markets are autonomous, complex and robust — like ecosystems. People accustomed to simplifying ecosystems into gardens and food courts will also try to simplify markets into good, bad, ethical, and so on. Anyone who has studied (or operated) supply chains will know that such descriptors (let alone KPIs) are nearly impossible to measure or apply to supply chains.

That said, Hayek claims (correctly) that prices help us navigate this complexity as buyers of goods or sellers of inputs. Prices can be wrong if they ignore the costs of  “negative externalities” (such as pollution) or reflect a monopolist’s market power, but even flawed prices are better than no prices. We have not found any mechanism better suited to coordinating self-interested strangers than the invisible hand.

Money, interest, borrowing and lending are feared for their complexity (see, e.g., debates over fractional vs full-reserve banking), which leads to bad policies, resource waste, and greater income inequality (those who “get it” grow wealthier). Politicians, of course, have sometimes neglected citizens. Inflationary spending harms savers and the poor while saving debtors from accountability and the rich from taxes. In 2020, short term (MZM) money supply jumped by 25% in the US — a rate far greater than historic norms.

7. Our poisoned language

Understanding and cooperation require a common language. In some cases, language for new ideas needs to be invented (e.g., “telephone” to “mobile phone” to “zoom”). In other cases, language based on “erroneous theory” sows confusion and division. I see this problem with “post-modern” thinking faffing, but Hayek worries (justly) about socialists who attribute order to design when “observed order” actually results from an evolutionary process. Likewise, discarding the “state” for “society” is dangerous because it trades accountable known people for an unaccountable nebulous “movement.”

Building on this statement, Hayek then looks into the (mis)use of “liberal,” “capitalism” and “socialism” — terms with a variety of (sometimes) contradictory meanings. “Capitalists” and the “proletariat,” for example, are portrayed as opponents when they actually benefit each other.

One of the oldest terms… societas, from socius [Latin], the personally known fellow or companion… has been used to describe both an actually existing state of affairs and a relation between individuals… To call by the same name such completely different formations as the companionship of individuals in constant personal contact and the structure formed by millions who are connected only by signals resulting from long and infinitely ramified chains of trade is not only factually misleading but also almost always contains a concealed desire to model this extended order on the intimate fellowship for which our emotions long (p. 112-3)

Thus, we are confused when people use “social” to refer to small groups joined by personal relations as well as larger groups joined by impersonal norms.

Hayek lists over 160 nouns that are qualified by “social” (e.g., “social animal” or “social justice”), to show how those claiming (social) legitimacy try to avoid accurate terms that deliver less authority: “The traditional term for what is now called the ‘social state’ was ‘benevolent despotism’, and the very real problem of achieving such despotism democratically, i.e., while preserving individual freedom, is simply wished away by the concoction ‘social democracy’” (p. 117).

Hayek warns that social justice warriors’ support for redistributive interventions undermines the market forces that bring wealth and “society.” Although I agree with his point, note that some “social” measures (regulating bad behaviour, taxing wealth, subsidizing public goods, and reducing inequality) can be designed and implemented in ways that allow for individual decisions, market-efficiency and overall prosperity.

8. The extended order and population growth

It is, then, not simply more men, but more different men, which brings an increase in productivity. Men have become powerful because they have become so different: new possibilities of specialisation – depending not so much on any increase in individual intelligence but on growing differentiation of individuals – provide the basis for a more successful use of the earth’s resources This in turn requires an extension of the network of indirect reciprocal services which the signalling mechanism of the market secures. As the market reveals ever new opportunities of specialisation, the two-factor model, with its Malthusian conclusions, becomes increasingly inapplicable. (pp. 122-123). 

Although Hayek is right about the development and deepening of markets, he overlooks population- and growth-related issues as they affect the commons, which (by definition, due to missing property rights) are not amenable to market incentives or solutions. Hayek indirectly invokes such a caveat:

As long as an increase in population has been made possible by the growing productivity of the populations in the regions concerned, or by more effective utilisation of their resources, and not by deliberate artificial support of this growth from outside [=negative externalities], there is little cause for concern (p 124).

…but then fails to admit its relevance:

There is no danger whatever that, in any foreseeable future with which we can be concerned, the population of the world as a whole will outgrow its raw material resources, and every reason to assume that inherent forces will stop such a process long before that could happen (p. 125).

This bold statement is just wrong, and the fact that Hayek cites Julian Simon (see this post and this review) confirms his myopia with respect to non-excludable goods.

Hayek argues that population growth should be allowed to run its course and that humans will “find a way” to live sustainably, innovate solutions and thrive. Such hopes are misplaced as long as politicians and communities fail to manage their collective goods and markets continue to “grow artificially” using outside (non-priced) resources, as we can see with climate chaos, crashing biodiversity and increasing water scarcity.

9. Religion and the guardians of tradition

Hayek and I agree that “If God did not exist then it would be necessary to invent Him.” But the existence of so many religions — in contradiction to Voltaire’s gist — provides evidence of their social value. How do religions help? They use stories, beliefs and superstition to direct individuals towards choices that benefit the group.

In any case, the religious view that morals were determined by processes incomprehensible to us may at any rate be truer (even if not exactly in the way intended) than the rationalist delusion that man, by exercising his intelligence, invented morals that gave him the power to achieve more than he could ever foresee. If we bear these things in mind, we can better understand and appreciate those clerics who are said to have become somewhat sceptical of the validity of some of their teachings and who yet continued to teach them because they feared that a loss of faith would lead to a decline of morals. No doubt they were right; and even an agnostic ought to concede that we owe our morals, and the tradition that has provided not only our civilisation but our very lives, to the acceptance of such scientifically unacceptable factual claims. (p. 137). 

Collective well-being also helps religions survive. Judaism may have strange rules (no cheeseburgers, closed for Shabbat, etc.), but you can’t deny its long-running (3,500+ years) benefits to the Jewish community. Other religions (e.g., Communism) are doomed (recall this book is from 1988) because they denounce property and family, thereby undermining their current effectiveness and future prospects.

Hayek reminds readers that we have come this far without knowing why we believe, act or hesitate in certain situations. Taking success as the ultimate measure, he recommends we put our faith into the evolved institutions that have brought collective prosperity rather than the “rational” schemes offered by scientists, visionaries and quacks.

This “review” is now over 5,300 words, so congratulations for reading so far! I hope this review helps you understand (or decide to read) this excellent book. I think Hayek is 90 percent right and 10 percent wrong (mostly regarding collective goods) in his argument and analysis of how private decisions can combine to create positive collective outcomes. I give this book FIVE STARS.

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* I definitely recommend you read “Why I am not a conservative,” an excerpt from Hayek’s 1960 Constitution of Liberty. In that short accessible essay, you will see how Hayek worried about radicals from the Right as much as the Left.

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Here are all my reviews.

I’d heard about this book — the story of the rise and fall of Elizabeth Homes and her company Theranos — long ago, but I only decided to read it when preparing readings for my course, The World of Entrepreneurs. I wanted to understand her case, as an example of the dark side of Silicon Valley —  not the side of “fake it until you make it” —  but the side of “lie to everyone, about everything, if that gives you an advantage.”

Aside: I worked in three start-ups in Silicon Valley, of which two were dominated by frauds of the “funding secured” and “vaporware” models, respectively, so I have a real interest in similar stories. That said, I am pretty sure that at least 80% of start-ups are, on the whole, legitimate (read this review). The trouble is not the really bad apples — Theranos and WeWork being recent examples — but those that cut corners as a “necessary part of doing business” — Facebook and Uber being high on that list.

This review will be short because Carreyrou is such a good writer and the story comes at a fast pace. What strikes me are the following:

• Elizabeth Holmes was an aggressive, ambitious founder who wanted to change the world and become rich and famous. Her challenge was reality. She preferred to ignore inconveniences and distorted reality to convince others that she knew what she was doing, i.e., building a machine that could run 200 blood tests based on a finger-prick sample of blood. Outside scientists told her that her goal was impossible, due to physics and chemistry. Inside scientists, lab workers and “beta-test” doctors said her machine was not working or viable. Rather than listen, she lied about using commercial equipment to do the tests supposedly run on her machines and ignored the dangers of bad results from her machines. (One million tests later deemed “inaccurate” translates into one million stories of false positives, false negatives and needless suffering.)
• Holmes was aided and abetted by Ramesh Balwani, a boyfriend who assumed that his luck (presence) in an earlier start up made him a visionary. Balwani and Holmes bullied staff, fostered a culture of paranoia, and sent lawyers after whistleblowers seeking to protect investors and the innocent. Different product teams were separated, which limited their ability to spot the fraud but also their ability to find solutions. Lawyers like David Boies worked hard to threaten whistleblowers because they were paid in shares. Holmes recruited a bunch of famous old white men (George Schultz, Henry Kissinger, Rupert Murdoch) whose “halo” protected her company from awkward questions.
• The end came when an anonymous insider brought the story to Carreyrou, whose investigations resulted in Theranos’s tests being suspended, arrests and trials. Holmes was not a disruptor; she was caught wearing “the Empress’s new clothes.” The women who saw herself as the next Steve Jobs was actually just another blonde grifter.
• Holmes’s most recent defense is that she’s mentally unfit to face charges. Given her history — and 2019 marriage to the male heir of millions — I assume her defense rests on more lies. (I also worry about her husband, especially if he has a high-value life insurance contract.)

My one-handed conclusion: Read this book if you want a fast-paced story of how self-delusion, greed and privilege (high-priced lawyers who will defend your lies) can allow someone to get away with “statistical murder” (all those wrong tests surely resulted in more than one death). FIVE STARS.

Update (2 Oct 2021): Read Carreyyou’s thoughts on Holmes’s trial

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Here are all my reviews.

Kiara Bickers, the author of this 2019 book, sent me a copy because I reviewed Digital Gold: Bitcoin, the Inside Story. As an economist with an interest in how bitcoin, blockchains, and crypto-assets are evolving, I agreed to look at her book.

In short, I found it insightful and interesting. I learned some useful stuff, but there were also some weaknesses.

The book is divided into four parts (conceptual reframing, analysis & knowledge, properties of the system, and synthesis & understanding), i.e., “what’s the idea, how does it work, how do people use it, and how can I get involved?” Some of these topics can get quite technical, but Bickers has a friendly tone and uses sketches to lay a foundation that readers can build on with further research.

(I’m now thinking the “bitcoin ecosystem” may now be too complex for anyone to understand.* The “crypto” ecosystem, of which bitcoin plays a small but significant part, is even more complex, confusing and chaotic.)

Here are some thoughts and highlights I noted while reading…

Part one explains bitcoin and the Blockchain (capital B, to distinguish it from many other blockchains that use similar protocols), two related ideas that depend on public key/private key cryptography. In my understanding, the blockchain records transactions linking bitcoins to various addresses that function as “safes.”

A miner is rewarded with bitcoin when they solve a math problem before other miners — all of them using special computer hardware and lots of electricity. Reward bitcoins are recorded in new blocks that also (and this is really important) record transfers of existing bitcoins among addresses. These actions mean that bitcoins, which can be divided into one million satoshis (think milli-pennies) are stored at an address until all or part of the bitcoin is transferred reassigned to a new address. Some addresses can be “rich” with many bitcoins but many addresses are empty. Transfers only occur when the person controlling coins at an address “signs” (cryptographically approves) a transfer to another address. Approved transfers are then bundled into new blocks that are added to the end of the Blockchain, copies of which are kept all over the world on “full nodes” (simple computers that do not use much electricity).

I learned from Bickers’s description of these steps. First, miners do the work but full nodes display the results of work, which — in the case of bitcoin — consists of a shared public ledger that shows where bitcoins are held as well as confirming when and where bitcoins are transferred. (I say “shared” in the sense that over 100,000 nodes agree have copies of the same Blockchain, which keeps the system “secure” from those who want to shut down the system or spend coins they do not have.)

Second, the combination of bitcoin+Blockchain is elegant and effective, just as many “alt coins” (or shit coins) and/or blockchains are solutions in search of problems. (Read “Blockchain, the amazing solution for almost nothing,” which is insightful, funny and cringy, and this academic analysis of the many useless projects that are burning government and enterprise cash without producing value, let alone evidence of success.)

Third, bitcoin/Blockchain are “trustless” in the sense that you can use them without needing to trust any person, organization or government.* This characteristic explains how and why people get scammed by so many alt-coins, but also why bitcoin is popular in dysfunctional countries (Turkey, Venezuela, and Zimbabwe spring to mind). Trustless doesn’t mean simple, by the way, which is why the “bitcoin industry” of consultants, speakers and services has sprung up. (Bickers offers her own advice to paying clients.)

Fourth, a lot of people think bitcoin is a terrible “payments solution” because it records a few hundred transactions every 10 minutes, rather than thousands of transactions per second, like Visa/Mastercard. This critique misses the point of the 10-minute block: to help synchronize 100,000+ copies of the Blockchain held in nodes around the world. Slow but secure is why many people see bitcoin more as digital gold (an asset) than as a digital currency.

Part two gets into some deep technical analysis, but it’s quite interesting.

I like the idea of the Blockchain as a method of “triple-entry bookkeeping” that shows where bitcoin have been subtracted (sender) and added (receiver) — the double-entry part — but also giving a global view of where all bitcoin are. (Bitcoin transactions are not anonymous but in plain view on the Blockchain; the tricky part is identifying who controls bitcoin at various addresses.)

Bickers is a fan of Austrian economists and “full” (as opposed to fractional) reserve banking, and the Blockchain’s “triple entry” nature means it’s impossible to inflate bitcoin by printing more (miners can’t get paid when they try that) or trading more (nodes prevent “double spending”), which gives bitcoin an advantage over fiat currencies that have value because governments say so. Although most of us trust US dollars or Euros, others want trustless, “sound” money as a hedge against printing new money and inflating the money supply via fractional reserves. (I keep a wad of 100 Bolivares notes as a handy reminder of how Venezuela debased its citizens’  savings. The wad of 100 notes was worth around USD2,500 in 2013, but only USD0.01 in 2018.)

The rest of Part two is technical but not unclear, covering transactions, node networks, mining and smart contracts. In that last chapter, Bickers does a pretty good job demolishing the 1,000-plus altcoins and blockchains that claim to be “trustless” but deliver scams and broken promises.

In Part three, Bickers discusses governance and decentralization, both of which exhibit robust stability under game-theoretic conditions in which many players in many roles cooperate via self-interest without creating vulnerabilities that can be taken over by insiders or outsiders.

When she turns to “the economics of money,” she falters, misinterpreting and misunderstanding comparative advantage, Smith’s interested bystander, the labor theory of value, quantitive easing, mortgage-backed securities, and service-sector inflation. I think most of these errors arise from her reading of biased, unreliable sources. Perhaps they can be fixed in edition 2.0?

Part four covers markets, hype cycles, and a healthy mindset for switching from fiat to bitcoin. These philosophical chapters draw on Bickers’s self-identity as a university drop-out pursuing a career in bitcoin. Although the discussion was useful, there were also errors in explaining the origin of “HODL”, the problem of known unknowns, and valuing growth stocks. Even so, the chapter ends with a heartfelt and welcome call to rebel against the status quo

My one-handed conclusion is that this book offers insights, explains complex ideas, and gives plenty of material to ponder. Although weakened by some preventable mistakes, I recommend it to anyone interested in bitcoin. FOUR STARS.

* 2 Nov 2020: I think it’s helpful to think of Bitcoin/Blockchain as a new (digital) species whose evolution, use and “goals” are beyond our control but important in our lives. If the 80s were the decade of the PC, 90s of the Internet/WWW, 00s of mobile phones, and 2010s of social media, then what consumer tech will dominate the 2020s? Bitcoin and crypto might be that tech.

Addendum: On bitcoin adoption: Discovering Digital Gold and Bitcoin and The American West

Feb 16: Ray Dalio and his researchers put out a great note on Bitcoin.

Apr 7 2022: Ten (useful) pieces of advice on bitcoin

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Here are all my reviews.

I read this book a few months ago but got distracted by current events. In the meantime, “something” technical deleted all my notes, so I skimmed the book again and wrote down my thoughts. This review is very long but not as long as Amsterdam’s 750-year history 😉

tl;dr: Amsterdam has evolved over centuries under pressures from survival & conformity versus ebullient openness & risk-taking. In other words, “do what you want as long as you pay your taxes.”

Geert Mak wrote the Dutch original in 1994. Philip Blom translated it into English in 1999. These dates are important because Amsterdam’s renaissance from the depths of the 1980s was still underway; the city was not nearly as popular then as it has been in these past 10 years. (The city’s population hit a nadir of 675,000 in 1985. It grew to 695,000 by 1990, 730,000 in 2000 (+5%), 768,000 in 2010 (+5%), and 872,000 (+14%) today — a record level, if one ignores political boundaries.)

The book begins with a prologue on the character of Amsterdammers: critical, self-effacing, independent, proud but not boastful. Of the greatest importance is the City’s long history of independence in thought, freedom and action. Put differently: Amsterdammers will leave you to your business, unless you’re in the way.

Amsterdam and other nearby villages got their start in the middle of 12th century flooding, slowly building up ground by draining and channeling swamps. These works were directed by dijksgraven (dyke administrators). The town was mostly independent from its distant owner (the Bishop of Utrecht) because it was poor, but local would-be “lords” rebelled for centuries. They mostly lost, and the town on the dammed Amstel was left to fishers, farmers, and traders.

In 1275, the Count of Holland gave “the people abiding near the Amsteldam” freedom from taxation. This document — and its date — marks Amsterdam’s official birth. After some ups and downs and confusion, it was replaced in 1300 by a longer document that established city rights, the rights of citizens and some governing bodies. Amsterdam got its first dedicated pastor in 1334.

Amsterdam wasn’t very important compared to older, bigger and richer towns. That position changed when the Bishop of Utrecht got greedy for tolls from Hanseatic merchants bringing goods from the North and Baltic seas to Flanders, France and the Mediterranean. Amsterdam stepped in as a competing middleman and grew quickly. (The Zuiderzee, before it was renamed IJsselmeer after the afsluitdijk cut off sea access, had that name because it was south of the Noordzee from which many trading cogs traveled.)

A cultural divide emerged:

The Bishops [in Utrecht, inland], relying on the feudal system of landowners and serfs, ruled over farmers who literally had nowhere else to go, and who were weighed down with taxes like old donkeys until they simply caved in. The Counts [of Holland, on the coast], on the other hand, understanding the importance of commerce to their lands, appreciated the fact that merchants were not serfs, and were at liberty to use other routes if they so chose. Furthermore, they understood what would later develop into one of the most important traditions of the Netherlands: the need to deal with the new and the foreign without smothering them with rules and restraints and cheap profit-hunting. In Holland, people opened themselves to the sea and to everything that came from afar, while those on the sandy soil of Utrecht, Gelderland and Overijssel turned their backs on it. (pp 22-3)

Amsterdam’s growth brought diversification: blacksmiths, goldsmiths, brewers, prostitutes, shoemakers, and more. Windmills ground grain and sawed wood; guilds protected artisan wages. It also had plenty of mud, fires and trade. 

Wooden houses leaned into streets to gain space for living and allow for goods to be hauled to upper floors without hitting the facade. It took several centuries of fire-regulations before stone and brick replaced wood, but  buildings still leaned out to ease goods-exchange. Many houses opened for business in the front while keeping private areas in the back. 

Beer was imported and taxed, which is why we know Amsterdam took one-third of Hamburg’s beer. The city grew in wealth through trade and started to engage in wars. In 1368, Amsterdam sent one ship to help the Hanseatic league defeat a Danish king. Amsterdam received the right to set up a post for trading haring, an important commodity fish. In 1398, Amsterdam sent 50 ships in a war against the Frisians (“exploiting the fact that the Frisians were locked in a desperate civil war, a conflict to the death over issues nobody knows any more” p 32), indicating the city was growing in naval power. City merchants started to circumvent the Hanseatic league’s claimed monopolies on trading routes. By spreading cargoes across multiple boats, merchants reduced risks, made more money, and grew bolder.

As the city grew and matured, its citizens began to see themselves as individuals playing important roles in history. In the 16th century, these trends drove — and were driven — by the Renaissance/Enlightenment. People took last names, had their portraits made, and “took back power” from the kings and priests who claimed power by divine right:

Amsterdam was never a truly medieval city. No king has ever held court here, the Church has never played a truly all-encompassing role, the social and political structures were never determined by the relations between ruler, vassal, and serf. From the very beginning it was a modern city, its citizens were independent and stubborn enough to take care of themselves. p42

The medieval religious past of the city left monasteries and convents with large holdings in the center. Amsterdam gained from its status as a place of pilgrimage (based on a “miracle” in 1345), but its piety was always tempered by the need to do business. Shipping volumes grew fourfold in the 16th century. The city produced cheap, good ships from imported wood and other materials. The city’s population increased five fold, and its land area as well. When conflicts arose between God and Mammon, Mammon won every time, and that trend strengthened after Martin Luther’s 1517 call for reform of the (Catholic) Church.

Religious disputes arrived in a city ready for change:

The streets were full of carts and horses and were strewn with heaps of dung. Everywhere breweries, dyeing shops, tanneries, and scores of other little businesses caused constant stench, smoke, and noise in among the houses in which people lived. Much of the rubbish was thrown into the canals, which led to enormous waves of foul air rolling over the city, especially in summer… More than three quarters of a family’s income was spent on food and the rest on rent, clothing, heat and light. (p 63)

New prophets and visions arrived. The Anabaptists challenged authority on Earth and sought to distribute wealth among all. They tried to take over the city (for God’s work) but failed, facing torture and public execution. The less aggressive Mennonites were likewise punished, as the city fathers liked the current distribution of wealth.

Thus, their “tolerance” (read my 2010 post on Dutch tolerance) was more practical than principled:

Tolerance was in this town not a mere principle but a practical necessity: the open merchant city, being the meeting place of all sorts of different cultures, could not allow itself to indulge in the large-scale prosecution of those adhering to different beliefs. (p 62)

The Eighty Years War (1568-1648), although presented as a war of Protestant Calvinists against the rule of Spain’s Catholic king, was more about commerce and middle class rights than religion. Religions laws were barely enforced if they interfered with common sense:

Several centuries later this attitude was to grow into a typically Dutch way of using the law, a modus operandi governed by civic opportunism: the state is entitled to prosecute a crime, but it is not bound to do so, especially if the means of prosecution is deemed to be worse than the crime – as, for instance, in the case of prostitution, or the use of soft drugs. (p 77)

The Eighty Years War began with complaints over aristocratic privileges and high taxes (the tenth penny). After the old order expeled Calvinistic reformers, war began. Although Amsterdam was “loyal” to the Catholic king, the rest of the Netherlands was not. During the war years, Amsterdam was a thriving trading center (even selling food, weapons and ships to the Spanish) and gaining immensely when Antwerp’s port was blockaded and its merchants moved to Amsterdam, bringing trade in silk and diamonds, artists and printers. They were joined by Sephardic Jews fleeing prosecution in Spain and economic migrants from Germany. The city’s language and culture diversified away from its solid but boring fishing roots. 

Amsterdam grew on commerce over land and water:

Decartes said in 1635: “Everyone [in Amsterdam] is so preoccupied by his own profit that I could live here for all my life without ever being noticed by anyone.” There were few palaces and churches or imposing buildings here, and it was noticed by every visitor that this city existed for financial gain alone. The Amsterdam of the “golden” seventeenth century was, to all intents and purposes, one enormous slot machine. Each available piece of earth, every skilled hand, was turned to this end…

…a complete waterscape had come into being, subdivided by pontoons, in which some large and countless small ships rose and fell with the waves…The atmosphere of this strange, sloshing, half-rotting world is recalled in prints from the period: crooked, mossy poles; fences, pontoons and short ladders, the silent water, rowing boats, a few seagulls. For centuries this scene would define the transition from city to water…

The power of this whole complex of capital, trade, and information lay mainly in its thoroughness and speed. The merchants in the city administration watched, hawklike, over the quality of the service sector. Immediately after landing, a shipper knew where to bring his cargo, while a merchant could work even with foreign currencies without any problems and, given the information available in Amsterdam, could ensure that reports from abroad were viable and impartial. Continuity, efficiency and absolute trustworthiness were the key elements of this economic miracle. (pp 100-101, 103)

Migrants seeking wealth and opportunity lived in crowded slums. The solution was to expand by constructing a canal belt (Grachtengordel) district of three canals (heren-, keizer- and prinsen-gracht) in “belt” wrapped around the old center. Construction took decades, hurrying and slowing with the city’s fortunes. Outside the canal belt came the Jordaan (filled with workers’ cottages) and Plantage, which was like a multi-use park.

As Amsterdam grew rich from trade and innovation, it allowed free thinkers, artists, and scientists to chase their passions and heresies. Rich merchants supported these middling classes, but they lived apart, in the canal belt. Ever since then, the city has struggled to balance economic freedom with social cohesion.

Merchants set up joint-stock companies (the first companies in the world to issue shares, and thus reduce risk to investors) to trade and conquor the East (the VOC, or Vereenigde Oostindische Compagnie colonized Indonesia), West (the WIC, or West-Indische Compagnie, founded New Amsterdam York before trading it for Surinam, which had a profitable slave trade), and North (the Noordische Compagnie harvested whales). These enterprises landed the Dutch in all corners of the world, as sailors, explorers, merchants and imperialists. The Dutch spent less money building better ships, borrowed more cheaply on sophisticated financial markets, found  cheaper goods in diverse markets, used wind-power to process wood and manage put water where they wanted it, and attracted from cheap and skilled labor. In 1650 the Dutch fleet was larger than the English, Scottish and French fleets combined; half the ships sailing to Asia flew Dutch flags.

Amsterdam’s wealth and businesses did not always align with Dutch interests (recall Amsterdam trading with the Spanish enemy). Stadthouder William II of Orange tried to invade the city but failed. In the “peace” that followed, Amsterdam’s leaders agreed to cooperate while William “ruled” the city with a light touch. These “live and let live” arrangements are still common in Dutch culture. 

The end of Amsterdam’s Golden Era arrived via two trends: the rise of neighboring nations and the weakening of Amsterdam’s governance. The beginning of the end was 1672, the rampjaar (disaster year) in which the Netherlands was invaded by France, England, Münster and Cologne, aristocratic neighbors jealous of Dutch success and threatened by the Republic’s support for freedom of religion, trade and thinking (propagated via its free presses). 

Amsterdam’s internal decay began when merchants became bankers, making money from money rather than trade, exploration and risks. These bourgeoisie separated themselves from other citizens (departing to country houses in summers) and used their positions as rentier sinecures rather than platforms from which to reform and strengthen the city’s institutions. Fashion and frippery replaced morality and humility. As local industry lost its productive capacity, bankers, as the “privileged unemployed,” lived off lending  profits.

Amsterdam’s shipping capacity suffered as its harbours and channels silted up (read Dredge Drain Reclaim for an amazing history of Dutch water management). Neighboring countries interfered with trade. London and Hamburg, with both goods and customers, cut out Amsterdam as the middleman. Foreign shipbuilders copied then out-innovated the Dutch.

The city stank from raw sewage and piled rubbish. Public works were neglected as important posts were sold to the highest bidder, rather than the competent or hard working. The Little Ice Age reduced crop yields, prevented ships from carrying fresh water to the city, and killed many. Peasants and migrants crammed into the city, increasing poverty and desperation. Men joined the VOC, trading debt for danger (“Of the 671,000 men who travelled out from Amsterdam, only 266,000 were to return” p 161). For women, “most of the evident easy virtue in the city had nothing to do with freedom and everything with poverty, despair, and powerlessness” (p 162). In 1748, riots broke out against the useless bourgeoisie; preachers condemned their excesses. Manors were raided, their riches tossed into canals. The Great Frost of 1763 marked another step down, as the peace of the Seven Years War allowed neighboring countries, their bankers and merchants to focus on taking market share from the Dutch.

The people began to demand monarchy, but the House of Orange was not ready (or competent) to rule. A third vision — of citizens electing militia and city officials — was ignored when William IV supported corrupt, incompetent, hereditary burgomasters. The people’s revolution went nowhere. 

The Enlightenment brought science and debating societies, as well as hot arguments over politics and governance. Amsterdam’s coffee houses were partisan and rowdy. America’s 1776 Declaration of Independence attracted attention from free thinkers and merchants eager to sell arms, but the British navy, now much stronger than the Dutch, quickly stopped most trade. The Netherlands — and Amsterdam — was no longer a global, let along European, power. The VOC and WIC went bankrupt. William V ignored Amsterdam in his decisions. Revolutionaries battled Royalists in the streets. 

“A house divided cannot stand.” Divided, Amsterdam and the Netherlands were too weak to resist invasion from Revolutionary France. In 1794, the Republic was gone. Trade collapsed, banks emptied, colonies were lost to other imperial powers. In 1810, The Netherlands was a mere province in the French Empire.

Nineteenth-century Amsterdam lacked motor noises and night lighting. It was famously smelly. Life expectancy was 30 years for manual laborers. The city was stuck frozen in time. Power rested in Paris; trade was diverted elsewhere. The population dwindled (below 200,000) as industry and jobs died off. 

In 1813, The end of Napoleon and his empire brought independence and King William I of Orange.* William I took possession of The Royal Palace on Dam Square (built in 1655 as Amsterdam’s town hall; its was the largest administrative building in Europe), which had been seized by the French in  1806. The King neither lived there (the Royal Family lived in The Hague, potentially due to Amsterdam’s unhealthy stink) nor gave it back to the citizens. The King kept it as his residence in Amsterdam, which was declared the national capital (the seat of government is in The Hague).

(* Since 1815, all four kings and one queen had “William” in their names; Queens Juliana and Beatrix are exceptions. The current heir is Princess Catarina-Amalia.)

The city continued to slumber, rejecting the “progress” of the Industrial Revolution, communist calls for uprisings, or mechanical innovations. The train arrived in 1839 and piped water in 1853, but the city sank into decay, its 16th and 17th century buildings gracefully falling apart. The city’s relative poverty and obscurity spared it from the monumental buildings, boulevards and slum clearances shaking Paris, London, and Vienna. (Exceptions being the Rijksmuseum, Central Station, Concertgebouw and the Paleis voor Volksvlijt, which burned down in 1929.)

The city jumped awake in the 1870s, as trade with booming Germany expanded, trade with Dutch Indonesia grew, and South African diamonds fed the city’s ancient industry. Steam-powered trains and ships crossed here and there; lights kept the streets open at night; the North Sea Canal (opened 1876) restored the city’s access to the sea and trade. The new Central Station (opened 1889) cut off the city from the waters of the IJ (officials in The Hague choose its location over local opposition), triggering a cultural change that would include filling in sixteen canals to make way for carriages and trams (and later car parks).

The city’s population grew from 243,000 in 1859 to over 500,000 40 years later. Most new arrivals lived in cheap, poorly built slums. The city administration did not monitor land use. The only “nice” new districts were  built in the Plantage and around the (initially private) Vondelpark. The city’s bourgeoisie and working classes started to blend as workers earned more and rich dressed down. A new middle classes of skilled workers, bureaucrats and managers grew.

Political movements in favor of workers and socialism swept over the city, occasionally facing opposition (and police bullets) from the city’s conservative factions. The city took over private electricity, gas, telephone and water companies. Unions, newspapers and popular education  flourished. The city expanded its neighborhoods (my building dates from 1904), pulled by prosperity and pushed by laws to improving housing conditions.

The Netherlands was neutral in World War I. During the 1920s, political diversity rose and neighborhood differences (and dialects) weakened. Jews, freed in 1825 from their ghettos, educated their children and joined socialist and workers movements. 80,000 Jews (half the Dutch total) composed 13 percent of Amsterdam’s population. In some clubs and districts, they were not welcome but they formed communities in some of the newer residential areas.

Plane-, ship and metal-industries employed many. After a 1921 change in the city’s borders, cheap social housing projects appeared everywhere. (These buildings are still standing, and they were well made.) The city hosted the 1928 Olympics. In 1934, a master expansion plan was published that would guide the city’s development for decades. The unemployed cleared and planted the Amsterdamsebos, which added green space to the city. (We go there to bike, picnic and swim.) Nevertheless, the Depression hit Amsterdam hard. One-fourth of the workforce was unemployed, and their subsidies gave barely enough to eat.

The rise of the Nazis affected the city. Jewish refugees came to Amsterdam. Dutch Nazis (the NSB, or Nationaal-Socialistische Beweging) fought with the socialists and communists. The city’s leaders separated into racist factions. Monne de Miranda, a Jewish alderman with a working-class background who favored cheap housing and subsidized meals, was undermined in the press (De Telegraaf is still quite right-wing) and eventually shipped to a concentration camp where he died (partially due to abuse by fellow prisoners who disliked his politics).

The Dutch planned to remain neutral during WWII. Their Jewish neighbors felt safe. These hopes were dashed by the Nazi invasion on 15 May 1940, the  first time that Amsterdam had been invaded in 400 years. 

At first, the Dutch cooperated with German occupiers, even as Jews lost their rights and trouble makers were fired or imprisoned. The February Strike of 1941 was significant as being the only strike by non-Jews in defense of their Jewish neighbors in Europe, but German violence and Dutch government collaborators ended it.

Could they (should they?) have done more? Mak makes a good point: 

One feels somehow dishonest when writing about this period in Amsterdam’s history, more so than with any other. It is because we know the outcome, whereas the people of Amsterdam did not. It is a difficult time to visualize. A permanent insecurity dominated life, and every decision had to be made against a background of rumours and confused assumptions. This was true not least for the Jewish community… almost nobody at this stage had any idea what was hanging over their heads. In May 1940, for instance, there was considerable pressure from various sides for the destruction of Jews’ registration cards for safety’s sake, but the Jewish community’s leaders adamantly refused…

People who have lived undisturbed for generations, who have not experienced a pogrom for centuries, simply lack the imagination with which to picture the sort of evil that lay in wait for them. Nor can it be denied that the German occupiers displayed great cunning. What appeared at first to be little more than mild harassment turned out to have been but a prelude to the Final Solution.

The displacement of Amsterdam’s Jews was not achieved in a single action but by a process of uprooting, intimidation, marginalization and isolation that was established step by step. The chief means of this was not physical violence, but the insidious power of bureaucracy. With their obfuscating use of language – “work deployment” was the euphemism for deportation to Auschwitz – the persecutors lulled their victims, and often themselves, into a false sense of security. The Germans and many of the Dutch collaborators saw themselves mainly as transport agents transferring a certain product, in this case Jews, from A to B. (pp. 258-259).

Systematic deportations began in June 1942.  (Anne Frank’s family went into hiding on 6 July 1942.) 

Nevertheless, there was a certain bloodless efficiency with which the Dutch condemned their fellow citizens:

…countless Walter Stiers [“just doing his job”] aided the Germans in their discreet mass slaughter. Dutch Railways arranged, without the slightest objection, special night trains to Westerbork and to the German border, for which the bill was paid punctually by the occupiers…[Just last week, over 7.000 victims filed for compensation from the national rail company.]

Other municipal services also carried out the work as though nothing out of the ordinary was happening. Municipal clerks stamped Js on identity papers, impounded Jews’ radios and bicycles, and sent the Jewish unemployed to labour camps. Almost everybody took great care to hand in his Declaration of Aryan Descent. Amsterdam University collaborated without protest by dismissing Jewish teaching staff and by asking students to sign a declaration of loyalty to the occupiers…

The Germans never posted more than 60 officers in Amsterdam, even at the height of the persecution of the Jews. The rest was done by the Dutch. Of the total number of men deployed in the big raids, about half were ordinary Dutch policemen. Moreover, after October 1942, the Dutch police were ordered to raid Jewish houses on their own, instead of under the leadership of the Sicherheitspolizei or the SS. The majority of these officers did just that, and more: they were so thorough that when they found Jews in a flat for which they did not have an arrest warrant, they took them anyway. (pp. 265-266).

Some Dutch sabotaged Nazi programs, but they were not  numerous:

The Dutch still have a tendency to talk up the extent of their resistance to almost mythical proportions. In reality, proportionally more Jews were deported from the Netherlands than from any other Western European country. As Adolf Eichman was to explain later, the persecution ran “like clockwork”. After the war, an official investigation found that almost half a million Dutch men and women had collaborated with the occupying forces in one way or another…this phase of Amsterdam’s history offers little scope for self-congratulation. Most Amsterdammers were anything but resistance fighters. (pp. 267-268). 

Thus, we should not be surprised that the Dutch can sometimes be blind in taking moral decisions. The Dutch failed to protect 8,000 Bosnians from Serbian murderers in 1995, for example.

Mak finishes his history of WWII with stories of the heroes who took chances, often fatal. Wallie van Hall, the Resistance Banker, helped steal, forge and otherwise source funds to help members of the Resistance (which grew stronger and more popular as the Germans targeted non-Jewish Dutch). In Jan 1945, van Hall was caught and executed by Nazis acting on information collected from a traitor (the man was caught, tried and executed by the resistance).

During the Hunger Winter of 1944-45, thousands of Amsterdammers froze and starved while Resistance leaders bickered over who would hold power after the Germans were gone. Karel Broekhoff, the “militarist” candidate for Police Commissioner, beat the “democracy” candidate with promises to protect collaborating police from retribution. He didn’t serve long before he was admitted to hospital, where he died in June 1946. In 1994 (just before this book was published), researchers found evidence that Broekhoff began collaborating in 1935 with the Gestapo. (He wasn’t always helpful to them, a double-cross that probably saved lives and protected his secret.) Broekhoff’s replacement was most well known for proposing to fill canals to make space for cars.

Canadian forces liberated Amsterdam on 5 May 1945. With one exception (Germans who fired into a celebrating crowd on 7 May), life improved immediately. 

Not surprisingly, conservatives immediately worried about too much sex and celebration:

Amsterdam sought to impose some order on all this. There was indeed a moral problem, but it did not lie with the young or with the girls. If one simply considers the statistics, it is simply a miracle that so few Amsterdammers perished during the Hunger Winter. The reason is simple: during the last months of the war, the people of Amsterdam cheated, deceived and stole on a grand scale. They pillaged and participated in the black market. In order to survive, even the most respectable citizens had to do things that they would rather not remember (p. 284). 

As a result of the backlash, members of the Resistance lost standing and former collaborators were forgiven and left in power. Despite massive political support for Communists and Social Democrats, the City Council stuck with 1939 morality and rules. People were told to marry, work, pay  taxes, and “doe normaal“.

The city was rebuilt, transport and trade revived, and housing expanded to meet demand from new arrivals and locals who wanted more personal space. The average flat went from 4 occupants in 1917 to 3 in the 1950s to 2 in 1994 and 1.84 in 2020. New housing promised modern and stylish, but delivered cheap and plain. Rising incomes allowed people to buy bikes, then scooters and cars. Amsterdam, like many rebuilding cities, decided that the future lay with cars. Thus, old districts were ripped down for widened roads, canals were filled in for car parks, and “visions of the future” meant  abandoning many of the city’s human elements.

After 20 years of discipline, the backlash arrived with flowers in its hair. The Provos [after provoceren, to provoke] were younger people who wanted more from life than a paycheck. They were pro-bike, anti-(tobacco) smoking, and anti-consumerism. They tapped into Amsterdam’s culture of rejecting controls, collaboration, and doe normaal. The Provos had weekly fights with the police, each using the other to build support. Journalists wrote about the events; politicians adopted Provo ideas into their platforms:

…the Provos had the genius to bet on two horses. They pointed out the impossibility of a situation in which wealth and opportunities for personal development were rapidly increasing, while the moral attitude supporting this remained as parsimonious, prudish and authoritarian as it had been in the 1930s. At the same time, however, they also poked fun at the “cream-whipping masses”, tapping into the anti-progressive cultural undercurrent. This situated them exactly at the crossroads of two distinct developments that were extremely topical during the 1960s: on the one hand, they were the catalysts of progress, and on the other they were the romantic conscience of the nation (p 292).

The Provos launched “White Plans” for bikes (against cars), against pollution, for women’s liberation, for cheap housing, and against police brutality (topical!). In 1966, riots interrupted Princess Beatrix’s wedding (to a German who had served in the Wehrmacht). Other protests (to preserve holiday pay, allow cannabis, strengthen women’s rights, etc.) shifted the city’s political balance, but these victories were perhaps pyrric. The city’s center was losing families and businesses, gaining junkies trading stolen bikes for smack, and destabilizing as squatters (krackers) invaded empty buildings. These losses were magnified by the loss of Jewish residents and trade links broken by Indonesia’s 1956 independence.

An attempt to build the City of the Future in Bijlmer completely backfired. Instead of high-rise garden city, the area was settled by poor migrants from newly decolonialized (1975) Surinam who could not live safely in a vast anonymous area built for architects and planners rather than people and community. (Read Jacobs’s 1961 Death and Life of Great American Cities to understand the failures.) The Bijlmer debacle was a turning point against replacing neighborhoods with expressways. Opposition to “redevelopment” of Nieuwmarkt stopped a road but not the metro (still a sore topic for many Amsterdammers). Sadly, the squatters who had attracted much support managed to lose it through violence, bickering and not really having a plan or goal. 

In the mid-80s, Amsterdam was divided, dirty and losing economic and demographic power. The population dropped from 868,000 in 1964 to 676,000 in 1985.

Mak’s history ends in 1994, but he ends the book with an enduring observation: 

This ongoing battle [between idealistic Provo’s and conservative administrators] was in principle a confrontation between the “romanticism” and “functionalism”. Functionalism regarded the city as an organism that had to fulfil certain goals. The romantic ideal considered the city as an ensemble of citizens, a collective, with a distinct history and personality (p. 306).

By the end of the 1990s, Amsterdam had found its balance between these two opposing forces. The city grew more attractive as a place to live and work, and it continued on its centuries-old path of sustainability, i.e., the ability to carry on, indefinitely, into the future. Climate change, gentrification, refugees, and coronavirus are just a few of the challenges that Amsterdammers now face. These challenges will force change, but — if  there’s one thing we can count on — Amsterdam will find a way.

In conclusion, I strongly recommend this entertaining, well-written book. My only quibble is the way Mak occasionally jumps decades forward or backwards, but that bug for me as reviewer is a feature for you the reader. Five Stars.

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I met Diego Gambetta back in 2005 when I was a student at a summer school on organized crime. I am still interested in crime and corruption, so I bought this 2009 book awhile back.

So what are criminal codes, and how do they work? At their best, they allow communicating and signalling in a way that non-criminals do not notice, wanna-be criminals cannot counterfeit, and real criminals can understand easily and accurately.

Good codes might be a tattoo that indicate what gang you’re in, a nickname that friends can use but the law cannot, or sexual slang that sounds like a grocery list. In many cases, codes are associated with criminals or terrorists, but they are also used by forbidden groups (gays, prostitutes, activists) whose existence is illegal or forbidden.

Gambetta is a smooth, fluid writer. His elaborate prose sometimes seems too measured for the topics, but his citations, caveats, and hypotheses provided enjoyable, cautious perspectives on the forms behind the shadows.

Chapters are organized into two parts: Costly Signals (e.g., putting yourself at risk to gain trust, fighting for respect, or self-harming to empower) and Conventional Signals (“Fat Tony”, [the organization that shall not be named], and messy dressing).

Here are some notes I made as I read…

• Prison time is valuable for criminal skills and contacts, but time also strengthens one’s reputation as someone who “has been inside.”
• There’s no honor among thieves, so they find creative ways to build trust. One is incompetence, i.e., being gangster enough to provide protection for 10% of revenues but not smart enough to take over your business.
• Corrupt power-brokers promote the most incompetent to show their power surpasses objections. Caligula appointed his horse as senator. Trump hired his son-in-law (and many other incompetent scoundrels).
• KGB operatives had experience laundering money abroad to fund shell companies pursuing political, economic or military goals. When the USSR fell apart, ex-KGB officers (including Putin) used their skills to entrench their power and wealth. (Listen to this podcast I suggested last month.)
• If someone knows you have broken a law, then they have power over you. Italy has over 100,000 laws (Germany has 6,000) so Italians have a lot of power over each other. That power can ensure conformity or good behavior. It can also help people evade prosecution.
• Prison fights increase when prison populations have high turn-over and few opportunities to communicate. “Lifers” have time (and reason) to establish order and reduce violence. A jail of itinerant young men will have many fights, as each new arrival needs to be “put in place.”
• Women fight more than men.
• Many threats are bluffs. Prisoners want rank, not injuries. Rape threats and robberies are often directed at rankings.
• If you do get in a fight, then fight to win, or suffer the long-term consequences. A weaker reputation means abuse.
• Here, I was annoyed that prisoners were fighting instead of organizing to overcome authorities and escape. Then, Gambetta explained how Polish prisoners organized themselves to improve their conditions. They did not escape, but ex-cons can use their organizational skills outside to become bigger and badder.
• Psychologists and civilians assume self-harm means self-hatred, since many people think the goals of life are maximum happiness and minimum pain. Self harm can deliver gains — in attention, protection, or respect from others afraid of “that crazy mothafucka.”
• Mafia are very careful about their body language. A wrong signal can get someone (even the signaler) killed.
• Gays don’t really use colored handkerchiefs to advertise sexual preferences.
• Underworld types will use a signal until the general public catches on, then it’s abandoned to posers (who occasionally get killed over confusion about the legitimacy of their signaling).
• Trademarks retain customer loyalty and pricing power. Heroin stamps mattered on the East Coast of the US because users bought white powder. On the West Coast, “tar” heroin was easier to identify. Stamps are easy to counterfeit, so gangs either switch stamps quickly or kill anyone using their mark. 
• Mob dads are proud when their sons are inducted into another gang. They prefer an outside confirmation of quality over nepotism (unlike Trump). “The Godfather” got this wrong as “families” are not usually made of blood-relatives but those worthy of becoming “men of honor.”
• Most of the book focusses on the Italian (and American) mafias, but Gambetta includes examples from prisons, Russia, Japan, and a sprinkling of European countries. I just heard a podcast explaining how law enforcement has trouble decoding minority languages, which also means that scholars have a hard time learning about the criminals that use them. Even so, I would have liked to hear more about the Latin American underworld, which is probably more violent (in murders) and successful (in revenue) than Italy’s mafia.
• When a family grows larger than the Dunbar number (~150), then they need safe ways to identify each other. The safest way for two wiseguy strangers to meet is to find a made man they both know, who can then introduce them.
• It’s hard to jail “Ciapudda” (Onion) as a gang boss if the guy you’re holding is named Salvatore Bondino.
•  Gangsters love to see themselves in movies. They adapt habits (and strategies) from movies. If they are dangerous and nasty in movies, so much the better: It’s easier to intimidate the public, and gangsters make easier money from “protection” than they do on drugs, gambling or prostitution.

My one-handed conclusion is that this book is a fun read for anyone who wants to think about communication — or start a gang. Five Stars.

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This is a very short review for a very good book. My review is short because the 2015 book reads more like a fast-paced thriller than the  non-fiction catastrophe it documents.

The author is Bill Browder, an American-born, British-based investment banker who got rich investing in the chaos of 1990s Eastern Europe and Russia. In many cases, he and his team got rich by buying shares in companies that were not as badly managed as others assumed. In other cases, they exposed corruption and catalyzed reforms that improved company governance.

Those early stories form the first half of the book. The second half tells a gripping, surreal and tragic story of how Browder and his team were punished for crossing lines laid down by Vladimir Putin, his cronies, and the corrupt officials in his government. The details do justice to the old claim that Russia is “a riddle, wrapped in a mystery, inside an enigma.” They also show that Russian is run by thugs who will lie, torture and murder anyone standing in the way of their pillaging of businesses, government assets, and pretty much anyone they feel like exploiting.

Remember that Trump is a big fan of Putin. Americans are lucky that their government still holds Trump back from killing his critics — something that Putin’s government does not do. Hundreds of journalists have been killed during Putin’s reign. (Trump said it was OK for journalists to die in Russia.) Businessmen, politicians and others opposed to Putin’s dictatorship have also been assassinated.

The pivotal element in the book — and the reason that Browder redirected his life from investment banking (he’s still wealthy) to human rights — is the illegal arrest, torture (for 358 days) and murder of Sergei Magnitsky, a Russian lawyer employed by Browder who uncovered a $230 million tax fraud perpetuated by Russian security officials. Magnitsky’s torture and murder by “law enforcers” illustrates how the “rule of law” does not apply to those in power or protect ordinary Russians.

Sadly, the only good result of Magnitsky’s murder is the Magnitsky Act, a law passed by the US Congress in 2012 that names and sanctions corrupt and violent members of the Russian government. (The Act was expanded to corrupt individuals in other countries in 2016.)

Putin has asked Trump and Trump’s personal cronies to undermine the Act, but Trump’s initial support fell away as soon as the idea reached the public.

In sum, I strongly recommend this book to anyone who wants to see the world Russians live in — and the America Trump wants. Five stars.

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Mark Miodownik’s 2014 book is another in the most-welcome genre of “pop science” — a genre of books that explains scientific ideas in clear and comprehensible prose.

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I read this 2019 book at record speed due to its breezy (“magazine”) tone and discussion of one of my favorite passions: reusing old stuff.

A few years ago Adam Minter wrote Junkyard Planet about the trash trade, but many readers told him about how they reused stuff rather than about their trash. Their passion led to this book (subtitle: Travels in the New Global Garage Sale) on the second-hand goods that are exported by businesses and non-profits in the US and Japan, via processors in India, to various Asian and African countries.

Perhaps the most important fact I learned is how little we know about the secondhand-world. Data is missing due to the “used” nature of the goods, their missing objective value (“one mans trash is another man’s treasure”), and the informal trade of “worthless” things among some very poor people.

That’s the summary. Now I will list my notes and highlights to summarize what I learned and why you might want to read it.

• Part of [North] Americans’ problem with having “too much stuff” can be traced directly to the huge amount of personal space that Americans enjoy. My girlfriend and I share 60m2 (600 square freedom units), which means that I often throw away (or donate) old stuff as new stuff comes in. Americans with garages, mini-storage, etc. tend to buy too much and definitely throw out stuff they’ve barely used.
• Governments “like” new stuff that can be taxed and added to GDP. That means they may disfavor reuse saves people money and reduces the environmental harms from production and disposal.
• Rich people can choose to be minimalists. Poor people are involuntarily so.
• Producers respond to our desire for more, new, cheap by reducing quality, which means we might not care for the goods but also reduces resale value. These dynamics put us another step away from a circular economy (aka, “Spaceship Earth”) and towards a throughput economy that increases resource use and environmental damages.
• The move from handmade and hand-me-down to fast fashion and psychological obsolescence means that people are more careless about their stuff, which drives the circle of high-speed, low quality consumption around once more.
• “Marie Kondo… is addressing the problem of an abundance or excess of stuff, which is a problem only if you’re of a certain class and can afford to have an abundance and excess of stuff. [S]he doesn’t actually address the consumption side of things… how and why stuff ends up in your home in the first place” [loc 659].
• Goodwill Industries began as a business to help underemployed people repair and refurbish used stuff for reuse. That model has changed to hiring professional managers to sell decent quality used stuff and then using the revenues to help the poor get jobs outside of Goodwill.
• The global trade in used stuff has been changing as China produces cheaper new things that grab people’s attention, further undermining reuse. “Between 2000 and 2015, global clothing production doubled, while the average number of times that a garment was worn before disposal declined by 36 percent” [loc 985].
• In Japan, there are businesses that will buy used stuff, so they get higher quality. In the US and Europe, old stuff is donated so people do not take care of it.
• The value of used stuff can rise and fall based on trends (e.g., typewriters and hipsters).
• “The democratization of stuff that began with the industrial revolution is quickening. In the nineteenth century, household objects that once held value—like dishes, glassware, and solid-oak furniture—began to lose it. By the early twentieth century, middle-class consumers could afford multiple sets of dishes and changes of clothes. Individuals further down the income ladder were still excluded from the new and fashionable, but thanks to the excess thrown off by wealthier consumers, they could participate via secondhand” [loc 1548].
• India, Mexico, Nigeria and Rwanda prohibit trade in used goods, which helps local producers but harms consumers and results in smuggling (and corruption).
• The secondhand world is ruthless about costs and profits, which maximizes trade-value-added as well as tonnage dumped in landfills: “more than half the apparel that arrives at Goodwill is unsold” [loc 2084]. (Japan’s landfills are expensive compared to the US, which means there are stronger incentives to reuse goods.)
• African buyers of bales of used clothes are businesspeople, not idiots:
  ‘“Do people send garbage? Not if they want to be paid. They learn what we will take. We are not a dump.” That’s an opinion at odds with fashionable Western perceptions and critiques of the secondhand-clothing trade. Instead of viewing it as an exchange of goods driven by African demand, Western critics tend to view it as an exchange between the savvy and the ignorant’ [loc 2375].
• “In fact, by easing consumer concerns over the environmental impact of consuming, and lowering the overall cost of raw materials (recycled raw materials compete directly with virgin), recycling can actually contribute to more consumption. There’s a reason that “recycling” is the third “R” in the familiar “Reduce, Reuse, Recycle” environmental mantra: it’s the third best (or worst) thing you can do with stuff. When a consumer brand like Coca-Cola advertises the recyclability of its products, it’s not promoting sustainability. It’s helping sustainably minded consumers assuage their guilt” [loc 2857].
• Baby-car-seat manufacturers in the US add “expiration dates” to their products and tell parents to buy new (if they want their kids to live!) without any evidence of safety problems. They just want to sell more seats. (This is fucked.)
• Quality depends on the buyer’s goals. “Rather than design for the durability valued by business, most consumer appliance manufacturers will work on finding a way to ensure an attractive sticker price”… and thus build lower-quality, cheaper goods [loc 3202].
• Consumers do pay attention to quality but manufacturers can lie about it. (I have a few “100% cotton” shirts that are poly-cotton.) What to do? “Companies must be transparent about the lifespans of their products and attach a sticker or tag (physical in stores, and virtual for online) to their products informing consumers of just how long they’re projected to last, based on verifiable testing” [loc 3278].
• “Right to repair” laws should be enacted everywhere. (I tossed out an old dishwasher with a leaking hose because I could not access the back panel. Since it would cost €100 to get a service person to open the panel and €30 for an official plastic hose, it was more cost-effective for me to buy new.)
• The media loves stories about e-waste dumping in Africa or Asia, with stories illustrated by children burning bundles of plastic wires. The reality is that most goods shipped over the ocean have value (someone pays for shipping plus what’s in the container) so those fires only for the least valuable dregs of a sophisticated reuse and refurbishment industry. “Implicit in these editorial choices is the assumption that Ghanaians are incapable of doing anything with foreign technology other than burning it. That’s a failure to see the computer workshops in Agbogbloshie and around Ghana. And in many cases, it’s a failure to recognize that the developed world has something to learn from the developing world about managing stuff” [loc 3897].
• Waste colonialism is when rich-country politicians, rather than traders in markets, decide what’s “waste” (and thus prohibited from export) or not: “Whether acknowledged or not, debates over whether certain countries and peoples can import or export “waste” are, at their core, debates over whether certain racial groups should have access to material goods, and whether they should be required to use and dispose of them in ways that richer, usually white countries prescribe… As a white U.S. citizen… but also a business journalist with a career spent covering the global recycling and reuse industry. In that capacity, I’ve learned that ignorance, racism, and other prejudices are among the most intractable barriers to the development of globalized secondhand and recycling” [loc 3985]. Let the market work!

I enjoyed this book immensely for its confirmation of what I knew, its corrections of what I misunderstood, and its strong support for less consumption, quality repairable goods, and a vibrant market in used goods. I recommend that you read it but more strongly recommend that you examine your own consumption:waste ratio before buying anything this holiday season 😉

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