Review: Bad Blood

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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Review: Bitcoin Clarity

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


Here are all my reviews.

Review: Amsterdam: A brief life of the city

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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Review: Codes of the Underworld

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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Review: Red Notice

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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Review: Stuff Matters

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.

Miodownik’s insights into the abundant materials surrounding us (glass, steel, plastic, etc.) really help you grasp the miracles that scientists, engineers, entrepreneurs and geeks have brought to our lives. The paradox is that “stuff” costs us so little that we often forget its tremendous value. (One of Miodownik’s funnier lines guesses at what would happen if we thought more deeply about the value of concrete: We’d be “treated as lunatics if we spent the whole time running our fingers down a concrete wall and sighing.”) This book highlights those values while explaining how we got access to the stuff and the ways in which various stuff has transformed human existence.

Indeed, humans trace their own history in terms of access to stuff. From the Stone Age, Bronze Age, and Iron Age, we have moved into the Hydrocarbon Age, which may be — if the negative impacts of fossil fuels arrive as predicted — the last age of positive improvements before the cycle reverses, and we put our energies into defending and withdrawing rather than building and expanding.

Each chapter in the book covers a different material, so I will (as usual) transcribe and expand on the notes I made as I was reading.

Ceramic: Incredibly hard, brittle substance that we continue to use for dishes, sinks, etc. when less fragile materials are available — probably because of its delightful aesthetic.

Steel: Carbon alloyed into iron makes a stronger material because different-sized atoms mix into a stiffer crystal-latticework . Carbon does not stiffen tin or bronze, so it was a surprise when “overworked” iron came out of the forge, stronger. The science behind that surprise took centuries to understand, which is why swordmakers surrounded themselves with myths and secrets. Stainless steel has a “transparent protective layer of chromium oxide that makes the spoon tasteless, since your tongue never actually touches the metal and your saliva cannot react with it” [p 19].

Paper: Cheaper and easier for writing than animal skins (e.g., vellum), paper’s killer technology was the “codex…—a stack of papers bound to a single spine and sandwiched between covers—… that it allows for text on both sides of the paper and yet still provides a continuous reading experience… [T]he advantage of the codex, with its individual pages, is that many scribes could work on the same book at the same time, and after the invention of the printing press many copies of the same book could be created at the same time” [p 30].

What is it about paper that allows words to be expressed that might otherwise be kept secret? They are written in a private moment, and as such, paper lends itself to sensual love—the act of writing being one fundamentally of touch, of flow, of flourish, of sweet asides and little sketches, an individuality that is free from the mechanics of a keyboard. The ink becomes a kind of blood that demands honesty and expression, it pours on to the page, allowing thoughts to flow [page 50].

Concrete: A mix of cement and stones that will be weak if too little or too much water is added. Cement is made by breaking and then baking rocks rich in calcium carbonates and silicates at 1450C, at which point a calcium silicate ash, or cement, is available. The Romans did not have the “firepower” to make cement, but they were able to mine natural cement from volcanic deposits near Naples and build bridges, domes and arches — even underwater (cement still sets underwater). The Romans could only use  concrete when it was “compressed” (pushed down). We had to wait until 1870 before building concrete structures that would resist bending, and that was possible because steel embedded in concrete would expand and contract at the same rate as the concrete that it now “reinforced.” One fascinating cement product is “cement cloth” that can be used to make robust shelters.

Chocolate: Dark chocolate is made by separating cocoa nut power and cocoa fat and then recombining them in the right ratio: “Through sheer ingenuity, we have found a way to turn an unpromising tropical rainforest nut that tastes revolting into a cold, dark, brittle solid designed for one purpose only: to melt in your mouth, flood your senses with warm, fragrant, bittersweet flavors, and ignite the pleasure centers of the brain” [p 77].

Aerogel: Watch this.

Plastic: Although plastic was the material of the future in 1967 (“Plastics“), it was first put into use in photography in the 1880s! Plastics then went on to compete with wood (Bakelite), silk (nylon), and flesh (silicone). Plastics also allowed for novel uses such as vinyl albums.

Glass: First discovered where lightning had struck sand, glass came into wider use once glassblowing was discovered in Roman times. Stained glass, larger windows and mirrors came into use over a thousand years later, as techniques for forming molten glass into sheets evolved. The arrival of cheap crystal glass in Bohemia in the mid 1800s set off a revolution in beer brewing, as people shifted from “muddy” beers (think Guinness) to light, golden Pilsners (also first brewed in Bohemia).

Carbon: Diamonds are strong but hard to form into shapes. Graphite can be spin into fiber and woven, mixed with epoxy, to make carbon fiber composites.

…and then there is the scale on which we experience these materials:

The miniature scale combines the atomic structures, nanostructures, microstructures, and macrostructures into a structure that is just visible to the naked eye. This is the scale of a piece of thread or a strand of hair, the scale of a needle and the line width of this font size. When you look at and feel the grain of wood, you are seeing and feeling the combination of all these structures at the miniature scale. This combination gives wood its characteristic feel of being stiff but not too hard, of being light and warm. Similarly, ropes, blankets, carpets, and most importantly clothes are made at this scale, and the strength, flexibility, smell, and feel of these materials are the result at this scale of the combination of all structures embodied within them: a thread of cotton may look superficially similar to a thread of silk or Kevlar, but it is the hidden detail of their atomic-, nano-, micro-, macro-, and miniature structures that makes the difference between something that can protect against a knife or feel as smooth as cream. It is at this scale that our sense of touch engages with materials.

[snip]

Because of this strong connection between the materials and their social role, the materials that we favor, the materials that we surround ourselves with, are significant to us. They mean something, they embody our ideals, they give us part of our identity… designers and architects consciously use these meanings to create clothes, products, and buildings that we like, that we identify with, that we want to surround ourselves with. In this way the meanings of materials are reinforced by our collective behavior and so take on a collective meaning.

I highly recommend this book (5 stars) as a fun and engaging tour among the materials that enrich our lives. Read it.


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Review: Secondhand

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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Review: The Invisible Hook

I read Peter Leeson’s The Invisible Hook: The Hidden Economics of Pirates a few months ago, but now I have time to write out some thoughts on his entertaining and educational book.

Leeson is a professor of economics at George Mason University, where the default ideology favors free markets and the norm of public engagement means that many professors are active with blogs, podcasts, and popular books.

Leeson’s Hook fits squarely in that tradition by explaining how pirates managed to plunder without fighting each other or getting caught.

Leeson’s central question is: “How can pirates cooperate without appeal to the formal authorities that most of us rely on to maintain order and promote cooperation?”

Related: The rules prisoners enforce among themselves.

The short answer is: By establishing institutions (formal rules and informal norms) that reward cooperation and punish defection. These institutions, Leeson writes, bring wealth to pirates as if “guided by an invisible hook” — a rephrasing of Adam Smith’s famous observation — that investors benefit others as a side effect of pursuing their own profits, i.e., 

He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.

As an interesting footnote, consider that the “golden age” of piracy (1716-1726) took place before Smith discussed the invisible hand. I don’t think he was thinking of pirates, but here’s yet another example of academics “discovering” a phenomenon that’s been obvious for ages to normal people.

Contextual preamble done. Now let’s get to my notes on the book:

  1. Many pirates had been abused as sailors on merchant ships whose (distant) owners gave officers leave to do as they pleased. The resulting cheating and bad treatment (under the protection of law and contract) led many sailors to abandon ship as soon as they could. Pirate ships were “cooperatives” that were owned by their sailors and managed under pirate articles that allowed sailors to fire officers who mistreated them. These “democratic checks and balances” set expectations on officers’ behavior and protected sailors from abuse.
  2. Pirates flags signaled mercy on surrender but death for resistance. Given their superior firepower, pirates would win most battles, but the best battle was an early surrender. Captains often surrendered to pirates because pirates wanted to steal (the boat owner’s) cargo, not kill them.
  3. All sailors agreed to the ship’s rules before departure. Changes in the rules required unanimous agreement, which ensured that nobody would be (immediately) disadvantaged by changes.
  4. Pirates separated power a century before governments did. The captain would decide where to go and how to battle, but the quarter-master was in charge of arms, discipline, and dividing loot.
  5. Pirate democracy, likewise, predated America’s revolutionary democracy by a century. The crew voted for the captain and quartermaster, and could vote them out for abuse of power (or any reason). The worst captains were turned over to the authorities, who would hang them.
  6. Near equality on pay also reduced friction. The captain’s quarters were not private. The captain and quartermaster usually received two shares of loot, compared to one for ordinary sailors. The surgeon and carpenter also received two shares, due to their important roles in keeping sailors healthy and the ship at sea, respectively. That said, nothing was distributed until casualties of battle were compensated. This “insurance” maintained morale in a deadly trade.
  7. Pirates gossiped. Everyone knew which ships were well or poorly run. Given the norm of joining boats for one voyage at a time, pirates would shift to better boats if they could. Such freedom meant captains competed for crews, resulting in Tiebout competition that raised the standards for all pirates. I lean on the same dynamics with my idea of giving everyone on the planet a second passport, which would improve life for citizens everywhere. (Think Uigurs in Chinese concentration camps, Kurds in Turkey, Venezuelans, et al.)
  8. Pirates made rules to reduce “negative externalities,” i.e., prohibiting women, drinking, and fighting on board, or smoking below decks (where powder was stored). These rules kept the crew united in its mission to plunder other boats and not blow up, respectively.
  9. Pirates were (relatively) non-discriminatory among each other. They treated other personalities and races equally. They did not force captured prisoners to join them, as that would violate the basic norm of voluntarily agreeing to abide the ship’s constitution. Pirates did not (collectively) keep slaves on ship very often, as the benefit of “free labor” was often outweighed by the cost of losing their boats or lives to a slave’s betrayal. They either invited captured slaves to join as free crew or (more often) sold them at their next port of call.

Leeson’s book gives an entertaining insight into the world of pirates — and the economics under which they lived and prospered (until authorities changed rules and applied far more effort into capturing them around 1730). 

My one-hooked conclusion is that that anyone interested in economics (or piracy) should read this book (rather than Freakonomics or Doughnut Economics) because it’s fun and thought-provoking. I give this book five stars.


Here are all my reviews.

Review: Through the Language Glass

I’m a language geek and borrowed this 2010 book by Guy Deutscher from a friend.

The book is interesting but poorly edited too long. Deutscher takes too much room for his own work, i.e., over 100 pages on words to describe color (more below) but only 20 pages on the language of gender. 

This review will therefore record my summary takeaways, for those readers who have better things to do with their time 😉

  1. All languages use different means to convey ideas at what turns out to be the same pace. Thus, they may differ in verb endings or placement, noun complexity, etc., but they more or less work with the rate at which we can hear and understand speech. Languages are not equally complex, but they can convey the same information.
  2. Languages spoken by small groups can be very complex (e.g., a single word for “your brother-in-law’s father”) as a reflection of complex social relations. In “mass languages,” words and structures are simpler, to help strangers construct shared perspectives. 
  3. A single word might be translated into one of several words in another language that does not use relation to convey meaning. Some languages have groups of words to explore nuances (the famous example of eskimos and snow). 
  4. The most important colors are black, white and red. Other colors are added to our vocabulary (it seems) as our need to discriminate among them. The sky has always been blue, but the color blue has only come into use as we began to make and trade blue objects.
  5. After 150 years of debate over the naming of colors, it turns out that cultures with a limited range of colors are not “color blind” as much as “color indifferent.” They can tell the differences between unnamed colors but don’t bother to differentiate in everyday life. This phenomena is the opposite of eskimo-snow vocabulary (or academic jargon defining obscure ideas), but similar to the practice of counting “1, 2, many” in some cultures.
  6. Perhaps the easiest way to show that limited vocabulary does not indicate limited thinking is when someone switches from one language “lacking X” to another where they say “X”. Unspoken doesn’t mean unknown.
  7. Languages gain and lose words all the time. If gains exceed losses, then the vocabulary is growing. If the word falls out of use, then it disappears forever. More people speaking the language can reduce word count as they settle on more basic words that more people can understand.
  8. Academics have misinterpreted languages for centuries. Languages (and cultures) have been maligned by outsiders imposing a “Latin grammar structure” on the local language, or mistaking someone’s poor use of their non-native tongue for stupidity in their native tongue. German or French philosophy cannot be traced to their native grammars, nor can they be superior due to their expression in a “perfect” language (a common claim).
  9. “Languages differ in what they must convey not in what they may convey.” We can say “Dr. Jones” without knowing if the doctor is male or female, but we must know gender if we want to use “Mister” or “Miss.”
  10.  The original use of “gender” referred to “type,” e.g., humans, big things, small things, collectives or liquids. Gender became associated with male and female because European languages (and the scholars who speak them) were not aware of how other cultures grouped words.
  11. That said, male or female words can influence how one thinks of an object, e.g., the French associate a fork (la fourchette) with feminine qualities while Spaniards use masculine words when thinking of el tenedor.
  12. Some languages (especially among Aboriginals in Australia) use cardinal coordinates (N, S, E, W) to refer to objects (“my western hand”) whereas most of us use egocentric coordinates (“my left hand”). Both systems work, but mixed conversations can be confusing.

My one-handed conclusion is that all languages are useful, but some are harder to learn than others, often due to their distance from one’s mother tongue. I give this book three stars.


Here are all my reviews.

Review: Travel as a Political Act

Rick Steves is perhaps the most famous American giving advice on traveling abroad. I have never used his guidebooks (thinking that they were perhaps too generic for my “advanced” backpacking skills), but I just bought one for Italy.

This book (subtitle: “How to leave your baggage behind”) is not a guide for tourists but a guide for understanding other countries and cultures. What I especially enjoyed was how Steves clearly explains foreign ideas in terms familiar to Americans. I would have loved to have this book as a response to the many people who have asked why I travel and what I’ve learned.

This book very easy to read, so it’s also a good one to take on vacation. (These data are a few years old but they show that 40 percent of Americans took zero vacation years in the prior year while only 12 percent vacationed outside the US.)

But let’s get to some interesting parts of the book:

  1. “Travel as a political act” refers to the ways in which we might import new ideas and perspectives from abroad back to the US:

     We can learn more about our own country by observing other countries—and by challenging ourselves (and our neighbors) to be broad-minded when it comes to international issues. Holding our country to a high standard and searching for ways to better live up to its lofty ideals is not “America-bashing.” It’s good citizenship (loc 74).

  2. Travel is also good for YOU. Travel has changed what I eat, how I commute, what I read, and so on. My revelation is not unique. In the 14th century, Ibn Battuta wrote that “traveling leaves you speechless, then turns you into a storyteller.” For Steves, “travel has taught me the fun in having my cultural furniture rearranged and my ethnocentric self-assuredness walloped. It has humbled me, enriched my life, and tuned me in to a rapidly changing world” (loc 64).
  3. Steves and I agree that travel helps us understand our own countries better, and we both lament the FUD that our house-bound neighbors espouse. For him, the lesson was to protest war and push for cannabis legalization. My lesson was to accept that Dutch culture was better for me in some ways. Sadly, most people are too afraid to travel or question the status quo:

    As the news becomes more sensationalized [Congress repeals the FCC’s Fairness Doctorine in 1987], the viewer becomes more fearful. And eventually, all that fear metastasizes into the political realm. In the long run, the transformation of news from information to entertainment—making us feel that we’re less safe—threatens the fabric of our democracy…and, ironically, actually makes our country less safe (loc 385).

  4. I agree with Steves that we could bring far more security to ourselves (and the world) by spending money on aid instead of bombs, but corporate war mongers mean that the United States American taxpayers spend $600 billion on the military and 15-times less ($40 billion) on all international affairs. I am sure that the “war on terror” would disappear if we shifted  7 percent of the military budget to doubling the international budget.
  5. Steves captures the tradeoffs for living in “socialist” Europe (loc 1093): 

    European housing, cars, gadgets, and other “stuff” are modest compared to what an American with a similar job might own. It’s a matter of priorities. Just as Europeans willingly pay higher taxes for a higher standard of service, they choose less pay (and less stuff) in exchange for more time off. Imagine this in your own life: Would you make do with a smaller car if you knew you didn’t have to pay health insurance premiums? Would you be willing to give up the luxury of a cutting-edge TV and live in a smaller house if you could cut back to 35 hours per workweek and get a few extra weeks of paid vacation? Would you settle for a 10 percent pay cut if you knew you’d never get an email or phone call from the office outside of work hours? For most Americans, I imagine that the European idea of spending more time on vacation and with their family, instead of putting in hours of overtime, is appealing.

  6. Steves captures the essence of economic migration, immigrant culture and the refugee crisis in three excellent passages:  
    1. If you’re wealthy enough to hire an immigrant to clean your house, you do it—you get a clean house, and the immigrant earns a wage. If you don’t want to trade away your personal freedom to care for an aging parent, you hire someone else to care for them…and it’s generally an immigrant. That’s just the honest reality of capitalism. (loc 1406).
    2. 99 percent of Americans descend from immigrants, whereas much of Europe has been largely homogenous for millennia. In some European countries, large-scale immigration is a fairly recent phenomenon. This makes many Europeans particularly vigilant about ensuring that Europe’s homegrown culture continues to thrive. I share their concern, and yet, it’s easy to fall into contradictions: If diversity is a tenet of EU beliefs, what’s wrong with immigrants wanting to preserve their home cultures? Is it hypocritical to celebrate the preservation of the Catalan language, but expect Algerians to learn Dutch? (loc 1425)
    3. I think the real refugee crisis is the human cost of a failed state. The refugees coming to Europe today are a direct result of poorly drawn borders by European colonial powers a century ago. If Europeans (or Americans) complain about the hardship of housing those refugees, they should ponder the hardship brought about by their ancestors’ greedy colonial policies a century ago (loc 1440).
  7. Steves is also perceptive on (un)sustainable choices and lifestyles:

    In America, we have freezers in our garages so we can buy in bulk to save money and avoid needless trips to the supermarket. In contrast, Europeans have small refrigerators. It’s not necessarily because they don’t have room or money for a big refrigerator. They’d actually rather go to the market in the morning. The market visit is a chance to be out, get the freshest food, connect with people, and stay in touch (loc 1511). 

    The bottom 40 percent of humanity lives on roughly 5 percent of the planet’s resources. The top 20 percent lives on over 75 percent. The greatest concentration of wealth among economic elites in the history of the human race is happening at the same time our world is becoming a global village. Meanwhile, even in the countries that benefit (such as the United States), the spoils go mostly to the already wealthy—padding profits for shareholders even as working-class American jobs are exported south of our borders, leaving many citizens of the rich world underemployed and disillusioned (loc 1859).

    Any society needs to subscribe to a social contract—basically, what you agree to give up in order to live together peacefully. Densely populated Europe generally embraces Rousseau’s social contract: In order to get along well, everyone will contribute a little more than their share and give up a little more than their share. Then, together, we’ll all be fine. The Danes—who take this mindset to the extreme—are particularly conscientious about not exploiting loopholes. They are keenly aware of the so-called “free rider problem”: If I had to identify one major character flaw of Americans, it might be our inability to appreciate the free rider problem. Many Americans practically consider it their birthright to make money they didn’t really earn, enjoy the fruits of our society while cheating on their taxes, drive a gas-guzzler just because they can afford it, take up two parking spots so no one will bump their precious car, and generally jigger the system if they can get away with it. We often seem to consider actions like these acceptable…without considering the fact that if everyone did it, our society as a whole would suffer (loc 2258).

    A perfect example of Danish “social trust” is the image of babies sleeping in carriages outside a restaurant while the parents eat inside. You might say, “But no one is watching!” A Dane will say, “Everyone is watching” (loc 2310).

  8. What about drugs, prisons, terror and the Holy Lands??

    When it comes to soft drugs, policies in much of Europe are also more creative and pragmatic than America’s… Much of the US seems afraid to grapple with this problem openly and innovatively. Rather than acting as a deterrent, the US criminalization of marijuana drains precious resources, clogs our legal system, and distracts law enforcement attention from more pressing safety concerns (loc 2909).

    While America is still building more prisons, the Dutch are closing theirs. My Dutch friends needle me with the fact that the US has the world’s highest incarceration rate—nearly 10 times the Dutch rate—at an annual cost of $60 billion (loc 3037).

    Yes, there are evil people in Iran. Yes, the rhetoric and policies of Iran’s leaders can be objectionable. But there is so much more to Iran than the negative image drummed into us by our media and our government. I left Iran impressed more by what we have in common than by our differences. Most Iranians, like most Americans, simply want a good life and a safe homeland for their loved ones. Just like my country, Iran has one dominant ethnic group and religion that’s struggling with issues of diversity and change—liberal versus conservative, modern versus traditional, secular versus religious (loc 3707).

    Religions around the world seem to always be stoking turmoil—even though the teachings of those religions say “love your neighbor,” and all of them have the “do unto others…” Golden Rule. I’ve decided that fundamentalism is the crux of the problem…For a person of faith to travel without letting the experience stir what’s inside them is a lost opportunity. Of course, many people actually go on religious trips—pilgrims on pilgrimages. While I’ve never done exactly that, every time I’m at a pilgrimage site, I endeavor to keep a positive attitude about the devotion that surrounds me. It’s easy to be cynical about the reverence given to relics I don’t understand, the determination many have to believe in what seem like silly miracles, or the needless pain someone suffers in the name of their faith—whether by climbing a mountain in bare feet or a long staircase on their knees (loc 3898 and 4097).

    The conditions in Balata [a Palestinian refugee camp] are dismaying, particularly when you think that people have been living this way here for decades. But Israelis point out that Israel has taken in many Jewish refugees and assimilated them into their prosperous society. Meanwhile, they claim that Palestine—and the Arab world—has intentionally kept the West Bank refugee camps in squalor in order to stir public opinion against Israel (4379).

  9. And… finally… coming home:

    On returning from a major trip, you sense that your friends and co-workers have stayed the same, but you’re…different. It’s enlightening and unsettling at the same time (loc 4513).

    Mark Twain wrote, “Travel is fatal to prejudice, bigotry, and narrow-mindedness.” These wise words can be a rallying cry for all travelers once comfortably back home. When courageous leaders in our community combat small-mindedness and ignorance—whether it’s pastors contending with homophobia in their congregations, employers striving to make a workplace color-blind, or teachers standing up for intellectual and creative freedoms—travelers can stand with them in solidarity (loc 4548).

    My one-handed conclusion is that all Americans should read this book. Travelers will recognize echoes of prior thoughts while the sedentary will (I hope) understand the common humanity that binds us all. 


Here are all my reviews.