Transplanting a Seattleite

I walked with M.

I did some laundry, including stripping beds. I’m also doing A’s comforter, so that’s exciting.

I’ve been poking around trying to understand why so many people I know are focused on the decision not to endorse by WaPo, and very, very, very secondarily LA Times and no focus on the Teamsters for same or, really for that matter, no one is saying boo about Bloomberg?

We’ve for sure had worse elections for Failure to Endorse, but all of that pales compared to 1980, when the Teamsters, PATCO and the Air Line Pilots Association endorsed the Republican candidate and I think about half the country remembers what happened to PATCO after that (the other half hopefully learned about it in school, since it happened before they were born). I’ve thought a lot (starting when it was happening, child tho I still was) about so many union members voting for the bad actor in that election, and how people persist in thinking that people will vote in line with their economic interest in spite of broad and deep evidence to the contrary.

So today, I’ve decided to step away from the specific current weirdness, and think about why have categories “micro” and “macro” in economics, but we don’t have them in politics and why. Because for all that people do not vote in a way that aligns with their economic interest, they equally do not make economic choices in ways that align with their political interests. And even when people know they are doing it, they keep doing it. I bet if I imagine what “micropolitics” and “macropolitics” might mean by analogy to “microeconomics” and “macroeconomics”, I’ll probably come up with a really compelling explanation. You know, take the use case seriously.

Unrelated: apparently, on the list of things that Drunk Walkitout will do, that Sober Walkitout will regret, is having 2 manhattans at Forge and Vine, and deciding that having the brussel sprouts and fries as her dinner is a great idea (there were also 3 oysters). The brussel sprouts and fries were awesome, as were the manhattans. As expected, the brassica (the sprouts) ensured that today did not involve anything remotely resembling a hangover. However, it turns out that in conjunction with whole grain for breakfast and veg and rice for lunch, this was a _lot_ of fiber. Just. A. Lot. Of. Fiber.

I was sufficiently puzzled by the intransigence on display in _The Lemon Tree_ and how difficult it was for our group to talk about it. I’m pretty uncivilized — if I’m looking at intransigent conflict, I’ll assign it to one of three categories: horrible and no one is a bad guy (super rare, but does happen, and mostly you help the survivors with the guilt after), everyone could have done better, but there is a clear bad guy (very common, alas), and everyone is horrible. You can imagine how well this aligns with the content of AITA (NAH, NTA and ESH) and how addictive that subreddit is as a result (expansion: on the social media platform reddit, a community of forums for online discussion, there is a subreddit called AITA, which stands for Am I The Asshole. It is a place to describe recent, true conflict that happened to you, in which you are wondering whether or not you are the bad guy, and commenters discuss. No Asshole Here is what it sounds like; Not the Asshole is NTA, and implies there is at least one other asshole and you are not one of the assholes; ESH is everyone sucks here).

When I am sufficiently puzzled, I will assign the puzzle to my brain before going to sleep and hopefully, some possibilities will be presented to my conscious self the following morning. So I did, and wow did I wake up with a doozy that has been unfolding ever since (days), as I discuss it with other people. Basically, I concluded that the invention of the joint stock corporation that can exist indefinitely created a meaningful competitor to the extended family / kinship structure for the growth and preservation of power by elite groups in society. I’ll probably be editing this more, but right now, I’m going to go have breakfast.

OK. When you have organized a society as an agglomeration of extended families (this was like, every society until a few hundred years ago — not totally true, but not honestly all that false either), families will tend to reproduce with comparatively near kin in order to preserve / accumulate wealth. People are not totally stupid ; so there are usually a bunch of rules to balance the genetic impact of this with the wealth / power payoff of any given marriage. Very, very powerful families — think, Hapsburgs — can pull this off over generations, but do accumulate some real negatives as a result. Queen Victoria sat at the apex of the most successful family of all time: her grandchildren were at the top of most of the countries of Europe and into Asia (Russia) , and the territories controlled or influenced by them extended to most of the globe. And there was that hemophilia thing. A society which remains, to this day, incredibly committed to primogeniture had a _Queen_ at the top because of the accumulation of genetic problems, and it toppled thereafter.

You can get a long way on The Family, but it has its problems.

Depending on how you think about corporations, they’ve been around for a long while. Certainly, the wikipedia article on them mentions China having had merchant partnerships a thousand years ago. However, a partnership is not the same as a joint stock corporation. A partnership is typically not tradable, certainly not on an open market. While partnerships can transcend generations (many law firm partnerships certainly have!), they don’t typically. But once you represent the shares in the partnership in an abstract way and make them tradable, you are a long way to having something that can let people join and exit without destroying the enterprise. You do need a way to deal with frauds, scams and in-group conflict, tho, and corporations have developed a large number of those over the centuries. However, A lot of the most entrenched conflicts within and between corporations are resolved through resort to a state-run judicial system.

Nation states are a comparatively recent phenomenon, and there are a variety of ways of thinking about them. The initial round were an extension of the family (where the King is Dad of the whole Country, Chieftain of Chieftains, whatever), but they relatively rapidly acquired constitutions which is to say, written rules, and they also adopted a perspective that this only works if the people ruled by the document / institutions created under the rules of the document are basically okay with how things are going (“consent of the governed”). There’s a _broad_ range of constitutions and interpretations of “consent of the governed”, and I think it’s fair to say that some parts of that range are more stable than others. But there is definitely more than one way of doing things with a constitution and “consent of the governed” that is more-than-one-lifetime stable.

There’s also a lot of ways of doing things that collapses quicker.

Anyway.

When you have a society that is doing the agglomeration of family thing, you get waves of empires — not super detailed governance (that’s left to family heads), but some group of people that is providing an external layer of recourse to between-family conflict. Empires are nice, because they reduce the number of wars. Empires suck because the wars that do happen are shockingly heinous, and they are prone to growing someone at the top who got there by killing all their siblings with the assistance of their mother (see: family structure, problems therein).

When something happens to your empire layer, at first, it’s not obviously bad — like, if they recede, because they’ve got a war going on way the hell and gone on the other side of the empire, and it is drawing away all the apparatus of the empire. You still have your family structure and even better, you have developed a lot of cultural mechanisms and habits to control conflict within and between families because y’all have myths and legends and stories about the shit that goes down if you go to the Big Boss with your problems. There are edge cases where _literally_ there is _only_ the family structure (think Afghanistan outside of the city, at least the way it is typically described). These cases have predictable problems (families live in armed encampments to which women and children are largely confined, waves of empires come and go, access to goods and services produced outside of the family’s jurisdiction is limited and erratic, there are no complex institutions outside of family structure). But in general, most family structured societies have this layer of empire, and it isn’t The End of the World for most people when it recedes.

HOWEVER! One of the things that empires do is control the movement of people within the empire (significantly, when they fail at this, they usually fall). They both _stop_ people moving around and _force_ people to move around. Family systems work well during steady states, but when something — a war, a famine, a drought, an earthquake, disease — sufficiently bad happens that families that used to be able to survive in one place feel like they have to pick up and go somewhere else, wherever they can go probably has people in it already and boy howdy will you then have conflict between the people who are already there and the new arrivals. A few can be absorbed, but a lot will result in a new war.

Empires exploit this. Empires roll into a new place and defeat the people there. On the less bad end of things, the men in the new place have to lay down arms, bow, pay tribute, possibly take up arms on behalf of the new empire. Somewhat worse, they are killed outright. But also worse, enslaved, forced to work in mines, forcibly moved to a wildly unfamiliar environment. The women, meantime, generally speaking are now forced to make babies for the Empire’s men, rather than whoever the men were earlier. Occasionally, the women will also be killed but honestly, less common than you might think. The line between boys and men, and girls and women is a lot younger, and greyer in these situations than any of us are happy with.

Empires have really explored a lot of territory around moving people around. If you’ve got a group of people that you really don’t want where they are (the other people there don’t like them, say) but who are valuable to you (they provide important services like water engineering, or a financial system), you may have to move one side of the argument. In general, Empires will pick some location within their territory where the rebels are particularly intransigent, go commit a bunch of atrocities there, and move one side of the conflict to the new location and assign them the task of finishing the job of dealing with the intransigent. I will leave it as an exercise for the reader to work out examples of this; there are certainly a lot of them associated with my Mennonite ancestry, and, then, too, I’ve got deep ancestry in the Americas and am white so a lot there as well.

I’m going to digress a bit now on the topic of cities. When you have an agglomeration of families, trade between families and across distances will happen, and you need a location for that. Fairs can be held at intervals, but anywhere there is a fair will tend to turn into a market town, and market towns will tend to become cities, and families specialized in merchants will fortify in those towns and have conflicts and attract the attention of fucking idiots with weapons but the Empire and all those families like to go shopping so you fortify, and you share the protection of the cities, and you have you know the drill. Free cities, charters, what have you. One of the escape valves for migration is to point it at a city. Cities are better at absorbing people than agrarian holdings that are occupied by the members of a complex extended kinship network. So when someone does not fit in to their kinship network, they can go to a city. Best of all, cities tend to kill people (lots of people living close to each other, so in addition to the food and water issues, lots of opportunity for conflict, and not necessarily great resolution mechanisms for conflict), so the Empire doesn’t have to have death squads to kill them, which saves the Empire some of the bad reputational issues of being an Empire AND means you don’t have an organized squad of psychopathic murderers that might turn on you, the person or persons running the Empire either directly or through your offspring or whatever.

I hope all my readers have worked out in their heads now why the classic Afghanistan story is, the city falls early, people cheer, think they now control the place, and find out to their sorrow that they do not. But you know, that’s not what I am here for. I am _here_ to explain the puzzling intransigence described in _The Lemon Tree_.

The Ottoman Empire was a pretty classic Empire along the lines I describe above. They controlled Palestine for … a long while, and so all the people there going into the twentieth century were part of that system. The Ottoman Empire had receded and then collapsed, and the British Empire wound up in control of the region, but Palestine remained on the edge of that Empire, of no particular importance. The backstory presented in the British era of Palestine is a pretty normal story of a new Empire working out the local problems and trying to figure out how to deal with one group of people in the area not being happy about new arrivals. Unfortunately for everyone involved, this was all occurring in a time period in which cities stopped killing people (better control of infectious disease, cleaner water, better sewerage) AND during a time in which a large chunk of the Mediterranean was under major stress and using their standard Kill the Other mechanism to defuse that stress AND during a time in which migration was easier than it had ever been before.

Why was the entire area under so much stress? Probably due to the increased rate of technological change, and the demographic transition.

Anyway. So influx of people fleeing death squads elsewhere (Jewish in-migration). A bunch of sleepy kinship networks objecting to that and abruptly realizing that they were not under the Ottoman Empire anymore, and the British Empire wasn’t taking the actions they wanted. Rebellion against the British Empire. That didn’t go well for them, and the only real accommodation they got was an agreement to stop new arrivals. _That_ didn’t work at all (see above: the entire area around the Mediterranean was engaging in pogroms. You are not going to stop that migration.) AND pissed off the recent arrivals who were actively bringing new arrivals in. You now have the _classic_ Imperial problem of conflict within two nominally subordinate to you groups who cannot get along. And they adopted the _classic_ Imperial solution: move one.

Except they didn’t follow through. This happens with Empires — they get a lot on their plate, and things get dropped. You could point at the flu as a big part of the problem. You could point at the damage to the elite families caused by The Great War, when many of them lost a bunch of young men in rapid succession who would otherwise have been future leaders, and the loss of whom generated a series if estate taxes that was existentially threatening to those families. A lot of the money coming in to rescue those families was coming from American heiresses whose families wanted access to the power structure of those families and the British Empire (Oh Here We Are Again). That money had come from _joint stock corporations_, but the corporations had no way into the power structure of the British Empire and thus The World, so it got laundered through daughters. You know, the way of Empire.

And then all kinds of other things happened to further destabilize the British Empire. The internal combustion engine really took off, and that meant that you could do just about anything now without muscle and the calories required to feed muscle. That meant you didn’t need to have 30% of your agricultural produce devoted to feeding traction animals. Now you’ve got a massive, massive, world-changing food surplus, and if there is a single thing you can say about financial markets between when they were created and the middle of the 20th century, it’s that they were extremely sensitive to the harvest. Massive surpluses = insanely low prices = no one can pay their debt = total collapse.

Worst of all, no one really understood what was going on, because nothing even remotely like the internal combustion engine rendering traction animals obsolete, not overnight, but close to it, had never, ever, ever happened before and honestly, no one was really even able to think about it clearly. We _still_ don’t explain the Great Depression this way. We still struggle to remember that the Great Depression was caused by a massive agricultural surplus.

Anyway.

Empire has started the process of resolving a difficulty and then gotten distracted. The financial collapse has now rendered Jews all around the Mediterranean a tempting distraction from all kinds of other problems, and they are fleeing the worst pogrom ever, which is to say the Holocaust. Both sides of the dispute in Palestine is unhappy with the British Empire’s solution (stop further in migration), which is also not working, and violence against representatives of the Empire in addition to the groups attacking each other is building up. In general, an urbanizing / migrating / fleeing oppressed group arriving in a city would be under-resourced, but in this particular situation, there were a lot of supportive resources arriving from other parts of the community in the United States (and, to a lesser degree, elsewhere).

The Empire leaves. And the story goes very, very, very much not the way that is ever expected by the group that has been in the place since whenever. Even weirder, however, is what doesn’t happen. They aren’t killed. Their wives aren’t taken to make babies for the new winners. Their babies are not indoctrinated by the winners.

Some of this is Old Skool Edge Effects. When you have two powers and a volatile border region, you’ll get all kinds of stuff in the border region and incursions both directions and everyone engaging in shenanigans. Reading _The Lemon Tree_, there are indications that King Abdullah of Transjordan and then Jordan was operating within this ancient framework.

But a lot of what happened here is an old script that ended in the middle. Or, perhaps more accurately, we are living through the middle. Hopefully, we are writing a different ending?

There are different endings available!

This was _not_ a melting pot. Ever. But there have been numerous melting pots over the millenia, many in recent centuries. Mostly, they fail — they devolve to this kind of inter-group conflict, resolved by an Empire by moving people around and/or Death Squads. We keep trying to solve it through family blending (Sarajevo), but it turns out that if you want to make family blending stick, you can’t just blend families. You have to change the constituent elements of your society, so that the Family is no longer a constituent element. We’ve done that here in the United States. That hasn’t happened (yet) throughout the Arabic Middle East.

As recently as the 1930s in the US, we still had a lot of The Family, especially in urban areas. We named places “Little Italy” or whatever in cities and we had hyphenated EthnicGroup/CountryofOrigin-Americans. But that ended, and we mostly did that by replacing the functions served by extended family/kinship network with a combination of constitutional government services and responsibilities and corporations. The government services and responsibilities side was primarily in the form of public education, which was extended by making it universally-compulsory and by extending the number of years one was expected to participate. This provided a ton of services to family (kid learns to read and write English, gets vaccinated, meets people who will be valuable to them as an adult, becomes an American, instead of a whatever-American and someone else disciplines the kid when they are trying to find trouble). There is a cost to the family (loss of the kid’s income / work), and part of getting families to comply with public education was getting the balance of services to a high enough level that families saw it as a clear win. But part of _that_ was by making it super clear to everyone that if you went to school and you learned to be An American, then when you were done with school, you could get a job working for a company. Not your family. A company.

I feel like a lot of this has not really been assembled in one place. Public school and working for a company — not your family — is a combo deal, and along with it is enforcement by the government (you do have to go to school) and also consent of the governed (local control of the schools / school boards / etc.).

I don’t want to suggest that everything is perfect and lovely with this system. It’s not. But it does go a long way to explaining some otherwise somewhat confusing aspects of schools: team sports and stylized commitment to particular competitions (UW vs WSU, type of thing, for my PacNW readers) channels adolescent identity energy somewhere other than I’m a CountryA-American and you’re a CountryB-American and our families have hated each other for thousands of years so nyah. And the work is far from done. The 1930s were an era in which entrenched within-Europe conflicts were reduced; there’s a helluva lot of the globe left to work through.

In any event, I am no longer confused by the intransigence of the groups described in _The Lemon Tree_. I do still find it risible that anyone would suggest that those groups could somehow live freely together and Just Get Along. If we actually want that to happen, it requires some kind of process like the one we imposed on ourselves. And as long as we’re sitting around bitching about how awful corporations are and how great families are, and reminiscing about the past and whatever, that isn’t too likely to happen.

We often talk about how rich people are based on their income, and "rich" people under this definition often point to their overall lack of assets (because they are spending all that they have coming in and perhaps a little more) in an effort to get some sympathy and argue for a definition of "rich" based on net accumulation or wealth, rather than on income.

Right there, it's pretty clear we've got some confusion.

Obviously, we have taxes that are based on income (sales taxes, many business taxes, payroll taxes, income taxes), but we also have taxes that are based on valuation of an asset (notably, property taxes). So it's not like this is just an argument with no relevance to anyone.

Financial planners and advisors engage in an exercise with clients (you, too, can do this and pick your set of rules however you like with lots of books and articles to assist you) in which they attempt to calculate "net worth" by summing up everything they own and everything they owe. Folding green stuff and checking accounts are straightforward, accounts holding liquid assets such as stocks, bonds and funds owning same a little trickier because they are "marked to market" that is subject to change moment to moment in value, nonliquid assets (such as cars and houses) are often easier to figure out what is owing on them than it is to figure out what they are worth. Let's just pretend that stamp collections, jewelry, old books, nice furniture and art work isn't actually worth anything, because if it ever comes to the point where you need to sell it to get the money, you won't actually be able to get the money anyway, or not nearly what you think you will. Altho, hey, the process of finding out what you could get for it (and how) is enlightening, particularly in light of how you probably bought it and what you paid for it. The two experiences are often shockingly different.

Actually, if we pause for a moment, and contemplate the purchase and resale process, it illuminates where money comes from, because money comes from transactions. It always has, and it always will. That is what money is and that is what money does and that is where money comes from. Transactions. Allow me to illustrate.

I have chickens. You have goats. Because it is the 17th or 18th century, we _know_ about coins made of silver and possibly gold and perhaps copper as well, but we don't actually typically see them. Nevertheless, we know that chickens typically go for so many of a particular kind of coin (which we don't actually have, but we know about) and that goats typically go for so many of that or another kind of coin and there's some well-accepted rate of exchanging one of the kinds of coins for the others. Let's say chickens are a dollar and goats ten dollars; the rate of exchange for a ten dollar to a one dollar is exactly what you think it is. At the time, it wasn't quite this clear (paper lightens our load and clarifies the math and helps us cope with the scarcity of metals), but good enough. So when I want a goat for the holiday and you want chickens so you can have eggs for breakfast, we don't have to figure out how many chickens a goat is worth; we figure it in dollars and ten dollars and work it out from there. Really. Honestly. Don't let the barter fans confuse you, and don't be imagining that agriculture exchange in the boonies a few hundred years ago had enough metal coins around to keep it moving.

That is what money is: an accounting system, a way of keeping track. These days, we do it with digital representations and a variety of physical means of showing our authority to speak for these digital representations, because our transaction may take years to complete (30 year fixed on a house) and we don't know each other that well.

You have a house. I have a job writing articles for websites about gadgets and I design iPad apps on the side. (Not really. This is an analogy. Like the goats and the chickens.) I want a house and you want to travel. So we come to some sort of agreement in which I commit a portion of the future income from my job(s) to making payments on a loan from a bank. The bank gives you a bunch of money up front (actually, they put it in an account that you speak for). The government gets a cut and the transaction is carefully documented.

Where did the money to give to you for your house come from?

Well, it sort of comes from the future: my future income, or my future resale of the house to someone else, or the house burning down in the future and insurance paying the balance owing, or whatever. And it sort of comes from the bank, which probably takes it out of a whole bunch of people's accounts, figuring they're not all going to ask for their money at the same time. It comes from a whole lot of other people's jobs; they have money they don't want now but will need later and they'll need a lot more of it later because they, too, want to be the kind of person who can travel and not work, and so they're willing to invest money in really weird securities that carve up bank loans and reassemble them and resell them.

Money comes from transactions. The chickens and the goats with the money as a mechanism for simplifying the process of figuring how how many chickens a goat is worth is pretty clear: the transaction is completed on the spot. But as soon as the future gets dragged into it, and borrowing, and lending, never mind the slicing and dicing, it should be fairly obvious that money that existed sort of for a brief instant with the chickens and the goats is actually hanging around for a very long time with the 30 year fixed or the Pay Option ARM or whatever. If money is accounting, if money is created by transactions, then the way money accumulates is when transactions are, basically, not "completed" in the sense that our chicken and goat exchange was completed.

One more example, because it seems relevant to me often and yet we don't talk about it. Ever. If we all were very sensible, and we all saved up this frozen-in-mid-transaction money so that we could all, as elderly, ailing, non-working people could afford to buy food, shelter, health care, etc., we have to contemplate who will be on the opposite side of that transaction. What will they be charging us for the things we need to buy? Back in the bad old milleniums, adults tried to have enough children that the odds would be good that adult children would be around to care for them if they were lucky enough to live that long. That transaction had an obvious person on the other side, and the debt made sense (I change your diapers; you change mine). Does our debt make sense? Who will be on the other side of our transaction?

Makes you think the Japanese obsession with human-like robots isn't so crazy after all.

All right. I can't really leave it at that, because I brought up the net worth exercise and the brokerage accounts and it turns out there's a bit that matters a lot there. When you calculate what your portfolio is worth, or your car, or your Magritte, or whatever, you look at recent transactions (comps, in housing). When someone loans you money with that as the collateral, the comparable transaction as some leverage: one house sale down the block that lets ten people get home equity lines of credit to go buy TVs with is creating way more money than if those ten people stayed home and played Hungry, Hungry Hippo instead. Whether you think this is a good thing or a bad thing is another matter; what seems impossible to argue is that money was created. If that same house down the street is foreclosed upon and then sold under really difficult circumstances, the amount of money the ten people down the block can borrow on their homes is generally dramatically reduced. If you figure that effect over society as a whole (never mind the knock on effects as people have to sell other things under even more difficult circumstances, to avoid becoming the next foreclosure), it seems relatively obvious that vast mountains of money are destroyed.

Really, how much money would the government have to figure out a way to create (whether by borrowing and spending, or quantitative easing, or whatever), to make up for that vast amount that was destroyed?

Perhaps I'll come back in a bit and explain why inflation is extremely unlikely under such circumstances. And the difference between inflation/deflation and appreciation/depreciation. Stuff like that.