8. Defense & War
There is probably no point in history when humans have not engaged in conflict over land, food, hunting grounds, and various forms of property. Smaller settlements, and, later, cities, built fortifications to defend against outsiders, but they were frequently breached by the advance of (a) improved technology, and/or (b) progressively larger fighting forces. Add the steady pace of weapons design—from swords to drones—and it’s clear that winning is never anything more than a temporary condition. Aggressive nations may win for a time, and may sometimes succeed in wiping out the enemy, but the more likely modern outcome is a negotiated political settlement. Still, some nations feel they must remain in the game: each year, the U.S. spends nearly $600 billion on defense, equal to the total spending by the next 14 countries (China, Saudi Arabia, France, Germany, U.K., Russia, Germany, South Korea, etc.) On the one hand, that would seem to be the price of peace. On the other, the U.S. remains the only nation to have dropped nuclear bombs on another nation (twice, in fact). During the 20th and 21st century, the U.S. military been involved in 900,000 American deaths (650,000 on the battlefield), plus 6 million foreign deaths. In defense of the action, without military involvement (often, U.S. military involvement), consequences may have been much worse.
7. Business & Economic Leadership
We directly elect political officials, but they control only part of the picture. The economic leadership provided by the private sector is probably even more significant. The U.S. Gross Domestic Product is nearly $17 trillion—these are the dollars associated with U.S. business and industry; that’s about 3x the amount controlled by local, state and Federal government. The world GDP is about $76 billion—so U.S. companies are responsible for about 21 percent of the global economy; Chinese companies for about 12 percent (and rapidly growing); Japanese companies for 7 percent; German companies about 5 percent; and French, British and Brazilian companies each at about 3 percent. Together, countries in these seven nations control more than half of the world’s economy: those who control the largest companies within these (and several other) countries are among the world’s most powerful leaders. As a rule, each company is governed by a Board of Directors and managed by a senior executive team paid in terms commensurate with their skill in economic and strategic leadership. They are not superior beings; with few exceptions, they rose through the ranks of educated professionals, learned to play the game at a very high level, and now make decisions with enormous economic impact. They influence, and are influenced by, government leaders. In theory, business and political leadership work together for the common good and for a productive economic future. Along the way, decisions may be mystifying—but few of us can evaluate what they do because so many of the details, and so much of the context, is obscured, invisible, or seemingly too complicated for common understanding. So we operate with trust.
6. Political Leadership
For tens of thousands of years, leadership was local: everybody knew the person who was chosen, appointed, or otherwise anointed leader. When we started building larger settlements, and cities, we modernized the concept of a leader, often with a sense that he (almost always “he”) was spiritually endowed. Often, this encouraged long periods of control: Kings and Queens successfully passed their leadership from generation to generation, creating a royal ruling class through intermarriage that finally ran its course a century ago. In the 1700s, this began to change: the people began to think of themselves as more than subjects, and determined they would select their own leaders (an old idea, but never before implemented on a large scale). The more modern approach became central to the experiment called the United States of America. For better or worse, we developed two competing political parties (other nations have more), and an elaborate, expensive system of electing more hundreds of thousands of citizens to serve in local, state and Federal positions for several years, plus a court system that is somewhat less subject to political whims. The system is subject to corruption and influence at every level, and tends to perpetuate itself on a massive scale. Many nations have replicated the American system of government, and now routinely elect presidents or prime ministers, legislatures and either elect or appoint justices. The two-or-more party system is also commonplace. Other nations are also adopting the U.S. approach to political spending: our 2014 Presidential race cost $7 billion, and India’s 2014 race cost $5 billion.
5. Power
Imagine yourself as powerful. How powerful? Would you exercise your Presidential powers to assure a $20 minimum hourly wage for every worker in the U.S.? Would you take over Canada or Mexico, or show off our national might by declaring war? Would you become God-like, and control storms or earthquakes? Or would you be happy if you could wield enough power to enjoy some peace and quiet in a home filled with teenagers? Would you choose to run a gigantic company, or assure a wonderfully quiet life because you’ve used your power to win the lottery? Need the use of power operate within ethical guidelines, or does your power assure that you can control the rules? Would you prefer power over other people, or power to accomplish on your own? Or would you use your power to assure that you retain the power—much as a government representative or a CEO might, especially under trying circumstances? Would you make magic or money, assure stability or progress, be a God who sets the stage but avoids direct control over human activities, or would you consolidate power and operate more like a crime boss? Would you contemplate the true nature of power, or just use it and learn by doing?
4. 21st Century Money
The concept of money as data is nothing new. For half a century, half of Americans have maneuvered away from cash and coins and toward a personal economy based upon personal credit (cards, etc.) and investments. (The other half are more reliant upon cash, interact to a lesser degree with credit and financial institutions, and tend to lag in other ways). Bitcoin and new notions of digital currency, Apple Pay and other digital payment systems, Paypal, compounded by globalization, a consumer economy that now expands beyond national boundaries, an income equality gap that links the digital divide with an economic and educational divide. Plus, an always-crazy labyrinth of regulations and laws that seem to assure a robust future for those with money, and a struggle for those with less. Acknowledging the potential of micro loans and other well-intended means of encouraging growth for lagging economies, does the game, more or less, remain the same?
3. Taxes
It’s helpful to think about taxes as a means to buy goods and services that we intend to share among large numbers of people. We’re willing to pool our resources in order to protect our part of the world from intruders and from local bad guys, and we’re willing to share the cost of roads and tunnels. We fight about the other items in our collective shopping cart: do we share the cost of individual education or health care? How about economic development? Or welfare, social services, subsidized housing? As we demand more and more public good, the cost of the services increases, and so does the size of the government we hire to collect and distribute the money, and manage some of the operations. What’s in our basket? Roughly: the U.S. working population devotes all its January salary to fund the defense budget, February to pay for Medicare and other health services, March to pay for Social Security, and April to other items (veteran’s benefits, housing and community services, food and agriculture, education, etc.)—and sometime each spring, we start working for ourselves, not for the public good. It’s no different elsewhere. Although we’ve been paying U.S. income tax for about a century, taxation is not a new idea. In olden days, people paid a tribute to the local Lord who paid a portion of his proceeds to the King; we paid tax on tea and whisky (and, in both cases, rebelled against the whole idea). Complain as we might, we love what our taxes buy (or, help to buy: the interstate highway system, the Internet, trains and airports, the school building, your local NPR station. Scandinavia’s standard of living may be higher than ours—if we want what they have, we can have it. To pay for it, we can either raise our taxes, or shift our public goods priorities.
2. Trade is Global
“As I write this, it is nine o’clock in the morning. In the two hours since I got out of bed I have showered in water heated by North Sea gas, shaved using an American razor running on electricity made from British coal, eaten a slice of bread made from French wheat, spread with New Zealand butter and Spanish marmalade, then brewed a cup of tea using leaves grown in Sri Lanka, dressed myself in clothes of Indian cotton and Australian wool, with shoes of Chinese leather and Malaysian rubber, and read a newspaper made from Finnish wood pulp and Chinese ink. I am now sitting at a desk typing on a Thai plastic keyboard (which perhaps began life in an Arab oil well) in order to move electrons through a Korean silicon chip and some wires of Chilean copper to display text on a computer designed and manufactured by an American firm. I have consumed goods and services from dozens of countries already this morning. Actually, I am guessing at the nationalities of some of these items, because it is almost impossible to define some of them as coming from any country, so diverse are their sources. I have also consumed minuscule fractions of the productive labour of many dozens of people.” —Matt Ridley, The Rational Optimist
1. What Humans Do That Other Animals Don't Do
Humans progressively build on the knowledge of past generations. Human keep records, and share information to continue to make progress as a species. We make great use of the other two by bartering, exchanging, and trading to make the best use of our time and resources. We specialize, gain efficiencies, which drives personal income up and drives prices down. It’s possible that whales or dolphins or ants are smarter than we are, or do things we cannot comprehend, but for humans, trade turns out to be the secret of our success. Tools are probably a close second. If we cannot see clear, we figure out how to manufacture eyeglasses. If a person cannot walk, we invent a cane, crutches, a stretcher, a wheelchair, artificial limbs, and small motorized vehicles along with sidewalk ramps. We can manufacture glass so that smart phones don’t suffer from cracked screens. We can travel to the moon as often we wish—but we’re already past that and now, when NASA launches a rocket, or doesn’t, nobody seems to care. We drive. We build schools. Humans rock! But we do a whole of things that would mystify any sane-and-smart antelope, and the way we sometimes think, well, it’s a good thing that we’re in charge because the dolphins might lock us away for good.
Matt Ridley, author of The Rational Optimist, is convinced that trade is the activity that allows humans to make progress. When we exchange, we begin to specialize, and when we specialize, we accumulate wealth. One might extend Ridley’s thinking to include accumulation of power, which energizes big decisions: where bridges will and will not be built, who becomes Governor or Prime Minister, whether a company will receive the vital investment it requires in order to grow, which nations thrive, how income is distributed, which nations are at war and which ones enjoy long-term peace. Of course, power extends beyond business and industry, affecting religious beliefs, media choices, what we learn, know, and understand.
3. Trade, Money & Power