A wheelbarrow of cash for a loaf of bread: The Downfall of Money (F Taylor)

Frederick Taylor.  The Downfall of Money (2013) The story of the German hyper-inflation that followed World War I, 1919-1923. Taylor mixes political, economic, and personal stories, which gave me a vivid impression of what it was like to live through that time. For example, a memory of how the family would get the father’s salary at the beginning of the month, and strive to spend it all on food and other necessities by noon or early afternoon at the latest, before the prices went up. With luck, the haul lasted until the first of the next month, when the exercise was repeated.

      Taylor is also good on thumbnail sketches of the politicians and their motives. He emphasises the murderous mutual vilification of left and right, which came near to outright civil war. We can see the beginnings of the tangled path of cross-purposes, and more or less blatant betrayals, that led from the Weimar Republic’s inability to forge a national unity to the handing over of power to Adolf Hitler.
     The book is highly readable. Taylor has done his homework: the list of sources occupies six pages of small print. He has the knack of synthesising huge amounts of information, clarifying the narrative lines, and dropping telling details at the right places to create the personal, human scale that allows us to form an impression of reality.
     As a believable story of the times, the book is very good, As an analysis of why and how the awful events unfolded, it is weak. It’s clear enough that the intransigent French refusal to renegotiate reparations payments played a key role, as did American insistence on repayment of debts. It’s also clear that the German inflation was in part deliberately induced to reduce the accounting value of the reparations. A side effect was that all that excess money created consumer demand, so for a while there was a boom. But since the money supply grew faster than production, that did not last.
     In addition, the government was unwilling to risk the effects of a limited money supply, which would have stabilised the currency, but which would also have required siphoning large amounts of cash out of the economy in order to pay reparations. The last phase, hyper-inflation, created grievous hardship.

     In short, Taylor is good at presenting the immediate causes of the inflation. He does not raise the question of underlying causes. Inflation is a puzzle: Why do people come to expect to hand over more and more cash for the same quantity of goods? And why do central banks supply that cash? Why do people believe that austerity (borne mostly by other people, of course) will generate a desired surplus of cash for payment of debts?
     The German hyperinflation is a good case study in the role of psychology in the economy. People make decisions (such as investing in war bonds) because of their beliefs about how the economy works. When those beliefs prove unreliable guides, they act on different beliefs (and spend a month’s salary in half a day to get enough food to last the month). To understand inflation we need to understand what people believe about money.
     It’s pretty clear that the dominant belief operating in the postwar period was that money is wealth. That’s why the French wanted money from the Germans. That’s why the Americans wanted the Allies to repay the money they borrowed. The French did insist that at least part of the reparations should be paid in kind (iron and coal, mostly). But what they wanted was gold marks, actual bullion, or paper money that was guaranteed to be exchangeable for gold. Neither the Americans nor the French were willing to forgive the debt owed them, nor to help Germany rebuild its economy so that they could supply the goods and services that France and Belgium needed for rebuilding. It was all about the cash. I think it not at all surprising that the German government decided to provide the cash, in the end by the wheelbarrow.

     Could inflation have been avoided? I don’t think so: Devaluing currency is a handy way to reduce debt, and everybody did it to some extent (the British and Americans least of all, which is why the pound held its value against the dollar). But once people realised that cash is not wealth, and preferred things (food, clothing, furniture, jewellery, etc) over cash, hyperinflation was the predictable result. (So was bartering, which enriched a lot of farmers.) Then if inflation becomes bad enough, people are willing to swallow the bitter medicine of currency reform, and the sharp but relatively short-lived pain of adjustment to the new bookkeeping.
     Money works only as long as people trust it. Whether “backed” by gold or not, money is a measure of value, just as a meter stick is a measure of length. There’s a difference, though. The value of a dollar depends on what people believe it to be. A $10 bill is an IOU; as long as we trust it as a “medium of exchange”, it can be cashed in for real wealth: a meal, a book, a few gallons of gas, a pair of gloves, a theatre ticket, a sack of potatoes.
     Good book, worth reading as history, and as an object of meditation about the nature of money. ***

Read one, you want to read the next: The Oxford Book of English Detective Stories

    Patricia Craig, ed. The Oxford Book of English Detective Stories (1990) Craig has done wonderful job. A handful of the classics are here (e.g., “Silver Blaze”), and I’ve read work by many of the authors. But about half are new to me, and if the samples indicate their skill, they are underrated, for example Cyril Hare, whose “Miss Burnside’s Dilemma” shows how point of view can be used not only to narrate a crime but also to show its ripple effects.
     The collection covers about half a century, when detective stories concentrated on the puzzle, and the characters were just complicated enough to make both the crime and its discovery believable. What struck me was how little we need to be told of a character to construct an impression of the backstory that grounds motive in reality and method in plausibility. It was as often as not the style, the throw-away phrase or word, that created these impressions, I think because they create a vivid narrator. Make the story-teller sound trustworthy, and we will follow their lead.
     A potato-chip book: when you finish a story, you immediately want to read another. ***

Economics 201: Thermodynamics and efficiency

 Thermodynamics and economics: Why a car is the most expensive mode of transport.

A typical gasoline engine in a car runs at about 25% efficiency. That is, the energy in 1 out of every 4 litres (or gallons) of fuel in the tank does “useful work”. The energy is mostly converted to waste heat, but some is wasted in "internal losses", such friction in the engine and transmission, pumping coolant etc. (Efficiency in the lab can be much higher, but we’re talking real-world here, not lab conditions).

The “useful work” consists of moving the car. So about 1 of 4 litres of fuel is used to move the car and its driver. Let’s assume the car plus driver weighs a tonne (1000kg), of which the driver weighs 90kg. Since a litre is 1,000ml, the system burns 1ml of fuel per kg of weight. Of this, 90ml will be used to move the driver. The rest (910ml) is used to move the car. So out of a total of  4,000ml of fuel, 90 ml is used to move the driver. That’s approximately 1/4%.

Therefore: If the fuel costs $1/litre, you’ve spent $4 to move yourself, of which 1 cent's worth of fuel moves you, 99 cents’ worth moves the car, and $3 pays for internal losses and waste heat. One can scavenge some of that waste heat to warm the cabin in winter, so it’s not entirely wasted.

The above calculation ignores the effect of speed, because speed increases fuel consumption overall. However, since with increasing speed an increasing fraction of the energy is used to push air out of the way, the fraction used to move the driver decreases. In other words, at most 1/4% of the fuel moves the driver down the highway.

I’ve also ignored the effect of passengers, stuff in the trunk, etc, since those merely increase total weight and hence total fuel consumption. The amount of available useful work will still be about 25% of the energy in the fuel. The fractions for moving the car and moving the people in it will change somewhat: a loaded car will transport people and their gear a little more efficiently than a nearly empty one.

But however you tweak the scenario, using a car to transport people is appallingly wasteful.

The Sackett Brand: vengeance for murder.

     Louis L’Amour. The Sackett Brand (1965) One of the earlier Sackett stories: William Tell Sackett, a lonely man who has found Ange, his true love, is bushwhacked while scouting the trail for his wagon, tumbles down a cliff, and plunges into the river. Badly injured, but determined to get back to Ange, he finds her murdered. He eventually tracks down and kills her murderer. His quest causes rumours, so a bunch of Sacketts come to his aid. The story ends with his realisation that he will never be lonely again, with all those Sacketts surrounding him.
     A typical L’Amour romance, with a hero just this side of unbelievably tough. A good read for a fan of Westerns, a good introduction to L’Amour for those who haven’t discovered him yet. Average for L’Amour, above average for the genre. **½

Roy Daniells: The Chequered Shade

     Roy Daniells. The Chequered Shade (1963) I recently read three of Daniells poems at a public event. They were well received.
     Every time I reread Daniells’ poems, I like them better. They are beautifully crafted. Daniells does sonnets especially well. His language is plain or not, varying with his subjects and themes. Most are narratives, sometimes of an encounter with a place, sometimes a riff on ancient tales. His responses are sometimes explicit comments, sometimes implicit in the language.
     The book has three sections. “Where the Great Caesar Came”, a travelogue in verse. “The Immemorial Stones”, biblical stories and themes. “The Map Nailed Up”, a manifesto and confession of his poetic practice and his own life.
     I’ll quote “Noah 2", which I think shows how Daniells takes his subject seriously. This Noah is no mere mythic-symbolic semi-abstraction, he’s a real man in the real world. The poem epitomises Daniells method of translating well-worn myth and cliched history into felt reality. I suspect that the poem mirrors Daniells' own experience with resistance to visionary projects.

They gathered round and told him not to do it.
They formed a committee and tried to take control.
They cancelled his building permit and they stole
His plans. I sometimes wonder he got through it.
He told them wrath was coming, they would rue it.
He begged them to believe the tides would roll,
He ooffered them passage to his destined goal,
A new world. They were finished and he knew it.
All to no end.
                       And then the rain began.
A splatter at first that barely wet the soil,
Then showers, quick rivulets lacing the town,
Then deluge universal. The old man
Arthritic from his years of scorn and toil
Leaned from his admiral’s walk and watched them drown.

The book is out of print. Secondhand copies may be found online. ****

Ig-Nobel Prizes 2 (2004)

     Marc Abrahams. The Ig-Nobel Prizes 2 (2004) The Ig-Nobels began as a lark by Marc Abrahams and his friends: It’s a group of annual prizes for the best examples of research “that first makes you laugh, then makes you think.” That includes both proper research on oddities and quirky questions, complete with experimental and observational data; and fake research by fraudsters, religionists, pseudo-scientists, and the like, featuring more or less batty reasoning about whatever the researcher is investigating. Thus we have both Troy Hurtubise (North Bay, Ontario) who devised, built, and tested a grizzly-proof suit; and Jack and Rexella van Impe, who claim that their research proves that Hell is located in black holes (though they haven’t specified which one or ones).
     Anyone can nominate anyone for an Ig-Nobel. The only ineligible candidates are fictional characters, or people whose actual existence cannot be determined. Go to The Annals of Improbable Research, in which you will find many of the papers whose authors qualify as Ig-Nobel nominees.
     A lovely journey through human folly, wisdom, quirkiness, and delusion. Will be shelved with other reference works. ***

Murder in the Abbey (Louise Penny, The Beautiful Mystery)

     Louise Penny The Beautiful Mystery (2012) Chief Inspector Armand Gamache and Inspector Jean Guy Beauvoir investigate a murder at the abbey of St Gilbert Entre les Loups. Superintendent Sylvain Francoeur, Gamache’s enemy,  arrives a day later and messes things up. Gamache solves the murder, but Beauvoir relapses into oxycontin abuse. The book ends with a rift between the two men, made worse because Jean Guy has fallen in love with Annie Gamache, Armand’s daughter.
     Penny’s strength is character. The puzzle is fairly solved, using the old provoke-a-confession ruse, but the focus is on Gamache and Beauvoir, and their complex relationship, which is tangled up in Sûrete politics and corruption. Gamache is just this side of too good to be true: Penny manages to make him believably sane and incorruptible, but she’s helped in this by the reader’s willingness to believe  such a man is possible. The history of Gregorian chant figures in the story, as do the mystery of monastic life, and the puzzle of faith. It’s a novel, an examination of characters in a specific context, and how that context affects their scope of decision and action, and how their weaknesses limit their options. Penny’s stylistic trick of short paragraphs wears a bit. Well done. ***½

How to Plan Your Model Railroad.

     Tony Koester, ed. Model Railroad Planning 2018 (2018) The annual Model Railroader special issue on planning layouts. Better, on designing them, but the word “design” hasn’t become comfortable usage for model railroaders.
     This one has 15 articles, mostly of the “how I did it” variety”. Each includes a track plan with summary stats such as room size, mainline run, curve radii, etc. The articles focus on the process of deciding what kind of layout the owner wanted, and how they arrived at an acceptable version of it in available space and time. Most of the layouts are large to very large, based more or less accurately on some prototype, and intended mostly for operation by a multi-person crew.
     A couple of exceptions: David Barrow built a small shelf layout in O scale, depicting a small town, perfectly suited for solo operation, and (like all his layouts) about as simple as a layout can be. It’s not much more than track on plywood, with a couple of building mockups and photos of industries tacked to the wall. It's the layout as game board.
     Two layouts, planned by professionals, are designed primarily for train watching. One of them uses vertical staging: shelves along the wall above the work bench, reached by spurs off a helix that hides one end of a folded-dogbone mainline. Each shelf hold two tracks, slightly separated vertically so that the train in front doesn’t completely hide the one at the back. The owner can turn from his work to watch his trains.
     The other one uses a spiral (pioneered by John Armstrong), which allows long runs between towns, and a division point that plausibly requires engine and crew changes, block-switching of through freights, and assembly of local switch runs. This layout gives the owner both the train watcher’s thrill and the pleasure of operating with a crew of friends.
     The lead article by Doug Tagsold tells of how he returned to Colorado narrow gauge modelling, but wanted more reliable mechanisms than HOn3 could guarantee. He devised a scale of 1:72, using HO track and rolling stock tweaked to have the narrow-gauge look. The gauge works out to 3.95 ft (approx. 3 ft 11"). Not exactly narrow gauge, but the overall impression is plausible, judging from the photos. 1:72 is a popular military scale, so there’s lots of material available for scenery.
     Most of the layouts allow both train watching as well as operation, but as usual operation is the main goal. For the average hobbyist, the stories inspire, and may encourage the vaguely dissatisfied to tear down and rebuild with a better notion of what they want from their layout. For the beginner, it’s a showcase of what’s possible, and may help them avoid the beginner’s mistake of trying to have it all. Koester's summary of "Seven things not do" should be tacked up on the wall of every layout room. ***

St Thomas Cantelupe, Bishop of Hereford

     Meryl Jancey. St Thomas Cantelupe, Bishop of Hereford. (1982) I didn’t know there was a St Thomas of Hereford until I was given this book. My Great Uncle Peter (F.  C. Morgan) contributed two photographs to it, and his daughter Cousin Penelope contributed an essay and a photograph.
St Thomas was Bishop of Hereford in the latter 1200s, soon after St Thomas a Becket was martyred for his insistence on the Church’s rights and privileges. St Thomas of Hereford had a somewhat easier time of it, but the  relationship between Church and King had still not been settled, and he had some trouble asserting the power of the Church. Hence his canonisation. I think that the strained relationship between Church and King continued beneath the more or less formal accommodations between the religious and secular authorities, which made it easier for Henry VIII to break with Rome.
     Very little documentary evidence about St Thomas survives, apart from the dossier assembled as part of the canonisation process. But even that is incomplete. The essayists take care to stay well within the bounds of plausibility when they fill in the gaps. St Thomas was a typical senior churchman of his time, of an aristocratic family, used to command, and absolutely sure of his authority. What faint impressions of his personality reach us across the eight centuries since his death suggest an imperious, somewhat cold man, who took his duties seriously, and discharged them faithfully. He would not have been a chatty dinner companion. I learned a lot about medieval life in England. The canonisation process became formalised during St Thomas’s life; I suspect that he would have been made a saint much more easily a century earlier.
     Saints' cults were a major source of income for the Church, which had not yet assembled the wealth that would make it pretty well independent by Henry VIII’s time. Hereford encouraged the cult of St Thomas, which lasted for about 100 years from the time of his death (about thirty years before he was canonised). Cousin Pen’s essay describes the evidence for the effects of the cult of St Thomas. The money raised was used not only to build a splendid tomb for St Thomas, but also to repair and eventually rebuild the cathedral. The See was not rich, and needed the money.
     I’ve been to Hereford several times. It’s best known for its library, one of the oldest preserved medieval libraries in the world, with its original volumes still chained to the shelves; and for Mappa Mundi, one of the oldest maps of the world. Uncle Peter and Cousin Pen always gave us a wonderful time guiding us around the library and the Cathedral. That’s why I’m glad to have this book.
     It’s a good ancillary text for any student of medieval history. The documents presrve a surprising amount of the music, which has been reconstructed and rewritten in modern notation. ***

The Improbability Pirnciple: Why we don't notice the improbability of eveyday life (re-read)

 

David Hand. The Improbability Principle (2014) Suppose you’re playing bridge. You get a hand of all 13 hearts. How unusual! In fact, this deal is one of  635 013 559 600 possible hands. “Ordinary” hands are much more likely, right? Well, yes and no. The fact is that any combination of 13 cards is equally likely. The all-hearts hand is unusual only in that you notice it. A hand with a mix of values and suits looks normal, and it is, in the sense that there are only four all-suit hands, and 635 013 559 596 mixed-suit hands. But each one is unique. So each one is as unlikely to be dealt as any other. All bridge hands are equally improbable. 

     The same goes for lottery number picks.  

And when you have absorbed that fact, you are on the way to understanding Hand’s book. He explores odds and chance, our perceptions of odds and chance, and the tools available for estimating odds and chance more accurately. The exploration shows that “Coincidences, miracles, and rare events [will] happen every day”. He demonstrates several laws of probability that combine to make the improbable happen.

                                                  Ian Fleming was wrong.

    Hand’s book will help the reader realise how improbable every event is. It’s a good introduction to probability and statistics, with many real-life examples as well the standard text-book ones. It will help the reader see the world in which they live with more understanding, and I hope more curiosity. Hand writes well, his tone is conversational, he allows himself the occasional dry joke.
     Recommended. ****
     

Here’s my take on his work. It builds on his book, and other books I have read.
     Improbable events must happen, for there are long and convoluted chains of cause and effect leading up to every event. Call them event-chains. Looking forward from here and now, an enormous number of possible event-chains stretches into the future. They intersect and criss-cross in unpredictable ways. The future is a network of possible events. Any one event lies on a node, where several possible paths through the network meet. Which paths through this network could lead to events involving you, tomorrow morning, while you are having breakfast? An enormous number. You can list some of the most likely events (the cat will want to go out just before you set the breakfast table, you will fetch the cereal from the pantry, etc).

Jung didn't understand probability. Nor did he notice that "meaningful coincidence" is meaningless. What's meaningful for one person is a mere oddity to someone else, and triviality to a third.

      But there are other ones, trillions of them in fact (a meteor will crash into the garden, a storm will strip the leaves from the oak tree, two cars will collide in front of your house, the water heater will spring a leak, etc). The odds that any one of them will happen is small (the microwave will stop functioning). For most of them, the odds are very small (one of the people in the collision is a schoolmate whom you haven’t seen in twenty years). Some are extremely small (on the back seat of the blue car there’s a paperback that you donated to the Goodwill in another town seven years ago).
     One of these unlikely events will happen. True, some event-chains are more likely than others, but in general, there are far more unlikely possible events than likely ones. There are so many that unlikely events are more likely to happen than likely ones. The likely ones just happen more often.

      As with the all-hearts hand, most events are equally unlikely. Or equally unlikely enough that it makes no difference. We pay attention to the ones that we feel are strange in some way. (That's why Jung was wrong about "synchronicity".)

     Think about it this way:
     You go to buy a box of ball-point pens. Consider the event-chain leading up to your purchase. Dozens, perhaps hundreds, of people were involved in producing the raw materials, shaping them into parts, assembling them into pens, packaging them, distributing the pens to the store. Then there’s the event-chain leading up to your decision to buy the pens. Today, not yesterday. This store, and not another. And so on. What are the odds that you would buy this particular box of pens, today?
     Exactly.
     So why don’t you think of it as improbable?
     We don’t usually notice the improbability of any given event. That’s why we’re flummoxed when we do notice one.

 Another review of this book:  https://kirkwood40.blogspot.com/2016/05/the-odds-that-odd-things-will-happen.html

 

The Fierce People

     Napoleon Chagnon. Yanomamö: The Fierce People (1968) In 1964 and 1965, Chagnon spent about 13 months with the Yanomamö. A PhD was one result. This Case Study in Cultural Anthropology is another. It’s aimed at students, hence a nice personal tone, with anecdotes about Chagnon's reactions to the people he came to know. He does the standard thing,  describing the people’s “adaptations” to their physical and social environments, their kinship structure, their myths, and their politics, which for the Yanomamö is primary. Their life focuses on gaining respect and power within their villages, trading and allying themselves with neighbouring villages, raiding their enemies, and as often as not betraying their allies.
     Physically and ecologically their life is hard. They build gardens, and must stay near them to protect them. New gardens must be built every four or five years. Their technology relies almost exclusively on the materials the jungle affords them. Villages trade goods with others, but more for political reasons than material need, since everybody can make what they need when they need it. Villages with European contacts have acquired steel and aluminum pots, knives, and other trade goods, which they trade with remote villages.
     But the most important currency is women. Their marriage rules are fairly complicated. Fathers and brothers have the right, individually and as a group, to decide with whom to trade a woman. A husband may trade one of his wives or give her away (usually to a younger brother). Marriage ties are more important than blood ties. Alliances between villages require the exchange of women. Raids are often done to abduct women. A man may be accepted into a village by marrying a local girl: her family become his allies, and he strengthens their group.
     Fierceness determines social and political status. Alliances between villages, created by hosting a feast, determine the political status and relative security of the villages. Fighting for status is expected and encouraged, but the various kinds of fight are carefully regulated to minimise bloodshed. Even so, while Chagnon provides no numbers, the death rate from manslaughter and murder must be evry high. (Other sources indicate that half of all male deaths are by violence).
     The daily routine of a man revolves around gardening and cooking, taking drugs, politics, occasional hunting, and fighting. and occasional raiding For a woman, it's gardening, cooking, childcare, making hammocks, foraging, and serving her husband. Both men and women will play with children, who for the most part are left to amuse themselvesuntil about 6 or 8 years old. Fights, raids, and feasting punctuate this life.
     Chagnon’s description of his life among the Yanomamö is vivid and personal. His technical discussion of their kinship system, and its effects on their politics, is clear. He is at pains to emphasise that marriage ties are more important than blood ties, most of the time. Marriage creates and preserves the lineage, and lineages are politically significant groups.
     Ok, that’s a summary of what I’ve learned, mistakes and all.
     What’s my impression of the Yanomamö? Schoolyard bullies. Boasting, with occasional violence to back up the boasts; anxiety about maintaining one’s reputation; accumulating as much treasure as possible; doing only necessary chores; and lazing about as much as possible: does that sound familiar? About the only thing that’s missing from the schoolyard is the explicit trade in women, but among high school students the charming bully gets the girls, so the difference isn’t as great as it might seem. In short: Yanomamö life is nasty, brutish, and short.
     The Wikipedia article notes disagreements with Chagnon’s take on Yanomamö culture. But the article contains enough reference to documented raids and massacres that the argument that the Yanomamö are basically just as kind and loving as other tribal people sounds like special pleading. I think that Chagnon’s account is plausible. The Yanomamö really are more concerned with their violent notions of male honour than most peoples are. But keep in mind that violence and male honour are linked in every human culture. That suggests that the  Yanomamö are merely an extreme example of a human constant, of species-specific behaviour.
     More thoughts on violence, honour, and the Yanomamö are found on The Art of Manliness.
     Chagnon writes well. The book includes a good selection of photographs and diagrams. **½

Wisdom is more important than IQ.

So you think being smart is what matters? Nope. Wisdom beats intelligence, according to a BBC article on the downsides of a high IQ:

From my experience, being clever tempts you to believe that your notions are better than other people's. After all, you have such excellent clever arguments supporting them!

Beware of trusting your own cleverness.