Looking for the Logos of Lucre I

Thomas Piketty. Capital in the Twenty-First Century. Translated by Arthur Goldhammer. Harvard University Press, 2014.

[Illustration: Victor Dubreuil, Barrels of Money, 1893]

I’ve been slow in posting these comments on a book I finished reading last spring, but recent developments in federal tax laws seem about to begin an experiment to test some of the author’s ideas. I’ll write more about that once the tax bill is done with, but meanwhile, here’s a summary of what I learned from Piketty. If you have time and inclination to read the whole 700 pages and take careful notes like I did, I say, do it. Otherwise, this somewhat lengthy post is my best effort to describe some very important work.

Piketty left his position at an American University because he felt American economists were too childlike in their fascination with mathematical models and too ignorant of the historical patterns of economies in the real world. He feels that economics in America was too divorced from the other social sciences to contribute usefully to understanding the changes in global society. While Piketty does rely heavily on economic data, and he uses a few very simple equations, for the most part, this is a book about history and what it suggests about the future. In some ways Thomas Piketty sounds like Alexander Herzen (whom I posted about last year). He admits that he cannot really predict what capital will do in the twenty-first century, because as he says, “history always invents its own pathways.”

In part one of the book he shows that growth rates for the two factors that control economic output, population and productivity per capita, have undergone a dramatic rise and fall since about 1700. This started in Britain, France and the US, and then spread to the rest of Europe and later to Asia. According to Piketty, the most likely scenario is that the rest of the world will catch up in the 21st century. Overall this leads to a rise and fall of economic growth, with a likely leveling off around 2100 at 0.2% population growth and 1.2% per capita output growth, for 1.4% growth in total economic output.

Piketty believes inequality rises because the rate of return on capital (r) is higher than the overall growth of output (g), or simply, r > g. The rich, who own capital, benefit from r, while the lower ranks, who depend on wages, can usually only gain as the economy grows (g). Economic inequality was very high throughout the nineteenth century and then declined in the early twentieth. The top ten percent’s share of income was about 45% from 1910 to 1940, fell to about 35% from 1940 to 1980 and has risen since to 47-50% [without any signs of slowing down, I think]. From this, there also follows a shift in the capital to income ratio, that is the value of accumulated goods compared to annual domestic production.

In part two, Piketty talks about how the character of capital has changed. The nineteenth century novels of Honore de Balzac and Jane Austen illustrate the way well to do people then lived off rents, mostly land or government bonds, although Balzac’s characters often owned factories or mercantile houses at some time in their lives.

Beginning about 1914 there was a huge drop in accumulated wealth across the developed world, but a much smaller reduction, or even growth, in economic output. What caused the big twentieth century dip in the ratio of capital to income? Physical destruction in war does not account for more than a third of the drop. He attributes the rest to the collapse of foreign assets, low savings rates and low valuation of assets in the politically unstable times. Wealthy people sold assets to maintain their level of consumption during the Great Depression, etc. Government bonds’ value was lost through inflation. “Ultimately the decline in the capital/income ratio…is the history of Europe’s suicide, and in particular the euthanasia of European capitalists.”

America never had the drastic swing that Europe did in the 20th century, so we may tend to regard capitalism with less suspicion, according to Piketty. Also today, because of Europe’s slower growth, economic and demographic, accumulated wealth is even more important there than here. Britain and France have capital/income ratios of five or six, compared to the US ratio of four. Germany is also at four, which he says is because German corporations are more controlled by stakeholders (unions, government, citizens) relative to stockholders, which keeps their stock prices down. The global ratio of capital to income stands at about 4.5:1 as of 2010. Piketty projects that it will rise to something like 7:1 by 2100.

The capitalist’s versus the laborer’s share of national income in Britain and France has gone from 35:65 in the eighteenth century, to as high as 45:65 between 1830 and 1870 (think of Ebenezer Scrooge) to as low as 15:85 between 1925 and 1980 and back up to 25:75 today. Picketty also tries to assess the rate of return on capital, which generally seems to be about 5% but got somewhat higher around 1920 and a lot higher (>10%) around 1950. He stresses that non-wage work, such as in small business owners and partnerships are hard to assign correctly to labor vs return on capital and that even pure return on capital like interest or dividends, requires quite a bit of work. Adjusting for this to get a “pure” return on capital lowers and flattens the temporal variation. He thinks larger individual or corporate fortunes earn higher rates of return. On really large fortunes and things like endowments, it may be well above 5%.

He expects that the rate of return on capital will not decline as the capital to income ratio increases in the future, which will lead to a higher share of national income for capital, possibly as much as 30 or 40% by the end of the century. This depends on whether capital is able to go on substituting for labor (by computers, robots, etc.) or whether the increasing demand for skilled operators will strengthen labor’s share in the long run, as some economists believe. It never crosses his mind that we might go with Ivan Illich and begin liberating ourselves from industrial goods and technology by political means.

He begins his third section, on inequality at the individual level, by returning to Balzac’s Pere Goriot, specifically Vautrin’s lesson to Rastignac about the futility of work and study as a route to wealth. Only an inheritance, direct or through marriage, could enable a man to become rich in Paris in the first half of the nineteenth century. Piketty points out that inherited wealth lost much of its importance in the twentieth century, so differences in income began to have more to do with talent and effort. You could go quite far by work and study after the great decline in capital to income ratio triggered by the world wars.

He observes that capital is always more unequally distributed than income from labor. This is true across all periods and all countries. The top ten percent of income earners get about 25-30% of wages, while the top ten percent of owners have 50-90% of wealth. The bottom 50% of workers get about 25-33% of wages, but the bottom 50% generally own only 5% of wealth. One problem in measuring these inequalities is lack of good data on lifetime earnings for labor, which would even out some of the fluctuations that individuals experience. If wealth were largely accumulated to protect against such fluctuations or provide for retirement, the wealth could be more equally distributed than current wages or as evenly distributed as lifetime wages, but this is never the case.

Inequality in wealth shows similar patterns across all age cohorts, so it’s not simply a matter of lifetime accumulation. The two keys are inherited wealth and different rates of return on capital, especially on large vs. small amounts.

He gives a detailed history of inequality, as far as the data permit, showing how the distribution of both income and wealth across percentiles has evolved since the eighteenth century. Inequality declined sharply during the 20th century, but after 1980 it began to shift back towards higher inequality. During the same period, the US went from one of the more egalitarian societies, particularly with respect to wealth, to the least egalitarian with respect to income distribution of any society for which he has data. These trends have continued apace since 2010, of course. The big change has been the rise of a professional elite that receive pay many times the national average. He wonders if this is in fact a supermeritocracy, as some have termed it, but he does not draw any conclusion in this part. He points out that the upper percentiles, above 90%, are quite diverse, including academics, doctors, lawyers, small business owners, upper managers and at the very top the small number who still earn huge amounts from dividends, interest, rents, etc.

The New York Times had an editorial, 21 February 2017 explaining that neither immigration nor automation causes the current discontent of the people at the bottom. It is due to the policies that have led to the top 10% getting 60% of all the gains in the economy since 1980, while everyone else stays the same or little better, with income growth of a half percent per year. Weakened collective bargaining, stagnant minimum wage, reduced support for education and changes in tax laws have all contributed to the ascendancy of the upper levels. Tax reform, curbs on financial practices that hurt workers and support for childcare, elder care and fairer scheduling (I would add healthcare and affordable housing) would do much to restore balance, according to the Times [dream on…the GOP has just done the exact opposite].

Piketty tries to show that the rapid growth of inequality cannot be the result of growing differences in individuals “marginal productivity,” that is, how much value a CEO or other manager adds compared to lower level employees. There are some increases in the difference between the unskilled, the older skilled and the younger, tech savvy workers (the race between technology and education), but this is not enough to account for the gap, which in the US is greater than it was in apartheid South Africa. It is also hard to see why the gap is less in Europe and Japan, if technological innovation were the only cause.

He points out that the notion of “marginal product” of a CEO is nearly impossible to define; instead it is determined largely by factors like ideology, hierarchical relations and bargaining power. Once the elites start to grab a bigger share, they can point to one another and say, “look how much other CEO’s make.” [This is certainly how it works for college administrators.] The ultimate problem becomes what sets limits. It must be social norms (there seem to be no legal norms) but why do Europe and Japan differ so much from America? One factor may be a greater degree of “extreme meritocracy,” the tendency to attribute success to individual ability and effort, as opposed to collective effort, good fortune, etc.

Changes in top marginal tax rates since 1980 have provided a much greater incentive to raise top pay. In a clear example of positive feedback, the resulting windfalls have gone, among other places, into donations to political parties, PACs and think tanks, whose platforms and policy recommendations include keeping those taxes as low as possible. [It seems to be working out for them].

At the beginning, the US started more equal, but it was catching up to Europe by 1910 (~80% wealth to top 10%) This caused concern in political circles that the US might lose its egalitarian ethos and this in turn led to establishment of progressive federal estate and income taxes, according to Piketty. He contrasts that with the talk among economists and politicians today that US inequality (which has surpassed Europe since the 1970s) is good because it drives entrepreneurship. Conservatives and libertarians think Europe is now too equal. [Congress is about to abolish the estate tax, which they cleverly call the “death tax,” so we will see plenty more inequality in the future.]

Piketty says that there is no reason to expect a stable distribution of wealth in the future. The real reasons inequality was lower from 1914-1970 were the series of multiplicative shocks to capital from wars and financial crises and the taxes governments imposed in the twentieth century. If, as seems to be happening, those taxes are abolished or greatly reduced, then inequality will rise.

In the nineteenth century inheritances and gifts accounted for about a quarter of national income. Between the world wars this went down to only about ten percent, but now it is increasing again, because the capital to income ratio has gone back up from around two to about five or six. The golden age of self-made fortunes is past. Of total wealth, well over half is inherited, more so, if you count gifts and income earned from capital. Underlying all this is the r>g phenomenon, which means those who inherit can accumulate faster than those who labor. The big change from the nineteenth to early twentieth century was that more middle class people accumulated some wealth that they could pass along. Today, most people, however, still inherit nothing. Accumulated wealth does not go mainly to support us in old age; it goes to the heirs of the very wealthy.

Piketty describes the inherited wealth of the nineteenth century as seen in Austen and Balzac, where only a tiny elite could live much above subsistence. Equalizing everyone’s wealth and income at that point would have perhaps severely diminished “civilization.” William Hinton makes a similar point in Fanshen: when the peasants overthrew the landlords in China in 1948, there just wasn’t much wealth to go around. None of the nineteenth century novelists, Piketty says, were under the illusion that these differences in wealth were merited. Today, with the rise of the meritocracy, we tend to assume otherwise, but the evidence is mixed, at best. [Take a look at Trump and his offspring.]

There seems to be a global trend for the share of wealth held by the richest, the multi-billionaires (he’s speaking of fewer than 300 individuals in this class, who together account for about 0.9% of the world’s wealth) to be increasing at about twice or three times the rate of the average per capital wealth globally. Probably 60-70% of this wealth comes from inheritance, the rest from entrepreneurship, but it all increases at 6-7% a year, more for the very richest, like Bill Gates. The differential rate of increase, if it extends down into the top 1/1000 of the population (the 10 million dollar fortunes) could increase that group’s share of global wealth from the current 20% to 60% by 2050. This would have profound consequences. Only progressive taxation can control them, he says.

The question is how to constrain what Piketty calls the “inegalitarian spiral,” so as to protect the public interest and democratic values from “patrimonial capitalism.” The principal alternatives are a global tax on capital, which would have the added advantage of opening wealth up to public scrutiny, in turn making regulation of the financial system possible, or a retreat into nationalism, which sacrifices the advantages of openness and global competition.

Between the 1930s Great Depression and the 2000s Great Recession, the role of government in society changed tremendously. Financial regulation and confiscatory taxes on high incomes have been evolving in the industrialized democracies since the 1930s, and they have been under constant attack since the 1970s. Piketty says these arguments are natural and proper, especially since both financial capitalism and government controls have become more complex and opaque to most people. How can the issues and responses be made clear? The starting point is to look at the growth of the “social state” since the nineteenth century.

At the beginning of the twentieth century, taxes in what were in many ways still “regal” states consumed less than ten percent of income in the industrialized countries, covering basically police, courts, the military, foreign affairs and administration. Education and health consumed only 1-2% of national income. From World War I to the 1980s, the share of income devoted to education and social welfare increased, leading to levels of taxes (including all compulsory payments to government at all levels) that range from 30% in the US to 50 or 55% in France and the Nordic countries. These rates have been almost constant since then. Piketty notes that the amount dedicated to the functions that dominated in the nineteenth century (defense, etc.) still consume around 10% of income, so the increase has been almost entirely devoted to building the “social state,” namely education and health (10% to 20% of income) and income transfer payments (welfare, unemployment and social security, also 10% to 20% of income). He notes that the US spends more (20%) than European countries (10-12%) on health, if private insurance is included. He thinks the lower levels and slower growth of social state spending in the US is attributable in part to racism. The US is the only democratic country that essentially uses prisons as an alternative to welfare, especially for young black men. We have the highest incarceration rate in the world. We are also unique in using food stamps, because we fear that otherwise welfare money will be spent on drink or vice, possibly another legacy of racist attitudes. This may also account for our fondness for other voucher programs. Hating and mistrusting the poor is a decidedly American trait (now being seen in Europe as refugees and immigrants become more difficult to deal with). Perhaps this is because of the successive waves of immigrants, including freed slaves, that have characterized US social history.

He links the growth of the social state to the notion of rights as expressed in the Declaration of Independence and the Declaration of the Rights of Man, especially the latter’s claim that inequality can only be justified by social utility. Piketty argues for a Rawlsian definition of utility, relating it to benefits to the least advantaged, as opposed to a utilitarian preference for a mathematical sum of benefits across the social spectrum.

What is the future of the social state? Piketty thinks that is will continue but is unlikely to grow much, at least in Western Europe. Slower growth of income and productivity will mean that raising taxes would slow or reverse income growth and constrain private consumption. Also, the social state becomes hard to manage if it grows too large. Of course, he says, a lot of the infrastructure of education and healthcare, which make up 20% (or more) of the overall economy, is privately owned and managed (hospitals, colleges, etc.) The pattern differs from country to country and is changing as new modes of organization develop.

An important point he raises is that the absolute level of taxation is less important than whether taxes are collected fairly and transparently. I assume that also goes for how they are spent, so whatever the organization of the social state, it needs to be open to scrutiny by all citizens. This is where so many organizations break down (for example, the Port Authority of New York and New Jersey) and why people are suspicious of public/private partnerships. If they function to shut out scrutiny and debate about how taxes are spent, they are anti-democratic.

He thinks that in Western Europe the debate about the social state will be mainly about reforming and modernizing the existing structures. One major issue is access to education. He asks whether education has fostered social mobility, rather than just upping qualification requirements across the board. Generally the answer is no. Sweden shows the most upward mobility, while the US shows 30% less, with the other Western European countries in between. Mobility is hard to measure across generations, so these comparisons are imprecise. Still, this may fairly accurately reflect the much more unequal access to the best education in the US vs Europe. Parental income is an accurate predictor of university access in America. The average income of parents of Harvard students is in the top 2%, despite the claim that admission is based only on merit. This is a case where the actual process is a closely guarded secret.

Even in Europe, where tuition is free or low, there are other factors at work in universities that insure that the public spending on them goes to reinforce or exacerbate existing social hierarchies. In the one French grande ecole that he could get data for, the students came disproportionately from the upper 10% of the income hierarchy (he quotes the school’s founder from 1872, saying essentially that the upper class had to stop being idle and “invent meritocracy” in order to save itself from the rising democratic tide). Piketty notes that the US has a large share of the world’s top universities in part because they can charge high tuition [the Republican tax plan, which will make graduate assistants pay taxes on waived tuition, may change this]. He thinks that it would be possible to have greater access to elite universities if the government provided a lot of funding to independent schools [As scholarships? Is that really consistent with independence? It could be, if students could use them anywhere they chose, like National Merit Scholarships].

He also talks about pay as you go pension systems like Social Security, which work well with high economic and demographic growth, as prevailed from the 1930s to the 1980s. A capitalized system would avoid the problem of slower growth and take advantage of rates of return likely to be at least 4%, but there is no simple way to make the transition. The US probably has more flexibility than Europe, because FICA taxes are lower than the 25% the French pay (so he says) and we don’t tax all wages and salaries. He believes that there’s no way to eliminate Social Security in the immediate future. I personally am very happy with my capitalized TIAA-CREF retirement plan, but not everyone can save 10% of pay, even with an employer match.

He briefly surveys the developing and emerging countries and finds that they have low rates of taxation, basically in proportion to their level of economic development, not enough to adequately support a social state. Some have even seen levels decline, as neoliberal or ultra liberal policies are forced on them by international organizations. Loss of tariffs revenue is a key factor. He says the rich countries are using the less developed (and the old communist countries) as guinea pigs for economic theory testing and not giving them a chance to follow the historical course that the west did itself. If they try to build a social state on a regal state level of taxation by underfunding police, military, etc. they risk cops on the take, anarchy or a military coup. China seems on the right path as far as taxes and social services, with great uncertainty, political and demographic, while India seems stuck in a regal rut.

Piketty defines proportional, progressive and regressive taxation, and then shows that at present, overall taxation is generally regressive at the highest levels of wealth and income. Because of the importance of mandatory contributions like Social Security and because income taxes have become less progressive, especially since 1980, the rich pay a lower percentage than the poor of their income. Add to that that corporate income and income from capital are taxed at lower rates than wages and that the rich have greater access to tax havens, and you get even more regressive overall taxes. Piketty worries that this will begin to undermine the consensus supporting the social state’s financing, especially among the middle class, which bears the heaviest burden of progressive taxation. It also takes away the consolation to those in the lower ranks, who have already been hurt most by globalization. These trends were painfully clear in the US 2016 political campaign. The Republican response has been to advocate for dismantling the social state and replacing it with either the system that existed in the 1920s under Coolidge and Hoover, or some kind of free-market fantasyland, possibly with some Christian charity thrown in. Bernie Sanders tried to get people to see what the real problems were, but Hillary Clinton and the business as usual neoliberals pushed him aside. Both candidates tried to sell feel good nonsense to their base constituencies, but neither had any real plan. [Trump actually did: it turns out to be the congressional Republican plan.]

He looks at the history of attitudes towards returns on capital, noting that the Greeks and Christian Europe distrusted or banned interest on lending, but not rent on land. This facilitated social control, but it stymied economic growth. Communism banned all returns on private capital by abolishing it. The problems then were not related to increasing inequality, since r=0, but to the difficulty of having g not go to 0, without the incentives of free markets. Efforts to control the economy ended up in tyranny. In the course of the democratic revolutions in America and Europe, taxes on property were set to insure the proper registration of titles more than for revenue. I think customs and excises provided most revenue until the twentieth century. Then the long discussed progressive taxes began to be implemented in the chaos of war and depression, etc. In the twentieth century, taxes on capital, including real estate, that did exist were low and often inefficient because they were not based on current market values. Furthermore, the real property tax was regressive, in that the lower your wealth, the more of it tends to be in real estate.

Progressive taxation is an almost entirely twentieth century phenomenon, according to Piketty, arising out of the changes caused by World War I. The need for revenue to pay for wars and the rise of the social state led to rapid increases in top tax rates on income and estates. He says the very highest rates, above seventy percent, which were first enacted in the US, were intended to make it difficult, if not impossible, to achieve very high levels of wealth. The intent was economic leveling. Piketty feels this is the best way to balance equality and freedom. As Kenneth Boulding said about the estate tax, it makes it harder to accumulate huge fortunes, and so promotes equality, without necessarily discouraging productivity or penalizing those who promote it. The estate tax, in particular, does not fall on those who actually earned the money. Piketty refers to Irving Fisher’s 1919 presidential address to the American Economic Association as one example of the degree that people worried then about inequality. Like Boulding and Josiah Wedgewood, Lewis favored estate taxes as opposed to taxes on profits and other returns on capital. The Great Depression started right when inequality was at an all time high in the US, driven by huge capital gains on stocks. One of Roosevelt’s first actions in 1933 was to increase the top income tax rate from 25 to 63 percent, and then to 94 percent by 1944. It stayed around 90 percent until the mid-60s and was still 70 percent in 1980. These high rates in the US and Britain applied to unearned income (rents, interest, dividends, etc.) and earned income rates were often lower. Furthermore, these top rates never applied to more than 1% of taxpayers, usually more like 0.1-0.5%.

This passion for leveling lasted from the 1920s to the 1970s in the US and Britain and then did a 180, leading to top tax rates much lower than in France and Germany, which had not gone in for so much leveling. This has caused proportional increases in the share of income going to the upper percentiles in both countries. Piketty thinks that part of the driving force behind Thatcher and Reagan was anxiety about the way France, Germany and Japan were catching up to the US and Britain by the 70s, even though this was just the inevitable consequence of their having fallen so far behind because of the wars. Piketty doesn’t find any relation between the decline of these tax rates and productivity increases. He thinks that the cuts just made it more worthwhile for top executives to angle for huge raises, of which they got to keep a much bigger share. His solution is to reinstate top rates of about 80% on incomes over $500,000 and 60% on those above $200,000. This would rein in top salaries, without, he says, reducing productivity. The government would then have revenue to begin to strengthen the weak social state, especially in health and education.

Piketty’s long-term solution to the problem of capital is a global tax on all wealth. The rate would amount to about 0.5% of global income. It would be progressive, designed to slow or halt the growth of really large fortunes. It would require complete transparency of who owns what globally.

Today, he says, it is hard to even discuss the problem of capital, because we don’t know where most of it is. Private wealth is hidden in tax havens, foreign investments, etc. Ownership of huge assets is often concealed by layers of dummy corporations. That’s why you cannot get the world’s debts and credits to balance. As Piketty says, it looks like Earth must owe money to Mars, a scenario rendered plausible only by the TV series, The Expanse. Lack of transparency also makes it difficult and dangerous to try to deal with global financial crises. He has a lot to say about transparency and its relation to free markets and trade, including that it is criminal for some countries to siphon off the assets of others (e.g. Cayman Islands from the US), although one could see that as payback for colonialism, if the locals were benefiting.

He argues for automatic sharing of banking data globally. We have this in the US now, and are supposed to have it for foreign assets (excluding some important classes, like some trust funds and foundations) under the 2010 Foreign Account Tax Compliance Act. We don’t think that the domestic rules are so onerous; they insure fairness better than self-reporting would. A lot of places apparently have automatic adjustment of real estate values, too.

A tax on capital, once we knew how much there was and where, would first insure that the super rich, like Bill Gates, contribute their fair share of taxes. Income taxes, even when rates are 50-60% or more, rarely capture the gain in wealth of these individuals (6-7% annually, in some cases, while reported income amounts to 0.01% of that same fortune). The observed positive correlation between rate of return and size of fortune, shows that a progressive tax on capital would amount to a progressive tax on income as well.

He notes that such a tax would also act as a strong incentive to seek highest returns on capital, instead of leaving assets in low earning investments. This may be somewhat beneficial, or not. For instance, relying only on taxes on capital and not on income, would hurt companies when they get into difficulty.

What would an international tax on capital be like? It would have to be fairly small, like real estate tax, if it were collected annually. In Europe a zero, one, two percent progressive tax, with breaks at one million and five million euros, would bring in revenue of 2% of Europe’s GDP a year. With complete transparency, you could replace the property tax with 0.1% tax on wealth under 200,000€ and 0.5% on 200,000 to 1,000,000€. This could be done by individual countries on their own, making the property tax structure much more progressive, especially if debts were deducted from assets. Right now, I pay taxes on the market value of my house, even though I owe a lot of that to the bank, which doesn’t pay any tax on its share. Piketty thinks the fairest system for large fortunes, above 5,000,000€ would be to set rates based on a rolling average of rates of financial return. Such rates, when returns are running above 6% say, should be adjusted up above 2%. By setting this rate to effectively reduce the gap between r and g, you can constrain the increase of economic inequality in whatever way you decide is fair and socially desirable. You can even engage in leveling, while still keeping free markets.

The alternatives to a carefully designed, progressive tax on wealth to regulate patrimonial capitalism are protectionism and controls on capital. Protectionism can protect undeveloped economic sectors and punish transgressions of international order, but doesn’t in itself generate growth. Capital controls are being considered in many countries to counter the instability created by free flow of capital. Free flow was advocated in the 1980s to 2008 by IMF, the World Bank, etc. Since then, faith in self-regulating financial markets has declined, and countries are looking to protect themselves by holding on to lots of reserves of foreign exchange. China has never allowed free flow of capital, having a currency that can’t be freely exchanged. They also restrict capital investment from outside and outflows of capital assets. Unlike Russian oligarchs, Chinese capitalists can’t move to Switzerland with their assets, or continue to collect their dividends from Chinese companies. China has a progressive income tax and invests a lot in health and education, unlike the former Soviet bloc countries on the one hand and India on the other.

Another question is how to deal with the unequal distribution of natural resources. Oil is the big one, of course. The unequal distribution of these assets is a nasty issue, caused in part by postcolonial boundary drawing. We see the huge costs it imposes in the form of perpetual was and strife in the Middle East. Some countries, like Qatar, have hundreds of billions in annual revenue, while Egypt can invest only five billion to educate thirty-five million people. Piketty thinks a global wealth tax should be designed in part to remedy situations like this.

Immigration is another way the world has adjusted the distribution of resources, most obviously the US. Immigration has long served as a counterweight to accumulation of patrimonial fortunes here, and it continues to keep us from returning to the social conditions of Old Europe. Immigration supports g, in the face of r. Still, it is immigrants (and of course, blacks and women) who absorb most of the growing inequality of labor income here, too. Such redistribution via immigration works in Europe and the oil countries to some extent as well. Trouble is, this kind of redistribution only delays the growth of inequality to when g levels off around the world. Also, with immigration, you need to maintain that strong social state and progressive taxation, or you will get a backlash from those who lose out to globalization. We can see the truth of that warning in the election of Trump, who along with the GOP, seems bent on continuing the policies that got him elected by the discontented (see Chris Ladd on the White Socialism that used to provide America’s social state and why its beneficiaries voted for Trump).

Another alternative to taxes is public debt. The US and even more so Europe, have lots of private wealth but heavily indebted governments. Piketty says that, given a choice, it is better to tax the rich than to pay them for the use of their money (through borrowing). Tax cuts for the rich have been followed by accumulation of high levels of public debt in the rich countries (close to 100% of annual national income vs. 30% in the developing world). [In New Jersey and other states, tax cuts for the rich have been made up for by stiffing low paid public employees, via benefit cuts and unfunded pension obligations, a common form of economic austerity].

Reducing unsustainable debt can be done by taxing capital, allowing inflation (the historical solution) or austerity (the current solution). Privatizing all public assets in Europe would also just about wipe out public debt (the totals being about equal). This would replace interest on public debt with rent on previously public assets. Something similar is going on as funding for public higher education dwindles. This, he suggests, is simply shifting the form of the problem. Default, total or partial, has unpredictable consequences, which may hit small savers and the banks they rely on much more than the richest 10% who have more options for escaping the crisis default would trigger.

He thinks a one time progressive levy on all financial assets, amounting to about 15% of total financial wealth would be the best way to reduce excess public debt. This, of course, requires complete financial transparency. If the target were only a fraction of public debt, rates could be lower. After WWII, France imposed a one-time tax of from 0-25% to reduce its massive debt.

Letting inflation rise is a solution that has also worked before. Going from 2% to 5% inflation reduces the value of public debt by about 15% he says. France and Germany got rid of a lot of debt in the 20th century by inflation of 10% and sometimes a lot higher. The US and Japan are doing some of that now, much more subtly. Europe, which has rules against letting inflation rise, is faced with ten or twenty years, possibly more, of austerity policies to reduce its debt. Britain applied austerity throughout much of the 19th century to eliminate its debt from the Napoleonic wars. They spent twice as much on debt service as on public education, with likely consequences for their competitive position in the 20th century. This is what Europe is currently doing.

Inflation is hard to control. France had four consecutive years of 50% inflation, Germany a year of inflation that multiplied prices by one hundred million. I know this from stamp collecting: the inflationary issues of Germany and France are very familiar: hundred franc and billion mark values from those periods are found in any mixture of cheap stamps. Inflation also wipes out small savings and retirement funds, adding to poverty. In Germany, nearly everyone was ruined by the 1922 hyperinflation. This is partly why these countries and their bankers are so inflation averse today. The hard hit on savings, especially smaller accumulations, is somewhat offset by the reduction in indebtedness for other poorer people, but not enough to justify inflation as a solution, he thinks. The only good thing it does is punish the rich who have unproductive capital.

These issues lead Piketty to consider the role of central banks. When gold was the standard, inflation and deflation were tied to discoveries of gold and silver, but once the standard was abandoned in the early 20th century, central banks had to be responsible for regulating money. They failed in the run up to the Great Depression, being too tight fisted to allow the borrowing that could have saved many banks and other investors. Milton Friedman and others then took the view that all that was needed to keep the economy and society on an even keel was careful growth of the money supply. Social state programs were irrelevant. Piketty thinks that in the 1970s the disparity between Europe’s postwar growth and the slowdown in the US helped fuel the claim that growth of government was causing American decline. This opened the path for the conservative backlash under Reagan. The social state was stopped from completing its growth, and progressive taxation was abandoned, leading to our current dilemma. Piketty concludes that central banks have an important but not exclusive role as lenders with limited portfolios, alongside taxation and the social state.

Piketty discusses the future of capital and public debt and concludes that there is no magic formula involving the quantities discussed earlier that will decide what level of capital accumulation is desirable. This is a problem for democratic debate. The focus on common currency, the euro, was not enough without looking at taxes and debt for Europe.

The big issue for the future, thinks Piketty, is climate change. From an economic perspective, the problem is not figuring out the future cost, which we know within the limits of uncertainty, but deciding how much to discount that to determine how much current investment is needed to offset it. If you chose the current growth rate of 1-1.5% you get a different outcome than if you chose the current return on capital of 4.5-5%. He thinks the higher rate is way too optimistic. It suits the US do little attitude, but it is not in line with what is likely to happen. The opportunity is there, he says, to invest heavily at low rates of interest, if governments would decide to push for solving the problem. Green public investment, in other words, is a good idea.

The other thing he recommends is to develop new ideas about property and new approaches to democratic control of capital. He seems to be saying that mixed forms of public and private ownership in areas like education and health are good. What is essential is transparency on both sides, with the public fully informed. How much is that true in New Jersey? I suspect not to any great extent. He thinks that full public disclosure of corporate balance sheets is crucial, as well as seats for workers on the boards of directors.

In the conclusion, Piketty restates that r > g means past wealth grows faster than output and wages, or as he says, “the past devours the future.” This is a huge problem, without an obvious solution. Investing in education and research and development can’t raise g to 4.5-5% any more than cutting taxes has. Currently, even the Trump administration figure of 3% long term growth is deemed unrealistic. Free markets can’t correct the inequality. Wealth accumulation to such an unequal degree likely stifles innovation and opportunity, further reducing g. His progressive tax on capital seems to be the best solution, but it needs a lot of international cooperation to make it work. The US and China are big enough to achieve some things on their own, but Europe would need more complete democratic integration to make any progress.

I have noticed that economists here have very little useful to say about Trump and Republican policies generally. Most discourse is limited to the grossest kinds of generalities about markets, jobs, wages, growth, etc. based almost entirely on competing theories, with no real data to support them. It’s like talking about what to do about climate change, when your interlocutor has no clue what the data show and denies that they are relevant. You can’t make policy on abstract theories and catch phrases.

I have read a number of articles critical of Picketty, and I find that many of the authors seem to have overlooked things that I felt he dealt with. Studying economics solely through models is like studying evolution only through theoretical population genetics and ignoring systematics, biogeography and paleontology. The history of what actually has happened matters a lot. That’s Piketty’s major point: we can’t predict the future of capital, but we can look at its history, apply a few basic models that seem to account for what happened and try to see whether these models yield plausible ideas about the future. I see him doing that very consistently, all the while applying what we know from other social sciences to help understand what shapes the different histories of different countries and regions so that the simple economic factors produce diverse results. This is how evolutionary biology uses ecology, earth sciences and other disciplines to make the simple population genetics models produce the diverse results we see around the world.

One interesting parallel strikes me, since Piketty talks so much about inequality: increasing inequality may be a rule in evolution as well as economics. We know from studies of the Amazon rainforest that despite its enormous species diversity, a few species of trees make up a very high proportion of the biomass. Thus the abundance of species is very unequal. Perhaps this is a trend throughout evolutionary history as the somewhat better adapted species grow at higher exponential rates than the rest. This is very similar to Piketty’s r > g, since those are also exponential growth rates. In European economies, increasing inequality was the trend throughout the nineteenth century, until what Piketty calls the “shocks” of the World War era set back the wealthy and led to greater equality among the classes. Perhaps the shocks of abrupt shifts in climate, massive volcanism or meteor strikes are doing the same thing to the dominant (as ecologists call them) groups of organisms throughout the history of life. That is certainly the story we hear about the dinosaurs and other once abundant groups, now vanished or greatly reduced in abundance.

The one difference is, as Darwin long ago pointed out and others have maintained, since maybe 200 million of so years ago, g for overall life has been close to zero, that is, the biosphere is not getting bigger, leaving all life forms to fight for a share of an constant sized pool of living matter. Also, there is no distinction between income from capital and income from labor in the biosphere. There are no rentiers in a Darwinian struggle for existence, so it is just a matter of some species’ r values (here meaning the exponential rate of population growth) being higher than others’. In economics there are only two species, capitalists (rentiers) and workers, but they grade into one another in the middle. In ecology, there are literally millions of species, but intergradation is highly variable. Just as in economics, we can measure all wealth and income in terms of monetary value, in the biosphere all success must be measured in energy, of which biomass is an equivalent. There are complexities: how to account for the very high respiratory rates of some organisms, like wolves, or better, shrews, versus others with much greater biomass but less respiration, like trees. So total income for each species may be better than how much they accumulate, but you would not say that of humans when comparing a thrifty saver to a wastrel. So both accumulated biomass and total energy flow (= income) are legitimate ate measures of dominance or success in the biosphere, just like income and wealth need to both be included in economic analysis.

 

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Looking for the Logos of Life VII: Dr. Jeckyll and Mr. Hyde

The Strange Case of Dr. Jeckyll and Mr. Hyde. By Robert Louis Stevenson. I listened to the wonderful Librivox recording.

At first glance, a story set in nineteenth-century London may seem far afield for a Nearctic traveller. There are two reasons, however, to consider it. First, Stevenson is one of the most accomplished writers I know, whose Travels with a Donkey I intend to post about someday, and whose Treasure Island was THE adventure tale of my childhood. Second there is this passage in the story (which otherwise is too familiar to summarize) about the relation between the lives of our souls and bodies, and this relevant to a search for the logos of life:

“I was so far in my reflections when, as I have said, a side light began to shine upon the subject from the laboratory table. I began to perceive more deeply than it has ever yet been stated, the trembling immateriality, the mistlike transience, of this seemingly so solid body in which we walk attired. Certain agents I found to have the power to shake and pluck back that fleshly vestment, even as a wind might toss the curtains of a pavilion. For two good reasons, I will not enter deeply into this scientific branch of my confession. First, because I have been made to learn that the doom and burthen of our life is bound for ever on man’s shoulders, and when the attempt is made to cast it off, it but returns upon us with more unfamiliar and more awful pressure. Second, because, as my narrative will make, alas! too evident, my discoveries were incomplete. Enough then, that I not only recognized my natural body from the mere aura and effulgence of certain of the powers that made up my spirit, but managed to compound a drug by which these powers should be dethroned from their supremacy, and a second form and countenance substituted, none the less natural to me because they were the expression, and bore the stamp of lower elements in my soul.”

So here we have a dramatic statement of an old thesis about the mind vs body question, which has never ceased to captivate natural philosophers and others. Two very challenging recent papers that seek the logos of conscious, self- directed life through mathematical argument are

Hoffman, D. D., & Prakash, C. (2014). Objects of consciousness. Frontiers in Psychology, 5, 577. http://doi.org/10.3389/fpsyg.2014.00577

Conway, John; Simon Kochen (2006). “The Free Will Theorem”. Foundations of Physics. 36 (10): 1441. arXiv:quant-ph/0604079Freely accessible. Bibcode:2006FoPh…36.1441C. doi:10.1007/s10701-006-9068-6.

At this point all I can say is that I hope someday to get some idea what these authors are talking about. Will the result be enlightening, or could they simply have found new pathways into madness like poor Dr. Jeckyll?

Looking for the logos of life VI: Gaian analysis

Williams, G. R. 1996. The Molecular Biology of Gaia. Columbia University Press. 210 pp.

This is a book I wish I had read when it was first published. Williams lays out so many interesting scientific problems so clearly that I would have expected that it would have considerable influence on subsequent research, somewhat as Schrodinger’s What is Life? the subject of the first post in this series. I was somewhat surprised that Google Scholar only finds a few citations of this book. Perhaps William’s scholarly papers have been more extensively cited.

William’s goal is to see why the famous Gaia hypothesis has attracted so much popular interest, while receiving little positive notice from practicing biologists. He wants to determine whether the hypothesis is actually useful, either as a metaphor or a verifiable model of the function of the biosphere. The central question is whether it can explain why the Earth has remained habitable throughout the several billion-year history of the biosphere. That it has is not in question: all evidence points to the occupation of Earth continuously by the descendants of the first living things, which originated 3.5 billion years ago. This strongly implies that the earth has not frozen or boiled and that life has not otherwise been poisoned or starved during that time. Some factor or factors has kept the conditions on at least some of the Earth within the ranges essential to living organisms of some kind. In fact the conditions have not become intolerable to land plants and metazoans at least for hundreds of millions of years. The concept of the continuity of descent, expressed beautifully by Loren Eisley’s image of each of us trailing a long chain of ghostly ancestors, stretching back to those first living things, is to me one of the most useful ways to imagine what evolution is all about. If there had ever been a break in that chain, you and I would simply not exist.

The Gaia hypothesis states that this stability is the result of homeostasis: the regulation by negative feedback (like a thermostat) of a living super organism, Gaia. In its strongest form, the hypothesis is that life on the planet, the biosphere, regulates itself just as a single organism, whether a single cell or a multicellular individual, does. This idea has an obvious appeal: just as networks of interacting macromolecules make up a cell, which is capable of regulating its internal environment, so do networks of interacting cells make up tissues, organs and whole organisms that are able to regulate their internal environment. At least some organisms, like ants and bees, live in self-regulating colonies. Why shouldn’t all the organisms on earth form a self-regulating system?

Williams answers that for biologists the problem is how such a self-regulated super organism could be put together in the first place. Natural selection can explain how self-replicating systems can evolve, because natural laws can discriminate among multiple variant copies that compete for limited resources. The Earth is not self-replicating. There are no variants among which nature can select. There is only one. This problem led Lynn Margulis to argue that Darwinian evolution was not really that important, and that symbiogenesis was the true explanation. Margulis’s great contribution was the discovery that certain cellular organelles, chloroplasts and mitochondria, were once free-living organisms. More broadly, she showed that evolutionary advances by the incorporation and integration of separate living parts were behind the origin of the eukaryotes and that similar processes continue to operate in the form of horizontal gene transfer. The trouble with claiming that symbiogenesis is a replacement for Darwinian natural selection is that it appears obvious that all such new combinations remain subject to survival of the fittest.

Would it be possible for a Gaia-like system to arise in part of the biosphere and then spread, supplanting the less effective parts? Only if it’s self-regulating effects were confined to where it first existed, as might work for something like the terrestrial nitrogen cycle. It seems less likely where the atmosphere and oceans are involved, since they carry the products all over the planet.

Williams also points out that there is more than one possible explanation for the continuous suitability of the Earth for living things. He lists four: luck, inertia, equilibrium, and homeostasis. He analyzes each possibility in turn, and shows how each may contribute to the persistence of habitable conditions. In the case of homeostasis, he distinguishes between negative feedbacks from purely physical and chemical forces involving the lithosphere, atmosphere and hydrosphere and ones that require the biosphere. It is possible that even if there were no life on Earth, the temperature would stay within habitable limits (basically the range where liquid water can exist) just because of feedback among the temperature and the release and sequestration of carbon from air, ocean and rocks.

According to Williams, if you try to assess this possibility, the difficulty is that today the rates of almost all steps in this process, except volcanism, are under catalysis by organisms. We don’t know what an abiotic planet would be like. As of the time he wrote this book, not enough was known about the global chemical cycles at the molecular level to settle the question how much life matters. He gives an example of what was known about the molecular biology of nitrogen to show how complex the regulation of these cycles is likely to be. Nutrients move among four pools: inorganic forms in the lithosphere, hydrosphere and atmosphere; nutrients in forms available for uptake by organisms in the same three spheres and the biosphere itself as accumulated by organisms; nutrients incorporated into living cells and tissues; and bio products, from the cellulose of wood in trees to dead plants and animals to dissolved organic compounds to fossil fuels. All these are connected by flows and many of those flows (mobilization, assimilation, regeneration, sequestration and excretion) are controlled by living organisms, via enzyme-catalyzed, energy-requiring reactions.

I like this book because Williams thinks about Earth and ecology very much as I do. I learned from my professors at Cornell in the early 1970s about five processes of ecology: population dynamics, natural selection, energy flow, nutrient cycling and cultural evolution. These are closely interrelated ways of looking at the overall phenomenon of life on earth, or as I like to define ecology, the structure and function of the biosphere. Is the function of the biosphere to regulate the habitability of the planet, or does the planet have the property of remaining a stable habitat for life without life being involved? You can’t really answer that question with only one habitable planet and one biosphere to study.

I will add that I tried to read another account of the same problem of why the Gaia hypothesis had been largely criticized by biologists while being so well received by non-biologists: The Gaia Hypothesis: Science on a Pagan Planet by Michael Ruse (University of Chicago Press, 2013) I did not find it helpful, being mostly a historical narrative, with a focus on a wide variety of –isms, such as Platonism, Mechanism, Organicism, Hylozoism (the belief that all matter possesses life) and Paganism. I have never been much interested in –isms or cultural explanations for why people accept of don’t accept given ideas. Williams gives us a scientific way of thinking about the problem.

Looking for the Logos of Life IV

Pross, Addy. 2012. What is Life? How chemistry becomes biology. Oxford University Press. 200 pp.

Chapter 5: Origin of life

Pross gives a summary of research on this question that seems fairly reasonable, although he clearly doesn’t think much of historical approaches. I wonder whether he is not giving enough credit to geochemical analysis of rocks from the period before we find microfossils, that is to possible evidence of biogeochemistry back before the oldest fossil organisms. Also, he has not mentioned cosmochemistry – what was available in the part of the solar nebula that became the earth? None of that evidence in itself would answer the question, but he earlier talked about how historical studies could supply useful constraints on the free flow of speculative ahistorical studies of prebiotic chemistry.

He says sequence analysis fails on the origin problem because of horizontal gene transfer. If you start to see networks instead of trees, he claims that you can’t tell anything from the results. Is that so, or is that just a further challenge for clever analysts to overcome? After all, trees took a while to be generally useful. There still are lots of difficulties, but horizontal gene transfer isn’t just chaos. The process must have some logic, ultimately controlled by natural selection, like “normal” vertical gene transfer. I think he might be giving these approaches short shrift, because he has his own agenda.

He also assesses RNA world as unlikely, given the failure to create really complex self-catalyzing molecules in decades of lab studies. This despite his earlier claim that negative findings could not be used to rule out this very scenario. Well, if there was an RNA world, we haven’t been able to create a similar thing in vitro.

The other current scenario has a closed metabolic cycle evolving before self-replication kicked in. He calls such a cycle, “holistic autocatalysis.” So far, attempts to develop such systems by evolution in vitro have also not gone very far, according to Pross.

Biology’s Crisis of Identity

Pross asks three questions: what is life? How did it originate? And how would one make it? He says biology has reached a point, with the completion of the human DNA sequence project, that physics had reached in the late 19th century, prior to relativity, quantum mechanics and subatomic particles. How you can judge the state of mind of a body of scientists, I don’t know, but such an assessment feeds into his attempt to portray himself as breaking through confusion and complacency. To him, the problem is complexity. Is complexity a substance? Can there be a theory of complexity, as opposed to a complex theory?

Does all complexity go back to symmetry breaking, like quantum theory says, if I understand correctly? Life’s complexity clearly arises from the pure combinatorial possibilities of sets of fairly simple elements – four nucleotides, twenty amino acids, thousands of enzymes and similar numbers of intermediary products to create all those metabolic cycles. But they wouldn’t be of much use in a totally homogeneous environment. That’s the competitive exclusion principle. Life is complex because it exists in a large and complex environment, whose complexity is the result of irregularities in composition and past impacts, etc. leading to plate tectonics, and the uneven heating of a rotating almost sphere by the sun, leading to circulation of atmosphere and hydrosphere.

Pross says, “It is the organization of life, rather than the stuff of life, that makes life the unique phenomenon that it is.” Well, duh. He says “systems biology,” which tries to explain cells functions using mathematical ideas like “network topology, ” has not produced much in the way of insight. He also says that a holistic approach can be reductionism “dressed up.”

Another favorite of complexity mavens: non-equilibrium thermodynamics. Life, Pross says, can be said to be a dissipative structure, but what further insight comes from that? None, he thinks.

He then turns to John Conway’s Game of Life, the cellular automaton computer program, beloved of Gaia worshipers. These programs illustrate how simple deterministic games can generate complex patterns, but like the physical insights into complexity, there mathematical discoveries don’t seem to throw light on what Pross claims is the tough question about life: how does teleonomy arise within non-teleonomic worlds? I wonder if there is a fallacy in looking for the origin of “apparent purposiveness” when things apparent are clearly in the mind of the beholder. Can science find any sort of purposiveness at all? That’s a philosophic problem, as Socrates pointed out long ago. And as to “apparent purposiveness” is that anything at all? It’s not hard to explain how natural selection acts to give things apparent purposiveness: purposelessness is clearly maladaptive, it is not bothering to try. Is this his great insight?

Biology is Chemistry

The answer, he says, lies in systems chemistry. What defines it is that it deals with simple chemical systems that have life-like properties of self-replication. After dismissing all the previous attempts involving RNA or metabolic cycles, what is he offering that is different? He starts by justifying all over again the utility of simple systems, with the argument that since we think life started from simple stuff it will be informative to experiment with simple systems. This, however, is unproved: what if comets bombarded the proto-earth with really complex stuff, like Buckyballs and other cosmic macromolecules? Also, this comes after he says that we have no idea what sort of simple stuff life came from. I wonder if he’s headed for another case like those he dismisses.

He claims that systems chemistry is like looking at the Wright brother’s flyer to understand flight, as opposed to a 747. That is, if we can strip down to the simplest possible replicating system, we can get somewhere. But he just said that’s not possible because we don’t have any idea what the earliest living organisms were like. As if we did not know anything about airplanes prior to say, WWII, and we’re trying to imagine the ones from1903, could we do it? He seems to be saying both yes and no.

So here comes his “bombshell,” Darwin applies to replicating chemical systems, thus removing the distinction between chemistry and biology. Fine. But if this is really a momentous original discovery, a lot of folks must not have been thinking very clearly. Anyhow, we know Darwinian theory can apply to designing electrical circuits, why not replicating molecules? But can you actually use that to account for life on earth, more than just in principle? Now he brings in competitive exclusion, and we are off to the races. How well can you demonstrate this principle in a purely chemical system? He says replicating RNA molecules competing for different substrates, evolved to optimize their use of two different substrates, thus precisely mimicking the evolution of Darwin’s finches. Well, precisely is putting it a bit strongly. He claims totally without conclusive evidence that the finches are only doing what molecules were doing five billion years ago. He says that somehow replicating molecules transformed into living cells. I agree, but this is no profound insight, just an attempt to dress up a few clever experiments as a major breakthrough. And maybe the fact that a chemist can learn something from paying attention to ecology and evolution.

The earlier chemists, whose work he seems to dismiss, we’re studying the same things as he is, and he still has no idea what molecules to study. It seems exactly like non-equilibrium thermodynamics or systems biology or Game of life: some clever demonstrations, but no meaningful answers. On pages 132-134, he cites experiments that laboriously mimic the process that was already obvious, that evolving systems become more complex over time, but actually the experiment only shows that two interacting molecular species replicate more efficiently than a single species. Cross catalysis, in this case, speeds things up. So is all life one giant cross catalytic system? Of course it is. Herclitus’s ONE:EVERYTHING::EVERYTHING:ONE holds. Yes, it is chemical; life is an interacting system of macromolecules in an aqueous medium, but it is more. For one, it is largely cellular. Why? Can Pross explain that transition from chemistry to biology with more than a somehow?

Pross wants to add complexification into the sequence replication, mutation, selection, evolution. He puts it after mutation, but that makes no sense, and in his experiment it was the experimenter who in effect introduced it. Even the bare sequence is not right. Evolution doesn’t belong. It is not inevitable, it only happens if the frequencies of the interacting elements change, and that requires an outside physical/chemical/biological cause, a selective force. The system only evolves because of some constraint. Complexification is not a force, no more than evolution; it is the outcome of selection operating under varying conditions. It isn’t a cause. Evolution is change. Complexity is variability, they are not causes, they are results. True, it seems as if complexity is somehow auto catalytic, generating more and more complexity, but there is no law that says that has to be. Diversity does not necessarily result in stability or increasing diversity. Those outside constraints ultimately set the limits. Pross knows a little ecology and evolution, but not enough.

Pross says chemistry and biology are connected by a complexity continuum. What does that mean? Just that he’s repeating his claim in a different way? Wouldn’t discontinuity be more complex? His holistic claims seem more like good old reductionism dressed up. Is his bridge between the two more than just analogical? Physically, of course, it is the same stuff, but until you can actually make molecules evolve into living cells, what have you added to our understanding?

Is the first gene or the first enzyme buried somewhere in our cells, still doing a job, albeit not necessarily what it did billions of years ago? Or did it go the way of the protobiont and so many other species that are now extinct? If we could reverse engineer a simple bacterium into an even more minimal creature, would we be replicating our now vanished ancestors, or just making test tube freaks that never could have competed in the biosphere? Pross says the bacteria have remained simple, but how does he know? Is the bacterial component of the biosphere becoming ever more complex, just in a different way, than the higher plants and animals?

Assume he’s right, and some bit of RNA started the whole thing. Did it manage to do this in some primordial soup competing with uncounted numbers of other molecules, or was it in some incredibly sheltered, simplified environment, like those laboratory test tubes? One thing you don’t have to worry about is sufficient numbers to let mutation and selection act on. Enough might be produced in seconds, if you hit on the right mix. Even if it was much less rapid, as Pross notes, there was certainly plenty of time back then.

Natural selection is kinetic selection

Are competing organisms much like competing molecules? That’s a very loose analogy. Organisms don’t just compete for substrate. He claims we have to explain biology in the language of chemistry, but he uses all language very loosely. He really makes an unwarranted jump in equating chemical kinetics with biological reproduction. If you say that one species winning out over another is just chemical kinetics, I think you will get demurrals from most biologists. He’s back to hiding crude reductionism under his holistic claims. What he says about chemical systems being more amenable to mathematical analysis is just wrong, too (p. 139-140).

Fitness equals dynamic kinetic stability

He’s already in trouble by claiming fitness is a population phenomenon, not an individual one. Even chemically, I’d say that’s dubious, although there may be a population aspect. He is shoehorning a biological idea into a much simpler chemical concept. He claims you can focus on the population aspect, evidently without considering the individuals. But that is just wrong. The only real aspect of fitness is which individuals are the parents of future generations. Who is going to have descendants? Perhaps highly predictable with molecules that replicate. Not so easy with organisms. Even in general it isn’t easy. Who would have picked out the ancestors of angiosperms and placental mammals in the Jurassic? Connecting fitness to stability seems hugely wrong. On the level of the persistence of simple forms, maybe. Lots of genes seem not to have changed all that much.

His attempt to explain fitness landscapes and to make an analogy to a flock of birds seeking higher peaks is not particularly helpful, and didn’t that come from Richard Levin’s work in ecology? Actually the Eigen-Schuster Quasispecies concept is a neat mathematical formulation, but it is not clear what it applies to. Maybe viruses, maybe the origins of DNA RNA transcription/translation! maybe sex (see Wikipedia on quasispecies model) Certainly nothing like all evolving species. This is another analogy that seems to break down on close inspection. He’s trying to bridge the gap by forcing these analogies to do more than they are suited to do. After all, the real unification would mean that you can reduce equations of population genetics to chemical equations, doesn’t it?

He ends up not making a clear connection to the quasispecies concept and goes on to talk about his dynamic kinetic stability, which he admits can’t be measured absolutely, just like fitness, which also depends on the environment in which it is measured. Given how vague DKS seems, it does share the character of “fitness,” in as much as both can be what you want them to be. He suggests (p. 146-147) two measures: abundance and persistence, that are like part of Wilson’s definition of ecological success.

Incidentally, why does he not discuss the Eigen-Schuster hypercycle idea, which seems like a real theory of evolution of simple replicating molecules into linked pathways?

He now says that the cause of evolution is the drive toward greater DKS. But isn’t the cause self copying, with imperfections in a variable, limited environment? It’s differential reproduction, not any drive to achieve stability in any sense of stability I understand. A driving force towards something that he admits can’t be quantified and a mechanism that is a process of becoming a mechanism that is made up of more diversely interacting components (complexification) Seems pretty incoherent to me. He can’t put this into an equation, can he?

In arguing for the idea that life has undergone complexification he points to the fragility of self replicating molecules in the lab. I don’t see that that self-evidently applies to the first replicators in nature. Maybe we are all descended from a horrendously tough little replicator that just happened along out of the seemingly infinite possibilities. Maybe there are theoretical limits set by the problem of mutation in a small set of elements, something seemingly discussed by Eigen and Schuster. Small sets are inherently unstable, so it’s hard to conserve the replication when the replicates are too unlike the original. If a sequence is going to assume the role of a template, or even just determine catalytic properties, it can’t vary too much. Isn’t that just a trivial result, though? It sounds more profound if you introduce the term information into the discussion, but is that really necessary? Jacob Klein always denied that what geneticists talked about was information. I’ll stop at this point, because I think I have about reached my limit in thinking about where life comes from. Pross has made an interesting attempt to  define a new agenda for research in this area. I don’t think he’s got anything really significant, though. Perhaps if we can ever find another biosphere to examine, we will see just how narrow or how loose the constraints are.

Looking for the Logos of Life III

Pross, Addy. 2012. What is Life? How chemistry becomes biology. Oxford University Press. 200 pp.

Chapter 2 The Quest for a Theory of Life

Pross discusses previous attempts to develop what he calls a theory of life, beginning with Aristotle. The only aspect of Aristotle’s views that he describes, though, is telos. He also characterizes Copernicus, Bacon, Descartes, Galileo and Newton as banishing telos from the universe, instead of only from their philosophical explanations of motion. [It is worth noting that he retrospectively applies the name “science” to what they and others were doing.] Pross quotes Jacques Monod as saying that a purposeless cosmos is the most important discovery of the past 200,000 years. Besides being completely unverifiable and hence clearly unscientific, the supposed discovery doesn’t even seem that obviously useful. I guess you could say it frees us to do destructive experiments on animals, but our current regulations suggest that we don’t think that. Pross says it propels us into a new conceptual reality. What does he mean by that? Pross also adds that Schrodinger, in his What Is Life, said that the explanation of living things would involve as yet unknown laws of physics.

Pross thinks, along with Monod, that teleonomy requires an explanation. Isn’t teleonomy only supposed to be apparent purposiveness? So what is the problem? If we assume organisms lack real purpose and simply obey the laws of chemistry and physics, then there is nothing to explain except our perception of purpose. That may be a problem, the problem of consciousness. Is he going to solve that with his chemistry?

In his section on definitions of life, he carefully distinguishes individual living things, which cannot evolve, from populations, which can evolve, but he then talks about a population of mules, possibly not seeing that there can be no such thing.

He does seem to be on track in suggesting that most attempts to define life fail. The examples given either make mistakes like saying life is self-sustaining without qualification, instead of pointing to reliance on energy inputs, for instance, or only list some characteristics of life as known to us, or seem just ridiculous, like Freeman Dyson’s information definition.

Chapter 3 Understanding “Understanding”

Pross links understanding to induction, citing Bacon. He says all scientific explanations are inductive, being based solely on pattern recognition. True, patterns in some sense must match, but induction is a reasoning process, so it should describe not the explanation but the way it was derived. In that case, it seems clear that deduction plays as great a role as induction in our understanding. In talking about mathematics’ role in explanations, he goes from pattern recognition to pattern formulation, without noting that he’s moving between induction and deduction.

In discussing the problem of where the underlying patterns come from, that is, what is the reality behind them, he denies we can know that scientifically, and he quotes Wittgenstein to that effect. This would seem to put him into the linguistic positivists’ camp, but I doubt he’s that clear about questions like realism vs. anti-realism, although so far, his statements seem consistent with anti-realism. He does however seem to qualify himself at one point by saying that patterns are to some degree subjective. He also distinguishes quantitative, qualitative and statistical patterns. Then we get a dose of pragmatism to the effect that adequate understanding is whatever works. Then, in another twist, he says that the patterns we recognize are only reflections of the underlying reality of nature. Once again, it is not clear whether he’s an anti-realist, as he seemed to say earlier, or some sort of Kantian realist. Could he even be a Platonist? Images of reality?

The reductionism vs holism section doesn’t add anything. The problem is that he’s leaving out any discussion of the environment of life. If you frame the problem as what environment and what inputs do I have to supply to create a self-replicating molecular system that can undergo natural selection, you have a pretty good reductionist program for developing an understanding of life. If by life, you mean the biosphere, then you still have a long way to go, and it becomes necessary to use more complex terminology than what you would use to describe life in a simple experimental system.

Chapter 4 Stability and Instability

Pross agrees with my idea of auto catalysis: if something is auto catalytic the rate of formation increases as there is more of it around: dn/dt = rn provided you maintain steady inputs of reactants, while in a normal chemical reaction with a catalyst dn/dt = r, where n is the concentration of product and r is the rate of conversion of reactants to products. He expresses the idea in terms of the time required to produce a given amount of product, if you have a given amount of catalyst. For the Spiegelman RNA autocatalysis, you should get a logistic growth pattern, because the rate will be constrained by both the RNA and the protein enzyme acting catalytically. This seems like it ought to apply to PCR, for example.

Another thing about the RNA replication reaction is that it is template replication, so it actually yields copies with a highly specific structure – meaning that analogies to information become possible. Is that what all the talk about “information” in biology is, a physical analogy? How would the idea of a physical analogy apply to a computer or a brain? It seems as if information theory is a mathematical formulation applicable to understanding a variety of things, some of which (cells, telephone signals, computers) we think of as physical and others (language) that seem not to be. I would say that what goes on with cells is physical and the information is only metaphorical. A computer seems more problematic, especially since what it does can be represented as a Turing machine, and even though it isn’t a machine but a mathematical hypothesis its relation to meaningful information seems very immediate. Since information theory involves representations in mathematical symbols of concepts that are not physical, why invoke physical analogies? In all the physical systems covered by information theory, is there a point at which a mind is needed to interpret the meaning of the information? That seems to have been the original motivation in fields like cryptography, communications, etc. but in cybernetic systems there may be times when the information is used only by the machine. Still, someone has to eventually determine whether the machine is doing what it is supposed to, at least until we find ourselves in the Matrix, etc. Stephen Hawking apparently worries that this is where Artificial Intelligence is leading us. A biosphere is like that. It doesn’t need to be meaningful to us to be a biosphere.

What about crystal growth? Clonal growth?

What sense does it make to talk about kinetic dynamic stability or about the “efficiency” of maintaining a large population (p. 74) by rapid replication? I would think that in a way, autocatalysis is very unstable, because it tends to exhaust resources so quickly. He talks about Cyanobacteria being around for billions of years. Is persistence of a clade with little obvious development or change the meaning of stability? Success, might be a better term. To me, the Heraclitean flux is the only really persistent feature of the biosphere. Moreover, it looks as if the pace of change is accelerating: metazoans only in the last billion years, a full terrestrial biosphere only in the last 300 million years, hot blooded life only in the last hundred million, and cultural evolution only in the last six million? Is this all the result of auto catalysis? Is dn/dt = rn, where n is “information?”

It seems as if “stability” is not a very good word to encompass the persistence of biological entities through time, given the tremendous range of life histories found among living things. The mathematical complexities are very great (cf. Cole, L.C. The population consequences of life history phenomena. Quarterly Review of Biology Vol. 29, No. 2, Jun. 1954, pp. 103-137) and there are many dimensions to the whole problem of what is it that persists: genes, phenotype, species, clades? What about the stability of Redfield ratios? If true, it is an indication of an extremely widespread pattern. He claims the more stable replaces the less stable. Doesn’t that imply that species should last longer and longer in the fossils record? What is the actual pattern? TO BE CONTINUED

Looking for the Logos of Life II

Pross, Addy. 2012. What is Life? How chemistry becomes biology. Oxford University Press. 200 pp.

I found this an interesting and generally readable book, but I think it promises more than it delivers. My reflections on it are rather lengthy, so I’ll begin with:

Prologue and Chapter 1

Pross’s question is, “What is Life?” His book is offered as an advance over Schrodinger’s 1944 essay, What is Life? He will use “Systems Chemistry” to state a new law on the “emergence, existence and nature,” of living things. He claims to have found an overlooked form of stability in nature. According to Pross, “Darwinism is just the biological manifestation of a broader physical-chemical description of natural forces.” This will allow him to put forward a “generalized theory of evolution.”

Like Schrodinger, he starts with the laws of thermodynamics – heat transfer, entropy, etc. He sees his task as like Schrodinger’s: to account for the stability of a living cell, despite its being far from thermodynamic equilibrium. He also wants to explain how the first one could arise. He says the goal of that understanding is to be able to synthesize a living organism from scratch. I wonder whether in his “generalized theory of evolution” there is a deliberate echo of general relativity? Does this point to scientific hubris or is it an attempt to pump us a thesis is that is really not all that revolutionary?

The discussion begins by identifying certain “strange” characteristics of life that he thinks are problematic: life’s organized complexity, its purposeful and dynamic character, diversity, far-from thermodynamic equilibrium state and chirality (the “handedness” of amino acids)

Like almost every discussion of the origin of living cells, his begins by emphasizing the cell’s complex structure. I think he confounds small size with intricacy of design, which is ok, if you want to compare a cell to a refrigerator, but it seems odd to claim that an eye is a less intricate design than the ribosomes in the cells the eye is composed of. He tries to define complexity in terms of organization. Does that make sense? He uses the shape of a boulder to define complexity one way – what would it take to describe it precisely, I guess he means. He introduces the idea of information at this point. He claims that as far as the definition of a boulder, the exact shape is arbitrary, implying that the information describing a living cell is less so, but is this only because he ignores the internal composition of the boulder, how it acquired its particular shape and the relation between composition and shape, etc? He points out that even tiny changes in DNA can alter a cell, but this is potentially true of boulders as well, if we alter the makeup or distribution of components. Also, both cells and boulders can vary in exact makeup over quite wide ranges.

He says organized complexity and the second law of thermodynamics are inherently opposed. Cells need energy to maintain their ordered state. Does this really mean complexity is opposed to the second law? I find that physical scientists and some biologists make a very big deal out of what seems to me to be an artifact of looking at their experimental subjects in isolation. The opposition only arises if you ignore part of the system – the biosphere as a whole. Pross admits that this is the reason for the apparent contradiction.

Now he sets up another straw man: Darwinian theory only deals with biological systems, so it can’t account for the origin of the first, self-replicator, the protobiont. Darwin’s theory is biological and does not try to account for the origin of life, but does that mean a Darwinian theory can’t? Darwin himself says that natural selection is the result of natural laws, including presumably, those of chemistry and physics. In fact, apart from these, what are biological laws? Geometric growth is in a sense purely mathematical, but arguably so is a lot of physics and chemistry. Genetic variation and struggle for existence, even natural selection, are expressible in mathematical language. His question, “how did a system capable of evolving come about in the first place?” seems wrongly expressed, possibly because evolving is not the fundamental thing. Darwin’s is a theory of the origin of species. Is evolution a capacity or a faculty of living things? It seems more like the overall pattern that emerges. The word evolution has that troubling sense of preordination or unfolding.

He brings up chance and talks about how unlikely a cell is to form spontaneously. I guess you have to rule that out at some point. He refers to the “first microscopic complexity” coming into being, which seems to ignore that things are “complex” at the microscopic level in many ways other than being living things. He does not begin his argument by saying self-replication is the fundamental defining character of life, which I think unnecessarily draws out his discussion.

Talking about the apparent purposiveness of living organisms, he uses the word “teleonomy,” a coinage designed to avoid the supposed meanings of “teleology.” Pross says our interactions with the non-living vs the living world have a different quality, because of living things’ teleonomic character. He says we don’t use teleonomic explanations in the non-living realm, but then why is he always saying systems seek a lower energy state? Is the conservation of energy teleonomic? We can think of machines as having needs and of animals as machines. Teleonomy is a function of our way of seeing the world, not a measurable property of things: you can certainly think of a rock as wanting to fall or electricity wanting to discharge itself, and contra Pross, you can get some guidance from the laws of physics about the likely behavior of animals as well as trying to read their intentions in postures and expressions or consulting your own likely responses (putting yourself in their shoes). He sets it up as a stark duality, but is it? He then lumps under teleonomy things as diverse as chemotaxis and human voluntary behavior. He also identifies function with teleonomy.

In his long discussion, Pross never mentions the telos of teleonomy: self replication. Pross’s rhetorical withholding continues. It gets murkier when he does bring it up, because he says, while we can have a lot of goals as a human, we need to look at simple organisms to get at the real one. So is our purposiveness different from that of living things generally? He refers to it as a powerful replicating drive. What does “drive” mean? He claims teleonomy is as “real” as gravity. But gravity is in some way fundamental, as the physicists say, or at least an aspect of something more fundamental still, while teleonomy seems a by-product of self-replication. Teleonomy cannot, can it, be unified with the other forces of physics. He says gravity is quantifiable and teleonomy is not but that it doesn’t make teleonomy less real. He claims we stake our lives on the teleonomic principle when we drive our cars. What does he mean? Is it the design of the car or my ability to drive it to where I want to go and avoid hitting obstacles or going over cliffs?

Part of the problem is he starts talking about a teleonomic principle, not just teleonomy. Where did the principle come from? Teleonomy seems like an analogy to our own purposiveness, but what laws govern it? Is there any real similarity? Is the analogy in any way useful to reasoning accurately about living things?

Pross says, “Metaphysically…gravity and teleonomy are mental constructs that assist us in organizing the world around us [does he mean sense data?] So is he an anti-realist in the school of Hume and logical positivism or a Realist of the idealist school like Kant? Then again, the Scholastic ideas of gravity and teleology are organizing principles. Is teleonomy like the Scholastic gravity, going to be swept away by a better concept? At one point, he says “all inferred patterns are conceptual and are found nowhere else than in our minds.” How closely can he stick to this principle, and in that case, what is his book going to explain, patterns in our minds?

I think simply admitting that self-replication is a property of living systems, and not the goal, would obviate the need for teleonomy. If there is a need to talk about “purpose” to avoid prolixity when describing biological structures and behaviors that are aspects of self-replication, we should just use the term and not invent new words because we fear someone will accuse us of teleological thinking. I wonder if these constant verbal contortions are because we are still fighting battles with those who identify the ultimate cause with a Creator whose plans are often crudely anthropomorphic, like his appearance.

In the section of life’s great variety, Pross says, “non-living diversity is arbitrary.” That hardly seems true of geology or the atmosphere. Perhaps he means it is easier to see the relatedness of living organisms: classification of plants and animals by non-literate people is often very close to the scientific classification. He repeats the false characterization of species as, “each perfectly adapted to function and survive in its particular ecological niche.” So, he’s not an ecologist or evolutionary biologist, but even popular books like those by Steven Jay Gould warn against that sort of talk.

He claims further that there is an inescapable contradiction between the principle of natural selection and the principle of divergence [of character]. Again, this is not a bad point to bring up, but if it really were a contradiction, then something would be seriously wrong with our theories on the origin of species, and this is not the case. There is nothing preventing diverse things from being selected. If the conditions of life were always and everywhere identical, then selection would prevent divergence. The problem goes away once you include the idea that organisms exist in varying environments. He seems to confuse debates over mechanisms of speciation with debates over these two principles.

In the section on life’s far-from-equilibrium state, he seems to be setting up a straw man to knock over later. Yes, non-equilibrium thermodynamics is exceptional, but it is not confined to living things. The lithosphere, hydrosphere and atmosphere are not in equilibrium, so why should it be surprising that processes occurred at some point that led to small parts of these moving further from equilibrium? As long as there is sunshine and radioactive decay, there’s the possibility of a system being supplied with enough energy to move it far from equilibrium. By far the trickiest part is to get the autocatalytic process going in an environment where it can be safe from degradation long enough to become robust enough to deal with the challenges of a changing environment and to diversify so as to occupy more places. But with no competition from already-existing organisms and billions of years…

I suspect the mystery of chirality (as he calls it) will prove to be another straw man. A phenomenon to be explained, yes, but not really that much of a mystery, at least not in the sense of requiring new principles to account for it.

His claim that we fully understand and can explain the characteristics of water or other inorganic substances, while we can’t understand living things also seems problematic. Do we really know all there is to be known about water? Again, he seems to be trying to hype up the level of mystery, instead of just saying that it’s a really complex problem. This would make his supposedly new principle seem more marvelous, I suppose. His promise is that he will reveal the hitherto hidden essence of life. TO BE CONTINUED.

Looking for the Logos of Life I

Schrodinger, Erwin. 1967. What Is Life? The Physical Aspect of the Living Cell and Mind and Matter. Cambridge. Cambridge University Press. 178pp.

I wanted to put up this brief post before I launch into some much longer ones on books that purport to extend Schrodinger’s ideas and the tremendous biological discoveries that followed in the ensuing decades. I got started on this when I read another book, Eva Brann’s The Logos of Heraclitus [2011. Paul Dry Books. 160 pp], about which more later.

This is the first of a genre: physicists and chemists look at life. Schrodinger, in these lectures, delivered in Ireland in 1943, introduces the idea that life exists far from the thermodynamic equilibrium that physics sees most systems as tending towards. He is also the source of an idea I first heard when I was a graduate student, that organisms feed on “negative entropy.” The essay is worth reading for the quality of his reasoning and clear exposition, even though his predictions about the nature of the material carrier of heredity turned out not to be quite right.

Just one interesting thought: he points out that whatever molecule the hereditary material consists of carries out its functions in a way different from most of the enzymes in a cell. While most reactions in the cell rely on basically random interactions between molecules, in that you can only predict the general rate of reaction and not whether a specific molecule will react, there’s just one copy of a given gene in each cell. It has to be essentially certain that it will participate when needed in its particular role. Nevertheless, the basic processes of translation and transcription do involve many enzymes, along with the building blocks of nucleic acids and proteins, in what must be the usual sort of collectively predictable, individually unpredictable, dance. DNA is after all, a template, a fixed model against which to construct a product. Keeping that template stable and making sure it is copied correctly is the job of a whole complex set of enzymes in the cell. As Schrodinger points out, a big molecule like DNA can have the stability of a crystal, being held together by essentially the same forces.