Heavenly Relics as Means to Raise Money for Earthly Projects

Like many churches, the Castle Church of Wittenberg where Luther would nail his 95 theses had relics. More than 19,000 of them. The collection of relics included a twig from Moses' burning bush, four hairs of the Virgin Mary, five particles of her milk, a piece of Jesus's swaddling clothes, two pieces of hay from the manger, five pieces of the table from the Last Supper, and eight thorns from Jesus's crown. These were put on display once or twice a year.

Each relic had an associated indulgence that reduced the time a sinner had to spend in purgatory by days or years. Added together, the relics in the church collection could bring about a reduction of precisely 1,902,202 years and 270 days in purgatory.

That may have been the origin of the "must see" exhibition.

Oh, and they then used the money collected by people come to see the exhibit to fund bridges, dikes, schools, hospitals, and cathedrals. People were willing to pay for what they imagined and the authorities used that to pay for what was real. That's an interesting governance model and may have actually been more sustainable than the one we have now.

The Various Kinds of Racism that Led States to Refuse to Ratify the 15th Amendment

The 15th amendment was ratified in February of 1870. It states,

"The right of citizens of the United States to vote shall not be denied or abridged by the United States or by any State on account of race, color, or previous condition of servitude."

Kentucky, Maryland, and Delaware refused to ratify it because they did not want Blacks to have the right to vote.

California and Oregon did not ratify it because they did not want Chinese to have the right to vote.

Rhode Island did not ratify it because it did not want the Irish to have the right to vote.

From Eric Foner's The Second Founding.

Debt, Taxes, Revolution and Americans Curious Relationship with Monarchs

The United States was founded at the expense of two great empires. Each paid dearly to address the debt America left them.

After the 7-year war with France in North America (which ended in 1763), Britain's debt was 137 million pounds. The government's annual revenue was 8 million pounds and the interest payment on this debt was 5 million pounds.

When Britain asked the US to pay more in taxes to help pay down this debt, the average person in London was paying 26 schillings a year in taxes while the average person in Massachusetts paid only 1.

Outraged at "taxation without representation," the American colonies revolted against Britain.
The American Revolution would have failed without help from France. France not only helped the Americans with arms and ships but money - running a huge deficit.

Given their accounting was so poor, it took France a couple of years to realize how deep in debt they were left as a consequence of the American Revolution. Proposed tax reforms to address this debt were one of the big reasons the French decided that - like the United States - it would revolt against its monarchy.

Establishing the American colonies cost Britain half of them (only 13 of the 26 British colonies in America revolted in 1776, as places like Newfoundland and Jamaica remained British colonies) and cost France its monarchy. French taxpayers beheaded Louis XVI and Marie Antoinette in 1793.

One curious consequence was that while the Americans did rid themselves of monarchy - replacing King George with President George - the portraits of the king and queen of France continued to hang in Congress in Philadelphia years after the French monarchs had been guillotined in France.

Mitch Hedberg has this brilliant line, "I find that ducks' opinion of me is greatly influenced by whether or not I have bread." Something similar seems true of Americans, whose opinions of monarchs is greatly influenced by whether they are asking for or offering money.

The Future You're Buying Now Almost Immediately Begins Changing Your Present (Or What To Think About a Mere $2 Trillion Infrastructure Proposal)

1% of household net worth is $1.3 trillion.

Household net worth rose $19 trillion from 1Q to 4Q 2020.

In the Spring of 2021, Biden is proposing an investment of $2 trillion in infrastructure over 8 years.

By no stretch of the imagination is this excessive.

You buy land through simple purchase. You buy the future through investments. The quality and quantity of our investments is an indication of what kind of future we’re trying to buy.

I would love to live in a world in which I feel compelled to holler, "Wait! Don't you think that perhaps we're investing too much in R&D, education, reducing poverty, inclusion, and infrastructure? Aren't we putting too much money into making too many people more productive, creating new knowledge and funding projects to create great new products?"

And if that happens, please just look at me and say, "No. That's a preposterous notion. We would spend even more but for the fact that we've had a momentary lapse of imagination."

One of the many things we’ve learned about these investments? Beyond whatever future education helps kids to create, it creates jobs now. Beyond whatever successful businesses venture capital helps to create, it creates jobs now. Investment doesn’t just change the future. It changes the present. Investments create value twice.

A new highway increases future GDP in the region by making it easier for people to trade and travel. It also increases present GDP as you pay people now to build it. That's one of the more curious things about investments. As you try to change the future, you immediately begin changing the present. And that makes sense. Now was the future just a short while ago.

A 1962 Doctor's Warning About How Babies Become Socialists

There was an American pediatrician named Dr. Walter J. Sackett Jr. who suggested that you ignore crying babies. He wrote a bestseller in 1962 called, Bringing up Babies: A family doctor's practical approach to child care. And he said that if you didn't ignore crying babies, they would grow up to be socialists.

"If we raise our offspring to expect everything to be provided on demand, we must admit the possibility of sowing the seeds of socialism," he wrote.

If seems fair to say that the Cuban missile crisis reframed how Americans thought about most things.

From Sandi Toksvig on QI

One of the Rarely Reported Ways that Companies Have Transformed in the Last 25 Years

The opening lines of Adam Smith's Wealth of Nations are,

"The greatest improvement in the productive powers of labour, and the greater part of the skill, dexterity, and judgment with which it is any where directed, or applied, seem to have been the effects of the division of labour."

I've been working with teams developing new products as varied as computer chips and drugs, medical devices and engines for more than 20 years.

When I started, it was pretty normal for companies to go outside of the company about 10 to 30% of the time to a subcontractor. Most of the time they had a department that handled this one specialty and experts within it who did the work; sometimes they went outside the company for specialists.

In the last few years, the percentage of work that is assigned to an outside company instead of an inside department has been much higher. Often, more than 50% of the work is actually done by specialists outside the company.

Specialization has become even more specialized and departments within a company often can't compete with specialists outside a company. Specialists thrive with other specialists as coworkers and managers. Every molecule is its own universe; every specialty has its own complexity. Organizations that specialize in one thing get more data points and experience that they can translate into more knowledge and better processes. Experience drives evolution and organizations that get more experience have the potential to evolve more rapidly. An organization that is subcontractor to 5 companies has the potential to add more value for less cost than a department within any one of those 5 companies.

As if that is not enough, it is becoming increasingly common that the subcontractor who has been tasked with some subset of the project work to outsource some or all of their task. Your subcontractors have subcontractors.

If you think this is weird, consider this. If you are making a computer, you will outsource the computer mouse. Do you think that the company to whom you outsource the mouse does not turn to outside vendors to provide the ball and / or shell and / or circuitry, etc.? And that those outside vendors don't have their own suppliers?

The same sort of thing is happening in knowledge work that has been happening for an even longer time in manufacturing.

Specialists turn to specialists who turn to specialists who ...

The division of labor that Adam Smith found so transformative is still not done dividing.

Lincoln and Darwin Were Born the Same Day - And Also Shared a Sense of How Transformative Small, Incremental Changes Over Time Could Be

Abraham Lincoln and Charles Darwin were born 12 February 1809.

Lincoln is still the only president to hold a patent, which is a delightfully appropriate thing for the president who understood the importance of capital and the innovation and progress it could fund.

Anyone not properly impressed with the effect of compound interest over time either hasn’t learned how to use a spreadsheet or is really hard to impress. Invest $5,000 at 5%. Every year add another $5,000. In 40 years (when you might retire), you will have $640,000. Keep this up for 60 years (when you might die) and you will have $1.8 million. Time turns a small amount into a large amount.

A lot of time turns a small amount into a huge amount. After 250 years the $5,000 to which you added $5,000 and 5% each year turns into $21 billion. 250 years is not relevant to a life but is relevant to a country.

Lincoln and the capitalists who were excitedly investing in big capital projects like the Erie Canal, railroads and factories realized the power of compound interest as key to creating wealth. They had the vision to see the importance of investing now to transform the future.

Darwin took this vision of compound interest to the next level.

Selection was popular among farmers raising crops and animals. I remember looking through a catalog for bull semen at my uncle’s. He used artificial insemination (AI) to turn a herd of Hereford (I think it was) into the Charolais cattle that he preferred. The catalog for the bulls whose semen he was buying had a variety of information. I locked in on two: birth weight and weight after a year. The ideal was low birth weight (fewer complications in birth) coupled with high weight at a year. AI was just the latest technique for doing what farmers had been doing for centuries: intentionally selecting for qualities in breeding.

Darwin presented the idea that nature - like a farmer - also selects. The length and width of a finch’s beak could be naturally selected based on the island they lived on. Darwin studied this difference in the Galapagos Islands and from this drew the conclusion that with enough time, small differences could account for the differences between gorillas and orangutans, or humans and bonobos. Indeed, all of life.

Today’s world is very much shaped by the realization of how much difference compound difference can make. Darwin’s insights give us insight into the rapid evolution of viruses and the intentional reengineering of genes with CRISPR. Lincoln’s notions that big shared investments lift prosperity more generally have been repeatedly proven and we enjoy longer, more prosperous lives because of them.

Cumulative, incremental change transforms reality – whether in the form of the compound interest that creates wealth or the natural selection that creates new species. The further into the future, the bigger the transformation possible. As we gain more mastery of the technology of genetic engineering that Darwin’s ideas pointed us towards, we - or perhaps our grandchildren - may even be the ones who personally experience the transformation that incremental progress over a period of 250 years can bring.

Given the Gap in Household Wealth of Folks With and Without College Education is Growing We Need Bolder Infrastructure Plans

The gap in wealth because of education is big and growing.

In 1989, the average wealth of high school dropouts was 21% that of college grads; by 2020 it was only 9%.

If the gap had stayed constant, households with high school dropouts would have $200,000 more in wealth than they now do.

Trump's big idea (and given it is now completely his party, the Republican's big idea) is to return to 1970 and the heyday of manufacturing and strong wages for folks outside the information economy. Put up trade barriers and bring back manufacturing jobs. A lot of people get really excited about this (im)possibility.

The Democrats' big idea has been to create better social safety nets for high school dropouts. Until now.

Biden's infrastructure plan is a reasonable approach to addressing this gap; big construction projects will create really good jobs for folks who haven't learned programming, enabling them to create wealth and some measure of economic security.

How much is Biden's $2 trillion plan that spills across a decade? A paltry sum. Last year, household wealth rose $12 trillion to $130 trillion. $200 billion a year (roughly what Biden's plan proposes spending per year) is less than 2% of the amount by which household net worth ROSE last year.

Spending $200 billion a year is too little but it is a start at the creation of good jobs for folks without college degrees. It doesn't do any of us any good to make the penalty for struggling in school so high.

source:

https://www.stlouisfed.org/household-financial-stability/the-real-state-of-family-wealth/educational-household-wealth-trends-and-wealth-inequality

You Could Have Been Rich But You Had to Have That iPod - How Corporations Shifted Their Emphasis From Making Products to Making People Wealthy

A curious thing happened through the course of the 20th century: companies shifted their focus from making things to making money. This shift is important and still misunderstood.

In 1900, American homes did not have running water, electricity, a car, a radio, telephone, TV, computer, store-bought clothes, frozen food, takeout, aspirin, a refrigerator, microwave oven, canned goods, sneakers, safety razors, shampoo, or credit cards.

Fortunes were made by the various companies able to produce those goods at affordable prices. And people were largely focused on buying those things.

And then our curious thing happened: given these companies had gone public, they rather inadvertently created a new product. They created wealth. If you owned shares of a company that became successful, you could have one of the more curious products of all: financial independence.

On 23 October 2001, you could have been the first on your block to buy an iPod for $399. Call it $420 with tax. Apple was selling a product that made it easy to enjoy all your favorite songs on one slick device. (And of course, you’d have to pay another $1.29 for each song, so the $400 was just the admission price.)

On 23 October, 2001, for that same $420 you could have picked up 1,500 shares of AAPL – Apple’s stock. As I write this in early April of 2021, those 1,500 shares would be worth $194,325.

Apple was selling products that let you have private concerts at a whim. If you’re not amazed and delighted by that, you probably aren’t that impressed by music. The iPod was a fabulous product. But it likely pales in comparison to the other product for which Apple was becoming famous: its stock.

The person who spent $420 on Apple’s stock instead of Apple’s iPod back in 2001 has wealth to use for any of millions of products and services. The person who bought the iPod probably doesn’t know where it is now. Apple has made a lot of very impressive products. Perhaps none are as impressive as having made people rich.

Between 1900 and 2000, life expectancy rose from 47 to 77. (And no, this was not all due to infant mortality rates dropping. Your odds of dying at any age - from six months to 20 to 50 to 70 - steadily dropped during the 20th century.) People had always gotten old but old age was popularized in the 20th century and retirement was invented.

Pension plans and 401(k) accounts took advantage of decades of compound interest over these newly long lives to create enough wealth to fund retirements. People no longer had to work until they died or rely on the generosity of their children. And in 1900, that is what happened. The bad news is that people worked until they dropped dead. The good news is that they didn’t live that long. (Hmm. Or maybe that’s bad news too.)

At a certain point, more goods have less appeal. Your closet has more clothes than you'll wear, your freezer and pantry have more food than you'll eat, and your garage had more things than you can find. Eventually you realize that it is momentum from previous pursuits of happiness that are driving the purchase of more things. You realize that of all the things that corporations make, you are probably more interested in their ability to make you financially independent than you are whatever goods they’re selling. In fact, with the intense interest in startups, people are increasingly buying the stock in companies before those companies are even selling products. "What are you selling?" "Well, for now it's just stock but we do have a product launch planned."

An amazing, unprecedented economy emerged in the 20th century, providing goods that past generations could not have imagined. Of all the goods it made, though, perhaps the most alluring was its promise of financial independence. Of all the things that companies could make that people were eager to buy, the promise of wealth ranked highest.

It is difficult to properly understand modern companies if you still understand them as institutions focused on making things. That was largely true a century ago. Now, they are largely focused on making people rich. (What does Google "make?" Well, they've made a lot of people rich.)

Henry Ford became famous for making cars affordable for normal people. Previously, they were something only the very few, very wealthy could afford. The challenge of the early part of this century is to do something similar with companies' most interesting product yet: make ownership of wealth more widespread, more common. One of the keys to this will be creating more mechanisms that allow employees to use the company as a vehicle for creating wealth. As with the church and state before it, the corporation is to become a tool for the masses and not just the elites. The popularization of wealth will be a signal that we’ve overcome the limit of entrepreneurship and with it have moved beyond the limit of economics.

COVID Has Made Everyone's World More Virtual - And Threatens to Make Even the Real World More Virtual for Some

Forced to social distance by COVID, we're online in greater numbers and greater frequency than ever before. Beyond that, COVID strangely simulates the virtual world.

In one study, 86% of people who had COVID lost their sense of smell and after 60 days, 24% still had not recovered it.

It is still not clear whether the folks who permanently lose their sense of smell - and with it often the ability to distinguish tastes beyond salty and sweet - is closer to 2% or 20%.

The five classic senses are sight, hearing, touch, taste and smell. A loss of one or two is disconcerting and I find it odd that more isn't said about this loss of smell and taste.

But it also makes COVID such a weird echo of the online experience. Online is all sight and sound but no taste or smell. COVID - weirdly - has the potential to make our real world seem that much more virtual, a place with sights and sounds but no aromas.

The Big Penalty for Living in the Past - Or How People in Mississippi Pay $3,000 a Month to Live in the Past

There is a big penalty for living in the past.

Massachusetts was one of the first states to outlaw slavery, back in 1783. Washington and California entered the Union as free states. New York outlawed slavery relatively early - in 1799.

These four states have the highest average incomes in the country - about 25% higher than the national average.

The Thirteenth Amendment outlawed slavery everywhere in the US and was ratified in December of 1865.

Mississippi ratified the Thirteenth Amendment in 1995 - and certified that in 2013. 148 years after it was ratified nationally.

Mississippi has the lowest average income of any state in the country, 31% lower than the national average.

The difference between Mississippi and Massachusetts' average wages is $35,000 a year - nearly $3,000 a month. Folks in Mississippi make roughly half of what folks in Massachusetts make.

There is a huge penalty for worldviews that dismiss or limit the potential of any member of a community. The past is not a better place. You should move out of there daily.

Of note: had it not been for Mississippi, Kentucky would have been the last state to ratify the 13th amendment. The state that gives us Senators Mitch McConnell and Rand Paul ratified the 13th amendment in 1976 - a mere 111 years after the country as a whole. So, if you're ever wondering what kind of people think that McConnell and Paul would make great senators ... well, there you have it.

In Which Your Blogger Affectionately Mocks Baseball on Opening Day

I don’t know which came first: April Fool’s day or this being the opening day of baseball. In any case, fans from 30 different teams all believe that their team has a chance to win the whole thing this year. On opening day, every team has a perfect record. This encourages a form of foolishness.

In baseball, the pitcher tries to keep anything from happening and the batter tries to change that. Most of the time, nothing happens and then suddenly it does. That’s also how life works.

No matter how great a hitter you are, you have to wait for 8 other guys to go to the plate before you get another turn. Imagine that sort of turn taking in basketball or football. “Pass me the ball!” “No. It’s not your turn.” 

They call time out in baseball and yet no one pays attention to the clock or can tell you how many minutes are left in the game.

It’s a weird game, too, in that when a team goes on offense, they literally (well, most of them anyway) retreat into the dugout. On defense, you go out into the field and stand around. On offense, you go into the dugout and sit down. Possibly they first made baseball players begin to wear uniforms because given their penchant for sitting down to watch the game people were having a hard time telling the players and fans apart.

Baseball fans are obsessive about small differences in batting averages, pitching counts, etc. It’s a game with strict rules but the distance you have to hit a ball for a homerun randomly changes from park to park. Can you imagine a football stadium where an announcer says, “Defenders love this field. It’s 111 yards long.”

It’s hard to tell whether baseball players are overly optimistic about speed or very pessimistic about risk. In either case, it seems odd that they wear helmets when running the bases.

Players are constantly called out in baseball. It’s the thing that happens most. But the umps are nice about it. They give you a little thumbs up when they call you out.

I’m still waiting for the first baseball coach to abandon the traditional zone defense (“You play third base, you play right field …”) to pioneer a man-to-man defense (“I don’t care if he is on the bench, you stay on Jenkins …”).

Baseball encourages a philosophical bent. The most dominating teams still lose more games than the athletes in other sports play in a season. And your best hitter gets out twice as often as he gets on. To watch a game is to watch failure. That alone may be a reason it has held our attention for more than a century, another way in which it is less an escape from reality than a way to closely study it.