Monday, July 29, 2013

Albert O. Hirschman: Exit, Voice, and Loyalty: The American Tradition of Exiting

Malcolm Gladwell provided a fascinating portrait of the late economist Albert O. Hirschman in an article in The New Yorker: The Gift of Doubt: Albert O. Hirschman and the Power of Failure. Gladwell recounted Hirschman’s rather interesting life and described some of his economic contributions. Hirschman was somewhat unusual as economists go in that he seemed more interested in how and why things worked in practice rather than in assembling or testing economic theories. Gladwell referred to one work of Hirschman’s that seemed particularly relevant today even though it was first published in 1970. Some aspects of that treatise will be discussed here.

Hirschman wrote Exit, Voice, and Loyalty: Responses to Decline in Firms, Organizations, and States in order to investigate the means by which people can address problems that inevitably arise in the associations to which they belong. Although he discusses issues related to businesses, it is clear that the greater interest and relevance lies in the applications to social organizations and political parties.

"Under any economic, social, or political system, individuals, business firms, and organizations in general are subject to lapses from efficient, rational, law-abiding, virtuous, or otherwise functional behavior....Each society learns to live with a certain amount of such dysfunctional or mis-behavior; but lest the misbehavior feed on itself and lead to general decay, society must be able to marshal from within itself forces which will make as many of the faltering actors as possible revert to the behavior required for its proper functioning."

It is convenient to think of a perceived dysfunction of a company or organization as a decline in "quality." One response to a decline in quality is to leave and move to another company or organization. That is the "exit" option. A second response would be to speak up and campaign for a change in performance on the part of the company or organization. That is the "voice" option. The decision to utilize the exit or the voice response can be modified by the presence of loyalty, which can be considered an emotional attachment.

How these factors interplay in various situations is discussed in some detail. The case of a two-party political system will serve as a relevant example.

Consider a liberal party with a center-left distribution of political leanings, and a conservative party with a center-right distribution. There will be some overlap at the center and people who are in that region would find it relatively easy to switch allegiance if they became unhappy with their current party. Exit would be the most likely response to dissatisfaction. On the extremes are people for whom the gap with the other party is too great to bridge. The only response available to them, lacking a third party, is to stay and express themselves within their current party—the voice option. It will be the extremes of either party that will be the most vocal and the most demanding of change.

Economic analyses tended, at the time, to predict that political parties would tend to move to the center—to maximize the number of potential members. This simple analysis by Hirschman makes it clear that the opposite effect is more likely. Given the current state of our politics, Hirschman certainly nailed it.

There are a number of observations that can be made about the dynamics of groups and their members using similar reasoning. Here we will consider Hirschman’s claim that the United States has a society in which the exit option is too readily chosen. In discussing the role of exit and voice in American society and in its history he makes this statement:

"My principle point—and puzzlement—is easily stated: exit has been accorded an extraordinarily privileged position in the American tradition...."

He suggests, as a way of explanation, that the country was founded and peopled by individuals who had chosen exit over voice.

"This preference for the neatness of exit over the messiness and heartbreak of voice has then ‘persisted throughout our national history’."

The country people had fled to was so huge that the option to re-exit was available to them and to their children.

"The exit from Europe could be re-enacted within the United States by the progressive settlement of the frontier, which Frederick Jackson Turner characterized as the ‘gate of escape from the bondage of the past’."

The notion of escape from unpleasant circumstances by packing up and leaving is firmly ingrained in the national psyche.

"Even though the opportunity to ‘go West’ may have been more myth than reality for large population groups in the eastern section of the country, the myth itself was of the greatest importance for it provided everyone with a paradigm for problem-solving."

Hirschman injects this quote from Louis Hartz:

"In a real sense physical flight is the American substitute for the European experience of social revolution."

He also suggests that this habit of exiting has continued long after the entire country was settled.

"Even after the closing of the frontier, the very vastness of the country combined with easy transportation make it far more possible for Americans than for most other people to think about solving their problems through ‘physical flight’ than either through resignation or through ameliorating and fighting in situ the particular conditions into which one has been ‘thrown’."

Hirschman refers to examples that would have been familiar to one who had just lived through the 1960s. It would be too early to be aware of the phenomenon Bill Bishop refers to in his book The Big Sort: Why the Clustering of Like-Minded America is Tearing Us Apart. Bishop has documented the gradual aggregation of people into almost "tribal" enclaves of residents who tend to have the same values and, in particular, vote in the same way. Hirschman may have been unaware of this trend, but he would not have been surprised.

"The curious conformism of Americans, noted by observers ever since Tocqueville, may also be explained in this fashion. Why raise your voice in contradiction and get yourself into trouble as long as you can always remove yourself entirely from any given environment should it become too unpleasant?"

The habit of resorting to exit rather than face the trials of voice even plays a role in propagating income inequality.

"The traditional American idea of success confirms the hold which exit has had on the national imagination. Success—or what amounts to the same thing, upward social mobility—has long been conceived in terms of evolutionary individualism. The successful individual who starts out at a low rung of the social ladder, necessarily leaves his own group behind as he rises; he ‘passes’ into, or is ‘accepted’ by the next higher group. He takes his immediate family along, but hardly anyone else."

The meritocratic system of which we are so proud is an effective way of extracting those who might have been successful at exercising voice in support of their cohorts and rendering them socially ineffective.

"....upward social mobility of just the talented few from the lower classes can make domination of the lower by the upper classes even more secure than would be achieved by rigid separation...."

Hirschman also leaves us with a warning that the exit tendency endangers our system of public education. He discusses Milton Friedman’s injection of market mechanisms into education. The choice of exit makes sense when dealing with commodities for which there are numerous venders. If a consumer is unhappy with a company’s product, he will likely move on to another company looking for a better result. Is this the kind of thinking that solves problems in school systems?

Friedman’s advice:

"Parents should express their views about schools directly, by withdrawing their children from one school and sending them to another, to a much greater extent than is now possible. In general, they can now take this step only by changing their place of residence. For the rest, they can express their views only through cumbrous political channels."

Hirschman has a problem with Friedman’s description of exit as a "direct" expression of displeasure.

"....I am citing the above passage as a near perfect example of the economist’s bias in favor of exit and against voice. In the first place, Friedman considers withdrawal or exit as the ‘direct’ way of expressing one’s unfavorable views of an organization. A person less well trained in economics might naively suggest that the direct way of expressing one’s views is to express them!"

He is also upset with Friedman for suggesting avoidance of the normal democratic process and the responsibilities of citizenship.

"....the decision to voice one’s views and efforts to make them prevail are contemptuously referred to by Friedman as a resort to ‘cumbrous political channels.’ But what else is the political, and indeed the democratic, process than the digging, the use, and hopefully the slow improvement of these very channels."

Adherents to Friedman’s logic are pushing for state-supported alternatives to public education. The inevitable result of such policies would be to render our current public schools as little more than warehouses for the children of the poor and unfortunate.

Thanks to Albert O. Hirschman! His simple analysis has provided numerous insights.

He provides a new perspective on one of our favorite phrases:

"When the going gets tough, the tough get going."

Wednesday, July 24, 2013

Wage Growth vs. Productivity Growth: It’s Society’s Choice

It has long been recognized that wage growth has slowed relative to business productivity growth. This divergence began in the 1970s and has continued ever since. Liberals and conservatives argue over whether this represents something that has grown rotten in our economy or whether it is an inevitable outcome from changing economic conditions. Just when one begins to suspect that there is nothing radically new to say on the subject, someone drops a bomb on it and tries to redefine the issue entirely. Scott Winship performed that function in an article in the Wilson Quarterly: The Truth About Jobs.

This chart was produced by Robert Reich for his book Aftershock: The Next Economy and America’s Future. It illustrates the issue.

It is instructive to examine a complementary chart that focuses on family income rather that hourly compensation.

Family income will capture the increase in two-income families as more women entered the workforce. Even that factor provides little help in trying to keep up with productivity growth.

Explanations for this relative decline in wages usually turn on factors like, globalization, automation, the decline of labor unions, greed..... Winship takes another tack. He claims that the data is misunderstood because it is taken out of its proper historical perspective. What appears to be a decline in wage growth is really a return to a historic norm from the postwar years when people were vastly overpaid. Instead of normalizing to the "golden era" of the postwar years, we should be normalizing wages to the true "golden era" represented by conditions from 1900 to 1929!

"The hourly compensation of workers has failed to keep pace with productivity since the mid-20th century, but in the 1930s and ’40s pay raced ahead of productivity gains. By 1950, productivity was 65 percent higher than it had been in 1929, but hourly compensation was 115 percent higher. In contrast, pay and productivity rose by the same amount between 1900 and 1929. Workers in 1950 were making about 30 percent more than their productivity should have dictated. Correcting that overpayment required that compensation growth fall behind productivity growth."

Referring to this wage decline as the "Great Correction," he indicates that there is yet a long way to go.

"As of 2010, workers still made 14 percent more than productivity levels suggested they should have, despite the fact that productivity had grown faster than compensation since 1950."

And we should be of good cheer because things will eventually get better.

"....there is a silver lining to this story. In time, the Great Correction will run its course, bringing productivity growth and compensation back into long-term alignment. At that point, pay and productivity should begin to move in tandem once more, putting Americans’ wages back on an upward trajectory. When will that happen? It would be foolish to attempt a prediction, but the closing of the compensation-productivity gap has proceeded slowly, suggesting that we may have to wait a while for the Great Correction to end."

Winship’s conclusions are absolutely astonishing! There are so many options for replying that one hardly knows how to begin. Ultimately, it seemed best to take a high road.

What seems to be at the heart of his argument is a belief that that there is some fundamental relationship between productivity and wages; a belief that some economic law is at work here. Nothing could be further from the truth.

Businesses intend to hire as few people as possible and pay them as little as possible. That is the way capitalism works. That is the way capitalism is supposed to work. In the period with which Winship is so enamored (1900-1929) the floor on wages was set by human survival. We probably don’t want to go back to that.

Society had not yet evolved to the point where it realized that it could—and must—tame the capitalist beast. It took being led into the Great Depression to mobilize society into action. It was in the 1930s that legislation created the society and working conditions that we take for granted now. Child labor was essentially abolished. The formation of labor unions was facilitated. Minimum wage legislation was passed. In 1938, the Fair Labor Standards Act established the eight hour day, the forty-hour week, and overtime pay.

All the mentioned actions were designed to change the relationship between wages and productivity. In so doing, a foundation was laid for a better society—and a healthier form of capitalism.

The fact that wages and productivity have drifted apart in recent decades is a sign that economic conditions have changed and that society has not yet chosen to respond to the new order. Winship has served a useful purpose by reminding us that we are in danger of returning, in some ways, to the dark days prior to the New Deal. Viewed from that perspective, the need for action becomes more urgent.

The level of wages to be paid and wealth distribution are decisions that society must make. Economists and businessmen will claim that chaos will ensue if the economic system is tinkered with. They said the same thing in the 1930s. They were promoting what was best for them, not what was best for society. They were wrong then, and they will be wrong now.

Economists have been trying for decades to figure out whether raising the minimum wage is a good idea or a bad idea. When it is raised more things happen—some good, some bad—than they can possibly track. Current guessing seems to be leaning in the direction of "it might be a good thing."

Why not really crank up the minimum wage—to somewhere in the range of $12-15 dollars an hour. Higher wages would propagate throughout the economy. People would have more money to spend. Good things would come and the bad things would cause adjustments to be made.

Life would go on.

Monday, July 22, 2013

Two Faces of Evil: The American South and Nazi Germany

In her book, The Warmth of Other Suns: The Epic Story of America’s Great Migration, Isabel Wilkerson provides a detailed picture of what life was like in the Jim Crow South. She reminds us that there was a brief period after the Civil War when blacks were accorded the same rights as whites. This period, referred to as Reconstruction, came to an end when the northern troops and officials withdrew and left the blacks, once again, helpless.

"....the newly freed men were able to exercise rights previously denied them. They could vote, marry, go to school if there were one nearby, and the more ambitious among them could enroll in black colleges set up by northern philanthropists, open businesses, and run for office under the protection of northern troops. In short order, some managed to become physicians, legislators, undertakers, insurance men. They assumed that the question of black citizens’ rights had been settled for good and that all that confronted them was merely building on these new opportunities."

"....whites in the South began to resurrect the caste system founded under slavery. Nursing the wounds of defeat and seeking a scapegoat, much like Germany in the years leading up to Nazism, they began to undo the opportunities accorded freed slaves during Reconstruction and to refine the language of white supremacy. They would create a caste system based....solely on race, and which, by law, disallowed any movement of the lowest caste into the mainstream."

Note the reference to Germany. Wilkerson goes a bit further with the comparison.

"Not unlike European Jews who watched the world close in on them slowly, perhaps barely perceptibly, at the start of Nazism, colored people in the South would first react in denial and disbelief at the rising hysteria, then, helpless to stop it, attempt a belated resistance, not knowing and not able to imagine how far the supremacists would go. The outcomes for both groups were widely divergent, one suffering unspeakable loss and genocide, the other enduring nearly a century of apartheid, pogroms, and mob executions."

Given her wording in the last sentence, it is not clear, given that there is a scale to evil, exactly where the southern racists and the Nazis would fall relative to each other. While it is impossible to provide too harsh an assessment of the Nazis, it is possible to let the southerners off too lightly.

Pursuing such analogies further was not Wilkerson’s intent. However, other authors have commented on the two political systems and suggested that the American South provided the paradigm Hitler was looking for when he began his campaign to marginalize, isolate, and ultimately, eliminate the Jews.

David Runciman describes the admiration the Nazis had for the southern system in an article in the London Review of Books.

"Casting around for kindred spirits in the blighted international landscape of the 1930s, Hitler looked fondly towards Dixie. What was not to like? The South was effectively a one-party state. In the 1936 presidential election, FDR’s Democratic ticket won 97 per cent of the vote in Mississippi, 99 per cent in South Carolina. In some counties no votes at all were recorded for Republican candidates. The figures compare very favourably with the 98.8 per cent the Nazis secured in their own national elections the same year."

Political control was insured in both situations, but by different means.

"The difference was that Hitler used the coercive power of the state to secure an artificially high turnout (99 per cent of the German electorate was reported as having voted) whereas the Democrats used coercion to keep the turnout low. The population of Mississippi in the late 1930s was more than two million. Yet the number of people whose votes were counted in the 1938 congressional midterms was barely 35,000. This remarkably limited franchise was achieved by means of elaborate rules – including a poll tax – designed to make voting both difficult and expensive; it was backed up by threats of violence to anyone who challenged the status quo. The aim, of course, was to make sure the electorate remained exclusively white. Of the residents of Mississippi nearly half – roughly a million people – were black."

Of particular value to the Nazis were the South’s race-based laws and the total prohibition of intermarriage between the races.

"This was the other thing the Nazis admired about the South: it was a political order organised around an unambiguous idea of racial superiority, and geared towards keeping the races separate. Miscegenation was to be feared above all else. Anything was permitted to prevent it."

The Nazis and the southerners walked the same walk and talked the same talk.

"In a debate on anti-lynching legislation in the US Senate in 1938, the senator from Mississippi Theodore Bilbo echoed Mein Kampf in asserting that merely ‘one drop of Negro blood placed in the veins of the purest Caucasian destroys the inventive genius of his mind and strikes palsied his creative faculties’."

There was even a touch of anti-Semitism that could be shared.

"Bilbo suspected a Jewish conspiracy behind what he saw as Northern interference: ‘The niggers and Jews of New York are working hand in hand’."

The South’s ability to murder any black person for any reason also provided a model for the Nazis to follow. Wilkerson provides this bit of insight:

"Across the South, someone was hanged or burned alive every four days from 1889 to 1929, according to the 1933 book The Tragedy of Lynching."

"....violence had become so much a part of the landscape that ‘perhaps most of the southern black population had witnessed a lynching in their own communities or knew people who had,’ wrote the historian Herbert Shapiro. ‘All blacks lived with the reality that no black individual was completely safe from lynching’."

What must be noted is the cruelty associated with these "illegal" killings. Practices involved methods that the coldly efficient Nazis could neither match nor stomach.

"Newspapers alerted readers to the time and place of an upcoming lynching. In spectacles that often went on for hours, black men and women were routinely tortured and mutilated, then hanged or burned alive, all before festive crowds of as many as several thousand white citizens, children in tow, hoisted on their fathers’ shoulders to get a better view."

"Fifteen thousand men, women, and children gathered to watch eighteen-year-old Jesse Washington as he was burned alive in Waco, Texas in May 1916. The crowd chanted ‘Burn, burn, burn!’ as Washington was lowered into the flames. One father holding his son on his shoulders wanted to make sure his toddler saw it.
‘My son can’t learn too young,’ the father said."

To make sure that the reader is aware that this was not a practice of the dark, distant past, Runciman points out that lynching was still taking place in the era of Roosevelt and Hitler, and the rest of the country had not summoned the will to declare it a federal crime.

"This tacit acceptance of extra-legal killing was something else that struck a chord with the Nazis. In fact, what happened in the South was in the early 1930s more overt and more bestial than anything taking place in Germany, where state-sanctioned murder was treated as an unpleasant necessity rather than a public festival. As Ira Katznelson records, in November 1933, more than a year after FDR’s election, Lloyd Warner was burned alive before a cheering crowd of ten thousand in Princess Anne, Maryland, after an attempt to hang him had failed. Nothing so ghastly was permitted on the streets of Hitler’s new Reich."

Both the Nazis and the South treated their targeted citizens as economic assets. The Jews had property that could be confiscated, after which they were no longer of any value. The blacks were required as a quasi-slave labor force. The Nazis’ ultimate crime was genocide. That of the South was to impose a form of slavery on blacks that extended into the middle of the twentieth century.

It was not economical for southerners to practice genocide, but it was effective to threaten it. Wilkerson provides this example.

"’If it is necessary, every Negro in the state will be lynched,’ James K. Vardaman, the white supremacy candidate in the 1903 Mississippi governor’s race, declared. He saw no reason for blacks to go to school. ‘The sole effect of negro education,’ he said, ‘is to spoil a good field hand and make an insolent cook.’....Mississippi voted Vardaman into the governor’s office and later sent him to the U.S. Senate."

While the institution of slavery disappeared, new mechanisms were devised to keep the blacks in a subservient state that closely approximated slavery.

Instead of working the field as a slave for a landowner, blacks became sharecroppers. In principle the blacks were independent laborers who gave a share of their earnings to the owner as compensation for use of the land. In practice, the sharecropper had to borrow from the owner to cover expenses until the crop came in. Only the landowners were able to market the produce. This left the sharecroppers totally at the mercy of the landowner when the time came to settle accounts. The results were small earnings at best, or more likely, no earnings or a loss. And one could be killed for accusing an owner of cheating. The result was that most sharecroppers were tied to the landowner in much same way as when they were slaves.

Under various guises, blacks could be assessed monetary fines which they could not pay. For this they could be sent to prison and assigned to work gangs that were then rented out by the state to those who needed the workers. This, again, was slavery by another name.

This practice, known as debt peonage was widespread. During the war in the 1940s black labor was particularly valuable because of the manpower shortage. Rather than pay increased wages the whites preferred to utilize forms of slavery.

"From the panhandle to the Everglades, Florida authorities were now arresting colored men off the street or in their homes if they were caught not working. Charged with vagrancy, the men were assessed fines of several weeks pay and made to pick fruit or cut sugarcane to work off the debt if they did not have the money, which few of them did and as the authorities fully anticipated. Those captured were hauled to remote plantations or turpentine camps, held by force, and beaten or shot if they tried to escape."

"It was an illegal form of contemporary slavery called debt peonage, which persisted in Florida, Georgia, Alabama, and other parts of the Deep South well into the 1940s. Federal investigations into neoslavery in Florida uncovered numerous abuses of kidnapping and enslavement...."

Forms of slavery existed in the United States until the middle of the twentieth century. Yet we refer to our nation as the "land of the free."

Germany bears the burden of its history. The United States deserves no less.

Friday, July 19, 2013

Huey Newton, the Black Panthers, and the Right to Bear Arms

Adam Winkler provides an excellent history of gun rights and gun regulation in his book Gunfight: The Battle Over the Right to Bear Arms in America. He includes many interesting details about our past. One, in particular, seemed delightfully ironic and unexpected.

"If it hadn’t been for the Black Panthers, a militant group of Marxist black nationalists committed to ‘Black Power,’ there might never have been a modern gun rights movement."

This suggests there is an interesting tale to be told.

One of the founders of the Black Panthers was a young black man named Huey Newton. Newton receives a brief mention in Isabel Wilkerson’s magnificent story of the black migration out of the Jim Crow South: The Warmth of Other Suns: The Epic Story of America’s Great Migration. Wilkerson provides this comment:

"Over the course of six decades, some six million black southerners left the land of their forefathers and fanned out across the country for an uncertain existence in nearly every other corner of America. The Great migration would become a turning point in history. It would transform urban America and recast the social and political order of every city it touched."

Wilkerson chooses to use the biographies of three people who migrated as representatives to illustrate the issues and conditions faced by all the migrants. One of the three was a doctor who left Monroe, Louisiana and established a successful practice in Los Angeles. But Los Angeles was not the most common terminus for migrating blacks from Monroe. Oakland, California seems to have held that honor. Wilkerson mentions two of the migrants from Monroe to Oakland who played a role in "recasting the social and political order."

The first was Bill Russell who left with his parents at the age of nine. But nine years was enough time to observe the threats and humiliations to which his parents were subjected. Russell would go on to become one of the greatest basketball players of all time. Basketball enthusiasts view him as a national treasure. It is inconceivable that he would have had anywhere near the same life if he had been confined to the South.

The second person mentioned was Huey Newton.

"A toddler named Huey Newton was spirited from Monroe to Oakland with his sharecropper parents in 1943. His father had barely escaped a lynching in Louisiana for talking back to his white overseers."

The history Wilkerson provides puts the children of these migrants into perspective. A family like Newton’s would face an unofficial segregation policy in a town like Oakland. They had more freedom and more opportunity, but they were expected to live within defined boundaries. They escaped the South where law enforcement officers were inevitably racist and must be considered a threat, to discover that the police in Oakland had a strong racist component as well. While the non-southerners were not likely to assist in beating you, or torturing you, or mutilating you, or burning you alive, it was clear that a black person was much more likely to get roughed up or shot in an encounter with the police than a white person. It was anger at police treatment that brought Huey Newton to prominence.

The first generation migrants usually accepted the bad with the good and made the best they could out of the situation. It would be their children who would rebel at the conditions they viewed as unfair and intolerable. Civil rights were not coming fast enough and many blacks thought a new strategy was required.

Adam Winkler explains how Huey Newton changed the nation’s conception of gun rights and gun regulations.

The Black Panther organization was formed in 1966 by Huey Newton and Bobby Seals, both of whom migrated from the South as children. The official name was "Black Panther Party for Self-Defense." The "self-defense" label referred to the goal of protecting black people from the police.

The year 1966 brought three notorious cases where unarmed black men were shot and killed while allegedly committing "petty" crimes. One was shot seven times in the back for what the police referred to as "trespassing." The Oakland police department was almost exclusively white.

"In Oakland, Huey Newton and Bobby Seale committed themselves to fighting back against the police....As one Panther said, ‘the primary job’ of the police ‘was to keep black folks down and corralled’ in the poor part of town....Self-help seemed the only available option. As one Panther said, it didn’t make any sense ‘to report the police to the police’."

The Panthers followed the example of Malcolm X who had argued that blacks had the need and the right to defend themselves "by whatever means necessary." The necessary means included arming themselves. Malcolm X reminded everyone that the Second Amendment provided them that right.

"’Article number two of the constitutional amendments’ Malcolm X had argued, ‘provides you and me the right to own a rifle or a shotgun’."

"Guns were central to Newton’s and Seale’s philosophy and to the public image of the Panthers. They taught their early recruits that the gun ‘is the only thing the pigs will understand. The gun is the only thing that will free us—gain us our liberation’."

Newton knew enough California law to know that he and his comrades had the right to carry loaded weapons as long as they were not carried in a threatening manner. One needed a license only for carrying a concealed weapon. It was also legal to drive around in a vehicle with weapons as long as they were not loaded. This meant that the Panthers could legally walk around displaying an awesome arsenal of loaded weaponry.

The next step was to force a public confrontation with the police. Not surprisingly, a police officer would take note of a group of black men climbing into a car carrying rifles. When the police inevitably came over to see what was going on they were told that they had no right to inspect the weapons. This interaction ensued.

"’Who in the hell do you think you are?’ the officer responded."
"’Who in the hell do you think you are?’ said Newton indignantly"
"The officers asked Newton to get out of the car. Newton did, but while getting up he simultaneously loaded a round of ammunition into his M1. Newton was careful to keep the gun pointed upward and not aimed at any of the officers."
"’What are you going to do with that gun?’ asked one of the stunned policemen."
"’What are you going to do with your gun?’ Newton replied"

Needless to say, this encounter drew a large number of gawking blacks. The police told them to disperse, but Newton yelled that they should stay because it was their legal right to observe police officers making an arrest as long as they didn’t interfere. The observing crowd and the fact that Newton was, in fact, following the law convinced the officers to back off and leave him be.

The blacks had never seen someone face down the police in this manner. Newton’s notoriety spread quickly and attracted the interest of more disgruntled black youths.

The next step was to begin monitoring police actions in order to insure that the police were obeying the law.

"....the Black Panthers began a practice of policing the police. Thanks to an army of new recruits inspired to join when they heard about Newton standing up to the cops, groups of armed Panthers would drive around following police cars. When the police stopped a black person, the Panthers would stand off to the side and shout out legal advice."

A group of armed observers could provide a powerful disincentive against any straying from appropriate police procedure. After a year of this Newton was quoted as saying:

"With ‘weapons in our hands, we are no longer their subjects but their equals’."

Not surprisingly, pictures of black Californians walking around with loaded rifles were found to be disturbing by white Californians. Laws were introduced in the state legislature that would restrict the carrying of loaded weapons within city limits. Newton decided that it was time to stand up to the state’s legislators and demand that their right to bear arms be maintained. Another daring confrontation was planned. It was decided that Seale would lead in order to avoid putting Huey Newton at risk.

"It was a sunny day in Sacramento, the lily-white hub of California politics, when, on May 2, 1967, a group of twenty-four men and six women, all black and between the ages of sixteen and thirty-one, parked in front of the Capital Building. As they got out of their cars, they loaded their guns, which included .357 magnums, 12-guage shotguns, and .45-caliber pistols."

"In front of the Capital is the West Lawn, a large, flat expanse of grass used for special events. This is where a group of mostly white eighth-graders were gathering for a fried chicken lunch with the governor, the former actor and future icon of the conservative movement, Ronald Reagan. The students stopped and stared in amazement as the Black Panthers marched right by. News crews there to cover the governor’s event saw the better story developing and rushed to follow the heavily armed Panthers."

The Panthers read a prepared statement explaining why they were here and what they hoped to accomplish to the assembled crowd before entering the building. Once inside, they wondered about looking for the legislative chamber. Finally they had to ask for directions. Several armed Panthers made an appearance in the viewing section and observed the chamber activities. The Panthers were quiet but the newsmen with their camera crews were not. The commotion led to both groups being removed.

The demonstration by the Panthers produced the effect they desired. It provided them a national presence and it was effective in recruiting new members.

"The Sacramento ‘Invasion,’ as the papers called it, was a huge success for the Panthers....Their visit to the Capital made headlines across the country and television news broadcast film of the event over and over."

Their bold actions could not help but generate counteractions.

"The reaction of Americans depended largely on their race. Whites were horrified and began to call for the government to take more aggressive action to stop the Panthers. Blacks, emboldened, inundated the Black Panther office in Oakland with calls seeking information on how they could form chapters in their own neighborhoods."

Ronald Reagan immediately responded with this quote:

"There’s no reason why on the street today a citizen should be carrying loaded weapons."

Reagan soon signed into law legislation that would disarm the Panthers’ police patrols. But that was only the beginning. The Black Panthers’ activities combined with race riots, rising crime statistics, and notable and provocative assassinations to encourage a wave of gun restricting legislation.

Whites who were aghast at the notion of blacks running around carrying guns, soon began to notice that their own rights were also being restricted.

A revolution did occur, but it didn’t involve radical blacks; radical members of the National Rifle Association (NRA) took control of the group and changed its emphasis from sporting uses of guns to guns to be used for self-defense.

"The new NRA-led gun rights movement was not only fueled by the laws passed to disarm the Black Panthers and other black radicals; it also echoed many of the principles espoused by the Panthers. Like the Panthers, modern gun enthusiasts didn’t view guns as valuable for sporting purposes; guns were about personal self-defense. Though justified as a way to fight crime, gun control laws were, in reality, just another way for elites to harass and oppress. Guns were not only for protecting your home; people should be allowed to carry them on the street for protection. Law enforcement was demonized as the enemy, prone to abusive behavior and disregard for the rights of people. The Panthers went to Sacramento to make their voices heard; the NRA lobbyists went to Washington."

The Black Panthers started the gun rights movement. The backlash of gun regulation by fearful whites helped bring about the collapse of the Panthers. The mostly white-driven NRA then, using the Panthers’ arguments, fought back against the imposed gun restrictions with considerable success.

Now we no longer worry about armed black revolutionaries fomenting trouble in our cities; now we have more heavily armed white revolutionaries running around the countryside training in anticipation the day when they will kill police, national guardsmen, or government employees who might be sent to ask them to do something they don’t wish to do.

Such is progress within our nation.

Sunday, July 14, 2013

John Lanchester: Making British Bankers do the Perp Walk

The term "perp walk" refers to the habit police agencies have of parading someone accused and arrested for a crime into a public area where the "perp" can be viewed and photographed by the media. The "perp" is often handcuffed (at least) and wearing prison attire. The justification for the practice involves the need to transfer the accused from one location to another and the tradition of freedom of the press. Whether necessary or not, it has become quite common in the United States. What is indisputable is that it is a humiliating procedure for the accused. Public humiliation was probably its initial intent.

John Lanchester has produced two excellent articles in the London Review of Books on the status of banks and banking in the UK. The first details the recent sequence of crimes and incompetencies for which the bankers are guilty. The second article addresses what might be done to correct the banking situation. Here the focus will be mainly on the first article.

Lanchester hides neither his anger nor his incredulity at the activities that have been revealed.

"....a story full of failure, scandal, greed and incompetence."

Given the size of the banking system and its importance to the economy, allowing this type of behavior to continue is unacceptable.

"....the UK bank assets are 492 per cent of GDP. In plain English, our banks are five times bigger than our entire economy....We know from the events of 2008 and subsequently that the financial sector, indeed the whole world economy, is in an inherently unstable condition. Put the size together with the instability, and we are facing a danger that is no less real for not being on the front page this exact second. This has to be fixed, and it has to be fixed soon, and nothing about fixing it is easy."

Lanchester was moved to make this comment:

" their current condition our banks are an existential threat to British democracy, a more serious one than terrorism, either external or internal."

He fears that the revelations of misbehavior have been so frequent that the public has lost the ability or will to focus on the details. The public’s capacity for outrage has perhaps been diminished at a time when public outrage is most needed.

"In the midst of this cacophony of largely justified accusations, the banks have had a strange kind of good fortune: the noise is now so loud that it’s become hard to hear specific complaints of wrongdoing."

Lanchester is particularly incensed over one criminal activity that was so outrageous, so egregious, that it should be considered "the biggest scandal in the history of British banking." More explanation will be provided later.

One cannot address the banking issues appropriately unless one fully comprehends the depths to which the profession has sunk. For that reason he provides the reader a discussion of a series of banking activities that are intended to arouse anger and publicly humiliate the responsible banking executives—a form of literary "perp walk."

Interestingly, Lanchester shoves aside the greatest banking debacle of all, the orgy of risk taking that brought world economies to their knees and initiated the Great Recession. Perhaps he thinks it is a too oft-told tale, or perhaps he finds risky behavior less vile than the blatantly illegal activities on which he chooses to focus.

Banks are often described as "too big to fail." This descriptor is usually followed by the label "too big to jail." There is another comment that is, unfortunately, less often heard: "too big to manage."

Economic disasters can be generated in many ways. Let us not ascribe to duplicity what can be explained by simple incompetence. Lanchester begins with incompetence and the tale of the bank HBOS.

"The company was formed in 2001 by the fusion of Halifax, the UK’s biggest mortgage lender, with the Bank of Scotland, thus, in the words of the parliamentary report which rolled over this particular rock in April this year, ‘turning the "big four" banking groups into the "big five"’."

The downfall of HBOS was attributed to nothing more complex than just making too many bad loans. What is disturbing about this case is that HBOS was warned by British bank regulators that it was "an accident waiting to happen." Neither the bank nor the regulators responded to this assessment, and HBOS went merrily on its way lending itself into impending bankruptcy.

"This was nothing to do with go-go derivatives and fancy mathematical engineering; it was nothing to do with overpaid investment bankers making bets they didn’t understand. HBOS was almost entirely a traditional retail bank. ‘Whatever may explain the problems of other banks, the downfall of HBOS was not the result of cultural contamination by investment banking. This was a traditional bank failure pure and simple. It was a case of a bank pursuing traditional banking activities and pursuing them badly.’ In other words, the single biggest factor in the collapse of HBOS was simple incompetence."

But it was incompetence on a grand scale, and someone would have to pay a price. HBOS would take down not only itself, but also Lloyds bank. The government encouraged Lloyds to take over HBOS and rescue it from bankruptcy.

"Unfortunately the extent of the losses was so great they ended up bringing Lloyds down too, and the new combined bank was bailed out by the taxpayer a month after the takeover. We, the taxpaying we, now own 40 per cent of the combined bank; 2008’s ‘big five’ are now only four, and two of them (Lloyds-HBOS and RBS) are partly owned by a reluctant us."

With the Libor scandal we transition from pure incompetence to criminality based on a license to steal issued by the banking community.

"Libor is the single most important number in international financial markets, used as a reference point throughout the global financial system. It is a range of interbank lending rates, set after consultation between the British Bankers’ Association and two hundred and fifty-odd participating banks. During the daily process, each bank is asked the rate at which it could borrow money from other banks, ‘unsecured’ i.e. backed only by its own creditworthiness rather than by specific collateral."

Note that the question being asked is what rate could you borrow at, not what rate have you borrowed at. There is a world of difference between the two questions; one invites a guess or an estimate, while the other demands a precise answer. And the quality of the answer is very important.

"It seems bizarre that something so central to the global markets – $360 trillion of deals are pinned to Libor – should have such a strong element of invention or guesswork. The potential for abuse is immediately apparent. As MacKenzie prophetically said, ‘the obvious risk to the integrity of the calculation is that a bank on a Libor panel might make a manipulative input, trying to move Libor up or down so as to influence interest rates or the value of its swaps portfolio.’ Surprise! After the crisis, when investigators were taking an energetic interest in Libor, it turned out that that was exactly what had been happening, not just at one or two banks but across an entire swath of the industry."

Is it any surprise that an invitation to cheat would be recognized as an opportunity to cheat and utilized as such? Lanchester is sufficiently cynical about the power of the banks in London to suggest that these actions might have gone unreported had not other countries and their less-friendly law enforcement agencies been brought in to investigate.

"From this perspective, the important fact about Libor is that while the rate is controlled by the British Bankers’ Association, it is widely used, indeed is omnipresent, within the US financial system. So manipulation of Libor is a crime not just in the finance-friendly City of London, but in the eyes of US law enforcement. That profoundly changes the mood music, and the resources devoted to investigating wrongdoing. If Libor had only been of relevance within the UK, the same actions could have taken place in the same institutions and my suspicion is that we wouldn’t have heard a word about it."

The fallout from the various criminal investigations is still accumulating.

"In June last year, Barclays paid £59.5 million in fines to the Financial Services Authority, $160 million to the US Department of Justice (DoJ), and $200 million to the US Commodity Futures Trading Commission (CFTC), making a nice round total of about £290 million. (It’s worth pausing for a moment to register the full magnitude of that: from one single bank, more than a quarter of a billion quid in fines....In December, the Swiss bank UBS agreed to pay $1.2 billion to the DoJ and the CFTC, £160 million to the FSA, and 59 million in Swiss francs to the regulators back in the old country. That’s a total £970 million...."

"There’s plenty more to come: Deutsche Bank, Citigroup, Credit Suisse and JPMorgan Chase, four of the biggest banks in the world, are under investigation, along with many of their peers, and the bodies pursuing them include not just the DoJ, CFTC and FSA but also a variety of US state-level attorney generals."

Note that these figures are for fines levied by government agencies for criminal behavior by banks. They do not address the fact that anyone who believes they lost money because of Libor-related manipulations can sue for restitution. The amounts involved could be enormous and the legal wrangling could go on indefinitely. Lanchester provides one illustrative example.

"To give just one instance where there are certain to be dozens and perhaps hundreds more, the city of Baltimore and a number of associated parties are suing a group of banks for a ‘global conspiracy to manipulate Libor’. The US municipalities’ losses on the relevant interest-rate swaps have been put at $6 billion, in addition to the $4 billion they’ve already had to pay to get out of them – that sounds like a lot, but they had bought $500 billion of swaps. Multiply this phenomenon globally and the full scale of the potential disaster for the banks becomes apparent."

Lanchester then shines a light on some activities that qualify as "pure" criminality. These are instances that involved breaking painfully clear laws in order to aid criminals or rogue nations.

The first instance involves the bank Standard Chartered which was accused of spending a decade facilitating deals with the Iranian government that are illegal under US law.

"The regulator said that the bank had been operating the scheme/scam for a decade and had used it to hide more than $250 billion in deals."

After the obligatory claims of innocence, the bank agreed to pay fines.

"In September the bank paid $340 million to the DFS in settlement, then in December another $227 million to the DoJ and $100 million to the US Federal Reserve, and accepted a ‘deferred prosecution arrangement’ in which the authorities said they wouldn’t prosecute the bank if it abided by the conditions made in the settlement agreements."

With the arrogance that only a guilty banker can summon up, the chairman of Standard Chartered continued to profess innocence of any criminal intent. The US DOJ was sufficiently angered to actually threaten to prosecute a criminal banker. The result was this statement issued by Standard Chartered:

"’....To be clear, Standard Chartered unequivocally acknowledges and accepts responsibility, on behalf of the bank and its employees, for past knowing and wilful criminal conduct in violating US economic sanctions, laws and regulations’."

Consider the enormity of the act, the confession of guilt, and the fact that nobody went to prison. "Too big to fail, too big to jail seems" to be the operative mandate.

Next up is the bank HSBC which managed to combine illegal transactions with countries like Iran with laundering money for drug cartels.

"L’affaire HSBC had more entertainment value in that it involved laundering money for drug dealers. The DoJ said that the bank had laundered at least $881 million in money for Mexican and Colombian cartels, and another $660 million in sanctions-avoiding transfers with Iran, Cuba, Sudan, Libya and Burma. Some of the details concerning the drug money were lurid. Drug dealers deposited hundreds of thousands of dollars in cash at HSBC in Mexico, and to facilitate matters, even designed special boxes to hold the cash that made an exact fit with the holes in the bank tellers’ windows."

"As part of the deferred prosecution deal, the bank agreed to have an independent monitor inside the bank, checking on its compliance, for the next five years – an unprecedented arrangement for a British bank. Also unprecedented was the size of the fine: $1.92 billion. That’s a stupendous amount of money for a fine, but it might not be enough to satisfy US critics of the deal, many of whom think that a criminal prosecution is preferable to the deferred prosecution arrangement; the judge in charge, John Gleeson, hasn’t yet signed off on the DPA. This story, already as bad as any crisis has ever been for HSBC, may yet turn even worse."

Finally Lanchester arrives at the greatest scandal of all, and the most troubling acts of criminality. It is one thing to cheat an impersonal country or business or another trader who might be willing to cheat you. It is quite another thing for a bank employee to look a bank depositor in the eye and lie to them in order to extract profit from them.

The issue at hand is a form of insurance known as PPI (payment protection insurance). As the name implies, it is insurance designed to cover payment for mortgages and bills when, for whatever reason, a customer becomes unable to make the payments. Obvious examples include people who lose their jobs or become too sick to work. The banks marketed what appeared to be an excellent form of insurance, but configured it in such a way that many people they sold the insurance to would never be able to collect on it.

"The problem was that the majority of people who bought the policies would not, in the real-life instances for which they were buying the policies, be able to use them. Two categories of people who were not eligible to make claims against PPI were the self-employed and anyone with a pre-existing medical condition. They couldn’t use the insurance, but they were, in their (our) hundreds of thousands, sold it anyway. They weren’t told the basic facts about the insurance they were buying, facts which were not merely marginally relevant or potentially relevant, but which directly contradicted the raison d’ĂȘtre of the policies. The banks sold them to customers in the knowledge that they were not and would never be of any use to them. In many cases, customers bought products which had PPI tacked on, without being told they were being charged a premium for insurance which for many of them was useless."

This practice is obviously outrageous, but the notion that the bankers thought they could get away with it is equally outrageous.

"That’s what’s costing the banks all that money now: refunding the money paid, plus interest which was added on top, plus 8 per cent interest which could have been made if the money wasted on PPI had been put to some legitimate use. The average pay-out by the banks is in the region of £2750. It’s all those payments which add up to the £16,000,000,000 that the banks are going to have to pay; which gives you some sense of just how many people were mis-sold these crappy policies."

The British are at least formally aroused. Commissions are issuing reports and threats of jail time for banking executives are being bandied about. It is difficult to see how anything less would make a difference. There is a long history of issuing fines for bad behavior. The result seems to be more frequent bad behavior. Banks have so much money at their disposal and so many options for utilizing it that fines become a mere cost of business that can be passed on to the banks’ customers.

Money is power and the banks have plenty of it. They usually are able to use their resources to escape from serious regulatory blowback, but even in cases when one profitable area of activity is shut down, there are other opportunities available to replace it.

Truly, the only public recourse is to start with the chief executive of a bank guilty of criminal activity and start throwing people in prison.

Let’s follow a literary perp walk with a real one! Bankers in shackles and orange jump suits! Live television coverage!

Wednesday, July 10, 2013

The Myth of the Population Boon

Economists like to tie a nation’s health to its demography; too many old people is not good; too many children is not good until later; the assumed ideal is to have many working age people and few of both young and old. Economists prefer to have a single model that fits all situations. Given that mature, wealthy societies are producing populations with larger fractions of old people, their obvious solution is to produce sufficient tax payers to subsidize the golden years of these seniors. However, this requires maintaining a birth rate that produces population growth that matches the growth in seniors—an ever-growing population. Can this possibly make sense?

Philip E. Auerswald provides arguments that support the notion that population growth is beneficial, although he stops short of declaring it to be necessary. His essay appeared in The American Interest and was titled The Population Boon.

Auerswald takes great pleasure in pointing out that Malthus was proven wrong (thus far!). He delights in concluding that the explosion in population over the last few generations has been accompanied by a similar growth in income.

"Population really starts to take off, though, after World War II. In the second half of the 20th century, global population more than doubles, from roughly 2.5 billion in 1950 to almost 6 billion in 2000. And the data show that, in material terms at least, individual well-being (as measured by global per capita income) takes off at exactly the same time as population."

He further extends this conclusion over a longer period of time.

"....the two processes—increasing population and increasing wealth on a global scale—have been strongly correlated over the past two millennia."

The author argues that this correlation is derived from the fact that creativity can be taken as a universal constant independent of country and time. Therefore, the more people, the greater the likelihood of creative sparks.

"....the likelihood of great invention is pretty much a constant in all cultures, through all periods of time, and this assumption seems to fit the data on the long-term evolution of human society pretty well."

"Over the very long term, the evidence supports the claim that the creativity of individuals powers human productivity and the improvements in societal well-being that follow. More people imply a likelihood of more ideas; more ideas, in turn, imply more of the great ideas that ultimately propel human societies toward increased prosperity."

From this logic comes the claim of a "population boon."

Auerswald’s article illustrates the difficulties in applying a simple model to the entire human population. Every nation provides a different history. By Auerswald’s logic, one would assume that the wealth that was created over recent centuries was shared in a somewhat equal fashion. Good luck in finding data to support that notion!

The sort of creative individuals who make a difference in a society are what Malcolm Gladwell would refer to as "Outliers." As he so eloquently illustrates, these outliers are not necessarily the best and the brightest, but rather, they are usually those who have, at some point in their lives, been awarded greater opportunity to develop and demonstrate their capabilities than many others with equivalent potential. Given this as a fact, the means of encouraging greater creativity is to provide greater opportunity to develop and utilize skills, not to create more babies. Society produces more potential "outliers" now than it can handle.

The notion that a growing population is, in itself, an aid in producing innovation, creativity, and social progress is nonsense. Depending on circumstances, a growing population can be as much a bane as a boon.

It is no accident that fertility is falling in wealthy societies. This decline in birthrate seems inevitable. It is as though humans are following an impulse as old as life itself. Organisms evolved by insuring that their genes were passed on to the next generation. This biological imperative did not involve producing as many offspring as possible; it involved producing offspring that could survive. A mechanism for eliminating those that could not be fed and cared for had to be developed.

As the social and economic costs of feeding, clothing, sheltering, and educating a child have increased, humans seem to have instinctively limited the number of children they produce in order to better focus their finite resources. This is a good thing for children, for families, for societies, and for humanity.

Nations and economists will have to learn how to deal with declining populations. There is no economic or physical law indicating that a society declining in numbers must be a society declining in quality.

Sunday, July 7, 2013

Cultural Factors and Mental Illness

Modern psychiatry has often been criticized because its approach to diagnosing mental illness is based on identifying a particular malady by comparison with a committee-approved collection of symptoms rather than via some sort of physically measurable manifestation. Ethan Watters provides an interesting perspective on mental illness and its manifestations in an article in Pacific Standard. He begins with this lede:

"Psychiatry is under attack for not being scientific enough, but the real problem is its blindness to culture. When it comes to mental illness, we wear the disorders that come off the rack."

What Watters is implying is that when a person is suffering mental distress, the way the person communicates his/her distress is suggested by cultural clues that help insure that this distress will be recognized and taken seriously. In Watters’s view the symptoms expressed become a mechanism for crying out in pain in a language easily understood.

"Viewed over history, mental health symptoms begin to look less like immutable biological facts and more like a kind of language. Someone in need of communicating his or her inchoate psychological pain has a limited vocabulary of symptoms to choose from."

From this perspective, psychiatry and mental health diagnosis looks like an iterative collaboration between the tormented and those who would help the tormented. The very act of defining a set of symptoms that are representative of a particular mental illness, suggests to those in mental distress how to construct their cry for help in a way that will be easily interpreted.

"Because patients usually seek help when they are in need of guidance about the workings of their minds, they are uniquely susceptible to being influenced by the psychiatric certainties of the moment. There is really no getting around this dynamic....The human unconscious is adept at speaking the language of distress that will be understood."

To illustrate this point, Watters reminds the reader that in the late nineteenth century the diagnosis of "female hysteria" was quite common.

"Women by the tens of thousands, after all, displayed the distinctive signs: convulsive fits, facial tics, spinal irritation, sensitivity to touch, and leg paralysis. Not a doctor in the Western world at the time would have failed to recognize the presentation. ‘The illness of our age is hysteria,’ a French journalist wrote. ‘Everywhere one rubs elbows with it’."

These symptoms were consistent with what women were told about themselves, and consistent with what doctors believed about women:

"....fanciful beliefs about female anatomy, an assumption of feminine weakness, and the Victorian-era weirdness surrounding female sexuality."

This form of mental illness eventually disappeared. It vanished not because of some miracle drug or treatment; it vanished because it became unpopular. The symptoms were no longer satisfactory to women as a demonstration of suffering, and psychiatrists were developing a new set of symptoms that they were more willing to recognize. If one wishes to receive help, one has to communicate in the language the help-givers understand.

"The resounding lesson of the history of mental illness is that psychiatric theories and diagnostic categories shape the symptoms of patients. ‘As doctors’ own ideas about what constitutes ‘real’ disease change from time to time,’ writes the medical historian Edward Shorter, ‘the symptoms that patients present will change as well’."

Watters can’t quite bring himself to recognize a logical conclusion that can be drawn from the history he has provided. If "female hysteria" disappeared for non-medical reasons, then it could not have been a mental illness in the sense of representing a brain malfunction.

If cultural cues induced the symptoms that women suffering from hysteria demonstrated, and then, at a later time, made them disappear, how can one differentiate between medical fads and mental illness?

If cultural cues induce symptoms, and symptoms define the mental illness, then why can’t cultural cues induce the illness itself?

If mental illness is related to a chemical imbalance or a neurological malfunction, then how can its symptoms be induced and eliminated by cultural signals?

If psychiatrists and drug companies claim that mental illness can be "cured" by drug therapy, doesn’t that create an environment where people with difficult problems to address will find it easier to declare themselves mentally ill in search of a simple pill-based solution rather than attempt to resolve their problems by addressing them directly?

Consider depression. Everyone suffers from sadness, grief, anxiety, and apprehensions. This is all perfectly normal—up to the point at which it is no longer normal and becomes mental illness. Is there some physical transition that takes place, or are we mainly dealing with culturally defined (and thus arbitrary) norms that define the transition? Clearly there are some people with symptoms so severe that medication is called for to alleviate the symptoms, but how many would be better served by socializing their mental distress and seeking traditional forms of support from family, friends, and counselors? 10%? 50%? 90%?

It is rather easy to conclude that clinical depression might be a greatly over diagnosed condition based on cultural factors, but what about a more complex illness such as schizophrenia?

Tanya Marie Luhrmann discusses mental illness in general, and schizophrenia in particular, in an article in the Wilson Quarterly: Beyond the Brain. The title is meant to convey the notion that what we refer to as mental illness is more complex than a mere brain malfunction that can be addressed by appropriate drugs.

"It is now clear that the simple biomedical approach to serious psychiatric illnesses has failed....At least, the bold dream that these maladies would be understood as brain disorders with clearly identifiable genetic causes and clear, targeted pharmacological interventions (what some researchers call the bio-bio-bio model, for brain lesion, genetic cause, and pharmacological cure) has faded into the mist."

She provides this introduction to modern thought on schizophrenia:

"To be sure, it would be too strong to say that we should no longer think of schizophrenia as a brain disease. One often has a profound sense, when confronted with a person diagnosed with schizophrenia, that something has gone badly wrong with the brain."

"Yet the outcome of two decades of serious psychiatric science is that schizophrenia now appears to be a complex outcome of many unrelated causes—the genes you inherit, but also whether your mother fell ill during her pregnancy, whether you got beaten up as a child or were stressed as an adolescent, even how much sun your skin has seen. It’s not just about the brain. It’s not just about genes."

The incidence, severity, and probability of relief from symptoms seem to depend on social and cultural factors.

"In recent years, epidemiologists have been able to demonstrate that while schizophrenia is rare everywhere, it is much more common in some settings than in others, and in some societies the disorder seems more severe and unyielding. Moreover, when you look at the differences, it is hard not to draw the conclusion that there is something deeply social at work behind them."

"Schizophrenia has a more benign course and outcome in the developing world. The best data come from India. In the study that established the difference, researchers looking at people two years after they first showed up at a hospital for care found that they scored significantly better on most outcome measures than a comparable group in the West. They had fewer symptoms, took less medication, and were more likely to be employed and married."

The better outcomes in India seem to be derived from a firmer belief that the illness can be overcome and sufferers will be able return to a normal life. If your belief is that your brain is damaged and requires medical treatment, you will tend to wait around for treatment to come and help—something that rarely happens. Cultural cues are extremely important.

"As a result, none of the patients thought of themselves as having a career-ending illness, and every one of them expected to get better. And at least compared to patients in the West, they generally did."

Luhrmann suggests that the notion that social factors can be both disease activating and disease curative is becoming more widely accepted. She refers to several patient-driven organizations who are dedicated to self-help approaches to illnesses rather than depending on medications. One such group is called the Recovery Movement. Perhaps the most intriguing approach to dealing with the issues of schizophrenia is provided by the "Hearing Voices" movement.

"In Europe, the Hearing Voices network teaches people who hear distressing voices to negotiate with them. They are taught to treat the voices as if they were people—to talk with them, and make deals with them, as if the voices had the ability to act and decide on their own. This runs completely counter to the simple biomedical model of psychiatric illness, which presumes that voices are meaningless symptoms, ephemeral sequelae of lesions in the brain. Standard psychiatric practice has been to discount the voices, or to ignore them, on the grounds that doing so reminds patients that they are not real and that their commands should not be followed. One might think of the standard approach as calling a spade a spade. When voices are imagined as agents, however, they are imagined as having the ability to choose to stop talking. Members of the Hearing Voices movement report that this is what they do. In 2009, at a gathering in the Dutch city of Maastricht, person after person diagnosed with schizophrenia stood up to tell the story of learning to talk with the voices—and how the voices had then agreed to stop."

Dealing with mental illness in a proper fashion is critical. In the past mental illness was rare and episodic. Somehow our society and our science have managed to make it common and chronic.

Something has gone terribly wrong!

Wednesday, July 3, 2013

Bats and the Increased Danger of Epidemics

The term zoonosis is used to describe the transfer of a pathogen from a nonhuman animal species to humans. David Quammen has provided a survey of how this process has occurred in recent history in his book Spillover: Animal Infections and the Next Human Pandemic. He explains why this phenomenon is common and tells us that about 60% of all infectious diseases known to man are classified as a zoonosis.

For the record, it is also noted that the process works both ways. Diseases specific to humans can cross over and infect animals as well. In that case the process is referred to as anthroponosis. Quammen refers to the work of the biologist Patricia Reed.

"The scope of her work, Reed told me, encompassed a range of infectious diseases that threaten gorilla health, of which Ebola is only the most exotic. The others were largely human diseases of more conventional flavor, to which gorillas are susceptible because of their close genetic similarity to us: TB, poliomyelitis, measles, pneumonia, chickenpox et cetera. Gorillas can be exposed to such infections wherever healthy people are walking, coughing, sneezing, and crapping in the forest....the famous mountain gorillas, for instance, have been threatened by anthroponotic infections such as measles, carried by ecotourists who come to dote upon them."

Being human, we are more concerned about zoonotic processes. And that is Quammen’s main topic.

Quammen is concerned that man, in his roaming and thrashing about, is disturbing ecosystems and increasing the probability that diseases can transfer from animals to humans. He suggests that such transfers have become dangerously common.

"The drumbeat has been sounding ever more loudly, more insistently, more rapidly over the past fifty years."

"If you assembled a short list of the highlights and high anxieties of that saga within recent decades, it could include....Machupo [1959]....Marburg (1967), Lassa (1969), Ebola (1976)....HIV-1 (inferred in 1981, first isolated in 1983), HIV-2 (1986), Sin Nombre (1993), Hendra (1994), avian flu (1997), Nipah (1998), West Nile (1999), SARS (2003), and the much feared but anticlimactic swine flu of 2009."

The evidence that Quammen compiles indicates that bats are often the animal that harbors the virus that transfers to humans either directly or via another species. The SARS virus was ultimately determined to have been transferred from a species of bat to a species of mongoose and then on to humans in China. What is it about bats that makes them such a prolific disease transmitter? Quammen explains that we have only begun to study bats, their ecology, and their immune systems. While there are interesting conjectures, there is no definitive answer yet. That is also the conclusion of this academic paper: Ecology of Zoonotic Infectious Diseases in Bats: Current Knowledge and Future Directions. This paper indicates that bats have been identified, or tentatively identified, as the source of the virus for rabies, SARS, Hendra, Nipah, Ebola, and Marburg. It also provides this warning:

"Most recently, a new distinct lineage of influenza A virus has been discovered in little yellow-shouldered the Americas and a range of paramyxoviruses in bats from four continents. Given the potentially devastating effects of these emerging diseases on public health and wildlife is crucial that we improve our understanding of how bat ecology may influence disease dynamics and their propensity to serve as reservoirs for emerging pathogens."

Quammen provides the more interesting attempt at an explanation. We will return to his discussion.

To understand bats and their issues, some basics about disease epidemics are required. Consider a given population and the introduction of a disease causing virus. Some fraction of those infected will die and some will survive and become immune. Some fraction of those infected will pass on the virus and infect one or more others. If the population affected is too small, the disease will burn out because it will infect people and run its course faster than the population can produce new candidates for infection. If the population is large enough, new candidates can be produced at a rate that can sustain the viral infection within the population. Given the characteristics of the disease and its transmissibility, the size of the population required to sustain it can be calculated.

Clearly, accumulating large populations in a small area is good way to perform experiments with infectious diseases. While humans have begun to experiment with some rather large and dense populations, we will never be able to match bat colonies.

"Besides being diverse, bats are very abundant and very social. Many kinds roost in huge aggregations that can include millions of individuals at close quarters."

How close is close? Very close!

"Social intimacy helps too, and many kinds of bat seem to love crowding, at least when they hibernate and roost. Mexican free-tailed bats in Carlsbad Caverns, for instance, snuggle together at about three hundred individuals per square foot."

Any virus looking for a host would seem to find a bat colony an ideal place to land. While bat habits would seem to be rather unhealthy from an infectious disease point of view, bats seem to represent one of the more successful evolutionary strains.

"They are also a very old lineage, having evolved to roughly their present form about 50 million years ago."
"Bats come in many forms. The order Chiroptera....encompasses 1,116 species, which amounts to 25 percent of all recognized species of mammals. To say again: One in every four species of mammal is a bat."

Quammen suggests that the issue we have to deal with is not that we are ignorant of bat epidemiology, but that we, as humans, are altering our ecology as well as that of the bats. He issues this warning:

"Make no mistake, they are connected, these disease outbreaks coming one after another. And they are not simply happening to us; they represent the unintended results of things we are doing. They reflect the convergence of two forms of crisis on our planet. The first is ecological, the second is medical. As the two intersect, their joint consequences appear as a pattern of weird and terrible new diseases, emerging from unexpected sources and raising deep concern, deep foreboding, among the scientists who study them."

Quammen provides a theory for why the disease Hendra might have suddenly become a danger to humans. Hendra has emerged in Australia as a disease transmitted from bats to horses to humans.

Before humans began altering the environment, bats were widely distributed and lived in relatively small colonies distributed somewhat evenly along the terrain—as were their sources of food. These small populations could not support an epidemic for very long. Bats migrated from one colony to another quite frequently, and disease could be reintroduced frequently. Frequent infection means there are few new individuals in the population who can become ill and the intensity of the disease is low.

Along came humans who cut away the natural forest habitat and replaced it with orchards and farms and parks and cities. And bats have adapted to this new environment by coming in closer contact with humans.

"People have planted orchards, established urban parks, landscaped their yards with blossoming trees, and created other unintended enticements amid the cities and suburbs. ‘So bats have decided that, as their native habitat is disappearing, as climate is becoming more variable, and their food source is becoming less diverse, it’s easier to live in an urban area.’ They gather now in larger aggregations, traveling shorter distances to feed, living at closer proximity to humans (and to the horses that humans keep)."

Larger populations with less interchange of individuals leads to less frequent re-infections, but more intense epidemics when they do occur. Both the decreased separation between humans and bats, and the increased likelihood of a highly infected population at the time of re-infection enhances the probability of disease transfer to humans.

Quammen provides an interesting and a cautionary tale about the discovery that Marburg is a disease present in bats. There is a cave in Africa that came to be called "Python Cave" because pythons took up residence there and fed well on the bats residing there. Tour guides thought tourists might be interested in seeing the snakes and began taking the occasional visitor. Two women visitors were subsequently diagnosed with Marburg. They made the news because they carried the virus back to their home countries. Astrid Joosten, a Dutch woman died from the disease. Michelle Barnes brought her illness back to the United States and managed to survive even though her sickness was not accurately diagnosed until after the illness had subsided. These events sent scientists scurrying to that cave where they detected Marburg infection in the resident bats.

A few lessons are to be learned from this and other tales provided by Quammen

If someone asks you if you want to crawl into a cave filled with bat droppings and bat urine to watch a snake eat bats—tell them you will wait for the movie to come out.

If you encounter a dead animal—call a professional to deal with it. It is unlikely that it died of old age.
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