Genghis khan, deep history, minimum wage, Lao-Tzu, peaks, information and 20 years of the Commercial Internet

“In twenty-five years, the Mongol army subjugated more lands and people than the Romans had conquered in four hundred years. Genghis Khan, together with his sons and grandsons, conquered the most densely populated civilizations of the thirteenth century. Whether measured by the total number of people defeated, the sum of the countries annexed, or by the total area occupied, Genghis Khan conquered more than twice as much as any other man in history. The hooves of the Mongol warriors’ horses splashed in the waters of every river and lake from the Pacific Ocean to the Mediterranean Sea. At its zenith, the empire covered between 11 and 12 million contiguous square miles, an area about the size of the African continent and considerably larger than North America, including the United States, Canada, Mexico, Central America, and the islands of the Caribbean combined. It stretched from the snowy tundra of Siberia to the hot plains of India, from the rice paddies of Vietnam to the wheat fields of Hungary, and from Korea to the Balkans. The majority of people today live in countries conquered by the Mongols; on the modern map, Genghis Kahn’s conquests include thirty countries with well over 3 billion people. The most astonishing aspect of this achievement is that the entire Mongol tribe under him numbered around a million, smaller than the workforce of some modern corporations. From this million, he recruited his army, which was comprised of no more than one hundred thousand warriors — a group that could comfortably fit into the larger sports stadiums of the modern era.

Because Sapiens summarily dispatches over 13 billion years of cosmic and terrestrial history in its opening paragraphs, focusing instead on our species’ trials and tribulations during the past 70,000 years, it might more accurately be defined as “Deep History,” another recent approach to historiography that extends the historian’s remit to the origins of the human species. Like Big History, Deep History views the lack of written records for human “prehistory” as an inspiring challenge to historians rather than an insurmountable obstacle, one that can be overcome by recent scientific findings and techniques.

A rough guide to the finances of the fast food industry is as follows. 30% goes on wages, 30% of revenues goes on ingredients and the other 40% is everything else. Rents, advertising, capital costs and, of course, profits. Those profits are pretty low. 5% of revenues isn’t an out of order estimation of the net profit margins in the business (and, of course, that’s an average, as some locations and some whole chains lose money).

So, if we by legislative fiat raise the price of one of those inputs then something, somewhere, has to give. Those profit margins are already pretty thin and so they’re not going to be where that extra cost comes from. More than that if we reduce the returns to capital in a particular line of business then less capital will be invested in that line of business in the future. This means fewer jobs in that line of business: This is one of the ways that a rise in the minimum wage destroys jobs. Fewer will be created in the future than would have been in the absence of the rise in the minimum wage.

“Let go of fixed plans and concepts and the world will govern itself”

The roots of libertarianism are traced back through classical liberalism from a few hundred years ago, but here is the “Tao Te Ching” stating what looks to be the libertarian argument more than 2000 years ago (When Lao-Tzu wrote the “Tao Te Ching” is unknown, but it is believed to be at least B.C.E.). The argument is that the world is governed by the Tao (the way), or the laws of nature. Nature is orderly by it’s very nature. What economists would call emergent order, Lao-Tzu would call Tao.

“[A]bout 1970 a great reversal began in America’s use of resources. Contrary to the expectations of many professors and preachers, America began to spare more resources for the rest of nature, first in relative and more recently in absolute amounts. A series of decouplings is occurring, so that our economy no longer advances in tandem with exploitation of land, forests, water, and minerals. American use of almost everything except information seems to be peaking, not because the resources are exhausted, but because consumers changed consumption and producers changed production. Changes in behavior and technology liberate the environment.”

When Schrödinger asked in the 1940s how a germ cell stores genetic information, he reasoned that both a liquid and an amorphous solid had physical structures that were too irregular to be useful for storing information. On the other hand, a crystal was too regular and too hard to change. In particular, it could not be altered by x-ray radiation, which was known to cause changes in the traits that an offspring inherits. So he suggested that the information in a gene might be stored in a linear aperiodic (or irregular) crystal. In making this case, he was building on ideas that other physicists (most notably Max Delbrück) had advanced, but his presentation in a short book was widely read and influential. Crick and Watson were among his readers. They eventually showed that DNA has precisely the structure that he and Delbrück had proposed.

Looking back on these events with a wide lens, it is now possible to ask, why did the privatization of the Internet turn out so well? How could such an event unleash a wide and profound set of economic outcomes?

The answer involves “innovation from the edges”—multiple perspectives originating from multiple places in an industry with little or no concentrated decision making. Innovation from the edges played an important role in all the key events.


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