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Month: September 2016

The Fed Plans for the Next Crisis – Article by Ron Paul

The Fed Plans for the Next Crisis – Article by Ron Paul

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The New Renaissance HatRon Paul
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In her recent address at the Jackson Hole monetary policy conference, Federal Reserve Chair Janet Yellen suggested that the Federal Reserve would raise interest rates by the end of the year. Markets reacted favorably to Yellen’s suggested rate increase. This is surprising, as, except for one small increase last year, the Federal Reserve has not followed through on the numerous suggestions of rate increases that Yellen and other Fed officials have made over the past several years.

Much more significant than Yellen’s latest suggestion of a rate increase was her call for the Fed to think outside the box in developing responses to the next financial crisis. One of the outside-the-box ideas suggested by Yellen is increasing the Fed’s ability to intervene in markets by purchasing assets of private companies. Yellen also mentioned that the Fed could modify its inflation target.

Increasing the Federal Reserve’s ability to purchase private assets will negatively impact economic growth and consumers’ well-being. This is because the Fed will use this power to keep failing companies alive, thus preventing the companies’ assets from being used to produce a good or service more highly valued by consumers.

Investors may seek out companies whose assets have been purchased by the Federal Reserve, since it is likely that Congress and federal regulators would treat these companies as “too big to fail.” Federal Reserve ownership of private companies could also strengthen the movement to force businesses to base their decisions on political, rather than economic, considerations.

Yellen’s suggestion of modifying the Fed’s inflation target means that the Fed would increase the inflation tax just when Americans are trying to cope with a major recession or even a depression. The inflation tax is the most insidious of all taxes because it is both hidden and regressive.

The failure of the Federal Reserve’s eight-year spree of money creation via quantitative easing and historically low interest rates to reflate the bubble economy suggests that the fiat currency system may soon be coming to an end. Yellen’s outside-the-box proposals will only hasten that collapse.

The collapse of the fiat system will not only cause a major economic crisis, but also the collapse of the welfare-warfare state. Yet, Congress not only refuses to consider meaningful spending cuts, it will not even pass legislation to audit the Fed.

Passing Audit the Fed would allow the American people to know the full truth about the Federal Reserve’s conduct of monetary policy, including the complete details of the Fed’s plans to respond to the next economic crash. An audit will also likely uncover some very interesting details regarding the Federal Reserve’s dealings with foreign central banks.

The large number of Americans embracing authoritarianism — whether of the left or right-wing variety — is a sign of mass discontent with the current system. There is a great danger that, as the economic situation worsens, there will be an increase in violence and growing restrictions on liberty. However, public discontent also presents a great opportunity for those who understand free-market economics to show our fellow citizens that our problems are not caused by immigrants, imports, or the one percent, but by the Federal Reserve.

Politicians will never restore sound money or limited government unless forced to do so by either an economic crisis or a shift in public option. It is up to us who know the truth to make sure the welfare-warfare state and the system of fiat money ends because the people have demanded it, not because a crisis left Congress with no other choice.

Ron Paul, MD, is a former three-time Republican candidate for U. S. President and Congressman from Texas.

This article is reprinted with permission from the Ron Paul Institute for Peace and Prosperity.

Markets Are Breaking Down India’s Caste System, Turning Untouchables into Millionaires – Article by Malavika Nair and G. P. Manish

Markets Are Breaking Down India’s Caste System, Turning Untouchables into Millionaires – Article by Malavika Nair and G. P. Manish

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The New Renaissance HatMalavika Nair and G. P. Manish
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This year marks the 25th anniversary of liberal reforms in India that led to the dismantling of many socialist economic policies and the end of the draconian License Raj. Liberalization has changed life for many in India over the past couple of decades, although much more remains to be done. Just the middle class alone has exploded from 30 million people in 1991 to 300 million in 2014.

So this is a good occasion to tell the story of perhaps the most unexpected beneficiaries of these reforms: the rising Dalit millionaires. In recent years, many thousands of so-called “untouchables,” or Dalits, members of the lowest group in the Indian caste order, have risen out of poverty to become wealthy business owners, some even millionaires.

By taking advantage of the greater economic opportunity brought about by market reforms, these Dalit entrepreneurs provide us with an important example of the power of markets, not just to bring about economic emancipation, but to fight deeply entrenched social discrimination.

The Plight of the Dalits

The Indian caste system is an ancient and complex social order that divides society into groups based on a somewhat rough division of labor. The Dalits belong to the lowest group, below the four-tiered hierarchy of priests, warriors, merchants and artisans. Traditionally, Dalits were relegated to a life of doing “dirty” jobs such as cleaning floors and toilets or handling garbage: hence gaining the name “untouchable” as others would refuse to come into contact with them.

Since one’s caste was determined by birth, and it was impossible to switch castes throughout one’s life, being born an untouchable meant a lifetime of being trapped in a low income “dirty” job with very low social status. Marriages would only take place among caste members, and hence one’s children would be faced with the same hurdles brought by the untouchable identity, leading to systematic discrimination locked into place for generations.

It isn’t surprising that the Dalits consistently rank near the bottom of poverty statistics in an already poverty-ridden country. The term “poorest of the poor” would be an apt description of their socio-economic status in general. For decades, this made them the targets of several affirmative-action programs as well as many a politician looking to champion a cause.

While affirmative action has helped some get ahead, it has by no means been a panacea. For as long as all industry was state-controlled and subject to extensive licensing, the state effectively made all production decisions and awarded licenses to a few chosen oligarchs. This meant that opportunities for entrepreneurship and business were slim to none, and affirmative-action programs only served to redistribute pieces of a fixed pie from one to another.

Slumdog Millionaires

But there is a new heartwarming trend of entrepreneurship and self-help among Dalits since the liberal reforms in India, especially in urban areas. A visit to the Dalit Chamber of Commerce website (see also the Facebook page) reveals slogans such as “Fight Caste with Capital” and “Be Job givers, not Job seekers” as well as a spokesperson who favorably cites the invisible hand, a la Adam Smith! This voluntary Chamber of Commerce, set up in 2003 to bring Dalit entrepreneurs together, currently has 5,000 members whose enterprises jointly boast over half a billion dollars in sales revenue. The actual number of entrepreneurs in the population is much higher.

To what do they owe their success? Fascinating new qualitative research that tracks the life stories of several of these Dalit entrepreneurs reveals a common thread. The opening up of production processes to market forces created new opportunities like never before. Starting small and scraping together resources and capital, many of these Dalits now run business empires that actually provide employment to upper caste members.

There is Thomas Barnabas who was born into a family of bonded laborers, all eight of whom lived in a one-room house. Thomas recalls being thrown out of an upper caste friend’s home as a child after eating and drinking there because he was “untouchable.” They then proceeded to purify and wash the floor where he sat and threw away the dishes from which he ate.

Thomas now owns an industrial waste recycling and disposal business that has an annual sales revenue of $2.3 million and employs 200 people (including many upper caste members) outside the city of Chennai. He strove to fulfill an unmet demand for the processing of industrial waste generated by large corporations like Samsung, Dell, and Mercedes that set up manufacturing facilities in India after liberalization.

Or there is M.M. Rao, who was just one of two children to get an education in a family of bonded laborers with eight children. His family was so poor that they could not afford to buy shoes. His mother and sister were forced to walk barefoot to work in a nearby town.

Rao now owns a group of companies that specialize in construction, especially in the telecom sector, with a sales revenue of $7.4 million in 2010 alone. He was able to use his education as a civil engineer to start a small sub-contracting business laying telephone cables for large companies after the liberalization of the telecom sector. Owing to the quality of his work as well as his business acumen, he was able to grow that small sub-contracting business into what it is today.

Sushil Patil grew up in a 200-square-foot house in a slum, and his father was a laborer in a factory where he was discriminated against for his low caste status. Sushil was able to complete his engineering degree only because his father had to request the college dean to waive the fees that they could not afford to pay. He recalls, “I can never forget my father bowing before the dean, that hit me hard.” He now owns a construction and engineering company with revenues of $45 million a year. His main business is to handle the construction of power plants for major power companies. He has friends who still live in the slum that he grew up in and hopes to construct a charitable hospital that will offer medical services free of charge to the poor.

Markets Break Down Barriers

These stories constitute but a tiny sliver of many thousands, if not more. They lead us to an interesting question: how is it exactly that markets fight social discrimination? Markets work in very different ways than the obvious and visible hand of state-driven policies. While the state seeks to outlaw and abolish caste identity by making discrimination illegal, markets work in quiet and invisible ways by making caste identity irrelevant.

Competition brings about the existence of meaningful and relevant alternatives that raise the opportunity cost of discrimination for everyone participating in the market. It is in an entrepreneur’s economic interest to hire and contract with those who have the highest marginal productivity regardless of their caste identity. For if he does not, his competitor might potentially steal away profits that he could have earned. The more open and competitive a market, the more true this holds.

Once liberal reforms were put in place, they created choice and opportunity for many like never before. Market forces unwittingly brought about economic and thus social progress for society’s poorest and most discriminated against.

But can we go as far as saying the caste system has withered away? Not at all. It is unfortunately alive and well, especially in the rural areas where 68% of the population still lives, despite its being legally “outlawed” for decades.

Can we say that discrimination melts away in a market setting? Not necessarily. Anyone is free to discriminate on the basis of caste identity, even in a market. However, the greater the economic opportunity out there, the greater the chance that the cost of discrimination will be borne by the discriminator himself, not the one being discriminated against.

This is not true under socialism. When the state has a monopoly over all production and its chosen oligarchs (employers) sell to a captive market, discriminating against a certain group of people does not have negative economic consequences for the employer, but only for the ones being discriminated against. Naysayers claim that this rise among Dalits is marginal and not representative of Dalits as a proportion to the total population of the country. Some are getting ahead, but most are still left behind.

While this may be true in terms of numbers, the fact that this has happened at all is nothing short of marvelous. It’s not a coincidence that there were no Dalit millionaires emerging under socialism. It is a direct consequence of the underlying institutional setting. The Dalits exemplify the theory of the so-called poverty trap: being locked into a low-income equilibrium for generations. And yet, given a little opportunity and choice, we see many leaving a life of poverty and social discrimination behind to become well-respected business leaders and philanthropists.

Most encouraging is the recognition among them that it is the invisible hand of the market that has been instrumental for social and economic progress in their community. It is a step in the right direction for the future of classical liberalism and its role in alleviating poverty at a time when many who are more fortunate seem to be forgetting or ignoring its importance.

References

  1. The unexpected rise of Dalit millionaires: Swaminathan Aiyar
  2. Capitalism is changing caste much faster than any human being: Shekhar Gupta
  3. Defying the odds: The Rise of Dalit Entrepreneurs: Devesh Kapur, D Shyam Babu, Chandra Bhan Prasad
  4. Capitalism’s Assault on the Indian caste system: Swaminathan Aiyar, Cato policy paper
  5. 5. Dalit Chamber of Commerce website: www.dicci.org.

Malavika Nair is an Assistant Professor of Economics in the Johnson Center for Political Economy at Troy University. She is also an associated scholar of the Ludwig von Mises Institute.

G.P. Manish is an Assistant Professor of Economics in the Sorrell College of Business and a member of the Manuel H. Johnson Center of Political Economy at Troy University.

This article was published by The Foundation for Economic Education and may be freely distributed, subject to a Creative Commons Attribution 4.0 International License, which requires that credit be given to the authors.

A Totalitarian State Can Only Rule a Desperately Poor Society – Article by Ryan Miller

A Totalitarian State Can Only Rule a Desperately Poor Society – Article by Ryan Miller

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The New Renaissance HatRyan Miller
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I recently finished Anthem by Ayn Rand. In this short novella she tells the story of Equality 7-2521 (later called Prometheus), a man living in a dystopian collectivist society which has eclipsed the individual to such a degree that words such as “I” and “my” no longer even exist. The story is about Prometheus’ discovery of himself as an individual and of the world as it was before.

In this society babies are taken immediately from their “parents”, who were assigned to one another by the Council of Eugenics for the sole purpose of breeding, raised in the Home of Infants and then in the Home of Students, and then finally assigned their life-long profession at the age of 15 by the Council of Vocations. Everything is done for the supposed benefit of your brothers, preference is not allowed, superior ability is not allowed, and back-breaking toil is praised as such and not as a way to improve your own or humanity’s situation.

Dictatorship Means Poverty

But what is striking about this story is how accurately it portrays how the world would look under such life-throttling conditions. The Home of the Scholars is praised for having only recently (100 years ago) (re)invented marvels such as candles and glass. Since the times before the “Great Rebirth” and the discovery of the “Great Truth”—namely, “that all men are one and there is no will save the will of all men together”—humanity has, in reality, lost the progress of thousands of years and has reverted back to a time before even such basic utilities as oil lamps or clocks.

But Ayn Rand’s genius is that this is exactly what would happen to the world should it ever discover and truly act upon this “Great Truth.” Yet this is not typically how dystopian stories portray this type of society. Stories such as Brave New World, 1984, The Giver, Divergent, Equilibrium, and many others, all love to show some type of ultra-technologically-advanced world in the backdrop of total or near total oppression, suppression of the individual, and enforcement of conformity.

Despite the almost total (and often drug-induced) destruction of individual will, drive, and creativity, these societies have reached unprecedented levels of technological competence. This is especially true when one considers when many of these stories were written.

In Brave New World, written in 1931, everyone has a personal helicopter, science has advanced to such a degree that mothers and fathers are no longer necessary parts of the breeding process, and everyone is kept docile and happy by the apparently side-effect lacking drug Soma.

In 1984 (published in 1949) there are two way telescreens, miniscule microphones and cameras, and speak/writes which turn whatever you say into text. In the other stories technology is advanced enough to, among other things, control weather (The Giver), give kids serum-induced psychological aptitude tests (Divergent), and to completely suppress emotions (Equilibrium). In addition to these there are countless other inventions or practices in these stories and the many others of the dystopian future genre.

Invention Requires Freedom

The question that needs to be asked, however, is who invented all these things? These marvel feats, which in the stories are often used for the end of some malevolent goal, are really all potentially awesome, or at least highly complex and complicated, inventions or innovations. Their conception and ultimate realization would have required years of thought, testing, failure, tinkering, and then success—things which all require individual ingenuity, creativity, and the incentives arising from the prospect of individual pride and gain.

Every great break-through in history was achieved by some odd-ball going against the grain or traditionally accepted view of things in their particular field. If they had done things the way people had always done them, they would never have had the ability to think outside the box and discover or create a unique solution to the problem at hand. Inventors and innovators need their quirkiness, eccentricity, social awkwardness, or will and ability to stand up to the existing order. And they need that coupled with the idea that they have something to gain.

But all of these stories, to different degrees, have built societies that destroy our differences, our emotions, our passions, our ability to think differently, and our incentives to create if were even able to.

So where do these advanced societies come from? Sure they could drink from the well of wealth created by the society that may have preceded it, but only for a while. It would eventually dry up. And without new generations of ambitious and intelligent dreamers, tinkerers, outside-the-boxers, there would be no one around to rebuild the wealth. This is the world that Ayn Rand creates in Anthem. The hopeless world without individuals.

The existence of advanced societies in many dystopian stories is reminiscent of the problem with the thinking in our world today and in the past: the thinking that things “just happen”—that innovation, invention, and progress are phenomena which occur naturally, regardless of conditions. Though the worlds portrayed in these other novels are far from desirable, the progress alone that the societies in them have reached is a reflection of this idea that most people, at least passively or unknowingly, buy into.

In reality the world would look much more like that of Anthem.

 

ryan_miller

Ryan Miller is a University of Michigan graduate, freelance translator, and aspiring blogger. He is also a Praxis participant in the September 2016 cohort.

This article was originally published on FEE.org. Read the original article.

Don’t Lose Friendships Over Politics – Article by Jeffrey A. Tucker

Don’t Lose Friendships Over Politics – Article by Jeffrey A. Tucker

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The New Renaissance HatJeffrey A. Tucker
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Has election season always been this rough on friendships?

So many people I know are getting into Facebook fights, Twitter wars, Instagram arguments, and Snapchat squabbles. What begins as an ideological dispute ends in bitterness. People are provoking others, demanding those who do or don’t support their candidate leave their networks, cutting ties with friends and family, and all because of political differences.

I can’t even imagine what the Thanksgiving table will be like this year!

People perceive the stakes this year to be that high. To be sure, political philosophy does matter and does carry high stakes. However, the partisan struggle for the control of the state apparatus by this or that temporary manager doesn’t matter as much as election season seems to suggest. You might be being manipulated, and friendships and families are actually too precious to throw away for transient reasons.

It’s a pity to cause permanent rifts, and so unnecessary. The people who rearrange their personal relationships for the election imagine that they are taking control of their lives. They don’t seem to realize that they are actually letting strangers control their lives – strangers who care nothing for them in a system that actually seeks to divide people so it can conquer them. To permit politics to fundamentally alter something so important as friendship is to give politicians more importance than they deserve.

Trolling and Banning

Now, of course there is a proviso here. If there is someone in your network who is deliberately trolling you, harassing you, and goading you to respond, the best possible response is to block them. Not talk back. Not engage in a tit for tat. Just quietly block, without drama or announcement, much less denunciation.

Most public people I know have blocked as many as one hundred plus people over the past year, simply because this election season has been so contentious, with the alt-right and alt-left (who oddly agree on so much) battling it out on social media. Blocking is the far better path than engaging them. Vicious back and forths on the Internet can be life-consuming and draining. People who are trying to do that to you deserve exclusion from your conversation circle.

Apart from these cases, it strikes me as pointless to hurl someone out of your life because of political differences.

First, by denying yourself access to different points of view, you risk isolating yourself from a critic who might teach you something you need to know, maybe about anything in life, but maybe even about politics.

Second, talking to people with different opinions keeps you making sense and speaking in a civil way, addressing others in a way that could persuade them.

Third, and most critically, to isolate yourself, hate others for their views, and regard people with different points of view as less deserving of dignified treatment, plays into exactly what the political system wants for you to do.

But Aren’t They Aggressors?

A counter to my point was offered by a friend of mine last year. Speaking as a libertarian, he said, he regards anyone who supports some government action – even just casually and without much thought – as wittingly or unwittingly contributing to an opinion culture that supports rising political violence. The only friends he believes deserve the time of day from him must hold steadfastly to his voluntarist perspective, else he regards them as a direct threat to his life and liberty.

Now, this strikes me as vastly too severe. The truth is that most people who support some government action do not regard themselves as violent people. They believe that they are favoring something that is good for others, perhaps fostering the better life for the community.

For example, if a person favors higher spending on public education, they believe that they are pushing for policies that are good for others, not calling for violence against taxpayers to support unworkable programs. How can you possibly persuade them otherwise if you cut off all ties?

And it’s not just libertarians who can be this way. A good friend of mine was a casual lefty and, like most from his tribe, he was dead serious about the issue of climate change. I had no idea until the subject came up over coffee. I expressed some doubt that the science was truly settled concerning all causes and effects, solutions, costs and benefits, and so on. I was actually very measured in my comments, but somehow they caused him to blow up, call me a science-denying, tin-foil-hat-wearing capitalist apologist, and then actually leave the conversation. And that was it.

I was stunned. I was merely disagreeing with him, however cautiously. But somehow, he had come to believe that anyone who disagreed with him bears some responsibility for the rising sea levels, the melting of the polar ice caps, and the gradual disintegration of the planet, even though I’ve written very little on the topic at all.

He was letting politics control his life and even determine his friendships. Both of us are spiritually poorer as a result of this friendship loss.

And consider the toxic effect the rising politics of personal identity – on the left and the right – are having on the ability of people to find value in each other. Imagine how you would make me feel if you believed my whiteness represents a continuing stain on the world order. There is no chance for any kind of engagement; after all, I cannot change my race. Or what if I believe your blackness or gayness or atheism or whatever is leading to demographic or cultural destruction – how can we possibly be civil to each other? The politics of identity is causing precisely these sorts of irrational and pointless splits among us.

What Is the Point of Friendship?

What the libertarian and the lefty I mentioned above do not realize is that they are guilty of the same error of allowing politics to invade the conduct of their lives and determine the conditions of their personal happiness. Once this kind of thing starts, there is truly no end to it.

Must everyone agree with you on every jot and tittle of your ideology to be your friend? Must there be zero tolerance for even the slightest difference in outlook, priority, application, and goal of your particular political outlook? In other words, must all your friends believe exactly as you believe?

If this is your perspective, you might consider: there is not much point to being friends and engaging in conversation with someone who has the exact same view on all things that you have. It seems rather boring. Might as well stay home and reflect on your own infallibility.

I like to think of friendship much the way we think of economic exchange. In economics, goods and services do not exchange in the presence of perfect sameness. They exchange because each party to the exchange believes himself or herself will be better off than he or she was before the exchange. It is only in the presence of unequal expectations that exchange becomes mutually rewarding.

It is the same with friendship. We need to hear different points of view. We need the insights of others. Even if we don’t accept them in total, we can still hope to understand people and the world better by considering what others have to say – with sincerity, warmth, and honesty. In other words, friendships like this help us have an open mind and keep us all humble and teachable.

Candidates Will Betray You

Neither is it a good idea to give up a friendship based on loyalty to a particular candidate. The top two contenders for the presidency have held many different and conflicting views on a huge range of political issues, from taxation to immigration to war. These people are wired to be adaptable based on the polls. To follow one or the other all the way to the point that it affects your associations is to risk compromising your own intellectual integrity.

Neither is worth that.

One of the great tragedies of politics is that it can take people who in real life would be peaceful and loyal and loving friends and turn them into bitter enemies. I’m always struck by this when I see a political rally, with face offs between backers and protesters. What exactly is gained by this? If you put these same people in a shopping mall or movie theater or restaurant, they would have every reason to get along and no reason to be screaming obscenities at each other.

We should hold on to that realization. Each of us is a human being with feelings, hopes, dreams, and a vision of a life well-lived – every single person, regardless of race, religion, gender identity, or ideology. Politics should change nothing about that.

If we long for a better world of mutual understanding and peace, one way to help achieve it is to live as if it already exists. Above all, that means never letting politics get in the way of rewarding human relationships.

Jeffrey Tucker

Jeffrey Tucker

Jeffrey Tucker is Director of Content for the Foundation for Economic Education and CLO of the startup Liberty.me. Author of five books, and many thousands of articles, he speaks at FEE summer seminars and other events. His latest book is Bit by Bit: How P2P Is Freeing the World.  Follow on Twitter and Like on Facebook. Email. 

This article was originally published on FEE.org. Read the original article.

Criticizing Programmed Theories of Aging – Article by Reason

Criticizing Programmed Theories of Aging – Article by Reason

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The New Renaissance HatReason
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Today I’ll point out an open-access critique of programmed aging theories by the originator of the disposable soma theory of aging, one of the modern views of aging as accumulated damage rather than programming. The question of how and why we age is wrapped in a lot of competing theory, but of great practical importance. Our biochemistry is enormously complex and incompletely mapped, and thus the processes of aging, which is to how exactly our biochemistry changes over time, and all of the relationships that drive that change, are also enormously complex and incompletely mapped. Nonetheless, there are shortcuts that can be taken in the face of ignorance: the fundamental differences between young and old tissue are in fact well cataloged, and thus we can attempt to reverse aging by treating these changes as damage and repairing them. If you’ve read through the SENS rejuvenation research proposals, well, that is the list. The research community may not yet be able to explain and model how exactly this damage progresses, interacts, and spreads from moment to moment, but that effort isn’t necessary to build repair therapies capable of rejuvenation. You don’t need to build a full model of the way in which paint cracks and peels in order to scrub down and repaint a wall, and building that model is a lot most costly than just forging ahead with the painting equipment.

The engineering point of view described above, simply getting on with the job when there is a good expectation of success, is somewhat antithetical to the ethos and culture of the sciences, which instead guides researchers to the primary goal of obtaining full understanding of the systems they study. In practice, of course, every practical application of the life sciences is created in a state of partial ignorance, but the majority of research groups are nonetheless oriented towards improving the grand map of the biochemistry of metabolism and aging rather than doing what can be done today to create rejuvenation therapies. Knowledge over action. If we had all the time in the world this would be a fine and golden ideal. Unfortunately we do not, which places somewhat more weight on making material progress towards the effective treatment of aging as a medical condition – ideally by repairing its causes.

But what are the causes of aging? The majority view in the research community is that aging is a process of damage accumulation. The normal operation of metabolism produces forms of molecular damage in cells and tissues, a sort of biological wear and tear – though of course the concept of wear and tear is somewhat more nuanced and complex in a self-repairing system. This damage includes such things as resilient cross-links that alter the structural properties of the extracellular matrix and toxic metabolic waste that clutters and harms long-lived cells. As damage accumulates, our cells respond in ways that are a mix of helpful and harmful, secondary and later changes that grow into a long chain of consequences and a dysfunctional metabolism that is a long way removed from the well-cataloged fundamental differences between old and young tissues. An old body is a complicated mess of interacting downstream problems. In recent years, however, a growing minority have suggested and theorized that aging is not caused by damage, but is rather a programmed phenomenon – that some portion of the what I just described as the chain of consequences, in particular epigenetic changes, are in fact the root cause of aging. In the programmed view of aging, epigenetic change causes dysfunction and damage, not the other way around. That these two entirely opposite views can exist is only possible because there is no good map of the detailed progression of aging – only disconnected snapshots and puzzle pieces. There is a lot of room to arrange the pieces in any way that can’t be immediately refuted on the basis of well-known past studies.

There are two ways to settle the debate of aging as damage versus aging as evolved program. The first is to produce that grand map of metabolism and aging, something that I suspect is at the least decades and major advances in life science automation removed from where we stand now. The other is to build therapies that produce large degrees of rejuvenation, enough of a difference to put it far beyond argument that the approach taken is the right one. That is not so far away, I believe, as the first SENS rejuvenation therapies are presently in the early stages of commercial development. I think that, even with the comparative lack of funding for this line of development, ten to twenty years from now the question will be settled beyond reasonable doubt. Meanwhile, the programmed-aging faction has become large enough and their positions coherent enough that the mainstream is beginning to respond substantially to their positions; I expect that this sort of debate will continue all the way up to and well past the advent of the first meaningful rejuvenation therapies, which at this point look to be some form of senescent cell clearance.

Can aging be programmed? A critical literature review – by Axel Kowald and Thomas B. L. Kirkwood

Quote:

Many people, coming new to the question of why and how aging occurs, are attracted naturally to the idea of a genetic programme. Aging is necessary, it is suggested, either as a means to prevent overcrowding of the species’ environment or to promote evolutionary change by accelerating the turnover of generations. Instead of programmed aging, however, the explanation for why aging occurs is thought to be found among three ideas all based on the principle that within iteroparous species (those that reproduce repeatedly, as opposed to semelparous species, where reproduction occurs in a single bout soon followed by death), the force of natural selection declines throughout the adult lifespan. This decline occurs because at progressively older ages, the fraction of the total expected reproductive output that remains in future, on which selection can act to discriminate between fitter and less-fit genotypes, becomes progressively smaller. Natural selection generally favours the elimination of deleterious genes, but if its force is weakened by age, and because fresh mutations are continuously generated, a mutation-selection balance results. The antagonistic pleiotropy theory suggests that a gene that has a benefit early in life, but is detrimental at later stages of the lifespan, can overall have a net positive effect and will be actively selected. The disposable soma theory is concerned with optimizing the allocation of resources between maintenance on the one hand and other processes such as growth and reproduction on the other hand. An organism that invests a larger fraction of its energy budget in preventing accumulation of damage to its proteins, cells and organs will have a slower rate of aging, but it will also have fewer resources available for growth and reproduction, and vice versa. Mathematical models of this concept show that the optimal investment in maintenance (which maximizes fitness) is always below the fraction that is necessary to prevent aging.

In recent years, there have been a number of publications claiming that the aging process is a genetically programmed trait that has some form of benefit in its own right. If this view were correct, it would be possible experimentally to identify the responsible genes and inhibit or block their action. This idea is, however, diametrically opposed to the mainstream view that aging has no benefit by its own and is therefore not genetically programmed. Because experimental strategies to understand and manipulate the aging process are strongly influenced by which of the two opinions is correct, we have undertaken here a comprehensive analysis of the specific proposals of programmed aging. On the principle that any challenge to the current orthodoxy should be taken seriously, our intention has been to see just how far the various hypotheses could go in building a convincing case for programmed aging.

This debate is not only of theoretical interest but has practical implications for the types of experiments that are performed to examine the mechanistic basis of aging. If there is a genetic programme for aging, there would be genes with the specific function to impair the functioning of the organism, that is to make it old. Under those circumstances, experiments could be designed to identify and inhibit these genes, and hence to modify or even abolish the aging process. However, if aging is nonprogrammed, the situation would be different; the search for genes that actively cause aging would be a waste of effort and it would be too easy to misinterpret the changes in gene expression that occur with aging as primary drivers of the senescent phenotype rather than secondary responses (e.g. responses to molecular and cellular defects). It is evident, of course, that genes influence longevity, but the nature of the relevant genes will be very different according to whether aging is itself programmed or not.

For various programmed theories of aging, we re-implemented computational models, developed new computational models, and analysed mathematical equations. The results fall into three classes. Either the ideas did not work because they are mathematically or conceptually wrong, or programmed death did evolve in the models but only because it granted individuals the ability to move, or programmed death did evolve because it shortened the generation time and thus accelerated the spread of beneficial mutations. The last case is the most interesting, but it is, nevertheless, flawed. It only works if an unrealistically fast-changing environment or an unrealistically high number of beneficial mutations are assumed. Furthermore and most importantly, it only works for an asexual mode of reproduction. If sexual reproduction is introduced into the models, the idea that programmed aging speeds up the spread of advantageous mutations by shortening the generation time does not work at all. The reason is that sexual reproduction enables the generation of offspring that combine the nonaging genotype of one parent with the beneficial mutation(s) found in the other parent. The presence of such ‘cheater’ offspring does not allow the evolution of agents with programmed aging.

In summary, all of the studied proposals for the evolution of programmed aging are flawed. Indeed, an even stronger objection to the idea that aging is driven by a genetic programme is the empirical fact that among the many thousands of individual animals that have been subjected to mutational screens in the search for genes that confer increased lifespan, none has yet been found that abolishes aging altogether. If such aging genes existed as would be implied by programmed aging, they would be susceptible to inactivation by mutation. This strengthens the case to put the emphasis firmly on the logically valid explanations for the evolution of aging based on the declining force of natural selection with chronological age, as recognized more than 60 years ago. The three nonprogrammed theories that are based on this insight (mutation accumulation, antagonistic pleiotropy, and disposable soma) are not mutually exclusive. There is much yet to be understood about the details of why and how the diverse life histories of extant species have evolved, and there are plenty of theoretical and experimental challenges to be met. As we observed earlier, there is a natural attraction to the idea that aging is programmed, because developmental programming underpins so much else in life. Yet aging truly is different from development, even though developmental factors can influence the trajectory of events that play out during the aging process. To interpret the full complexity of the molecular regulation of aging via the nonprogrammed theories of its evolution may be difficult, but to do it using demonstrably flawed concepts of programmed aging will be impossible.

Given that the author here has in the past been among those who dismissed the SENS initiative as an approach to treating aging by repairing damage, it is perhaps a little amusing to see him putting forward points such as this one: “despite the cogent arguments that aging is not programmed, efforts continue to be made to establish the case for programmed aging, with apparent backing from quantitative models. It is important to take such claims seriously, because challenge to the existing orthodoxy is the path by which science often makes progress.” Where was this version of the fellow ten years ago?

Reason is the founder of The Longevity Meme (now Fight Aging!). He saw the need for The Longevity Meme in late 2000, after spending a number of years searching for the most useful contribution he could make to the future of healthy life extension. When not advancing the Longevity Meme or Fight Aging!, Reason works as a technologist in a variety of industries.
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This work is reproduced here in accord with a Creative Commons Attribution license. It was originally published on FightAging.org.
How Not to Fall for the Sunk-Cost Fallacy – Article by T. Norman Van Cott

How Not to Fall for the Sunk-Cost Fallacy – Article by T. Norman Van Cott

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The New Renaissance HatT. Norman Van Cott
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My wife and I frequently vacation near Asheville, North Carolina. Perhaps it’s the economist in me, but an interesting spot that I visit is the Western North Carolina Farmers’ Market. The WNC market is large (36 acres) with vendors selling every seasonal fruit and vegetable item you can imagine. Georgia and South Carolina peaches are always a highlight. Therein lies the basis for a teachable moment in economics.

Chasing Peaches

While returning to Indiana one year, we decided to stop at the market to buy peaches for ourselves and friends. Going west on I-40, we exited for the market. Turning left, we took the bridge over I-40 toward our intended exit. Since the on-ramp for I-40 east and the entrance to the market are not that far apart, we accidentally missed our exit. That was about a 6 mile mistake for me. Unavoidable costs should not figure in the decision about whether to pursue peaches.

By the time we had gotten back to the exit for the WNC market, the question arose whether we should (try again to) buy peaches. I pointed out to my wife that had we known the first time that getting to the peaches was going to entail an additional 6 or so miles of driving, we might not have ever tried to stop.

However, the gasoline, traffic delay and self-incriminating frustration associated with the 6 mile mistake were what economists call “sunk costs.” That is, there was no way to avoid them at that point. Being unavoidable means they should not figure in the decision about whether to pursue peaches. The only costs that matter at that point are the costs of exiting a second time, not both times. So we exited, bought peaches, and continued on our way.   

In retrospect, the net benefits of the peaches were less than what initially motivated us to try to buy them. The net benefits could actually have been negative, but had we not exited the second time, the loss would have been greater!

Sunken Soybeans

Let’s consider another example. Living in rural Indiana, I’ve heard farmers complain at harvest time about how the price of corn and soybeans has fallen so much during the summer. Seeing as they’re going to lose money for the year, “why even harvest” is the lament of some. This is bad thinking. At harvest time many of the costs associated with their crops are “sunk.” That is, the cost of the seed, pesticides, herbicides, fuel, etc. associated with getting to harvest time has already been incurred. Nothing can be done to get that investment back so it should be ignored. The only costs that matter at harvest time are the costs of harvesting itself. The only issue is whether lower prices will cover these costs.

When it comes to tax time those costs, previously labeled sunk at harvest time, suddenly become important in figuring farmers’ taxable income. The accountant is going to want to know them. Moreover, the IRS is going to be interested in their accuracy.

The following spring yields yet another issue. Those seeds, pesticides, herbicides, and fuel costs that didn’t matter last fall now matter, and not just for tax reasons. With planting not yet started, these costs are no longer sunk because they have yet to be incurred. If expectations are that the coming fall is to be a repeat of the previous fall, the farmers will be planting something different than corn and soybeans in the coming spring.

Sunk Costs Might Cost You a Championship

One final example. As a sports fan I have long noted the gargantuan salaries with multi-year, guaranteed contracts for professional baseball and basketball players. What’s interesting is the responses of team owners and general managers when “their” players perform below expectations. More often than not the owner or general managers will say something like “this guy’s contract means we’re paying him umpteen thousands of dollars for this season, so we have to play him to get our investment back.” Another case of bad thinking. Don’t put a bad player in the game just because you paid for them.

The player’s salary for the duration of his contract is a sunk cost. It has to be paid regardless of whether the player plays; it therefore shouldn’t figure in the decision about how much play time needs to be utilized from the player. What matters at this point is whether you can find somebody who can play better. If your favorite team(s) have owners and general managers who think sunk costs matter, I recommend you switch your allegiances.

I’ll admit that ignoring sunk costs is difficult to do. It seems like people have an innate desire to include them in their business and household decisions. But doing so can result in less than optimal decisions, which can include not being able to enjoy those large, juicy Georgia and South Carolina peaches.

T. Norman Van Cott; Economics
T. Norman Van Cott; Economics
T. Norman Van Cott

T. Norman Van Cott, professor of economics, received his Ph.D. from the University of Washington in 1969. Before joining Ball State in 1977, he taught at University of New Mexico (1968-1972) and West Georgia College (1972-1977). He was the department chairperson from 1985 to 1999. His fields of interest include microeconomic theory, public finance, and international economics. Van Cott’s current research is the economics of constitutions.

This article was originally published on FEE.org. Read the original article.