How the last two centuries led to today’s economy
The best and worst of yesterday has created the economy of today.
ADAM DAVIDSON is the cofounder of NPR's Planet Money podcast and a staff writer at The New Yorker, where he covers economics and business. Previously he was an economics writer for The New York Times Magazine. He has won many of journalism's most prestigious awards, including a Peabody for his coverage of the financial crisis.
ADAM DAVIDSON: I had this thought as I wrote the book that the best of the twenty-first century combines the best of the nineteenth and the best of the twentieth. And then my joke is the worst, combines the worst of those two centuries as well. What I mean by that is if you look at the nineteenth century and pretty much all human history before business was conducted almost entirely locally. You almost all physically made goods. They were made by someone who you didn't just know them your whole life, your great grandparents knew their great grandparents. And in many cases your clothes, your bed, your house were made by you or your family. And to the extent that there were services the equivalent of lawyers and accountants and doctors. Those would also have been produced locally. There's always been long distance trade but that was really just a very small number of luxury goods that had very little impact on the material lives of everyday people.
So you had profound intimacy to the point where if you lived in a certain neighborhood in Brooklyn or a certain village in France, the beer, the bread, the cheese—everything was how we do it here. It was fully intimate. And you go two villages over and they do it some other way that's totally different. And so you had this incredible enmeshment between producers and consumers.
Then you have the twentieth century which is about people in one place producing goods for people all over the world. So you have massive manufacturers in Atlanta or New Jersey or Chicago who are producing soda and candy bars and eventually furniture and cars and all of these goods. And they're made in one place, made in huge volume and then shipped everywhere in the world. And just the nature of that kind of transaction is scale. You can't know all that much about who's buying Coca Cola in some village in Vietnam or what things about a Ford car people in South Carolina like better than people in Alabama do or whatever. You just make, you know, with some variation you make the same set of products and ship them everywhere. And so that's scale and scale brings a lot of benefits that small intimacy doesn't. The benefit is an economy of scale. You can make more stuff more cheaply, spread it to more places.
But now that doesn't work very well. Big scale is in crisis. You look at the big scale consumer goods companies like Proctor & Gamble or Unilever and they're really struggling for growth. They're struggling to basically everyone who wants Tide soap and Oreo cookies already has Tide soap and Oreo cookies. And you sort of go by a candy aisle and you see the problem. Sure, we can have M&M's with pretzels and M&M's with caramel and M&M's with peanuts and M&M's with a million other things but you're not really transforming the experience of eating candy. And we live in a world where people are probably eating as much candy as you want. So you have these companies fighting over market share sort of unable to create really transformative value.
But then you have intimate products. You have products like let's use chocolate. You have entrepreneurs creating new ways of producing lovely chocolate bars but they don't have to only produce for people within walking distance or driving distance of their factory. And they don't have to produce 300 billion a day to get them all over the world. They can produce a reasonable amount of them and they can use the tools that the twenty-first century offer. The internet, of course, but shipping and logistics. There's been revolutions that make it just so much more affordable for a relatively small company to physically get stuff all over the world without owning big trucks, without owning big warehouses. Artificial intelligence is making it increasingly possible to match unique producers with unique buyers to get the, to combine the product with the buyer who most values it. And so that is what I call intimacy at scale, allowing you to do the nineteenth century thing of creating that unique thing. I often talk about candy and bread and beer because you can picture it but the same goes for accounting services and advertising services and medical and a million other, pretty much any kind of business to consumer or business to business product or service you can think of. And it allows you to do those things but do them at scale. Do them where you're reaching people all over the world who most want what you have to offer. That's the key.
We all know the Adam Smith "price is where supply meets demand." And the assumption with Adam Smith in "The Wealth of Nations" is that products are just this undifferentiated thing. Bread is bread and so you, if people start liking bread more and paying more money than new people make bread. And the way economists talk about it is price is actually at the point of indifference, or they call it the curve of indifference for complicated reasons. But basically you're selling to the least interested buyer. That's the price. If a pack of Oreo cookies costs $2.99 that's because they've figured out that if it was $3.05 some people would be like forget it, I'm not going to buy it. So you're targeting the least interested buyer.
The passion economy is about targeting the most interested buyer so the indifference price is rooted in the idea that you need that kind of massive scale to reach everyone. You need that last buyer to buy your thing to make the whole system work. But with the passion economy you could just focus on way up on the demand scale where people so love your product they'll pay far more for it, maybe $6 or $12 or $18, whatever it might be. And that, it's not just that you're getting more money from those people unfairly, it's that you're creating a product that can only exist if you're able to produce a product at that price which you can't do in the old system.
- Adam Davidson, co-founder of NPR's Planet Money, can trace a line through time from homemade clothing and baked goods to today's passion economy. Davidson argues that a combination of the nineteenth and twentieth centuries are how we got to where we are.
- We shifted from an intimate and localized economy of goods and services, to an economy of scale, and finally to what Davidson refers to as "intimacy at scale."
- There are, of course, positive attributes to this hybrid economic system, but it also comes with some of the flaws of its predecessors.
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Young people could even end up less anxiety-ridden, thanks to newfound confidence
- The coronavirus pandemic may have a silver lining: It shows how insanely resourceful kids really are.
- Let Grow, a non-profit promoting independence as a critical part of childhood, ran an "Independence Challenge" essay contest for kids. Here are a few of the amazing essays that came in.
- Download Let Grow's free Independence Kit with ideas for kids.
New research establishes an unexpected connection.
- A study provides further confirmation that a prolonged lack of sleep can result in early mortality.
- Surprisingly, the direct cause seems to be a buildup of Reactive Oxygen Species in the gut produced by sleeplessness.
- When the buildup is neutralized, a normal lifespan is restored.
We don't have to tell you what it feels like when you don't get enough sleep. A night or two of that can be miserable; long-term sleeplessness is out-and-out debilitating. Though we know from personal experience that we need sleep — our cognitive, metabolic, cardiovascular, and immune functioning depend on it — a lack of it does more than just make you feel like you want to die. It can actually kill you, according to study of rats published in 1989. But why?
A new study answers that question, and in an unexpected way. It appears that the sleeplessness/death connection has nothing to do with the brain or nervous system as many have assumed — it happens in your gut. Equally amazing, the study's authors were able to reverse the ill effects with antioxidants.
The study, from researchers at Harvard Medical School (HMS), is published in the journal Cell.
An unexpected culprit
The new research examines the mechanisms at play in sleep-deprived fruit flies and in mice — long-term sleep-deprivation experiments with humans are considered ethically iffy.
What the scientists found is that death from sleep deprivation is always preceded by a buildup of Reactive Oxygen Species (ROS) in the gut. These are not, as their name implies, living organisms. ROS are reactive molecules that are part of the immune system's response to invading microbes, and recent research suggests they're paradoxically key players in normal cell signal transduction and cell cycling as well. However, having an excess of ROS leads to oxidative stress, which is linked to "macromolecular damage and is implicated in various disease states such as atherosclerosis, diabetes, cancer, neurodegeneration, and aging." To prevent this, cellular defenses typically maintain a balance between ROS production and removal.
"We took an unbiased approach and searched throughout the body for indicators of damage from sleep deprivation," says senior study author Dragana Rogulja, admitting, "We were surprised to find it was the gut that plays a key role in causing death." The accumulation occurred in both sleep-deprived fruit flies and mice.
"Even more surprising," Rogulja recalls, "we found that premature death could be prevented. Each morning, we would all gather around to look at the flies, with disbelief to be honest. What we saw is that every time we could neutralize ROS in the gut, we could rescue the flies." Fruit flies given any of 11 antioxidant compounds — including melatonin, lipoic acid and NAD — that neutralize ROS buildups remained active and lived a normal length of time in spite of sleep deprivation. (The researchers note that these antioxidants did not extend the lifespans of non-sleep deprived control subjects.)
Image source: Tomasz Klejdysz/Shutterstock/Big Think
The study's tests were managed by co-first authors Alexandra Vaccaro and Yosef Kaplan Dor, both research fellows at HMS.
You may wonder how you compel a fruit fly to sleep, or for that matter, how you keep one awake. The researchers ascertained that fruit flies doze off in response to being shaken, and thus were the control subjects induced to snooze in their individual, warmed tubes. Each subject occupied its own 29 °C (84F) tube.
For their sleepless cohort, fruit flies were genetically manipulated to express a heat-sensitive protein in specific neurons. These neurons are known to suppress sleep, and did so — the fruit flies' activity levels, or lack thereof, were tracked using infrared beams.
Starting at Day 10 of sleep deprivation, fruit flies began dying, with all of them dead by Day 20. Control flies lived up to 40 days.
The scientists sought out markers that would indicate cell damage in their sleepless subjects. They saw no difference in brain tissue and elsewhere between the well-rested and sleep-deprived fruit flies, with the exception of one fruit fly.
However, in the guts of sleep-deprived fruit flies was a massive accumulation of ROS, which peaked around Day 10. Says Vaccaro, "We found that sleep-deprived flies were dying at the same pace, every time, and when we looked at markers of cell damage and death, the one tissue that really stood out was the gut." She adds, "I remember when we did the first experiment, you could immediately tell under the microscope that there was a striking difference. That almost never happens in lab research."
The experiments were repeated with mice who were gently kept awake for five days. Again, ROS built up over time in their small and large intestines but nowhere else.
As noted above, the administering of antioxidants alleviated the effect of the ROS buildup. In addition, flies that were modified to overproduce gut antioxidant enzymes were found to be immune to the damaging effects of sleep deprivation.
The research leaves some important questions unanswered. Says Kaplan Dor, "We still don't know why sleep loss causes ROS accumulation in the gut, and why this is lethal." He hypothesizes, "Sleep deprivation could directly affect the gut, but the trigger may also originate in the brain. Similarly, death could be due to damage in the gut or because high levels of ROS have systemic effects, or some combination of these."
The HMS researchers are now investigating the chemical pathways by which sleep-deprivation triggers the ROS buildup, and the means by which the ROS wreak cell havoc.
"We need to understand the biology of how sleep deprivation damages the body so that we can find ways to prevent this harm," says Rogulja.
Referring to the value of this study to humans, she notes,"So many of us are chronically sleep deprived. Even if we know staying up late every night is bad, we still do it. We believe we've identified a central issue that, when eliminated, allows for survival without sleep, at least in fruit flies."
We must rethink the "chemical imbalance" theory of mental health.
- A new review found that withdrawal symptoms from antidepressants and antipsychotics can last for over a year.
- Side effects from SSRIs, SNRIs, and antipsychotics last longer than benzodiazepines like Valium or Prozac.
- The global antidepressant market is expected to reach $28.6 billion this year.
Philosophers like to present their works as if everything before it was wrong. Sometimes, they even say they have ended the need for more philosophy. So, what happens when somebody realizes they were mistaken?
Sometimes philosophers are wrong and admitting that you could be wrong is a big part of being a real philosopher. While most philosophers make minor adjustments to their arguments to correct for mistakes, others make large shifts in their thinking. Here, we have four philosophers who went back on what they said earlier in often radical ways.
Or is doubt a self-fulfilling prophecy?