On the thorniness of historical counterfactuals

Both the economist and the historian are students of human organisations and behaviour.

The economist (at least in his empiricist manifestation) is usually interested in understanding causation - what causes drive what outcomes. This is at least one way of testing our models. The aim is to understand the structure of the world we live in, with the ultimate aims being prediction and policy improvements.

The historian has a choice to be either an economist or a journalist. The economist version wants to understand why things happened the way they did, and what can be learned about the world as a result. The journalist version scorns the grandiose conceit of trying to pin down causality, and instead sticks to the smaller question of "what happened", telling the stories of the past.

Of course, economists are also historians - they take a series of events that have happened, and assert that they're comparable along the dimensions that matter and thus worthy of being used to understand general principles.

For a genuine historian, especially of world events, the tools needed are different. One must treat historical events as case studies, to be explored in detail, rather than line items in a spreadsheet. If you're understanding World War 2, for instance, for many questions there's pretty much only one line in the spreadsheet. So running a regression isn't exactly on offer, and you probably would do better to crack open a book instead.

Even though it's generally out of fashion among historians, understanding causality and counterfactuals is very important if you want to draw actual lessons from history. The counterfactual says what could have been, if some other choice had been made. It aims to make, in a literary sense, the claim to causally identifying the effect of a single decision.

It goes without saying that this is incredibly hard to do. But for those of us not bound by the standards of academic publishing, it's among the more interesting ways of thinking about history.

Getting the counterfactual right, of course, is largely a matter of judgment and opinion, since we can't actually re-run the past and find out.

But there is one aspect of thinking about counterfactuals that is beyond dispute. If you don't have a clear sense of what the counterfactual is, then you don't have any idea what the actual impact of the decision was.

You might think that nobody could possibly be this stupid, but you'd be wrong. The surest sign is when people complain about some decision that was followed by bad consequences, but never explain exactly what the alternative was and how it was meant to work.

One case where I've come across this is in the role of the British in partitioning India in 1947 into two countries (India and Pakistan) when they left. This is part of the long list of standard recitations given as to how beastly the British were in all matters of administering the British Empire.

As everybody knows, what happened after partition was a total disaster, with widespread violence and population transfers under extreme duress. Estimates of the deaths involved range from several hundred thousand to two million, according to La Wik. The problem is the classic one in the colonial critic's playbook - that the lines drawn on the map didn't correspond to messy demographic reality. When the two came into conflict, the result was maybe a million deaths.

Which sounds pretty bad, no?

But again, bad compared to what? What other choices did they have, and what would the consequences have been?

Here, the dilemma is not so much the "what" as the "consequences". The main alternative was leaving the two places as a single country. The issue, of course, is how that would have actually played out. But for some reason, the people who denounce Britain never seem to spend much time discussing this aspect.

There are, to be fair, arguments that partition was a mistake, because a single country would have done a better job of calming ethnic tensions. To my mind, the strongest of these is the relative levels of antagonism between Indian Hindus and Pakistani Muslims, versus the antagonism between Indian Hindus and Indian Muslims. 

People have a tendency to forget that the last-mentioned category of Indian Muslims not only exists, but is enormous, around 172 million (almost as many, in fact, as the 193 million in Pakistan). And while there is violence and conflict between Hindus and Muslims in India, it's not on anything like the scale or seriousness as the tension between India and Pakistan. The latter could actually devolve into a nuclear missile exchange. 

By contrast, I don't even hear about serious pushes for Muslim separatism in India. I'm sure it exists in some form. But it's less prominent than, say Quebec or Belgium. Indeed, India is perhaps the only other exception (along with Switzerland) to the Holmes rule that there are no stable multilingual countries. Somehow, they mostly manage to rub along. The surest sign that the conflict with India's Muslims is probably not an existential threat to the country is that it's possible to go months without reading any newspaper stories on "Indian Muslims". Certainly, you go a lot longer than you do without reading something about the India/Pakistan tensions.

So this reads like a pretty bad indictment of the British, at least ex post. 

But there's another counterfactual which gets discussed even less.

What if Britain left them as a single country, but they had a bloody separatist war afterwards anyway?

The amazing thing about this example is that it's not even a hypothetical. It literally happened.

Where?

Bangladesh. It used to be called East Pakistan, and was part of the same country. They were divided by geography, but shared a common religion. Surely, we would reason, they should work well in a single polity!

Except they didn't. Bangladesh fought a bloody war of independence against what was (and I quote La Wik):

An academic consensus prevails that the atrocities committed by the Pakistani military were a genocide.

As coincidence would turn out (it seems in poor taste to call it "luck" in this context), the estimated number of civilian deaths ranges from 300,000 to 3 million, rather close to the deaths during partition. 

Huh! Doesn't seem quite so cut and dried now, does it?

It leaves me actually quite agnostic on the whole question, to be honest. It seems very unclear whether things would have actually turned out better or worse if the British hadn't partitioned India when they left. It may just be that when they left the place, there was a high chance there was going to be widespread ethnic conflict no matter what they did.

And yet, to slightly paraphrase the great Mr Bastiat, people have a tendency to judge actions primarily by what is seen, not what is unseen.

The people that might have died under an alternative political arrangement are not salient at all. The deaths during partition are highly salient. 

Sometimes there are just no good options, at least based on what you can reasonably know at the time. Sometimes, you have to call things as you see them, suspecting that a lot of people might die either way.

It seems depressing, but likely, that the only actual lesson of partition is the one that the Bard wrote centuries ago - uneasy lies the head that wears a crown.

The Imperfect Vision of the Past

As Mencius Moldbug noted, if the past is a foreign country, then a reactionary is a patriot of that country.

But the past being past, the reactionary is necessarily a patriot from afar. No man can live in any time other than his own. He cannot actually love the country of the past because he has never been there, unless his patriotism extends only as far as his own childhood. He must necessarily love an image of it, the brochure formed from (depending on how distant it is ) photos, paintings, texts, or just translations of texts.

There's nothing wrong with this, per se. We have almost unlimited information about our own age, and how many of us can claim to really understand it? But there is always the risk that unless careful attention is paid, one will still end up filling in gaps with assumptions from modernity. The problem, even for an honest and attentive broker, is twofold.

Firstly, old sources mostly wrote about what they considered important in their own society. Some of the weirdest parts to us may be things they would have mostly taken for granted, and hence didn't discuss much.

Secondly, we interpret these sources in the light of the controversies of our own age. These tend to become the focal points on which other societies are analysed. But the areas where our society is mostly in agreement are less likely to be studied, even if our agreement is completely different from their agreement.

For instance, I am a reactionary of death. It is not for nothing that this blog has an entire subject label devoted to 'mortality'.

And yet, despite being a fully grown man, I have seen a corpse only once in my life, in circumstances where it was not made plain that the person was actually dead. This is not an accident. This is how our society operates.

Just ponder that. Death has not gotten any less common, but extraordinary lengths are taken to ensure that when death visits, it is out of the way, hidden from sight. The main times you will witness an actual corpse is if you happen upon the scene of an accident. Otherwise, it takes place in a hospital, leading to the implication that it is simply the result of failed or insufficient medical intervention, which technology will eventually overcome.

This is of course absurd. You can realise this by studying life expectancy tables, or just by contemplating the human condition.

But most people today don't even realise that they hold thoroughly modern views on the subject of death. It's because it's largely just taken for granted. There are only a few controversies that touch on it generally, like euthanasia, but that in practical terms is actually a step even further in the same direction - now we can shuffle off this mortal coil with the best of drugs, in a comfortable setting, in a time and manner that doesn't have to alarm those around us. In this way, the already thoroughly medicalised process can also become artificially predictable.

Once upon a time, mortality was considered an important thing for men to wisely ponder, and consider how they wanted to live their life. Medieval Christianity used to emphasize this through a Memento Mori. That is, they took extra steps to remind themselves of mortality, so as to not miss the importance. And even without that, death was all around them. People died in their homes, and died much sooner. Avoiding it was just not an option.

The main reason my my own thinking diverges from the mainstream on this point, and I ended up a reactionary of mortality, is from the influence of Buddhism. In Buddhism death is viewed as terrible, one of the great destroyers of the world that inevitably leads to suffering. Unlike in Christianity, it offers no chance of the ascent to a permanent heaven, though there are temporary heavens. Death is often paired with old age, among forms of suffering, to emphasise that the impermanence aspect, and that it is the inevitable outcome of the process of decay. And in Buddhism (which, when I use the term, I mean Theravada, which is my background), even rebirth is not a cause of celebration, but another form of the problem of the endless cycle of suffering and unsatisfactoriness. As a result of all this, wisely contemplating impermanence is a central concern:

“What do you think, great king? Suppose a man would come to you from the east, one who is trustworthy and reliable, and would tell you: ‘For sure, great king, you should know this: I am coming from the east, and there I saw a great mountain high as the clouds coming this way, crushing all living beings. Do whatever you think should be done, great king.’ ...

“If, venerable sir, such a great peril should arise, such a terrible destruction of human life, the human state being so difficult to obtain, what else should be done but to live by the truth (Dhamma), to live righteously, and to do wholesome and meritorious deeds?”

“I inform you, great king, I announce to you, great king: aging and death are rolling in on you. When aging and death are rolling in on you, great king, what should be done?”

“As aging and death are rolling in on me, venerable sir, what else should be done but to live by the truth (Dhamma), to live righteously, and to do wholesome and meritorious deeds?”

“Venerable sire, kings intoxicated with the intoxication of sovereignty, obsessed by greed for sensual pleasures, who have attained stable control in their country and rule over a great sphere of territory, conquer by means of elephant battles, cavalry battles, chariot battles, and infantry battles; but there is no hope of victory when aging and death are rolling in. In this royal court, venerable sir, there are counselors who, when the enemies arrive, are capable of dividing them by subterfuge; but there is no hope of victory by subterfuge, no chance of success, when aging and death are rolling in. In this royal court, there exists abundant bullion and gold stored in vaults, and with such wealth we are capable of mollifying the enemies when they come; but there is no hope of victory by wealth, no chance of success, when aging and death are rolling in. As aging and death are rolling in on me, venerable sir, what else should I do but live by the truth (Dhamma), live righteously, and do wholesome and meritorious deeds?”

“So it is, great king! So it is, great king! As aging and death are rolling in on you, what else should you do but live by the truth (Dhamma), live righteously, and do wholesome and meritorious deeds?”

Of course, nobody thinks like that anymore, if for no other reason than that people do their absolute utmost to avoid even noticing death. If mortality is contemplated at all, it's mostly to advocate for mindless hedonism. Or it's contemplated for a day or two when a relative dies, before being shuffled off into the background and beaten down with awkward insistence that the subject is "morbid" whenever the topic of death even comes up.

If I am out of step with modernity, I am quite sure that it is modernity, not I, who is strange. But I would say that, wouldn't I?

Still, there are plenty of other aspects where older societies are different that aren't so flattering to my conceit.

For instance, I've been reading John Dolan's wonderful prose translation of the Iliad. In many ways, Dolan has undertaken the task of re-telling the Iliad to preserve a set of features almost entirely orthogonal to the standard ones. Which is to say, most translations try to preserve the poetic aspect and the literal word choice, at least as much as both parts can be rendered into modern English (which, for the poetic metre, is not very well). But Dolan ditches this to instead preserve aspects which, he argues quite persuasively, would have been far more salient to listeners at the time (and they were listeners originally, not readers). Which is to say, he preserves the gore, the slapstick comedy, the cruelty, and the enjoyment of military violence.

In this respect, the Greek narrative is actually more understandable than many of us would be comfortable admitting.

But as Dolan notes explicitly, apparently echoing Nietzsche, it is a mistake to view the Greeks as being like us. For instance, take Dolan's observations on how lust was viewed:

Now Zeus has to kill even more of the Greeks. His first thought, a painful wincing one: “Hera’s not going to like this”. His wife and sister, Hera, always knows what he’s up to, and she’s soft on the Greeks. She’s permanently mad at him anyway, because he’s just an old horndog pretending to be in command when he can’t even command his own penis.

These people were very down on lust. That’s one of the ways they weren’t like us. We love lust. They didn’t. It was too dangerous, and it gave women too much power, so lust is a bad thing in this story. To these people, a real man doesn’t get led around by his dick, and if he does, he’s not a man at all. A stud, to their way of thinking, is a sissy, and above all, a sissy stud is dangerous, capable of wiping out an entire city. 

The man who started this whole war was a stud, a Trojan prince named Paris, fitting for a man with the sexual ego of Pepe Le Pew. The only reason he didn’t drive a Porsche or wear Ray Bans is because the infrastructure wasn’t there yet. He’d have defected to Malibu in a second if the airport had been ready. This princeling Paris had the chance to judge a beauty contest of three female gods, and that’s what got Troy besieged.

You've gotta say, the Greeks have a point.

And the modern tendency is also to play up another very un-Greek idea - the importance of romantic love. Amazing as it seems to me, there is a tendency of some to view the Paris and Helen story as some kind of tragically doomed but still beautiful romance, rather than the height of folly, stupidity, selfishness, and effeminate behavior which is how it would have been seen at the time.

But not all of the alienness seems flattering of the Greek world view either. In his discussion of the book in the latest Radio War Nerd, Dolan mentions another aspect that is hard to believe at first:

Above all, they were other, they enjoyed cruelty, they found cruelty hilarious, and if you don't understand that about them, you'll never get them...

The Iliad begins with this captive girl watching as her old father limps down the beach to beg Agamemnon, the vile Greek leader, to release her. And Agamemnon purposely shames him in a really over-the-top way. And that's a bad idea, not because you should be nice to people - there's no such idea in the Iliad - but because he's a priest of Apollo.

The idea that cruelty is generally entertaining, and being nice to people is not an important trait, is something so utterly alien that it's hard to even conceive of it.

Remember this next time you're exalting the glory of the ancient Greeks.

But the weirdest of all to me is something taken even more for granted - the importance of a sense of humor. Robin Hanson had a great post on this. He cites Rod Martin:

Prior to the eighteenth century, laughter was viewed by most authors almost entirely in negative terms. … All laughter was thought to arise from making fun of someone. Most references to laughter in the Bible, for example, are linked with scorn, derision, mockery, or contempt. … Aristotle … believed that [laughter] was always a response to ugliness or deformity in another person. … Thomas Hobbes saw laughter as being based on a feeling of superiority, or “sudden glory”, resulting from some perception of inferiority in another person.

 From the seventeenth to the twentieth century, popular conceptions of laughter underwent a remarkable transformation, shifting from the aggressive antipathy of superiority theory, to the neutrality of incongruity theory, to the view that laughter could sometimes by sympathetic , to the notion that sympathy was a necessary condition for laughter. 

 As recently as the 1860s, it was considered impolite to laugh in public in the United States.

 In the United States, [a sense of humor] came to be seen as a distinctly American virtue, having to do with tolerance and democracy, in contrast to those living in dictatorships, such as the Germans under Nazism, or the Russians during the Communist era, who were thought to be devoid of humor. … By the end of the twentieth century, humor and laughter were … seen as … important factors in mental and physical health  

Which actually casts the earlier Dolan quote in a different light, which I'm not sure that Dolan fully appreciated. If the Greeks found cruelty hilarious, it wasn't just because they had a different attitude to cruelty. They also had a different attitude to hilarity, and what it was meant to represent.

If you want to see what noble character without a sense of humour looks like, read Marcus Aurelius. The seriousness of purpose shines through vividly, but he is not there to entertain you. There are more important traits than a sense of humour.

The sheer range of strange alternative values and thoughts shows, if nothing else, that if there indeed is a psychic unity of mankind, it comprises a far smaller set of traits than you might believe possible.

In the end though, there is no particular virtue in trying to exactly resurrect the past wholesale, even if it were possible. We can only grapple with the world we actually live in, and importing some contemporary assumptions is almost inevitable.

The value in studying how past societies operated, rather, is to illuminate the assumptions that we take for granted, and to inspire a greater imagination as to how things might actually work.

In The Current Year, even getting people to acknowledge that much is a non-trivial victory.

George Lunt and the Tragedy of the Civil War

Apologies, my dear readers (if any of you still exist) for my extended absence. A combination of moving house, work being busy, and life in general contributed to my poor (read: nonexistent) showing of late. I was going to write something brief to this effect, but after long enough away, the only way back on the horse is a proper ride, not a symbolic hop-on-hop-off. So here we are at last.

I’ve been slowly continuing my way through the Moldbug Canon of primary sources. The most recent foray in this regard has been George Lunt's "The Origin of the Late War", the late war in question being the US Civil War.

At least for me, it was profoundly depressing reading. Not just for what it said about the Civil War, but for what it portends about the state of modern America.

Those of us of a reactionary bent are generally inclined to view history through a tragic lens, and to be vaguely attracted to lost causes.

It used to be acceptable to view the South (while regrettably tied to the injustice of the proximate cause of slavery) as nonetheless a lost cause of resistance to the overweening imperial might of Massachusetts, even if this was not the majority view. Then again, it used to be acceptable to have a statue of Robert E. Lee in your town as well. Increasingly, there is only one acceptable narrative of the Civil War, and Cthulu makes a few more strokes leftward.

But to me, the Civil War is still a tragedy even under the modern left's own terms. By these, I mean - that the only relevant issue was slavery, that it was a moral imperative that slavery be removed, and that any measures were sufficient to justify this end.

Discussions of the Civil War take place in a bizarre environment of historical illiteracy. Not about the Civil War itself, or of America's experience with slavery - Americans actually know quite a lot about their own history, even if they've only heard one version of events.

No, the ignorance that is more striking is the ignorance of the slavery experience anywhere else on the planet. Of which there was plenty. And in particular, the ignorance of the other ways that countries went about ending slavery. Because it somehow never occurs to people to ponder whether there might have been other, better ways to end slavery without resulting in 700,000 corpses.

For instance, if you were slightly more patient, you could try the Brazil option. After first outlawing the slave trade, they later passed a law to the effect that while current slaves would continue in slavery, the children of those slaves would no longer themselves be slaves. In this way, there wasn't a radical change in the labor supply overnight, but it meant that slavery had a use-by date, and would eventually become a smaller and smaller part of the economy, until at some point it could be eliminated entirely without being a massive disruption resulting in fierce and violent opposition.

To a lot of progressives, this gradualism is unacceptable because it takes too long. Slavery must not only be ended, but ended immediately, whatever the cost. In that case, you could do what the British did in Jamaica, and pass a law that not only abolished slavery, but provided for compensation to the slave owners, so they weren't getting all their assets (as they viewed it) confiscated with no recompense. Which is something people tend to strongly and violently oppose.

Because if you're serious about "whatever the cost", then it seems pretty likely that you could have simply bought every slave in the US for less than the cost of the Civil War. The 700,000 people who wound up dead might have been willing to contribute a fair bit towards the necessary tax, for instance.

But suppose you're an extremist who thinks that everyone in white America was so tarred by the injustice of slavery that their lives are literally worth nothing, even those of people in the North.

Even then, the Civil War and its aftermath resulted in the deaths of perhaps about a quarter of the slaves. Don't trust me, you can read it in famous reactionary papers like The Guardian:

Downs reconstructed the experiences of one freed slave, Joseph Miller, who had come with his wife and four children to a makeshift freed slave refugee camp within the union stronghold of Camp Nelson in Kentucky. In return for food and shelter for his family Miller joined the army. Yet union soldiers in 1864 still cleared the ex-slaves out of Camp Nelson, effectively abandoning them to scavenge in a war-ravaged and disease-ridden landscape. One of Miller's young sons quickly sickened and died. Three weeks later, his wife and another son died. Ten days after that, his daughter perished too. Finally, his last surviving child also fell terminally ill. By early 1865 Miller himself was dead.

Suppose this were a hostage rescue situation. You had proposed just paying the ransom, partly because in this unusual case it would come with a practical guarantee that this would be the last time you'd ever have to do it. Someone else decided that terrorism can never prosper, so sent in the army, who ended up inadvertently killing 1/4 of the hostages and a large number of their own troops to boot. Even if you hated the terrorists, would you view this as a triumph?

You may not like the idea of slave owners receiving money for freeing their slaves, still profiting one last time from their unjust system. Very well. Do you like the deaths of hundreds of thousands of slaves instead? Life is full of tradeoffs. Shut up and multiply, as Mr Yudkowsky put it.

It is against this background that the Origin of the Late War takes place. But the action of the book is not the war itself. Instead, the war stalks the narrative of the book, as the terrible tragedy just over the horizon.

And the unfortunate message, which Lunt emphasizes over and over again, is the following: if things had gone only slightly differently, all this could have been avoided.

And in Lunt's re-telling, it is amazing just how many places this could have happened. Some of these start long before the Civil War was even on the horizon. For instance, at one point he implies that the Whig Party's decision in 1840 to nominate William Harrison against the unpopular Martin Van Buren was a momentous one. Lunt claims, credibly, that had they nominated either of Daniel Webster (who "worked for compromises to stave off the sectionalism that threatened war between the North and the South") or Henry Clay ("the Great Compromiser"), the Whigs would likely have still won the election, and much of what followed might have been different. Instead, Harrison got elected, then died roughly a month into office.

Another aspect to this is the sense of slowly building antagonism that becomes self-reinforcing and self-fulfilling. People in both the North and the South were increasingly outraged by the violence in Bleeding Kansas. So they funneled money and support to their side, which outraged their opponents more. Or equivalently, the South seemed so shocked by John Brown's raid that they felt that there was little hope of reconciling with the North.

And you can see how they would have felt this. But the action is always haunted by the eternal elipses of the war itself. Lunt mostly elides over this, but the end of lots of the chapters dangles the implication: "Of course, this alternative didn't actually happen, and so..."

700,000 corpses are contained in those "..."

Because weighed against this, lots of other alternatives suddenly seem not so bad at all. Including, in Lunt's telling, for the South to just continue to take it. Not that this was the only option, but it certainly would have been a lot better for the South, even under their own preferences at the time, than the eventual outcome. The casualties for the whole Bleeding Kansas conflict amounted to perhaps 180 or so, according to La Wik. It is a horrifying thought to ponder how long it would have taken at Gettysburg to exceed this amount, and whether the time would be measured in minutes or seconds. And from the perspective of the South, the loss of slaves to Northern operatives sneaking them out through raids like those of Harriet Tubman is trivial compared with, for instance, losing all of your slaves everywhere, forever. Which is what happened.

As Lunt puts it, if the South had simply held their ground, the North actually had surprisingly little power to force the issue of emancipation. The vote to free the slaves during the Civil War barely passed as it was, and this was without any of the Confederate representatives in the room. Their presence would have been enough to make it a total non-starter. Lunt quotes Andrew Johnson from after South Carolina had voted to secede:

What is the reason for disunion ? Because one man was not elected ? If Mr. Breckinridge had been elected, nobody would have wanted to break up the Union ; but Mr. Lincoln is elected, and now they say they will break up the Union. He said, No. What was there to fear ? Mr. Lincoln was a minority President. Let South Carolina send her Senators back, and Mr Lincoln cannot even make his Cabinet without the consent of the Senate.

Lunt is no straightforward Southern apologist. While he is sympathetic towards the South's perception that they were suffering injustices at the hands of the North, his overall position is that open rebellion against the Government was both unnecessary and ill-advised. Towards this end, he often notes the ways in which Southern enthusiasm for confrontation led them to their own downfall. For instance, consider the relative glee and amusement with which Preston Brooks' caning of Charles Sumner was greeted in the South (he was, as the story goes, sent many replacement canes, including one inscribed "hit him again!"). But even to the most ardent southern supporter, it doesn't seem quite so funny in hindsight, does it? As Lunt notes:

The unlucky blow afterwards inflicted by Mr. Brooks, of South Carolina, upon Mr. Sumner, in the Senate Chamber, gave him a prominence which there is no reason to suppose that ho could otherwise have acquired. It also enlisted sympathy enough, on his account, to secure an indulgence to his extreme views, from persons to whom they had been hitherto repulsive ; and in this way powerfully seconded the general radical movement. Except for that blow, there is every ground for believing that Mr. Sumner's official course would have ended with his first senatorial term.

Relatedly, it is hard not to see the Democrats' decision to split their party into Northern and Southern candidates in the election of 1860 as a catastrophe for the South. By sticking to principle, they ensured that the Republicans, who lacked anything close to an absolute majority, nonetheless got into power.

Indeed, at this moment, the conservative masses of the country possessed an immense superiority of physical and moral force over their opponents ; and could that have been guided by prudence and patriotism, it must have resulted in the entire and permanent overthrow of the now concentrated elements of radicalism and discord. At the election for President, in the ensuing year, the Republican candidate, Mr. Lincoln, fell short of a majority by nearly a million of votes ; while his plurality, in the free States alone, was considerably less than two hundred thousand.' It needed now, far more than upon the important occasion to which Mr. Benton referred "in a note to the Debates in Congress, already cited in his volume, "the last words of the last great men of that wonderful time." There were many still upon the stage, inspired by as noble sentiments of patriotism as had ever animated the hearts of elder patriots ; but the latter had left few or no successors to the powerful influence which they personally exerted, and which had been found hitherto able to compose the stormy passions by which the country had at times been agitated. But, although the multitude, under the whip applied by a very inferior order of men, was fast getting possession of the bit, to run the sort of helter-skelter race which usually occurs under such circumstances, it needed, after all, but a very little of that true spirit of conciliation, among persons of substantial influence, on both  sides, which should have marked the conduct of fellow-citizens, in an enlightened and Christian age, to avert that terrible impending catastrophe, which, it is not to be supposed, that the great majority, upon either side, could have really desired to bring upon the common country. ...

As Carlyle remarks, somewhere, in reference to a certain period of English history, " The times were great and the men were small." 

Be very wary of giving up the reins of power for symbolic purity alone. There is, it seems, surprising value in being at the head of even a weakened and divided state.

And even up to the very end, the drumbeat of the counterfactual continues.

It is certain, however, that long after secession had begun, by the act of the South Carolina Convention, the breach could have been repaired without much serious difficulty. 

Indeed, Lunt argues that there is strong reason to believe that the Crittenden Compromise, if agreed to, would still have averted the war. He quotes a special reporter from the New York World on December 28th, 1860, eight days after South Carolina voted to secede:

"The Star (Washington paper), of this evening, says: 'Circumstances have come to our knowledge, within the last twenty-four hours, which lead us to hope that Mr. Seward will, ere the close of the current week, counsel a settlement upon the basis proposed by Mr. Crittenden.' 

"One word that way could instantly settle the controversy ; dethroning the disunionists per se at the South, whose power is but the result of the universal belief at the South that the Republican party made up its mind for war to the knife, from the start, upon the constitutional rights of the slaveholding States." ' 

It is very true, that a newspaper reporter may be mistaken both in regard to facts and to the conclusions which he deduces from them. But if an intelligent reporter, and the World at that time, a leading organ of the Republican party, was not likely to employ one who was not of that class, he could hardly make a mistake as to the opinion generally entertained at Washington, and especially among the Republicans themselves, with whom he would probably confer, as to the effect — and an effect how momentous ! — which " one word " from a particular source, and in a particular direction, might have exercised in the prevention of civil war. 

 But the "one word" was never spoken.

And so...

As irony would have it, I finished Lunt's book not long before the Charlottesville debacle. When having recently acquired a hammer, everything becomes a nail, and the temptation is to overfit the parallels.

But it did cement something that I had felt long before. One should be very hesitant before cheering on a rise in political violence, even when your side seems to be winning. Just read the stories of men stumbling blindly into a monstrous, calamitous war, whose consequences were far worse on all sides than the perceived slights over which arms were initially taken up.

Mr Lovecraft cautioned us to not call up that which we cannot put down. Political violence has a tendency to turn into one such aspect.

Compromise is always intellectually unsatisfying, and just continuing to take the abuse is undignified and maddening. More importantly, these are not the only options on the table, so it's not like defeatism is the only option, or the best one.

But be wary of stumbling inadvertently into open conflict. You may yet find out the horror of the elipses in some future narrative.

No True Communism

As the estimable Mr Moldbug famously put it, America is a communist country.

This is one of those statements that, on first glance, strikes you as ludicrous. And then you dig a little more, and it seems funny and has something to it, but still seems over the top and wrong. And then you dig a little more, and suddenly you're not so sure any more.

Then one day, you find that 'communism' is a pretty concise explanation for lots of the crazy stuff you see going on around you. And you try to mention this to people, and they look at you like you've wandered off the deep end.

Which perhaps you have - the internet is a wild place.

Then again, communism itself is partly to blame here. It's not like Marx spelled out exactly how his society was going to work in detail, meaning that the label necessarily has a lot more ambiguity than, say, a mercentilist or a right-to-life supporter.

And yet, when someone declares that America is a communist country, it doesn't prompt a mental response of you trying to haggle over exactly what Marx might have meant, and which of the ambiguities of what policies should be classified where in terms of mapping American political thought to a somewhat-light-on-specifics political system.

Not at all. Rather, trying to swallow "America is a communist country" at the first attempt is like trying to drink a tumbler of whisky all in one go. They do it in the movies and look cool. You try it at home, it burns your throat and you throw up.

But among the various ways I've tried to explain this idea to people, here's a surprisingly powerful one.

Consider the following list of policy proposals and aims. It's long, but bear with me.

We'll call this one, Candidate A

-Work to eliminate national oppression, national chauvinism, discrimination and segregation

-Fight against all racist ideologies and practices

-Fight against all manifestations of male supremacy and discrimination against women

-Fight against homophobia and all manifestations of discrimination against gays, lesbians, bisexuals and transgender people

-Implement a $15/hour minimum wage for all workers

-Implement national universal health care

-Oppose privatization of Social Security. 

-Increased taxes on the rich and corporations

-Strong regulation of the financial industry

-Regulation and public ownership of utilities

-Increased federal aid to cities and states

-Opposition to the Iraq War and other military interventions

-Opposition to free trade treaties such as the North American Free Trade Agreement 

-Nuclear disarmament and a reduced military budget

-Campaign finance reform including public financing of campaigns

-Election law reform, including Instant Runoff Voting

Okay, with me so far? Imagining a hypothetical Candidate A?

Now, he's about to square off against his challenger, Candidate B. What policies does he favor?

-Racial justice

-Fight for affordable housing

-Fight for women's rights

-Fight for LGBT equality

-Make college tuition free and debt free

-Get big money out of politics and restore democracy

-Create decent paying jobs

-Implement a $15/hour minimum wage

-Combat climate change to save the planet

-A fair and humane immigration policy

-Work to create an AIDS and HIV-free generation

-Empower tribal nations

-Care for our veterans

-Medicare for all

-Strengthen an expand social security

-Fight to lower prescription drug prices

-Fight for disability rights

-Support historically black colleges and universities

-Reform Wall Street

-War should be the last option

-Real family values

-Improving the rural economy

-Make the wealthy, Wall Street and large corporations pay their fair share

So John Q. Normie looks at that list, and thinks: well, look, the first guy seems to push things a bit further on nationalising healthcare, but then again the second guy wants medicare for all, which seems like basically the same thing. The second guy talks a little more about veterans and the family, but it's hard to know what exactly that means. In terms of policies where they differ, the first guy wants nuclear disarmament and the second guy wants free college, but is this because they sound like they'd vehemently disagree with each other over this, or just that they didn't think of the other one's talking point first? The first guy somehow sounds more angry than the second, even though they both talk a lot about fighting. Perhaps it's just the spin doctoring that the second guy is fighting for stuff, and the first is fighting against stuff. Do I want the friendly guy, or the passionately fired up guy? Geez, I don't know who to pull the lever for. Does it really make a difference?

Enough suspense. Let me reveal the identities of our two candidates.

Candidate B is Bernie Sanders, taken from his issues page

Candidate A is the Communist Party of the USA, taken from Wikipedia's summary of their ideology. If you don't trust them, you can get it straight from the source too.

Actually, I cheated ever so slightly, by leaving out the one aim in the opening sentence from the wikipedia entry that does sound like classical communism

Struggle for the unity of the working class 

That might have set off your radar. But the rest of the stuff is how they plan to struggle for the unity of the working class.

The obvious point here is that it is pretty damn hard to distinguish the two lists. You could use this to simply say "Ah ha! QED, Bernie Sanders is a communist!".

While true, that's not the interesting part here.

The first interesting part here is that the vast majority of Americans, and the vast majority of Bernie Sanders supporters, do not consider Sanders' policies to be examples of communism. They just consider them as examples of slightly left of center Democratic Party politics. In fact, if you accused the average Bernie Sanders supporter of being a communist, they would likely either scoff, or get offended, or both.

And yet here we are. The Communist Party of the USA is claiming pretty much the same list as their policies.

If you're someone who thinks America is not a communist country, this is quite a conundrum.

The answer which I suspect most of the aforementioned group will instinctively choose, is to say that the CPUSA is wrong. We've learned about communism, it's only about central control of the means of production. The rest of it shouldn't be there.

To which I respond: be careful before you go down that path. Are you really saying that the Communist Party of the USA is insufficiently communist? Are you saying you know better than the Communist Party of the USA what actually constitutes communism? These guys have a pretty long and storied history going back to 1919. They walked the walk when it comes to supporting the Soviet Union when it was still in business. Hell, they're still shilling for Madura in Venezuela right now, even as the whole country is starving to death. They seem pretty darn serious to me.

And they say that communism looks a lot like Bernie Sanders. They too support democracy. They too call themselves socialist.

But there's a second thing to note.

The CPUSA is not exactly looking to take over the mainstream, remember. That's why they insist on calling themselves not just communist, but Communist. They're aiming at the fringe left. Even Wikipedia, hardly a bastion of reactionary thought, labels them as "Far Left".

The point is, presumably they'd like to distinguish themselves from the leftist wing of the Democratic Party, otherwise why bother? Why go to all the hassle of getting ridiculed as a Communist and then just end up agreeing with the Democrats?

There are two leading hypotheses here.

The standard one is that this is all subterfuge. They really do care entirely about the single issue they're not trumpeting, namely seizing the means of production, and the rest is entirely bogus and a hook to get people in the door.

Perhaps. In that case, you'd probably conclude they're rather dense, if their "hook" is that if you join you'll agree with the Democrats on everything but face widespread mockery from your friends and family.

The alternative one is that they genuinely have difficulty distinguishing themselves from the Democrats. They've just done what Moldbug joking referred to in his post: for "workers and peasants", read "Blacks and Hispanics". As I wrote about a while back, the story of the latter half of the 20th century is that cultural marxism beat out economic marxism. They've just moved slightly with the times, but other than that don't see a big contradiction.

Not that they couldn't emphasize more the seizing the means of production. Admittedly they're already seizing the utilities, but they could talk about other stuff too.

No, the problem is that when you want them to flesh out the rest of their program, after the means of production are seized, that's when it becomes extremely difficult to distinguish them from the Democratic Party. The means of production are seized! We control the commanding heights of the economy! What else would we like to get done?

The answer, apparently, is Bernie Sanders.

And why is that?

At the bottom of the rabbit hole lies one answer: because America is a communist country.

The pill is large though, and your gag reflex is strong. It can't be. There must be some other answer.

Read on, or read it again, and ponder.

The fastest way in

"Nature," as Mr Emerson once noted, "has made up her mind that what cannot defend itself shall not be defended."

A similar principle operates with public policies.

To wit, policies that the average person is not willing to openly and publicly defend, under their own name, will eventually be dismantled.

This may sound like a tautology, until you realize that there are lots of policies that exist partially out of inertia. But when you try to explain why they exist, suddenly the explanations sound awkward.

And the awkwardness comes because the mind instinctively feels that they jar with a broader principle that has been enunciated, but not yet everywhere applied. They are, in other words, Larry Auster’s famous unprincipled exceptions. And they are strong candidates when guessing where the liberal zeitgeist might head next, as I’ve written about before.

Auster seems to mostly have had in mind exceptions that get made deliberately, out of a sense by those in power that being consistent would lead to bad practical consequences. While this is true, there are other instances where it seems that inertia explains a lot. Steve Sailer’s quip that the Eye of Soros is powerful, but can’t be everywhere at once, seems quite apt. Sometimes the discussion almost has the flavor of gradually pushing the boundaries of the Overton window leftward until the mainstream feels instinctively that the boundary is catching up to them, and move accordingly.

The most glaring instances of these apply to immigration.

Modern liberalism, if taken at face value, deems it the height of evil and injustice to grant people special privileges and status based on:

-Their skin color when they were born

-Their genitalia when they were born

-Their sexual preference, (according to current fashion, also decided when they were born, though it doesn’t matter much if it happens later).

But so far, it is still acceptable to grant people special privileges based on where their mother was standing when they were born.

Why is this the case?

More importantly, suppose you were asked to justify why this is the case, in an essay that would be printed under your name around your workplace.

How many people would be comfortable doing so? I suspect not very many.

Because there are approximately two defenses

i) F*** you, it’s ours, and we don’t owe anybody anything.

ii) As a practical matter, we can’t let in everyone.

Version i) has a variety of flavors, most of which hinge upon variations of the definition of “us”, ranging from a particular ethnic/religious group (e.g.: Israel), to the current citizens (however they got here), to the current citizens plus whoever we choose to invite at our sole discretion (though this mostly punts the question to that of who we should invite).

I suspect however, that the vast majority of public defenses would be made along version ii).
But version ii) inexorably leads to the current situation – the west absorbs the third world, but at a slightly slower rate. Everyone who is let in, stays in. The ratchet moves gradually, but never moves back.

There are, however, a variety of ways to chip away at the current immigration policies.
You can make the frontal assault on the idea itself – denounce the very idea of citizenship as racist. We may yet end up there, but the frontal assault runs into too many problems of seeming to go against things that normal people love, like the American flag and national anthem.

You can make the bait and switch – citizenship is so important and beneficial, that we must make the important act of generosity and grant it to anyone who wants it. In other words, citizenship changes from something based on lineage (where your parents must be American) to something merely based on assenting to American propositions, with those whose parents are American merely being presumed to assent to them automatically. At that point, it seems like mere mean-spiritedness to not let anyone who wants to assent to the ideas and become American to do so, provided they’re not a criminal. Because, after all, people are all the same, so there could be no differences in anything to consider, none whatsoever, no siree.

Or you can make a circuitous attack. Maintain the idea of citizenship, but find another reason to let people in anyway.

This seems to be the most likely outcome to me. And the vector that seems the most potent here is the expansion of refugee programs.

The notion of refugees circumvents people’s ideas of how immigration should normally work. Sure, we normally screen immigrants carefully and don’t let just anybody move here, but these people are refugees! To send them back to where they came from would be to return them to certain death.

And this association has been built up so strongly that mostly people don’t seem to scrutinize any of the policies being snuck in as a consequence. The clearest sign of this is the fact that the major war being used to justify large migration flows into Europe is the conflict in Syria. However, a cursory glance at either a) immigration statistics, or b) photos of the refugees themselves reveals that a large quantity of them are coming from Africa (or, more recently, Bangladesh!), from regions where there is either no war at all, or conflict at a sufficiently low level that what they are fleeing from is simply everyday life in these places. Suddenly, the definition of a potential refugee has expanded to anyone in a sufficiently crappy country. Which, at last count, is most of the people of the world.

Not only that, but a second bait-and-switch has taken place, also without much discussion. Refugees went from being people that were taken in temporarily for the duration of a conflict, to people who were settled permanently. This process is left quite mysterious to the general public, which appears by design. It’s good if it happens by a court. It’s better if it happens by a permanent civil servant, or a whole lot of them. It’s best if the average person who is annoyed at the idea doesn’t even know whose decision it was.

I write the above sentence with snark, but then honest humility forces me to admit that I also have no idea exactly whose decision it was to have the vast shifts in immigration for most of the west.

Even if asylum is not immediately granted on a permanent basis, the refugee can always claim the risk of violence if he goes back. Like all of these claims, they are incredibly difficult to evaluate from thousands of kilometres away with little, if any, documentary evidence available. One either has to accept most of the claims, or reject most of the claims. The idea that one will be able through careful scrutiny determine the facts of each case seems fanciful. Of course, now that they’ve arrived *we* would be killing them by sending them back, and you don’t want that on your hands, do you, prole?

The other great benefit, to the progressive, is that part of the process happens through bodies like the UN (certainly in the case of places like Australia). Phrases like ‘international treaty obligations’ get thrown around, which are another way of telling the rubes that they have no say in the matter.

Refugees have become the ideal motte and bailey  of the immigration world. The motte is the idea that we're temporarily helping people who would literally die without our help. The bailey is large scale, permanent immigration of people from some of the most dysfunctional parts of the planet, via a mechanism mostly shielded from the political process.

You may wonder why this is a bailey, but that's probably just because you're insufficiently educated in the benefits of diversity, comrade. A little time in reeducation camp will sort you out. Or more practically, knowing how holiness spirals work.

I expect that mass immigration will most be legitimized by a systematic expansion of the practical, though not necessarily the formal, definition of refugee. In the world where policy is determined by feelz, it will come to mean "anyone who might plausibly be portrayed as an object of sympathy".

Which in practice means that anyone is allowed to come, as long as they're some kind of approved minority. In theory, there's probably an additional requirement that they haven't yet been proven to have committed a crime, though the process for evaluating that clause becomes essentially nugatory.

And so the ultimate aim gets accomplished. The others might have got there too, but I suspect this one will effectively dismantle immigration systems with less resistance. The unprincipled exception becomes semi-principled consistency.

On the time-series, the cross-section, and epistemic humility

One of the advantages of the economist's training is just the ability to instinctively think in terms of empirical tests. There's a reason that economists have tended to colonise other fields like sociology, law and politics - as much as anything, it comes from knowing about how to design proper empirical tests, and what good identification is.

Perhaps more importantly, it comes from knowing what poor identification is, including basic issues of endogeneity, reverse causality and omitted variables. For instance, knowing that you cannot infer almost anything about the relationship between prisons and crime just by looking at the variation over time in the total number of prisoners and the total number of criminals in a society.

The gold standard for identification, of course, is pure randomisation. When that isn't available, as it usually isn't outside a laboratory, you go for natural experiments - where something almost exogenous occurred. This gets used as an instrument - in the prisons and crime case, for instance, Steve Levitt used ACLU prison overcrowding litigation as a quasi-random shock to the prison population.

Of course, the pendulum swings back and forth. If the initial identification push corrected the free-for-all of 1980's empirical work (regressing the number of left shoes on the number of right socks!), the subsequent view seems to have gone towards 'identification uber alles'. In other words, the only question of interest is whether you've really truly identified totally exogenous variation, not the importance of the underlying topic. Plus, oddly, very few people seem willing to learn from an imperfect instrument. It seems to me that if there are 100 potential explanations, and an imperfect instrument rules out 90 of them, then we've learned something quite valuable - the answer is either the main hypothesis, or one of the remaining 10. But making the perfect the enemy of the good seems to be the way of things these days.

These questions end up being most important when you actually run empirical tests. Me, I'm lazy - there is a large hurdle for me to actually download a dataset and start fiddling with it. I'm always impressed by people like Audacious Epigone and Random C. Analysis who do this stuff all the time.

But there is another aspect of empirical training that ends up being even more useful for the computationally lazy - helping you sort through hypotheses just by knowing the panel nature of the dataset.

In particular, a lot of questions that purport to be about a time-series are really about a panel. That is, it's not really about a single variable over time (the time-series), it's about a group of different individuals over time. And thinking of the cross-section simultaneously with the time series greatly clarifies a lot of things. That is, instead of just coming up with hypotheses about why the average of some variable as changed over time, think about whether this hypothesis would also be able to explain which individuals would change more or less, or would be higher or lower on average.

One of my favorite examples is birthrates. The classic question is about the time-series : why have birthrates, on average, declined over time?

But there is also a cross-section - whose birthrates? This could be of individuals, or countries, or characteristics. Moreover, the cross-section exists both today, and in the past. If you're too lazy to run a regression and just wanted to sort through hypotheses about the time series with help from your friend William of Occam, one rule of thumb might be as follows: A good variable explains both the time series and the cross section. A mediocre variable explains the time series, but not the cross-section. A bad variable explains the time-series, but predicts the cross-section in the wrong direction.

For instance, suppose I wanted to know why birthrates in the west had declined overall. Here's the US Total Fertility Rate over time

You might look at that graph, and notice a big decline starting in the early 1960s. Certain hypotheses start suggesting themselves. What was going on in the 60's? Feminism? The Pill, approved by the FDA in 1960?

Quite possibly. But what hypotheses would come to mind if instead I showed you this graph:

The US is now in green. But we've also plotted New Zealand, in purple, Sweden, in light blue, and Japan in pink.

I personally would be astonished if your reaction isn't at least partly like mine, thinking that the world is actually quite a lot more complicated than you'd bargained for. Sweden was actually rising in the early 1960s, and New Zealand was higher than the US for a long time. Japan, meanwhile, has a completely different picture altogether.

You can add any number of these together at the excellent World Bank website to test whatever theory you have.

But there are other cross-sections within countries which can be used to test theories further.

Suppose I were primarily interested in the west, and my theory was about a rising cost of having children. It's a lot more expensive to raise children than it was in the past, as you have to pay for daycare, and "good schools", and all this other stuff, because societal expectations are higher.

I certainly hear people with kids complaining about cost all the time, which tells me that maybe there's something to it.

In the first place, I don't think this hypothesis stands up well to an actual examination of the data above. It turns out there's nothing quite like downloading the bloody data and plotting it to explode a lot of preconceptions. This probably actually is the most basic economist's tool of all, to be honest. Because the US graph above shows that not only did birth rates in general go down, but they went down precipitously starting in the 1960s, hit their low point around 1975, and have been slightly rising since then. Of course, since the graph only starts in the 1960s, you have to be wary of giving prominence to this date alone for the initial decline. But still, does this look like a graph of what you expect the cost of raising a child was?

I'd guess not, but with something hard to measure like "the cost of raising a child", who knows, maybe it is. After all, the aggregate time series is always hard. We only have one run of history, and lots of things are changing at once. But the cross-section has a lot more data.

For instance, consider the cross-section of rich and poor. At least in 2000, here's how they looked:

In other words, the poor have more children than the rich.

This immediately doesn't sound like a cost story. Even if the cost has gone up for everyone, why are the rich less able to bear it than the poor? Even if you think that the poor are on welfare so they don't care about the cost, as long as the rich have more money, they still are better placed to be able to deal with it. Are children some sort of inferior good, getting substituted for jetskis as income rises?

And there's another aspect - there's a historical cross-section as well. I suspect, though it turns out to be harder than I thought to find an easy citation for this, that this disgenic pattern in birthrates with respect to income is a relatively recent phenomenon. Certainly in pre-history or in polygamous societies, only the rich could afford to have large large families (or multiple wives, in the polygamy case). When the Malthusian limit binds, access to resources matters, and the rich outbreed the poor.

I've written before about how I think improved birth control is a big part of the story. But doubt it not, this does not much better at explaining the current cross section as a cost story. That is, it approximately fails to predict it at all (making it mediocre by my rule of thumb), rather than predicting it in the wrong direction like costs do. To get birth control to explain the cross-section of income as well, you'd need to believe that the poor are unable to afford birth control, but are able to afford the resulting children. Seems hard to square to me.

Cost, incidentally, also has similar cross-sectional problems when it comes to the increase in obesity. Leftists love the 'food desert' explanation, whereby the poor are forced to become obese because the stores in their area don't have enough fresh fruits and vegetables, and hence the only options to them are potato chips and coke.

Again, from a cross-sectional point of view, this is possible. But it's a disaster from the time-series point of view. As society in general has gotten richer, we've also gotten fatter. How is it that the poor today "can't afford to eat healthily", but the poor in the 1930's could?

So explanations have to get more complicated. There's no rule of nature that everything has a single explanation. I've picked fertility and obesity because they are two of the most stubborn problems facing the west today, which suggests, but does not guarantee, that they may not be amenable to a single simple explanation.

I think there's something quite humbling about looking at the totality of the data, because it rarely looks like any one neat explanation of anything. It reminds you that your models of the world are just that - models. You include what you think are the most important parts, but you leave out lots of other stuff too. Even if you're right on what's important (a big if), the world is a large and complicated place.

The End of Empire

As I mentioned last time, I’ve been listening to Patrick Wyman’s excellent podcast series “The Fall of Rome”.

One of the things that’s most interesting is the way Wyman fills in the gaps of how these kinds of power transitions occurred in practice. A particularly fascinating story is about the end of Roman Britain. As Wyman puts it:

The Irish came from across the sea to the west. The Picts came south, through and around Hadrian’s formerly great wall. And the Saxons came from the North Sea coast of the continent. They plundered and burned, pillaged and raped, killed and took captives. Without the Roman army to defend them, the Britons were helpless to beat back the attacks of these marauders. Within a generation, most of what remained of Roman Britain was lost and gone forever.

In the first episode of this show, I emphasized the importance of taking a regional approach. The fall of the roman empire happened in much different ways in different places. Some regions barely experienced anything we would call a disruption until the year 500 or even later, whereas others were barely recognizable in comparison to their former selves by that date. No province of the former Western Roman Empire went down faster or harder than Britain. And no region was more fundamentally or more deeply transformed by processes that we are calling the fall of the Roman Empire.

The island fragmented politically into a patchwork of new kingdoms ruled by petty tyrants, some of them native, some of them foreign born. The level of material sophistication dropped off drastically. By 500, nobody knew how to run a proper bathhouse, or, more seriously, even how to build in stone. The economy grew simpler, and barter replaced cash money. Urban centres shrank and all but disappeared. Roman Law Codes and legal concepts fell out of use. People stopped speaking Latin as an everyday language. Most strikingly, mass immigration from the continent completely rewrote the political, linguistic, and demographic map of the island. Britain represents the catastrophe side of the fall of the Roman Empire. In almost no facet of life was there recognizable continuity between Roman Britain in the 4th century and Anglo-Saxon England in the 7th.

For instance, how did Britain end up transitioning from Roman rule to Kings? Well, in Wyman’s telling, Britain was always at the periphery of the empire. Not just geographically, but also in terms of importance and focus. As the Empire experienced increasing turmoil during the late 4th century and early 5th century, attention simply turned elsewhere, and there was less and less interaction between the capital and the garrisons out in Britain. Wyman indicates that at a certain point in the early 5th Century, it would have been quite possible for Roman troops in Britain to have simply not heard anything from the central authorities for years at a time, nor been paid anything by them. In fact, the most significant effect of Rome was when usurpers like Magnus Maximus or Constantine III took a large number of their troops from Britain in their attempts to claim the throne. When the troops left, they didn’t come back, and that was about the last you would have heard on the matter.

So what was happening in the garrisons in the meantime? Well, what was left of the troops still in the the garrisons mostly supported themselves and stayed supplied by assessing taxes on the local population. By this point, these were mostly taxes in kind, as coin was becoming increasingly rare, another aspect of Empire receding. While it’s not like the locals exactly had a choice about paying these taxes to support the garrisons, it’s not obvious that they were unhappy with the arrangement either, as the garrison kept them defended from raiding parties like the Picts, the Scots or the Saxons. These groups had been increasing their raids even during the period of effective Roman rule in the 4th century, and this just got worse once Roman rule declined. In some places, such as along Hadrian's Wall, the garrisons continued to operate.  As long as the general was competent enough to keep the people happy and the troops loyal (since by this point, the troops had much more loyalty to their local leader than the far-distant Emperor they hadn’t heard from in years), things scraped by.

Though as you can imagine, losing the support of Rome did have disastrous effects on the ability of the garrisons to actually defend the people. In the 5th century, along Hadrian's wall or in the east of Britain, you were between three to five times more likely to have a blade wound visible in your skeletal remains as people during the height of Roman Britain. As some Britons wrote in 446 in a letter to the Roman general Aetius

To Aeutius, thrice consul, come the groans of the Britons. The barbarians drive us into the sea, the sea drives us back on the barbarians. Between them, two kinds of death face us. We are either slaughtered, or drowned.

But no help was forthcoming. Aetius had his own problems.

And so as Rome collapsed, the autonomy of these local generals gradually increased, until there wasn’t anyone giving them orders any more. But this didn’t come at a definite point where they were explicitly cut loose, and the nature of what they were doing didn’t experience any sharp shifts – it’s just that over time it become gradually apparent that nobody was coming anymore, and they were on their own. As a result, the distinction between “Roman general in an outlying garrison” and “local warlord” was a very blurred one in this period. There was a guy, he gave orders, they got obeyed. He may have nominally claimed to do so on behalf of Rome, but the frequency of invoking Rome as the basis of authority probably also declined until eventually it stopped altogether. At some point, the general started calling himself “King”. In an alternative timeline, maybe some future Roman Emperor might have turned up to re-establish authority. But it never happened.

In other places, the garrisons were sufficiently worthless that the job of defending the populace fell to local elites instead. Perhaps you armed some of your peasants to defend against the Saxon raiders, and gradually figured out enough how to fight them off. Again, like before, if you end up commanding enough people in battle for long enough, you effectively become a warlord.

The narrative of history that we tend to get taught is one filled with definite events and dates, especially for power transitions. The Nazis were defeated in 1945. Constantinople was taken over by the Ottomans in 1453. The American Revolutionary War ended (roughly) with the battle of Yorktown in 1781. In all these instances, the new power seems to get established fairly quickly, and our understanding is that it was readily apparent that a large transition had taken place. Whether this was exactly true even for these events is not clear, but it seems not a bad approximation of reality. And from hearing enough narratives of this structure, one ends up implicitly taking this as the rough template for when you’ve reached a sufficient understanding of What Actually Happened and Why.

But the fall of Rome just doesn’t look like that. For one thing, it’s not even clear exactly when you date the end of the Roman Empire. Before listening to this series, I naively assumed that the sack of Rome was the end of things, but that doesn’t seem to be the case at all. For starters, there were two of them, one in 410 and another in 455, and Western Roman Emperors continued to rule in some form or other before, during and after both. I also didn’t know that Rome wasn’t actually the administrative capital at this point, it was Ravenna. I’ve seen the “end date” given as 476 AD, when the last Western Roman Emperor Romulus was overthrown by Odoacer.  But this was as much as anything the last gasp of what was already a thoroughly decayed system.

And if this holds true for Rome, it holds doubly true for Roman Britain. Admittedly, we have very few written records from this period, making it hard to say for sure. The evidence for the stories above comes through things like evidence of garrisons near Hadrian's Wall being still functioning in the 6th century, the existence of hill forts in other parts of Britain around this time, and aristocratic burials emphasising military rather than civilian themes. But it seems safe to say that the end of empire was experienced partly as power and central authority just receding, until at some point it became apparent that it was gone altogether.

And the things that replace it are local power arrangements, especially those that are relatively self-sufficient. If you imagined this in modern America, if the Federal Government were to collapse, some much decayed form of New York City might survive as a separate autonomous city-state. After all, it has an existing private army in the form of the NYPD. While they only barely tolerate DeBlasio (and I doubt their restraint in this regard would survive the collapse of federal authority), it’s not hard to imagine a Giuliani or a Bloomberg continuing to run the city if the federal government disappeared. This seems much more plausible than, say, New York State – how many people with guns owe a strong primary allegiance to New York State, and how much territory are they in undisputed control of?

But then again, maybe somewhere like Idaho is a better bet. You wouldn't bet on the New York finance industry to keep functioning as usual if Washington collapsed. Nor would I bet on the continued smooth functioning of hundred storey skyscrapers in the event of an extended civil emergency. In the case of Britain, the urban centres emptied out almost entirely.

If the distinction between “general” and “warlord” is murky in the late Roman Empire, then even more murky is the distinction between “migration” and “invasion”. When the Goths crossed the Danube in 376 AD, they didn’t come as army – they were invited across by the Romans, and promised to pay taxes, serve in the  army, etc. And indeed, there had been Barbarians serving in the Roman army for a long time before this, including in positions of command. What was less common, however, and less ideal, was for entire tribes to join as a single unit, as they did with the Goths. In addition, armies at the time tended to travel with women and children. Look at them one way, and they’re a tribe or people migrating into an already multi-ethnic empire. Look at them another way, and they’re a notionally Roman but practically semi-autonomous military force with civilians supporting the camp. Either way, the result was disastrous.

So Roman armies being made up of mixed barbarian and Roman troops was not inherently unusual. But in this era, armies were independent power bases whose loyalty to the Empire couldn’t be guaranteed. The leaders of these armies would negotiate with the central authority to take part in campaigns. Was this just an amicable discussion over costs and supplies? Was it insubordinate generals being paid off instead of being made an example of (assuming that was still possible)? Or was it the Western Roman Empire making ad hoc treaties with incipient kingdoms? As with so many questions in a decaying empire, the answer is hard to pin down, and the answer you pick with the benefit of hindsight may not be the one you would have picked at the time. They’re all shades of grey, in an era when grey went from mostly white to increasingly black.

And this wasn’t just a problem for Barbarian-led armies either. Part of the reason that the Empire initially didn’t treat the barbarians as a serious threat is that the Emperors had to devote a lot of their efforts to fighting off usurpers. Some general or other amassed sufficient loyalty from troops and decided to try his hand at becoming Emperor himself. In this context, most Emperors treated these usurpations as a much more urgent and existential threat to their rule. Barbarians causing problems at the periphery of the empire could wait, but if you got overthrown today, you were toast. To the extent that you thought of the barbarians much at all, they might have been viewed as potential auxiliary forces to be dragooned in to assist you in your battles.

Of course, problems at the periphery don’t always stay at the periphery.

We look back and see “Rome”, threatened and eventually defeated by invaders. But the people at the time saw their other Roman rivals for power as the real issue. Their main aim was not maximising Rome as an abstract idea, but maximising their own power and influence. The Empire itself was just taken for granted, and all the serious efforts were devoted to the real enemy within.

It doesn’t map exactly to the Blue State / Red State conflict we see today, but the parallels are definitely there.

In late Rome, mass migration of potentially hostile peoples can be seen as both symptom and contributing cause of decline. The migrations themselves had disastrous consequences (like the loss at the Battle of Adrianople in 378, the first major defeat of a Roman Field Army in centuries). But you can also see the immigration itself as happening due to a divided and weakened state, where it was increasingly hard to staff armies, increasingly hard to maintain order, and increasingly riven with violent internal conflicts for power.

Even if the correlation is there, cause and effect may go the other way - a weakened state is unable or unwilling to prevent mass migration. This is certainly what post-Roman Britain looked like. The people who started out as raiding parties ended up as settlers. There is some dispute as to whether the Saxons arrived en masse uninvited, or whether some of them were brought over as warriors by local warlords to assist in the defence against other raiders, and just ended up pushing out the warlords once they had enough numbers. But the effect was the same - Roman Britain became Saxon England. If your local warlord wasn't strong enough to resist, you ended up being ruled by a new foreign warlord.

And how many people are we talking? To quote Wyman:

How big did a migration have to be to be a mass migration? Thousands? Tens of Thousands? Hundreds of thousands of people? I think say tens of thousands would be enough to qualify. They didn't all come at the same time, or even from the same places along that North Sea coast. A few thousand migrants per year doesn't sound like many in the context of a region with a couple of million inhabitants, but over a century or so, that's a huge number. Remember that idea of cultural diffusion, too. If those immigrants disproportionately end up forming the dominant class in that society, they can reshape it dramatically.

Do you find yourself wondering if historians of the future will say the same thing about Europe and America?

And so what starts out as a simple one-sentence narrative – the Roman Empire was destroyed by a disastrous decision to let in the Goths – ends up more nuanced. The original statement still has a significant kernel of truth, and you can see how it fits in the bigger picture. But history is complicated, and the more you look at the details, the harder it is to attribute everything to a single cause.

It's tempting to look at history and think that our lack of understanding comes mostly from a lack of source material and information. But as a friend of mine AL who studied it seriously once put it , we have almost all the source material you could want on the Iraq War - does that mean we fully understand it? Not really. The challenge is always what the economists call identification - we are always trying to tease out causation from a single timeline of events.

The economist would say that there is no hope of real identification from this kind of messy history.

The historian  might counter that when the issues are important enough, it is worth making the best attempt at it possible, even if it's imperfect. If there's a chance that you might be living through another major civilisational decline, that seems to be worth trying to figure out.

The economist's case for at least agnosticism about Bitcoin

As far as I can tell, the primary problem with Bitcoin is that after you've bought it, you become medically incapable of shutting the @#$% up about Bitcoin. So it goes.

It took me a long time to buy any bitcoin, but I should have done it about three years ago. This isn't cheap talk, by the way. I know exactly why I should have bought it back then, based on the knowledge I had at the time (which is the only criterion by which you ought to regret any decision). To wit: I considered myself a Bitcoin agnostic. This made me more optimistic than perhaps 99% of finance people I spoke to. But then again, 99% of finance people I spoke to also couldn't easily explain why Bitcoin existed in the first place. 3 years later, all of the above is still true, but I finally got off my butt and did something about it, albeit after an enormously costly delay.

The standard economics textbook description of money says that it tends to arise because it helps facilitate exchange. If we need to barter goods with each other, it's hard for me as a blacksmith to obtain wheat unless I can find a wheat farmer who also coincidentally needs blacksmithing services. But if I can exchange my blacksmithing services for some asset money (as yet undefined as to what that is) and then turn the money into wheat down the line, this greatly allows us to trade more and grow the economy. So far so good. But what exactly makes something money?

The standard economics textbook definition of money says that it has to fulfill 3 purposes, namely

#1. It has to be a unit of account - a way of measuring how much of something you have

#2. It has to be a medium of exchange - a means for people to transact amongst each other and exchange goods and services indirectly, rather than directly through barter

#3. It has to be a store of value - that is, have some worth derived from an alternative use other than the monetary aspect itself, to ensure that people will be willing to hold it.

Under this standard narrative, bitcoin fails. #1 is fairly easy to meet, but bitcoin's big strength is in #2, which it passes with flying colours. Importantly, however, it fails badly on #3. Digital bits have no inherent value, and no external use to make them a store of value. Ergo, it should have no value above zero, and anything else is a bubble about to collapse. So goes the standard story.

Gold originally fulfilled all three purposes. You could weigh it, and trade accordingly. Turning gold into gold coins helped with 1 and 2, so drove out raw gold. It was easier to transact and measure in coins. Of course, the problem with coins is that they could get filed away at the edges to steal some of the gold, but still be worth approximately one coin. So eventually the coins got replaced with pieces of paper that were claims on gold in a government vault. At the start, you could actually make the conversion. Then conversion became increasingly a fiction, before FDR decided to do away with the pretense of convertibility, suspending the conversion and limiting the ability of private individuals to hold gold.

 At this point, you may be wondering how US dollars continue to meet the 3 definitions above. After all, they kept being used as money, and economists didn't all seem in a raging hurry to update their definitions. So the standard answer is that the 'store of value' aspect is that the government, who has guns, will accept USD as a means of paying taxes (and indeed demands that form). Because they have a guaranteed value for that, they have a guaranteed value for everything else.

To me, this seems to have a definite flavour of ex-post rationalisation. My hunch is that if you asked people 100 years ago whether they would still be equally willing to hold dollars if they were backed by nothing at all, they would have answered strongly in the negative. In the end, they were prohibited from switching into gold at the time, so it was a moot point. But what about now, when they could switch? I highly doubt that many people today would explicitly state that they're willing to hold dollars because they can pay their taxes in them. 100 years ago, they probably would have laughed you out of the room.

The economists are right in a narrow sense, of course (as they often are). Bitcoin does indeed fail as a store of value, and, technically, the dollar does not.

And yet, here is some evidence that ought give you pause, assuming you're not an economist in the midst of full-blown cognitive-dissonance-induced denial:

This is Bitcoin today, stubbornly refusing to prove economists right by ceasing to exist. As a matter of fact, since the coinbase time series starts in January 2013, it's up some 19,000% or so.

Don't look at the graph and ask if you think it's about to drop. Look at the graph and ask how much it would have to drop to get to where it was in 2013 (let alone 2009).

At a certain point, it seems prudent to at least consider the possibility that there might be something going on here, but you don't know what it is, do you Mr Jones? Or at a minimum, ask the following question - what level of future growth would you need to see to change your mind? Another 100%? Another 1000%? Can we agree on it now, so that if it eventually happens, you might reconsider the question?

The null hypothesis here is not in much doubt. Bitcoin is a bubble, and will eventually collapse.

Actually, the true null hypothesis is a little more specific, at least if you believe standard economics. Bitcoin should have a price of zero. It has no value except as a currency, and it is worthless as a currency.

So what is the alternative hypothesis?

The alternative hypothesis is that Bitcoin is likely to stay at a non-zero value for quite a long time, if not indefinitely, and moreover may end up being worth a lot. That may sound woolly and hand-wavy, so let me explain.

First off, how many things can you name that truly have a value of zero?

It's surprisingly hard. If you don't believe me, here's a photo of cans of air from the top of Mount Fuji selling for ¥500

And things like rubbish or nuclear waste have definitively negative prices - you have to pay to get rid of them. They're still not exactly zero.

The point is that "fundamental value" is a concept that, in my opinion, creates at least as much confusion as it dispels.

The primary value of an asset today is what you think someone will pay for it tomorrow. If they can use the asset for some external purpose, and you have a guide to what that external purpose is likely to be worth to them, you have a guide to what it will be trading at tomorrow. But that's all it is. If you have some other way of estimating what people will pay for the asset tomorrow, then you don't need the intermediate heuristic of fundamental value. (This is especially true for assets which don't directly produce cash flows - for ones that do, there's a better case that you should just value the cash flows, but even then, you still need to know tomorrow's willingness to pay unless you're able to hold the asset to infinity to collect all the future cash flows).

So in that case, what should Bitcoin be worth? Whatever people are willing to buy it for tomorrow. And what number is that? Well, that's the rub. But at least we know the right question to ask now.

As a consequence, we can begin to formulate an alternative definition of requirement #3 for money that we started with. Specifically:

#3A - If you accept the asset today in exchange for giving up valuable goods or services, you have to have a very strong belief that you will be able to exchange said asset tomorrow for someone else's goods and services, and receive approximately the same value as what you exchanged today.

Viewed from this angle, we can see that requirement #3A is at heart a co-ordination problem. Once we all agree on something being money, it becomes money. More importantly, we can see why people mistakenly viewed #3 as being the requirement. In essence, being a store of value is one way of solving the co-ordination problem. If it's common knowledge that some people will be willing to accept gold because it's useful for jewellery, most people who don't value it for jewellery are nonetheless willing to hold it.

But this isn't a strict requirement. Once the belief is established, it becomes self-fulfilling. When you accept US dollars, you aren't doing the iterations and thinking that it will eventually be exchangeable for taxes. You're just accepting it because you can buy your groceries with it tomorrow. Now, in the long run, it's true that if the US government collapses, you don't want to be holding US dollars, so in that sense the economists are right. But this is a long way from most people's actual calculation.

In the case of Bitcoin, a belief that Bitcoin will retain some value tomorrow can justifiably be sustained as long as I know that there's a decent number of drug dealers and corrupt Chinese officials who want to hold Bitcoin because it's (sort-of) anonymous and can be easily taken out of the country when the porridge hits the propeller. But in the short run, I hold Bitcoin because I think that people tomorrow will hold Bitcoin.

In fact, it's stronger than that. Like a classic bubble, people actually believe that more people will want to purchase bitcoin tomorrow, and at higher prices. In other words, the supply is fixed, and the more the price goes up, the more people begin to think "Huh, maybe I should hold at least a few grand worth of Bitcoin, just in case." If more people begin to think that, the price will indeed keep rising. Of course it can't rise like that forever.

But even if you think of Bitcoin as a bubble, it behooves you to notice something rather different about it from most bubbles, like the tech boom. In the case of Bitcoin, it seems to me from anecdotal experience that many, if not most, of the people buying bitcoin today are planning to hold it for a long time, if not forever. And this is definitively not true for most bubbles. People generally ride bubbles planning to get out once it's gone up enough, then go back to holding cash, or houses, or whatever. If that's what most people are thinking, the belief structure becomes very unstable, as any dip in price suddenly might cause a lot of people to switch to selling. Even if Bitcoin is a bubble, if most of its adherents plan to hold onto it for a long time, regardless of current price levels, then this reduces the likelihood of a complete collapse when everyone rushes for the exits.

In other words, even if this is a bubble, it may be a surprisingly durable one.

And the reason that "bubble" here is not necessarily a pejorative term is a point made by Moldbug - that money is the bubble that doesn't have to pop. In other words, there will be at least one good that is held in excess of its demand for other uses, because of its use for transactional purposes.

It may seem strange to reference Moldbug, since he comes out as a skeptic, based on his guess that the government will outlaw it.

But there is a counter-argument to that - the Uber problem. Namely, the government has a limited amount of time in which it can easily ban Bitcoin. The reason is that as the price gets high enough, enough people have enough to lose that it becomes politically costly to ban it. And so at some point, you get a compromise answer, like Coinbase seems to have done - you have to submit ID, it's linked to your bank account, and you have to give a social security number. The US Government levels capital gains taxes, everyone is happy. Why ban something if you can make more money by taxing it instead?

Because there is one rhetorical claim about Bitcoin made by its proponents that I think has caused more confusion than any other. It was this realisation that made me change my mind and invest in it. (Which, to emphasise, I'm not encouraging you to do. I'm some stranger talking smack on the internet, and this is not financial advice. But still)

It is this:

Bitcoin is not going to be a substitute for the dollar.

Bitcoin is going to be a substitute for gold.

Which is to say, the reserve asset that you hold in some amount as a hedge against the @#$% hitting the fan. This is of course, mid-level @#% hitting the fan, such as large-scale financial instability - if things really get hairy, the only worthwhile assets will be guns, ammunition, antibiotics, water purification tablets, and that kind of thing. But again, the same holds true for gold. If you honestly think that in a post apocalyptic New York there's going to be a vibrant demand for gold for jewellery purposes, perhaps you would do better investing your savings in shares in the Brooklyn Bridge.

Put another way, the case for Bitcoin in concise terms is that Bitcoin is to gold what neocameralism is to monarchy.

That is to say, it's what you get if you took an old but existing arrangement, and instead of trying to mimic it exactly, you thought about how you would design a modern version of it that a) retained the essential strengths while b) utilising technological innovation since the early form to overcome its weaknesses. (Some thoughts of mine on the neocameralism vs monarchy comparison are here).

In the view of Bitcoin, the essential aspect of gold is its relatively fixed supply. So let's go one better, and make a mathematically fixed supply. Rather than gold coins, let's create highly divisible bitcoins that can be traded across borders costlessly. Rather than measure purity over and over, let's create a blockchain to solve the problem of double-spending and transactions between mutually suspicious parties. Meanwhile, the fact that it can be mined by anyone easily at first, but only with more difficulty later, encouraged people to get in on the action early.

If you thought an essential aspect of gold was its value in jewellery, then you'd be a skeptic.

Rather, the other essential aspect of bitcoin was its first-mover advantage. Sure, someone else might invent other coins (and they have), but because Bitcoin was the first to market, it already has the advantage of incumbency. And in a co-ordination game, that's a huge deal.

And I think phrasing the question this way to economists helps to clarify the issue. In other words, if you're a Bitcoin skeptic and think its a bubble that's inevitably going to burst, I would ask you: is gold a bubble? This is harder to prove than in the case of Bitcoin, because it does have a fundamental value from other uses, so its value shouldn't go to zero. As a consequence, evaluating whether it's a bubble is much more thorny and more subjective. But it seems pretty clear to me that central banks aren't holding gold because they're about to turn their bullion into wedding rings. As Moldbug points out, in 2011 gold reserves were 50 times annual production. For silver, they were twice annual production. Assuredly there is something unusual about people's desire to invest in gold. So if you think that this is creating excess demand, surely this is pushing up the price, no? Supply is pretty fixed in at least the short term, if not the medium term too. And isn't excess demand pushing up prices the definition of a bubble? The point, of course, is that with gold this state of affairs has persisted for an extraordinarily long time. Is there any particular reason to assume that gold is about to disappear as a hedge asset? Not to me.

But I know my economist friends well, and I know their objection to the above reasoning, which makes Bitcoin different from gold. Which is to say, without a fundamental source of value other than as a money-like good, isn't the whole thing liable to unravel really quickly? Put differently, you and I might be willing to hold Bitcoin because we assume that there's reserve demand from Chinese officials and drug dealers, but why are the Chinese officials and drug dealers themselves willing to hold it?

This is another way of saying, why don't we all iterate backwards and realise that without an ultimate holder of the good from some other source, the value to everyone should be zero? Suppose we have a game where if we co-ordinate on a good being money, it gives value to both of us, but in the final round whoever is holding it ends up with a worthless asset.

If the game is finitely repeated, the economists are absolutely right. If everyone correctly performs backward induction, you'd predict a) Bitcoin should never have a positive value to begin with, and b) even if it does, this should be rather fragile. If it's an infinitely repeated game, then the Nash Equilibrium has more possibilities, as it usually does. In this case, if there is no final period, then it seems more like a straight one-shot co-ordination game where if we both agree, we both benefit. But let's take the finitely repeated version with a penalty for holding in the last round, as the logic is stricter there. And the logic dictates that since no-one is willing to hold in the last round, they don't want to hold in the second last either, and so on.

But here is the trillion dollar question - how much do people actually perform backward induction? And if they don't, how should you act in response?

The classic version of this is the iterated Prisoner's dilemma. Suppose two people are playing against each other 100 times in a row. The economist's answer is that if we're only playing a finite number of times, there's only one Nash Equilibrium to this game. We both defect in the last round. Knowing this, we both defect in the second last round, and the third last round, and thus in all rounds.

And yet... people don't. They routinely co-operate, and only begin defecting towards the end. This is why tit-for-tat works so well in practice. Because most people don't actually do backwards induction for more than a few iterations. This is why they don't start defecting until close to the end.

And bear in mind that, unlike Prisoner's Dilemma, Bitcoin is a co-ordination game, meaning it actually is a Nash Equilibrium for us all to believe in Bitcoin, at least in the one shot version. In the case of Prisoner's Dilemma, you can mathematically prove that people aren't acting rationally, and yet they still do it just the same. Here, it at least can be rational.

Now, bear in mind, the economists aren't wrong on the bigger picture - it still might collapse, for all the reasons they say. But that's not the same as saying that it has to collapse. I would guess, rather, that the opposite is likely to be true. The longer it goes without collapsing, the stronger the self-fulfilling aspect of the belief becomes, and the more stable it becomes.

Mainstream economists and finance types are looking at Bitcoin continuing to rise in price, yelling that this is a stupid and unstable equilibrium and that people should all start defecting immediately.

This is just like the economist watching two people play prisoner's dilemma and continue to co-operate round after round. You can laugh and call them morons, but a betting market just opened up. It's round 43 of 100. They both co-operated last round. Rubber to the road, what would you bet they're going to do this time?

After eight years of people continuing to not defect in Bitcoin, perhaps, dear economist, it's time to re-examine your assumptions.

Updated: On the other hand, if you wanted to make a concise case for a bubble, just check out some of the bizarre creations down at the lower market cap end of the cryptocurrency list. $10 million of FedoraCoin, you say? It's woefully underperforming PepeCash at $13 million. Hmm.