| THE TRAGEDY OF THE COMMONS THE DAILY RECKONING PARIS, FRANCE
FRIDAY, 26 NOVEMBER 1999 * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
In Today's Daily Reckoning: *** World markets hit new highs. *** Riots in Lagos...profits in paradise. *** Ole Miss loses.
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*** Since Wall Street was closed yesterday...let's look
at what's going on elsewhere. Guess what...same thing!
Banking stocks sent London stocks up smartly. In Paris,
the stock market rose 3.2% yesterday...its 16th record
in 20 sessions. The French market was led by Canal Plus,
up 20%, based on the promise of an interactive TV venture. *** Frankfurt rose nearly as much. Mannesman has gone
up 12% over the last 2 days. *** The Helsinki market rose 3.2% too. Madrid went up 2%.
And Amsterdam hit a new record. *** Et tu, Toronto? Eh...yep...hit a new record yesterday. *** What a great market...what a great world. The dollar
also rose against the Euro again. Readers
may recall my forecast of several months ago- that the
dollar, yen, and Euro would all hit the same
value. It seems to be on track. The Euro is at $1.02. And
the yen is at $.0096. But the Japanese
are proposing to take two zeros off their currency. So,
they could soon all be the same. *** I wonder if there is a hidden agreement among the
G8 nations to bring the major currencies blocs
to parity...and leave them there. This would eliminate
the competition to devalue one currency
against the others. But it would also allow the major
central banks to devalue their currencies
together, leaving citizens nowhere to go, except gold.
*** Frank Laarman joined me for lunch on Tuesday.
We ate at a well-known eatery on the left bank-
Polidor-on the rue Monsieur le Prince. It's been serving
meals for decades. And still doing a good
job of it. The place was packed. Be sure to get their
early or late. Frank single-handedly began a
tax revolt a couple of years ago, which is still growing.
Three thousand of his followers attended
a meeting in Paris last week-and they were angry.
*** Profits in paradise? How about this-a 2,000 acre
farm with 4 kilometers of seashore, including a
seal rookery, in New Zealand....for just $350,000?
Doug Casey, who has bought a ranch down there for
himself, passed along the description yesterday. *** The stock markets in the resource economies-as in
New Zealand and Canada-may be good investments
too. If the "age of stuff" is really coming-as Gartman predicts,
these economies will do well. If
you're interested in finding out more firsthand,
the Oxford Club has a tour scheduled for next Feb.
11- 26., e-mail Amberlee Huggins at
ahuggins@agora-inc.com or call her at 1-410-223-2650. *** Yeltsin is sick again. And the war goes on. The
Russians learned in the last Chechen war to
avoid sending in soldiers until artillery had driven the
enemy out of town. So they blast Grozny and
wait. *** Meanwhile, police in Nigeria have been ordered to
shoot rioters on sight. Ethnic clashes in
Lagos yesterday left 27 dead-about a month's worth of
murders in Baltimore. *** And birthday wishes to Thom Hickling...a great
guitar player...and chief cook and bottle washer
for this Daily Reckoning service. *** Speaking of birthdays, we seem to be in the middle
of a new baby boomlet. International Living
publisher, Kathie Peddicord Simon, has just given birth
to a son, Jackson. And a writer who used to
grace our pages with his wit and wisdom, Addison Wiggin,
became the father of Henry Wiggin, on the
same day. Can the world support this explosion of humankind?
Some thoughts, profound and otherwise,
below. *** "Ole Miss" lost to Mississippi State yesterday Beirne
told me, with his Southern inferiority
complex resonating slightly. "I guess it's all up to me now..."
he said, "I can't rely on anyone
else for a sense of accomplishment. But please don't make
me sound like a dim Southern jock in that
digital rag you put out..." *** A hot subject for debate in London: Britain may be a
part of the European Union, but does it have
the right to pull out? Lord Rees-Mogg sued the government
in 1993 and got a ruling: "the British
Parliament retained the power to withdraw from the Treaty
of Rome." Of course, that's what Jefferson
Davis thought too. * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * THE TRAGEDY OF THE COMMONS
"The world would stand by unmoved," says the Marquis
de Sade, in the play, Marat-Sade, "at the
destruction OF the whole human race."
Assateague Island is a windswept barrier island on the
Atlantic, just south of Ocean City, Maryland. It is famous for the annual pony round-up, a festive occasion
in which the wild horses are brought in
for inspection, culling, and export off of the island. Were it not for the annual harvest of the young ponies,
they would grow up, reproduce, and soon
overwhelm the island's available grass. Then, they would
starve. Only a few would survive. the
grass would come back. And the cycle would begin again. "The Tragedy of the Commons" was a 1968 paper by
biologist Garrett Hardin which described why
"public" assets get used up. Poachers on public lands
in Africa, for example, kill every animal they
can. They have no incentive to protect them, even if the
animals are in danger of extinction. Likewise, settlers and foresters on "government" land in
the Philippines see little benefit in
preserving the tropical hardwoods. By contrast, private game preserves-which charge hunters
for the privilege of shooting big game-are
very careful to manage their animals, rotate their stock,
and up-grade and increase inventory.
Likewise, private forests are rarely laid to waste. In fact,
I recall one study that showed that
while over-cutting is a problem on government land,
the problem on private land is under-cutting.
Private owners are reluctant to turn capital assets-trees-into
current income-pulp and lumber.
What brings this to mind is an intelligent book written
by one of our own readers, Population
Politics by Virginia Abernethy. Virginia probably speaks
for the two richest men in the world when
she identifies humans as "the problem." Both Buffett and
Gates have promised billions to the cause
of population control. She then proceeds with a smart
and provocative analysis of the way human
culture interacts with environmental constraints, and the
way population policies fail, or even
backfire. I do not fault the analysis. It is the best I've read on the subject. Where Virginia and I part company is on the conclusions. In the wild, as it were, humans develop strategies...culture...
that avoids over-breeding. Norwegian
men used to marry older women, with fewer reproductive years
remaining, to reduce the number of
children they would have to support. Many tribes ban sex for
a large part of the year. Some even
perform disgusting minor surgeries on young girls to
guarantee that they remain virginal. On the
Indian subcontinent, "suttee" was the practice of
throwing widows on their husband's funeral pyre.
Whatever the motivation, it had the effect of preventing
them from remarrying. Infants were, of
course, suckled for long periods, which reduced fertility.
One tribe prohibited sex with a woman for
7 years following the birth of her child.
By contrast, when times were good-that is, when
"ecological release" eases the environmental
constraints-the cultural constraints tend to ease too.
One tribe in New Guinea suffers from a rare
disease transmitted by cannibalism. The women who
prepare the bodies of the dead must "taste the
brains" of the deceased. (I'm sorry...but these people
deserve whatever disease they get...) Always
a little short on people, the tribe encourages sex,
includes erotic rituals, teen sex, and so forth.
Population Politics shows how certain reproduction-inhibiting
strategies lead to genetic success. In
Tibet, for example, several men (brothers-an important
point-genetically speaking) may share the same
wife. This has the effect of concentrating the labor and
wealth of adult working men on relatively
few children. In times of famine, which were common,
those children, rather than the more numerous
kids in monogamous households, would be more likely
to survive.
Each environmental niche has a "carrying capacity."
Once you get more than a certain number of horses
on Assateague, for example, more than the carrying capacity,
you get the tragedy of starving horses. But in what sense is the entire world a "commons?"
Virginia argues that the whole world is on the
road to a tragedy, caused by overpopulation.
She cites figures showing the world population rising at
a rate such as to enter a "region of instability."
That is merely a mathematicians' way of saying
that trees don't grow to the sky. A mathematician might
have, and probably did, show that the New
York City would soon be submerged by a mountain of
horse manure, at the end of the last century, if
the number of horses kept growing at the same rate
they had been. Instead, the number of horses went
down dramatically. Manure happens. So do other things. She says the US population will grow to 400 million by
the year 2080. I detect a cry of alarm...but
why? What's wrong with 400 million? What would be
wrong with twice that number? Why is it a matter
for debate? It's none of my business how many children
my neighbors have. It is not a problem of the
commons at all, but a private problem. Either they can
be supported by their parents, their friends,
their relatives-or anyone else who cares to help-or not.
We are not grazing animals confined on an
island. When Americans arrived on the shores of the
Chesapeake bay some 350 years ago, the carrying capacity
of the area was very low. There were plenty of fish.
Plenty of animals. Plenty of nature. But the
technology of the time was primitive. Only a handful of
aboriginal Indians made the place their home.
The original settlers, in fact, took up residence in villages
that had been abandoned by the Indians. But now the region supports many millions. To speak
of the "carrying capacity" of the entire nation
is such a dynamic abstraction as to defy quantification.
America could support, surely, billions of
people. Things would be different, but not necessarily
worse. I have tried to find a scientific justification for the
anti-population growth position. But I
cannot. More people does not necessarily mean
poorer people-there are far more people, and far richer
too, in America today than there were 350 years ago.
Nor do more people mean, necessarily, a worse
environment. The countryside of France, for example,
is beautiful-far more beautiful than it would be
had it been left to nature. It is full of rows of trees,
hedges, roads, houses, barns, towns. Is it
less appealing than, say, the untended, wild areas of
West Virginia and Kentucky? And even densely-
populated cities can be quite attractive and appealing.
People pay $1 million for an apartment in
NYC, for example. The same space, in a less densely
populated area, would cost much less. Yes, nature would be quite content to see the
destruction of the human race. But it has been a big
hit with humans, and doesn't seem to be becoming l
ess popular anytime soon.
Best wishes for the weekend. Bill Bonner P.S. There is a woman visiting Paris who says she
has the answer to the population problem. She calls
herself "Jasmudeen," or something like that. And she
claims to live on air alone. No need to plow on
her account. No need for a lot of flatulent cows to
satisfy her. She is a Breatharian, who sells
books, tapes and other handy resources on the most
effective diet plan ever devised. So far, two of
her disciples have died of starvation. She submitted
herself to clinical observation to test her
assertion, and exhibited all the signs of starvation
before being turned out.
She is not, however, original. The first Breatharian I
encountered was at Doug Casey's house some
years ago. He described his food-free, guilt-free lifestyle,
and had us wondering how he did it,
until he was spotted sneaking out to the Burger King
late at night. The world needs more nuts like this. And suffers
them gladly.
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