Archive for May, 2009

Historical Dynamics

Wednesday, May 20th, 2009

Book review: Historical Dynamics: Why States Rise and Fall by Peter Turchin.

Turchin uses the tools and perspective of population biology to model some important aspects of the growth and collapse of empires. The relatively dry and mathematical style of the book makes it slow reading, but it leaves less ambiguity than most books about history. He has no obvious political biases – it often seems that his main bias is a preference for the tools of biologists over the tools of historians.

One important aspect of his approach is that it models the dynamics of a feature that is roughly described by terms such as solidarity, trust, and cooperation. He convinced me that he has described some of the influences that cause that feature to increase and decrease (the section title “Frontiers as incubators of group solidarity” says a good deal about his model).

Some aspects of the book left me wondering whether his eccentric worldview added anything to my understanding of history, but occasionally he comes up with ideas that have implications that are clearly new to me, such as his suggestion that monogamy can help an empire continue it’s expansion for a longer time.

He makes some serious attempts to test his models against the available data. It’s hard to tell whether enough data is available to adequately test such ambitious claims.

The biggest limitation of the book is that he assumes Malthusian conditions. While it is likely that some of his analysis applies to the industrial world, he thinks it’s premature to ask how much of it applies today. That means it ought to be of interest mainly to historians for now.

Economics of Piracy

Tuesday, May 5th, 2009

Book review: The Invisible Hook: The Hidden Economics of Pirates by Peter Leeson.

This is an interesting history of early eighteenth century pirates with an economist’s insights into what influenced them to have institutions such as democracy and to be in many ways pleasanter to serve on than commercial or military ships of the same time.

He has a fairly open bias toward portraying pirates favorably. I sometimes wondered whether there’s enough evidence to support his sometimes surprising conclusions. He makes plausible claims to be getting his historical information from the relevant experts, but without careful checking I can’t tell whether he has slanted his story to make it more entertaining.

He describes some good reasons why “workers’ democracy” doesn’t work as well in modern corporations as it did on pirate ships. But he is too willing to accept the observed absence of corporate democracy as evidence of its inefficiency. I can easily imagine that managers grab more power than is good for the company, and that principal-agent problems let them get away with it (pirates’ relations with the law made it easier for them to remedy this via mutiny). Also, he overstates the claim that “workers don’t have the finances required” for worker ownership of corporations. There are plenty of companies with low enough capital requirements for this to be unimportant. The big difference I see between modern corporations and pirate ships is that pirates had strong reasons to stick together until their venture got enough loot for them to all retire at once and divide the results. Employees in modern corporations want much more flexibility in when they leave the company, which creates complications for workers’ democracy or for the employee who wants to leave however it is handled.

One analysis whose absence disappointed me was whether the long-term benefits to joining a pirate ship were better than those of commercial or military ships. What fraction of pirates retired wealthy? How many of them were fooled by a temporary shortage of law enforcement into adopting a career with an abnormally high death rate once governments increased law enforcement?

He occasionally digresses into standard economics rants that have no relevance to pirates, such as the two pages on lobbyist rent-seeking.