Economists! Look to the inward giant!

Epigenetics is going to be the next economic growth sector. This is what any young ambitious economist ought to be building into his picture of the years ahead if he really wants to make his or her mark.

There can be little doubt about the enormous importance of epigenetics. The main reason for saying this is that epigenetics is already showing promise as being the key to the health of the bulk of the population. By “bulk”, I mean people between the ages of around 30 (that is, mature adulthood) and around 70 or 80 or even 90 in some cases (that is, old age before inevitable senility sets in). I speak of the mid-life diseases such as diabetes or heart problems or cancers among many, many others. These are the ones which are the most difficult, and the most expensive, to treat — or, with very few minor successes, have been attempted to be treated so far.

We are afflicted so abundantly with mid-life diseases for one simple reason. Our genes have never been selected for long enough in the past to give us natural immunity to diseases which occur in this age bracket. For by far the most of our existence in our scavenging and hunting days on the open savannah (200,000 years at least), very few humans ever lived beyond 30 years of age. Predation, accidents, warfare and epidemics saw to that. During our civilized existence (10,000 years at most), a few started living beyond 30 years of age. To all intents and purposes, mid-life diseases didn’t exist. There was no need for the natural environment to select appropriate genes for immunity.

In the West, health care is already the fastest growing political pressure on governments. Along with jobs and education, it is high priority in all political manifestoes which seek to bribe the electorate to vote for this party or that. The same political pressure is falling on governments in both the most avowedly “free enterprise” countries such as America, and the most socialist, such as the Nordic countries. But, together with other pressure groups of a more internal nature, such as defence departments, governments bureaucracies and privileged corporations, governmental backs are already bedning and straining. Every single Western government, elected by popular vote, is now technically bankrupt if future welfare benefits for the old and the poor are fully costed.

Even considering present attempts to cope with mid-life diabetes alone, several eminent medical spokespeople on both sides of the Atlantic are saying that, before too long, governmental health schemes cannot be supported out of taxation. It’s no use blaming obesity or poor state education (in failing to teach healthy eating), because both of these are proving to be as intractable and complex as the disease itself. When we think of all the other mid-life diseases — and many other complex surgical procedures that the electorate expect to be provided with — then, for many decades yet, the writing is on the wall for the generally peaceful politics as we have known it for the past century or so.

Mid-life diseases are not yet a problem for the Chinese government. The top priority of the mass of their people are consumer goods. More than anything else, they want what they think is the generally “good life” of the West as they see it on the television. So long as the nine-person Politburo can keep on supplying the consumer goodies then they won’t have our sort of health dilemma for a decade or two yet.

The science of biology and plain vanilla genetics has been dynamited in the last few years by the discovery of epigenetics. We now know that our standard human genes are not only given an almost infinite number of possible variations (making each one of us unique at birth), but that the variations themselves are capable of an almost infinite number of further tweakings and permutations (causing each one of us to become even more different according to the daily environments in which we live). They’re also heritable. It is these epigenetic tweakings which cause mid-life diseases.

I really need to say no more. Cures for mid-life diseases are already proving to be extraordinarily complex. Mid-life diseases are going to take decades and centuries before, one by one, they’re going to be treatable. And the getting-there is going to be expensive.

The subsidiary reason for the growth of epigenetics is that there will be no further economic growth in the West based on brand new consumer goods as incentives. We’ll continue to have a plethora of embellishments and marginal improvements, such as all-dancing, all-singing mobile phones or kitchen/bathroom make-overs (and an infinite recycling of clothes fashions!) but there’s nothing iconic on any consumer’s shopping list. In any case, in our increasingly locked-in urbanized way of life we don’t have the time, space or energy for any more uniquely-new consumer goods even if they existed in a corporate R&D lab. (If a lone inventor is tooling over a wonderful idea in his garage, you can be sure that corporate and venture fund talent scouts are aware of them.) Scores of major corporations have large accumulations of profits they don’t know how to invest.

In short, even if politicians dare not say so (and most career economists if it comes to that), we have reached the end of the sort of economic growth which has been consumer product led for the last 300 years. The present recession in the West will rove to be merely an introduction to a new era. Any new economic growth is going to depend on new producer goods and new consumer services such as health and education. Of the latter, we can already see that epigenetics, both in research and application is going to be a giant, far larger than anything so far spent on cars, television or mobile phones.

Keith Hudson

Now that the stock markets are crumbling

Governments took on an entirely new role almost 100 years ago. To be more precise, the centenary will actually be in 2014. The original event was when several European governments, led by the UK, started printing banknotes in prodigious quantities to pay for the First World War and then, afterwards, assumed that they could control their own economies. They made a bad fist of it, and this is why, of course, the second World War took place in 1939. They (now dominated by America) made an even worse fist of it when they decided in 1944 (before the war had actually ended) at Bretton Woods that they would control the whole world’s economy by fixing all the principal currency exchange rates, the American dollar being the only one to be exchangeable with gold.

But they didn’t control the world economy, they don’t, and they never will do, despite what the politicians might say in their State of the Union addresses or their Budget speeches. The real world economy takes place by means of hundreds of millions of daily transactions between businesses involving the movement of quadrillions of physical and informational goods backwards and forwards around the world. Governments can only intervene in fits and starts as data are collected periodically. Whether the data are elections (or opinion polls, or riots) of their people every now and again, or their annual personal incomes, or the balance sheets of businesses, the decisions are always after the event. Their decisions — whether of taxation, interest rates, quantitative easings (printing of banknotes), exchange rates, regulations, granting of privileges — are all of an adventitious, not to say, parasitic, nature. Important though governments may be for the security of the citizen, they are, financially, only the ivy growing up the trunk of the tree.

The businesses of Western Europe, America and China are now inextricably inter-dependent. But their governments are all in disarray. America’s government cannot balance its books and can only continue by continuing to inflate its dollar. China still cannot decide whether it is seriously freemarket or needs to relapse into communism. The Eurozone is becoming a political snake-pit with senior politicians of least 6 governments (Greece, Portugal, Spain, Ireland, Finland and, most recently, Netherlands) saying “Stop! We want to get off!”

The stock markets of Western Europe, America and China have been dithering for weeks and are now plunging. One of the three (probably the Eurozone) is going to collapse soon and all three will then be thrown into a depression worse than anything that has happened in 300 years. What can possibly happen to prevent this? A new world trading currency will have to be instituted. This will have to bebrought into existence within days before not too many business transactions falter by default. In my opinion, the only institutions that can do this and keep all existing economic transactions going are the largest transnational corporations. Its use can then ripple downwards and outwards to all businesses within days. Governments, corporations, and individuals will have to start brand new account books using the new money. All this will be the only guarantee that the world economic machine can keep going and that social breakdown can be kept to a minimum.

What will happen to present accounts, imbalances, bank collaterals and debts? They can be put on one side for the moment but they’d have to be paid off (with new money) in due course. This will take accountants years to do and, no doubt, years for politicians to bicker between themselves as to the exchange rates between their old national currencies and the new world currency. Government debts will have to be paid off also. But it would be unfair that future generations should pay for our governmental debts out of taxation (as governments are presently expecting them to). Huge though the debts are they can easily be paid off by selling some of the physical assets of governments, particularly property and land, of which all governments have sufficient. (Ex-prime minister Macmillan called this “selling the family silver”!) All this will take decades, but at least some sort of world economy will continue and our grandchildren will be relieved of the burden of paying our governmental debts from of their incomes. They’ll have more than enough problems of their own without ours as well.

Breivik’s intended consequence

To use an apposite metaphor (albeit horrific in this case), the Norwegian government is probably shooting itself in the foot by planning to keep Anders Behring Breivik’s trial going for ten weeks. Both feet actually, whether Breivik is subsequently found insane, or sane but guilty. Although the authorities will undoubtedly win their case and he will be incarcerated for many years, if not a lifetime, he has already had one victory and is likely to have another.

Some weeks ago, two government-appointed psychiatrists decided that Breivik was insane. However, a prison psychiatrist who’d observed Breivik closely over a long period said that he was sane and no doubt broke government protocol by saying so. She was very brave to go against what would have been a tide. A subsequent panel of three psychiatrists appointed by the court itself had to agree, of course — Breivik’s sanity is obvious to all now that we can see him on television. However, if the judges shorten the trial in the next few days by over-ruling this assessment (no doubt on exquisitely concocted “legal” grounds) it will be because the Norwegian government has decided that a long trial will have counter-intuitive effects. The law of unintended consequences.

If the Norwegian government has got any sense at all (which I’m sure it has) it will already be carrying out anonymous opinion surveys. (A preliminary one would probably have already persuaded it that Breivik’s “insanity” wouldn’t wash among the general public.) Such surveys would only confirm a powerful and growing resentment at the way that politicians and civil servants of Western countries have turned a blind eye to the growing immigration of poor and uneducated people from Africa and Asia in the past two or three decades. Indeed, the most vociferous against any further immigration comes from previous immigrants who’ve now found jobs, started their own families and are worried about the future job prospects of their own children. They, even more than the ordinary indigenous population, don’t want to see future welfare benefits diluted even further.

So what should the Norweigian government have done? Or do now? Instead of grandstanding for the sake of its multicultural polity, it didn’t need do much. The media have already given us more than enough gruesome evidence, and Breivik has already pleaded guilty. Instead of presenting yet more details and prolonging the anguish of the relatives of the 77 who were shot down by Breivik, a trial of a few days or perhaps one week would have sufficed.

I wouldn’t be surprised if, indeed, the trial is brought to an end this week by one means or another. At diplomatic level, other Western governments must already be requesting this. Breivik hasn’t achieved any dramatic victory but, actually, he’s won. He will have accelerated anti-immigrant feelings — albeit invisibly for the time being. The quicker that he’s put away, the better. I’m not suggesting that there’ll be copycat murders but we can be certain that racial incidents, particularly in Oslo where a quarter of the young people are new immigrants, will have been growing.

We humans have paradoxical instincts which have evolved, and normally express themselves, quite separately according to specific circumstances. In this case two opposing ones have been elicited simultaneously. By far the majority of West Europeans have been horrified by Breivik’s murder of 77 people, particularly of young lives with so much promise. At the same time, most countries’ majorities agree with Breivik that mass immigration must be stopped. If Western governments have any sense at all (which I’m sure they have when push comes to shove) they’ll now be thinking much more seriously about this than they were on 22 July 2011.

Where’s my consciousness?

A brilliant op-ed by a brilliant scientist appeared in the Los Angeles Times of 1 April. It suggests that we shouldn’t be worried if the universe doesn’t have a purpose. It is headed “A universe without purpose” and is written by Lawrence M. Krauss who heads the Origins Project at Arizona State University. He implies that all good people (that is, sensible people, lay-people as well as scientists) should be comfortable with the fact.

His key sentence is: “For many, to live in a universe that may have no purpose, and no creator, is unthinkable.” Then, in the next paragraph, he leads off with: “But science has taught us to think the unthinkable.” Well . . . for one thing, the sentence is self-contradictory. We cannot think about what we cannot think about. For another, the main thing — the only thing — that science teaches us is that whatever we may happen to believe now may, in fact, turn out to be wrong.

In fact, belief in a particular scientific theory is no different in kind from a particular religious belief. The only difference is time-scale. A particular religious belief may last for generations or centuries or even millennia before it is “disproved”. It changes when the surrounding culture has become sufficiently dissonant so that, usually, a chief spokesman (together with a close-knit group surrounding him) announces a replacement belief or a modification that sits more comfortably with the new culture. His flock usually adopt the new belief pretty instantly or, sometimes, a maverick youngster decides he wants to keep with the old “purity” and starts a new schism.

On the other hand, as soon as a scientific spokesman announces a new belief, then other scientists will immediately try to devise a new culture (a controlled experiment) which will seek to disprove it. If the experiment is successful then the new belief is abandoned, or modified or it’s substituted by an even newer belief. The point is that the belief is usually challenged well within the lifetime of the innovator. Science is a history of disproofs rather than a grand revelation.

But, essentially, there’s no difference between scientific belief and religious belief. They are both seeking some sort of coherent explanation of the universe and life — almost exclusively human life in the case of religious belief. I rather think that Richard Dawkins’ life-long, over-aggressive arguments with religious believers has done science, and evolutionary biology in particular, a lot of damage.

As for me, I remain very uncomfortable that the universe may not have a purpose, whether self-generated or initiated by something else. Until science can come up with a testable theory that would adequately explain why I (at least!) experience what we call consciousness and free-will and set them both well within the modern culture of science — quantum physics — then I’m quite happy with the belief that the universe might be designed beforehand or is being designed now by one method or another. So far, quantum physics tells us that the electrons in my brain that are producing personal experiences of consciousness and free-will are also having simultaneous effects on electrons somewhere elsewhere in the universe, even at its furthest ends — if ends there be. Might it also be the case that electrons elsewhere in the universe are affecting those in my head? Where’s my consciousness?

QED?

From now onwards, the West is generally moving away from consumer product-led economic growth (if indeed it exists at all at present outside questionable government statistics). Most of us now have a standard house and a standard stock of goods and equipment within it. Unless some amazing and uniquely new consumer product comes along then most of us are now pretty fully occupied time-wise and space-wise with what we have already.

While the comfortable 20-class will no doubt continue to keep fully up-to-date with the very latest versions and fashions of the existing stock of goods in order to maintain their status well ahead of the 80-class, the latter have only been able to catch up in the last 20 to 30 years or so because of steadily cheaper goods from Asia and by having ready access to credit which banks have been showering upon them — up until 2008 anyway. Also, a majority of the 80-class are taxation-neutral, or even taxation-negative, by virtue of receiving transfer payments from the 20-class via governments.

From now onwards, economic growth (if it can be called that) will take place along two main tracks. The first track is that of increasingly sophisticated producer goods (involving much more automation and computerization among other things) and a more efficient energy infrastructure. Here we may note that China is already moving bodily into this sector even before its own consumer revolution is fully complete. For example, unfortunately for America, China is now building its own state-of-the-art aircraft and aero-engines; unfortunately for Germany, China is now building the latest computerized machine tools; unfortunately for both America and Europe, China is now building an extensive high-speed railway system that will make its own domestic economy so much more efficient than ours.

The other track is that of consumer services, particularly in education and health. Because high attainment in both of these will increasingly depend on a deep knowledge of the genetic and epigenetic predispositions of the individual, then this is where the West still has a clear lead over China. The vast bulk of front-line research in these areas still resides in America, Germany and the UK. Until China can shake off its authoritarian state school methods which (by its own government’s admission) severely cramp creativity among its young people, then the West will be able to retain its advantage for at least, let us say, one or two generations to come.

But how will education and health services develop in the West? It’s all very well saying that we are trail-blazing the necessary fundamental research, but both areas are chock-a-block with restrictive practices. Also, because both services will increasingly depend on the specific genetics and epigenetics of the individual customer such customized services are going to be increasingly expensive. Will governments be able to tax their electorates sufficiently to pay for these services more widely? Will sufficient numbers of highly skilled teachers and doctors be taught and allowed into these professions?

Those are questions which I wouldn’t like to give definite answers to. As regards serving the 80-classes in both China and the West, each has their own specific educational deficiencies to overcome. But maybe we have a clue already. The better-off 20-class of Chinese parents are increasingly sending their children (and at younger ages) to the minority of private 20-class schools and universities in the West; and the more enterprising 20-class schools and universities of the West are increasingly setting up shop in China. Meanwhile, for economic reasons, the 80-class families of both the West and China will probably continue their sub-replacement sizes and thus disappear to zero in the next three of four generations. Quod erat demonstrandum?

What Cameron ought to realize already

For the last 30 years in Western Europe and Japan (and more recently in America), the 80-class have been voting in the bedroom by not procreating enough children to replace themselves. It’s a sensible decision because they’ve noticed that, due to automation, average real wages have been steadily declining during that period and sub-fertility is the only way they can afford to rent or buy a house and fill it with the obligatory stock of household goods according to what they and their neighbours perceive their social status to be.

So far, governments have been accommodating themselves to this in four main ways: 1. turning a blind eye to immigrants from the Third World in order to try and maintain a sufficient level of taxation (apart from Japan which has maintained an almost total racial policy); 2. allowing their secondary state schools to be dumbed-down to give the false impression that children are better educated; 3. allowing the banks (and themselves) to open massive sluice gates of credit (and thus of present debt); 4. continuing to con the 80-class that economic growth can continue for . . . er, well . . . forever. presumably.

The cultural gap between the 80-class and the 20-class, though widening, is not watertight, of course. Failures from the latter will continue to drift into the 80-class (perhaps even down to the growing under-class of unemployables right at the bottom) and enough talented children and young people from the 80-class will be identified and fast-tracked upwards in order to top up the numbers of specialists increasingly needed by the 20-class — the economic decision-makers in politics and business.

It’s difficult — nay, impossible — to imagine how these trends can be reversed. The economic pressure of something like 2 billion poorer people in China, India and Brazil (at least) who want our standard stock of consumer goods can only grow if their governments want to remain in power. Their own developing 20-class (400 million?) who will also demand a much more varied protein diet (requiring four or five times normal grain acreage) will constitute additional economic pressure of its own due to existing world-wide freshwater shortage for agriculture.

Actually, there’s great hope for the West. As our 80-class decline into nothingness in the next three or four generations, the 20-class will be able to survive because their exportable specialist skills will still be needed by those countries which still manage to keep their heads above water in that period (during which time their own 80-classes will start to decline for the same reason as ours are now).

As for the immediate future in the West, this is far more problematic. It’s likely in my view that the financial sector, currently an all-too-successful sub-group of the 20-class, has already reached its zenith. Its present hyper-fast algorithmic methods of equity- and bond-trading with its supercomputers and optic fibre links have probably reached its limits for physical reasons (limits to electronic circuitry, speed of light, etc). All debts — banks’, governmental and private — will have to be written off sooner or later, and the financial sector will have to be reduced to its traditional role of being a helpmate to the real economy (2% to 5% of GDP?) and not its destroyer.

What will come to the fore in the 20-class? I’ve little doubt that the biological sciences, already foremost in frontline research funds, will become dominant. Increasingly precise brain-mapping will tell the 20-class a great deal more about effective learning methods in their own schools and universities. Genetics will gradually whittle down the incidence of harmful gene variations (both dominant and recessive ones) causing mid-life diseases. Epigenetics will not only teach us more about the avoidance of mid-life diseases but also, because epigenetic inheritance involves emotional predispositions as well as physiological ones, it may well help the political sector of the 20-class to do their jobs better. The David Camerons of the future will realize that countries like Tunisia, Egypt, Libya, Iran, Syria, etc, can’t be socially engineered overnight into copies of Western democracy. Some epigenetic instruction sheets in their DNA, being semi-permanent, take generations to change.

Actually David Cameron ought to realize these things already. The younger generation (in both the 20-class and the 80-class) are already disinterested in politics even though Cameron’s predecessors have tried several social engineering tricks in the last 50 years. In 30 years’ time they (the educated 20-class anyway) will be the generation that has the decision-making power. From the boardrooms of the thousands of specialized transnational corporations, large and small, the decision-makers of the real world economy, are probably going to want (and greatly influence) different governmental systems from those we have now.