Progress Daily

Trade between nations is the same as trade between people. Consider what the quality of life would be if each person had to produce absolutely everything that he or she consumed, such as food, clothing, cars, or home repairs. Compare that picture with life as it is now as individuals dedicate themselves to working on just one thing to earn a salary with which they can freely purchase food, a car, a home, clothing, and anything else they wish at higher quality and lower prices than if they had done it themselves.

The United States exports in order to purchase imports that other nations produce more skillfully and cheaply. Therefore, the fewer barriers erected against trade with other nations, the more access people will have to the best, least expensive goods and services. In the absence of trade barriers, producers face greater competition from foreign producers, and this increased competition gives them an incentive to improve the quality of their production while keeping prices low in order to compete. At the same time, free trade allows domestic producers to shop around the world for the least expensive inputs they can use for their production, which in turn allows them to keep their cost of production down without sacrificing quality.

Innovation is the basis of progress, and competition is the best incentive to innovate. New technologies, from computers to medicines to machinery, have helped the economy to become increasingly more productive per unit of labor and machinery employed in the production process. Since 1948, according to the Bureau of Labor Statistics, multifactor productivity — a ratio of output to combined inputs — in the U.S. private business sector has more than doubled. Productivity has fostered economic growth and, by lowering production costs, has given ordinary Americans the opportunity to raise their standard of living.

The U.S. economy is replete with illustrations of how competition fosters innovation. For example:

In the 1980s, personal computers were very expensive, few people owned them, and those they did own handled only word texts and a few calculations. Due to increased competition, by 2002, 65.9 percent of people living in the United States owned a personal computer that handled text, calculations, graphics, media, Internet access, and many other functions. In 1975, the airline industry carried about 200 million passengers; now, due to competition and lower costs, it carries almost 600 million passengers a year. In 1987, only 0.3 percent of Americans owned mobile phones. By 2002, 50 percent owned one. Similarly, in 1975, only 37.3 percent of people had a telephone mainline; now 64.6 percent have one. The percentage of people who own a television set soared from 48.6 percent in 1975 to 93.8 percent in 2001.

The data presented over the past seven years in the annual Heritage Foundation/Wall Street Journal Index of Economic Freedom show that the economies of countries that open their markets grow at a faster pace than the economies of countries that open their markets less or not at all. Of the 142 nations whose economies have been observed during this seven-year period, those that opened their markets the most grew twice as fast as those that opened them the least.

When people live under economic oppression and are at the mercy of a small ruling authority that dictates every aspect of their lives and limits their ability to realize their potential, they cannot enjoy the fruits of their efforts and cannot realize their potential. If they cannot feel free to do business, work freely, and trade freely; if they do not have anything to gain or to lose, they begin to feel that any change — even war — might be better. For this reason, the areas of greatest conflict in the world also happen to be those that are economically repressed. The Economic Freedom Map, drawn annually from the Index, shows, for example, that countries that are the most economically repressed have also suffered civil wars and unrest.

The areas of the Middle East in which civil wars and terrorist havens abound are both economically repressed and mostly unfree. North Korea, a country plagued by starvation and poverty, is repressed. Brazil, Argentina, parts of Africa, and some former Soviet republics — all mostly unfree — have high levels of poverty and periodically suffer political and economic crises.

As the Index demonstrates, once economic barriers begin to emerge, a nation’s wealth begins to decline. According to the Index, the United States has lost considerable ground in economic freedom (declining from 4th freest economy to 10th freest in 2004).

“Why America Needs to Support Free Trade,” by Ana Isabel Eiras, The Heritage Foundation

Helen Fisher and Lucy Brown recruited subjects who had been “madly in love” for an average of seven months. Once inside the MRI machine, subjects were shown two photographs, one neutral, the other of their loved one.

When each subject looked at his or her loved one, the parts of the brain linked to reward and pleasure — the ventral tegmental area and the caudate nucleus — lit up. Love lights up the caudate nucleus because it is home to a dense spread of receptors for a neurotransmitter called dopamine. In the right proportions, dopamine creates intense energy, exhilaration, focused attention, and motivation to win rewards.

Donatella Marazziti, a professor of psychiatry at the University of Pisa, measured serotonin levels in the blood of 24 subjects who had fallen in love within the past 6 months and obsessed about this love object for at least 4 hours every day. Serotonin is a neurotransmitter that is altered by Prozac, Zoloft, Paxil, and other psychiatric medications. Drugs like Prozac seem to alleviate obsessive-compulsive disorder (OCD) by increasing the amount of serotonin available at the juncture between neurons.

Marazziti compared the lovers’ serotonin levels with those of a group of people suffering from OCD and another group who were free from both passion and mental illness. Levels of serotonin in both the obsessives’ blood and the lovers’ blood were 40% lower than those of her normal subjects.

Drugs like Prozac damp down the sex drive, and Helen Fisher believes that they jeopardize one’s ability to fall in love and stay in love.

Scientists now believe that romance is panhuman, embedded in our brains since Pleistocene times. In a study of 166 cultures, anthropologist William Jankowiak observed evidence of passionate love in 147 of them.

But though romantic love may be universal, its cultural expression is not. In one survey of Indian college students, 76% said they’d marry someone with all the right qualities even if they weren’t in love with the person (compared with only 14% of Americans).

Oxytocin is a hormone that promotes a feeling of connection, bonding. It is released when we hug our long-term spouses, or our children. It is released when a mother nurses her infant. Prairie voles, animals with high levels of oxytocin, mate for life. When scientists block voles’ oxytocin receptors, they don’t form monogamous bonds and tend to roam. Scientists have been experimenting with treating autistic people with oxytocin, which in some cases has helped alleviate their symptoms.

In long-term relationships that work, oxytocin is believed to be abundant in both partners.

Says Helen Fisher, “Massage. Make love. These things trigger oxytocin and thus make you feel much closer to your partner.”

Arthur Aron, a psychologist at Stony Brook University, recruited a group of men and women and put opposite sex pairs in rooms together, instructing each to perform a series of tasks, which included telling each other personal details about themselves, and then stare into each other’s eyes for 2 minutes. Most of the couples reported feelings of attraction; one couple went on marry.

Fisher says this exercise works wonders for some couples. Aron and Fisher also suggest doing novel things together, because novelty triggers dopamine in the brain, which can stimulate feelings of attraction. Even if you just jog in place and then meet someone, you’re more likely to think they’re attractive.

“True Love,” by Lauren Slater

Niall Ferguson sets out a thesis: that the 20th century was “far more violent in relative as well as absolute terms than any previous era.” Yet not only does he fail to substantiate it, but he adds a late appendix conceding that the last century was “not so uniquely bloody” after all.

Even with superior technology modern mass murderers could hardly match the achievements of barbarians, crusaders, colonialists and civil warriors. China’s Taiping rebellion alone annihilated more people than the First World War. Pol Pot was responsible for two million deaths in Cambodia, but at least seven million died in King Leopold’s Belgian Congo. The Second World War killed 59 million, 2.6 per cent of the world’s population; Genghis Khan, who killed 37 million, reduced it by a tenth. He habitually butchered all the inhabitants of cities in his path - 1.6 million in Herat, about six times the number massacred during the Japanese “Rape of Nanking.”

Ferguson’s statistics are copious and telling. During the Second World War four Western soldiers were captured for every one killed in the Pacific; one Japanese was captured to 40 killed. During a conventional bombing raid on 9 March 1945 almost 100,000 citizens of Tokyo were, in General Curtis LeMay’s words, “scorched and boiled and baked to death.” Ford manufactured more military equipment than Italy. For every additional 19 tons of steel produced during the Stalinist period, one Soviet citizen perished. Ferguson might have noted, for comparison, that in 1800 two tons of Caribbean sugar cost the life of one slave.

Ferguson attributes 20th-century violence, including the hundred major conflicts between 1945 and 1983 which resulted in 19 million deaths, to three main factors. These are ethnic rivalry, economic volatility and empires in decline. Yet such broad explanations hardly go to the heart of the matter. From time immemorial people have killed each other for any reason and none.

The War of the World, by Niall Ferguson, reviewed by Piers Brendon

Girls tend to score higher on verbal IQ tests as well as on specific measures of reading, writing, associative memory, and perceptual speed. Boys tend to score higher on specific spatial tasks (such as mental rotation, detecting embedded geometric figures, direction sense), and on tests of math, science, and mechanical ability. There are exceptions: males perform better on verbal analogies, while females are better at numerical calculations and location memory.

Generally speaking, the size of these differences is quite small, equivalent to just a few IQ points but there is one striking difference between male and female populations. For most mental abilities, the range of performance is wider for males than for females. Boys vastly outnumber girls among the top achievers in mathematics as well as among populations identified as “learning disabled.”

Girls speak their 1st words earlier, and continue on a more rapid course of verbal development throughout childhood. Boys show signs of visual-spatial superiority as early as it can be tested, by age 3. Boys’ and girls’ brains respond differently to speech sounds, even in the 1st days of life, and by 3 months girls’ left hemispheres are more responsive to language than boys’. Male fetuses tend to have a thicker right hemisphere, particularly in the higher visual areas that would be involved in spatial analysis, while the hemispheres of female fetuses do not differ in thickness.

Estrogen and testosterone are produced by both sexes but estrogen levels are considerably higher in women and testosterone levels in men. Estrogen tends to promote “female” mental skills, such as verbal articulation, fine motor control, and perceptual speed, while it depresses “male” skills, such as spatial analysis and deductive reasoning. These findings are based on studies of women at different points of the menstrual cycle, as well as comparisons of postmenopausal women who either do or do not take estrogen replacement therapy. Estrogen is highest just before ovulation and lowest in the 1st few days of menstruation, so women actually think in slightly more male ways while they’re menstruating.

Women with higher testosterone levels outperform those with lower levels on specific spatial tasks. Men have about 17 times more testosterone than women, and it’s those with lower testosterone levels who show the superior spatial skills. One exception is older men, whose testosterone levels tend to be much lower than in earlier life; in this case, supplemental testosterone improves spatial skill performance. So moderate levels of testosterone are optimal for spatial intelligence.

Boys who are testosterone-deficient from birth show poorer spatial skills throughout life. Girl fetuses who produce high levels of male hormones, caused by congenital adrenal hyperplasia, end up with superior spatial skills, even when they are treated with normal female hormones from birth and are raised as girls. (They are also born with masculinized external genitalia, tend to prefer traditionally “boy toys” and rough play, and have an increased incidence of lesbianism.) Even the slightly greater prenatal testosterone exposure of females with a twin male brother is enough to enhance their spatial skills later in life.

Sex differences in intelligence become more pronounced after puberty. Adolescents, both male and female, who go through puberty earlier tend to be more verbally gifted, while those who mature later tend to excel at spatial skills. Boys generally go through puberty about a year later than girls, so their spatial skills benefit and verbal skills suffer accordingly.

What’s Going On in There?, by Lise Eliot, Ph.D.

Life in general, and markets in particular, involve large random factors, have complicated stochastic structures, and regularly spring nasty surprises. Their behaviour over short timespans may have so little significance as to be nothing but noise. Yet we continue to see patterns where none exist, misunderstand the role of randomness, seek explanations for chance phenomena, and believe that we know more about the future than we do.

There are many ways of being the fool of randomness. One is to fail to predict the rare event. Nothing can be more certain than that the unexpected will happen sooner or later, but lulled into a sense of security by the periods of relative calm between, people forget to allow for it. Another is to see significance in some random pattern. The more often you look at some fluctuating quantity (the value of your share portfolio, for example), the less meaning your observations have. Yet some traders watch prices move up and down in real time on screen — the changes are so small as to be completely random — and think they are learning something.

Another is the “survivorship bias.” Say we have a collection of traders whose strategies do no better than random: they will have a good year half the time, a bad year the other half. Half of them will have a good year. A quarter will have two good years in a row, and so on. One in 32 will do well five years running. Of course, it never occurs to them that their success is random: they attribute it to their superior strategy, and imagine they are in the top 3% of traders.

The rest of us see an advertisement for an investment fund showing a consistent good performance over five years. “They must be good,” we think, not stopping to think that there are many, many competing funds and it is ones who are doing well whose advertisements we will see, even if their success is entirely due to chance.

Random fluctuations and the survivorship bias can be magnified by a positive feedback loop: An actor who flukes an audition becomes known to more people (and directors), and as a result gets more parts and becomes even more well-known. A mediocre piece of software makes a fluke distribution deal, and then suddenly everyone wants it so they are compatible with everyone else.

Fooled by Randomness, by Nassim Nicholas Taleb, reviewed by Mark Wainwright