Some tidbits

See A French Sneaker Maker Grapples With How to Bring Production Home: Salomon has built a new shoe factory in France. Now it must also build a footwear supply chain in a country without one. by Trefor Moss of The WSJ. Excerpt:

"The company is banking on the shoe’s local, sustainable back story being a strong selling point"

See Fiction: ‘Trust’ by Hernan Diaz: Who was financier Andrew Bevel, and how did he successfully short the Crash of 1929? by Sam Sacks of The WSJ. He reviews the book Trust by Herman Diaz. Excerpt:

"Money may be a fiction, but it can be used to “bend and align reality”—that is to say, it’s a fiction that those with the right technique can alchemically transform into facts, like base metal into gold."

See ‘Hidden Games’ Review: Secret Equations: How game theory explains conspicuous consumption, royal coronations, rap lyrics, trench warfare—and more. by Matthew Hutson. He reviews the book Hidden Games: The Surprising Power of Game Theory to Explain Irrational Human Behavior by Moshe Hoffman. Excerpt: 

"Higher-order beliefs also explain indirect speech (“Would you like to come up for coffee?”), which enables plausible deniability. And symbolism. “Symbolic gestures are puzzling,” Messrs. Hoffman and Yoeli write, “because things that don’t matter matter: we put enormous weight on mere words like I’m sorry and I love you and spare no expense on rituals, ceremonies, and elaborate displays that don’t convey any new information.” Public apologies and royal coronations both enable coordination, harmonizing everyone on who’s in debt or service to whom."

See ‘Narrative Economics’ Review: Costly Tales We Tell Ourselves Like songs you can’t get out of your head, familiar story lines about the economy elicit thoughts and emotions; they also impel action. by James Grant. He reviews the book Narrative Economics by Nobel Prize Winning Economist Robert Shiller. Excerpts:

"A Nobel laureate, Yale economics professor and caller-out of the millennial-era bubbles in houses and dot-com equities, Mr. Shiller now entreats his fellow economists to make room for “narratives” in their otherwise quantitatively focused minds. As Mr. Shiller defines them, narratives are contagious stories. Like the songs you can’t get out of your head, they elicit thoughts and emotions. But unlike musical earworms, they also impel action." 

"Mr. Shiller wants not only to identify the stories we live by (or at least spend, hire and invest by) but also to present “the beginnings of a new theory of economic change.” Trying to understand big economic events by studying the data alone, he observes, “is like trying to understand a religious awakening by looking at the cost of printing religious tracts.”"

The Battle of Stalingrad Meets "The Man Who Shot Liberty Valance"

In the movie "The Man Who Shot Liberty Valance" people wrongly believed that Ransom Stoddard (Jimmy Stewart's) character killed the outlaw Liberty Valance when it was actually John Wayne's character. This propelled a distinguished political career for Stoddard after he started out as a frontier lawyer in the old west.

Near the end of the movie, after Stoddard has told the real story to a reporter named Scott, we get the following exchange:

Ransom Stoddard: You're not going to use the story, Mr. Scott?

Maxwell Scott: No, sir. This is the West, sir. When the legend becomes fact, print the legend.

I thought of this while reading a review of the book The Lighthouse of Stalingrad: The Hidden Truth at the Heart of the Greatest Battle of World War II by Iain MacGregor in today's WSJ. The review was by Andrew Nagorski. See Click here to read it. Excerpts: 

"Mr. MacGregor points out that “the mythologizing of the struggle for Stalin’s city can sometimes distort the true history, which in itself is unambiguously heroic.”"

"what actually happened was never enough for Soviet propagandists: they felt compelled to spin an unabashedly heroic narrative that overlooks inconvenient truths. This valuable addition to the body of work about Stalingrad goes a long way toward righting the balance between myth and reality.

Mr. MacGregor vividly describes the frantic Soviet efforts to beat back Field Marshal Friedrich Paulus’s Sixth Army as it reached the city. House-to-house, factory-to-factory fighting became the order of the day, and Gen. Vasily Chuikov, the commander of the 62nd Army, quickly adopted the tactic of “hugging the enemy,” positioning his troops as close as possible to the Germans, then striking with small mobile groups.

To illustrate his point about the mix of fact and fiction, Mr. MacGregor zeroes in on one of Stalingrad’s most legendary episodes: the Red Army’s push to take control of a strategic building code named “The Lighthouse.” In the official version, Sgt. Yakov Pavlov led a small band of men, representing a symbolic mix of Soviet nationalities, as they charged into the house and wiped out its German occupants. Subsequently, “Pavlov’s House,” as it became known, was hailed by the 62nd Army’s newspaper as “a symbol of the heroic struggle of all defenders of Stalingrad.”

Investigating these events, Mr. MacGregor combed the records and interviewed Pavlov’s son and Chuikov’s grandson. While he does not doubt Pavlov was a fierce combatant, he discovered contradictory evidence about who really took command of the lighthouse—and whether the legend of the battle comes close to matching what really happened. He concludes that “the imagined story line was deemed more important than the actual truth.”"

Our memory records very little of our lives. So how does the brain reconcile our sense of self?

In "The Self Delusion," author Gregory Berns explains why our self-perception is a "sort of fiction" 

By Mary Elizabeth Williams of Salon. Excerpts:

"I am not myself lately. Then again, was I ever? I'm not the self I was a year ago, or the one I will be in five minutes. My sense of reality is ephemeral, and my circumstances are constantly rewriting the narrative. My brain wants to make sense of all that, though, so it keeps trying to find order and actualization. But what it keeps writing, as Emory University psychology professor Gregory Berns puts it, is its own "historical fiction."

In his apt and timely new book, "The Self Delusion: The New Neuroscience of How We Invent — and Reinvent — Our Identities," Berns, author of "How Dogs Love Us," explores the neuroscience of self perception and the clever, confounding ways we attempt to tell the stories of our lives."

"The brain is a type of computer. In particular, I think, along with a lot of neuroscientists, that it's fundamentally a prediction computer or a prediction engine. That what brains evolve to do, which is try to make internal models of how the world works so the owner of that brain can survive and outwit competitors. Or if they're prey, to avoid predators, always just staying one step ahead of things.

The better prediction that the brain does, the better the person or the animal will do. There's been a strong evolutionary pressure to make brains very good at anticipating things that might happen in the future."

"humans overlay it with a narrative on top so that we have a way of putting meaning on things, if you will.

The anticipation bit is not just about what's going to happen. It's the consideration of the world of things that might happen. And not only that. We also have the capacity to look back in time and imagine things that might have been, the what-if scenarios. These are all various forms of predictions that the brain has evolved to do, to help humans in particular flourish in this world."

"we're going to be different in a year or ten years. We have to construct some mechanism to link all these together. The way we do that is through narrative and storytelling. We have to, just for our own psychological health, construct something that links all these versions of ourselves together. Otherwise, the alternative is completely existential, that there is nothing unifying past, present and future, and the universe is random. Psychologically, we can't handle that."

"our brains do not appear designed or evolved for continuous recording, or at least recalling things in kind of a continuous fashion. Our brains are not video recorders in the sense that a camera is. It seems as if the memories themselves are laid down in an episodic fashion and those episodes are defined by when things happen.

Most of the day, nothing happens. I don't think it's been calculated, but we go through the day, probably 90% of the day is pretty static, and then the other 10% is just stuff happening. That's going to vary from day to day. When stuff happens, when something in the world changes or something changes in you, those are the things that we encode in memory and those are the things that get stored.

When you recall a memory, you can't call up the exact recording of what happened. You have these sparse instances that you can call up. But you still have to fill in the gaps somehow, because they're not just still images, they're highlights. It's the highlight reel of the day, or of your life."

"The brain has to fill in those gaps. The thing I've become fascinated about is, how do you fill in those gaps? The best answer I have is that they're built on what psychologists call schemas. Or if we want to be mathematical about it, I call them basis functions. These are the templates that get laid down early in life as children. These are the stories that we hear when we're young, because those are the stories where the child doesn't have many of their own experiences. Not much has happened. Those are the templates for understanding the world, when the parents tell their kids stories.

These are fairy tales and fables and simple stories, good versus evil. These are going to be culturally different depending on where you grew up, but there are some common themes. Importantly, those are the templates that stay with us throughout our lives and help us interpret these episodic events as they happen to us. They provide a ready framework for slotting things into as they come."

"The brain is a prediction engine. It's that way because there was, at some point in time, a survival advantage to that, and there still is.

If you think about the alternative, let's say that life is just a series of random events that are completely unconnected to each other. If that were the case, then there really wouldn't be any survival advantage to having a predictive brain, because if things were random, then there's nothing to predict.

The fact that we can predict things is also a reflection of the world that we've evolved in, that there is some amount of order there, certainly not 100%, but there's enough order that brains can extract it. That drives things, even when there is no predictability or causality. It's not like you can turn off the prediction engine; it's always going.

That's where superstitions come from. It's like if two events happen in close proximity to each other, then the brain's naturally going to equate them in some causal way, even if they're not. That's how superstitions arise. Then you can consider superstitions the building blocks of storytelling or fables."

"Self-identity comes from the story that you tell about your life, which is the historical part. But it is a story. I hope to convince the reader there isn't just one story for anything. That story is one that you choose, and you have the capability of telling in different ways.

In that sense, it is fiction. The story you tell yourself is a sort of fiction. It's almost a delusion. The story you tell about yourself to other people is probably a slightly different version, so that's a different fiction. This goes on and on.

I hope to convey in the book that the stories you choose to tell, we have control over that to some degree. Actually, the best way to shift your storytelling, if that's what you want to do, is by controlling what you consume."

"For me, I don't feel beholden to my past self, if that makes any sense. Some people have an ethos that they have a life purpose and then they have to carry on a legacy. And for some people, it can be very heavy. It might be passed down from generations.

I like to think that I've shed some of that; [sounds like Joseph Campbell quoting Nietzsche who said something like you must slay the dragon "Thou Shalt"] I'd be lying if I said I've done it completely. I think COVID in particular has made us all aware how short life really is. I've resolved to do what I want to do in however many years I may have left on this earth [that sounds like following your bliss]"

See also this Goodreads, Inc. 

"“Nietzsche’s words that relate to this with respect to masks and the processes of life. He speaks of three stages in the life of the spirit incarnate in each of us. Three transformations of the spirit, he calls it. The first is that of the camel which gets down on its knees and asks, “Put a load on me.” That’s the period of these dear little children. This is the just-born life that has come in and is receiving the imprint of the society. The primary mask. “Put a load on me. Teach me what I must know to live in this society.” Once heavily loaded, the camel struggles to its feet and goes out into the desert — into the desert of the realization of its own individual nature. This must follow the reception of the culture good. It must not precede it. First is humility, and obedience, and the reception of the primary mask. Then comes the turning inward, which happens automatically in adolescence, to find your own inward life. Nietzsche calls this the transformation of the camel into a lion. Then the lion attacks a dragon; and the dragon’s name is Thou Shalt. The dragon is the concretization of all those imprints that the society has put upon you. The function of the lion is to kill the dragon Thou Shalt. On every scale is a “Thou Shalt,” some of them dating from 2000 b.c., others from this morning’s newspaper. And, when the dragon Thou Shalt has been killed — that is to say, when you have made the transition from simple obedience to authority over your own life — the third transformation is to that of being a child moving spontaneously out of the energy of its own center. Nietzsche calls it a wheel rolling out of its own center.”

 

    ― Joseph Campbell, Trick or Treat: Hallowe'en, Masks, and Living Your Myth"

The cultural evolution of love in literary history (maybe spurred by economic development)

By Nicolas Baumard, Elise Huillery, Alexandre Hyafil & Lou Safra in Nature Human Behaviour.

"Abstract

Since the late nineteenth century, cultural historians have noted that the importance of love increased during the Medieval and Early Modern European period (a phenomenon that was once referred to as the emergence of ‘courtly love’). However, more recent works have shown a similar increase in Chinese, Arabic, Persian, Indian and Japanese cultures. Why such a convergent evolution in very different cultures? Using qualitative and quantitative approaches, we leverage literary history and build a database of ancient literary fiction for 19 geographical areas and 77 historical periods covering 3,800 years, from the Middle Bronze Age to the Early Modern period. We first confirm that romantic elements have increased in Eurasian literary fiction over the past millennium, and that similar increases also occurred earlier, in Ancient Greece, Rome and Classical India. We then explore the ecological determinants of this increase. Consistent with hypotheses from cultural history and behavioural ecology, we show that a higher level of economic development is strongly associated with a greater incidence of love in narrative fiction (our proxy for the importance of love in a culture). To further test the causal role of economic development, we used a difference-in-difference method that exploits exogenous regional variations in economic development resulting from the adoption of the heavy plough in medieval Europe. Finally, we used probabilistic generative models to reconstruct the latent evolution of love and to assess the respective role of cultural diffusion and economic development."

Also see this interesting Twitter thread from economist Cameron Harwick. Excerpt:

"When more monetized societies adapt stories from less monetized societies (including their own past), they insert more romance. Interestingly, less monetized societies actually *remove* romance when adapting stories from more monetized societies."

Ancient poems and biblical narratives warn us about the abuse of power by those placed in positions of authority and privilege

See A Tale As Old As Time by Peter Boettke.

"The Epic of Gilgamesh is an ancient poem from Mesopotamia, and it tells the story of Gilgamesh, the King of Uruk.  In the story Uruk is well protected from external evaders and the city itself appears prosperous.  In many ways, Gilgamesh is a good King. But his all powerful status, also means that he isn't such a good King, for his abuses his power. He takes the sons of the citizens of Uruk and puts them to work as slave workers in the city, or sends them off to war, and he takes the citizens daughters to either work as servants, or to satisfy his desires. So the people of Uruk appeal to god to protect them from this tyrannical abuse of power.  So the gods send them Enkidu as a countervailing force to Gilgamesh's unchecked power.

The story dates from somewhere around 2100 BC and is regarded as one of the, if not the, oldest surviving works of literature.  And its story is about unchecked power, and the need for countervailing forces to keep power in check.

The Old Testament has a related story.

1 Samuel 8 New American Standard Bible (NASB)

Israel Demands a King

8 And it came about when Samuel was old that he appointed his sons judges over Israel. ² Now the name of his firstborn was Joel, and the name of his second, Abijah; they were judging in Beersheba. ³ His sons, however, did not walk in his ways, but turned aside after dishonest gain and took bribes and perverted justice.

⁴ Then all the elders of Israel gathered together and came to Samuel at Ramah;⁵ and they said to him, “Behold, you have grown old, and your sons do not walk in your ways. Now appoint a king for us to judge us like all the nations.” ⁶ But the thing was ^[a]displeasing in the sight of Samuel when they said, “Give us a king to judge us.” And Samuel prayed to the Lord. ⁷ The Lord said to Samuel, “Listen to the voice of the people in regard to all that they say to you, for they have not rejected you, but they have rejected Me from being king over them. ⁸ Like all the deeds which they have done since the day that I brought them up from Egypt even to this day—in that they have forsaken Me and served other gods—so they are doing to you also. ⁹ Now then, listen to their voice; however, you shall solemnly ^[b]warn them and tell them of the ^[c]procedure of the king who will reign over them.”

Warning concerning a King

¹⁰ So Samuel spoke all the words of the Lord to the people who had asked of him a king. ¹¹ He said, “This will be the ^[d]procedure of the king who will reign over you: he will take your sons and place them for himself in his chariots and among his horsemen and they will run before his chariots. ¹² He will appoint for himself commanders of thousands and of fifties, and some to ^[e]do his plowing and to reap his harvest and to make his weapons of war and equipment for his chariots. ¹³ He will also take your daughters for perfumers and cooks and bakers. ¹⁴ He will take the best of your fields and your vineyards and your olive groves and give them to his servants. ¹⁵ He will take a tenth of your seed and of your vineyards and give to his officers and to his servants. ¹⁶ He will also take your male servants and your female servants and your best young men and your donkeys and ^[f]use them for his work. ¹⁷ He will take a tenth of your flocks, and you yourselves will become his servants. ¹⁸ Then you will cry out in that day because of your king whom you have chosen for yourselves, but the Lord will not answer you in that day.”

¹⁹ Nevertheless, the people refused to listen to the voice of Samuel, and they said, “No, but there shall be a king over us, ²⁰ that we also may be like all the nations, that our king may judge us and go out before us and fight our battles.” ²¹ Now after Samuel had heard all the words of the people, he repeated them in the Lord’shearing. ²² The Lord said to Samuel, “Listen to their voice and ^[g]appoint them a king.” So Samuel said to the men of Israel, “Go every man to his city.”

So, we have ancient poems, and biblical narratives that warn us about the abuse of power by those place in positions of authority and privilege.  It is a tale as old as time.

And, it is a tale not lost on the great classical economists such as Adam Smith and David Hume, and of course it was a theme that ran throughout the modern political economy project of F. A. Hayek and James M. Buchanan.  Perhaps the Epic of Gilgamesh and the Old Testament should be required reading for all PhD students in economics prior to enrolling and studying the mechanics of microeconomics and macroeconomics so they can appreciate the tensions and paradoxes involved in the institutional infrastructure within which economic life is played out."

Success stories cause false beliefs about success

By George Lifchits, Ashton Anderson, Daniel G. Goldstein, Jake M. Hofman and Duncan J. Watts. From Judgment and Decision Making Volume 16, Number 6, November 2021.

Abstract