February, 2009

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Mobile Creatures like College Students

Wednesday, February 25th, 2009

Sorry this is posted late.  I had to reset my password/and had computer difficulties last night.  I promise this was written before midnight, though…

There are several principles I gleaned from the pages of Tropical Nature that have increased my understanding of social and economic institutions.

Daniel Janzen, via Miyata and Forsyth, suggests that tropical trees allow their trunks to be hollowed out in order to gain greater access to nutrients. “These trees, Janzen argues, may be trading off some structural stability for an increased access to fertility” and greater growth. This is a principle that seems to be found in nearly all aspects of business and finance. In order to achieve rapid and flourishing growth, structural integrity of a business or investment may have to be sacrificed.

Allowing old establishments to fail creates opportunities for new establishments. The authors explain that in rainforests, large tree-fall gaps can occur. When there is a tree-fall gap, an existing large tree and its surrounding foliage cascade to the ground, allowing immense amounts of sunlight to hit the tropical ground. When this happens, new trees and vegetation can begin in areas once dominated by older trees. I would relate this to Schumpeter’s principle of creative destruction.

Specialization is more efficient, but does have drawbacks. A number of plants, insects, and animals adapt to either produce a consumable material designed for a specific consumer, or to consume a material produced by a certain plant. When either the consumer or the producer has its life cycle disrupted, the other will suffer. Generalists have a better chance for survival.

Self-interest should be channeled, not changed. In the rainforest, a number of life forms seem to have parasitic relationships with each other. Not so, say Forsyth and Miyata. Life forms, out of their own selfish interests, adapt to attract other life forms who will have their own interests met. The authors gave an example of a plant which hollows out its core which provides room and board for ant colonies. When the plant is attacked by damaging insects, the ants forcefully remove the other insects. Neither plant nor ant displays any altruism, but rather shows how our social and political institutions should be expected to work – out of self-interest. The key is to create channels for self-interests to be met, rather than recreate self-interest.

In the final chapter, the authors point out that national parks may be only lines on paper, solely important to the bureaucrat who made them. This seems to echo the problems we discussed with national governments creating parks discussed by Karol Bourdreaux in our conversation last week.

-Rick

Nature and Market Forces

Wednesday, February 25th, 2009

Based on the reading of Tropical Nature we can build an analogy between tropical forests (with its ecosystems) and market system in that human intromission would damage their unique natural evolutionary process. Tropical forests, like markets, consist of a variety of species that specialize in the areas they are best at, “trading” with each other, and thus creating invaluable interdependent chains that make each other stronger.

 

Moreover, we can say that a market system, like tropical forests, contain a sort of “food chain” because a company’s final good might be another’s raw materials for producing a further refined product and so on. This process naturally, without third party alterations, generates a complex interconnected society that works more efficiently for both tropical forests and human societies.

 

According to Forsyth and Miyata “the cheapest tactics of seed dispersal employ free dispersal agents such as wind and gravity (78)”. In that same way, market forces (cheapest tactics) allocate resources to their most efficient use, like the wind and gravity (through the forces of nature) disperse seeds.

Jonathan

Building a Mature Economy

Wednesday, February 25th, 2009

Andrew Bjork

After reading Tropical Nature, I too was caught up in the wonderful world of the Amazonian rainforest.  Just the thought of all that variety of life and lush undergrowth makes the biologist and tree hugger in me come right out.  However, I realized that the forest, even with all it appeal and promise of adventure, isn’t exactly a nice man’s world.  There are mosquitoes waiting to lay eggs in your scalp, hords of army ants on the prowl, and the birds are so self-serving as to push the other birds’ youngsters right out of the nest.  Can we really compare this kind of world to our civilized human world? 

I think we can, if only to compare and if we are willing to learn.  There is a interesting line in the book that reads, “Adaptation is not a simple matter of efficiency.  All is compromise.”  I mention compromise, because I see it as a basis upon which we live.   Mr. Merriam-Webster defines compromise as a settlement of differences by arbitration or by consent reached by mutual concession, or as the blending of qualities of two different things.  We self-interested humans are much like the plants and animals of the Amazon and we use compromise to reach an end.  We use others to reach our end, and often that benefits us both.

Where improvement can occur is in how we adapt.  Animals adapt to their surroundings, and so do we.  Only that sometimes as individuals or businesses we get so caught up with how we want to do things.  We have certain needs or wants, and we want to achieve those in our own way, which isn’t always the best way.  If we can learn to adapt better to others and meet their needs, while achieving our ends, we will all be that much closer to the ideal.

Canyons of Light

Wednesday, February 25th, 2009

Bryson White

“When a tree falls, cleaving its way through the forest canopy, it opens a canyon of light and an avenue of change into the understory gloom. Light is energy, and energy brings change. The new patch of sunlight immediately stimulates great changes in the life of the forest floor.” This is creative destruction at its finest. As massive, centurion trees collapse to their death, they signify not only the end of one life, but the beginning of thousands of other lives who are able to fill the space left behind. Enormous natural disasters (wind storms, landslides, wild fires) destroy entire ecosystems, so it seems, but in reality they pave the way for new life and growth to flourish. This is how the market behaves. Massive companies dissolve and dissemble. They are too old and too slow. They die off but are replaced by young, energetic, high growth firms which seize every opportunity to efficiently utilize resources. Every death is replaced with a new life. Nature always remains in equilibrium. When one tree dies, it is naturally replaced with another. After a devastating fire, saplings begin to grow. Contrary to Keynesian belief, this is also the case with the economy. The decrease of demand in one sector implies the increase of demand in another. The aggregate remains the same. Nature takes care of itself and continually replenishes itself. What we, as economists, need to do more often is stand around and stare at our dung. Instead of trying to clean it up all the time and think that we can solve all the problems, we need to stand back and watch how the system takes care of itself. We’d be amazed to see how quickly the beetles come in and clean up the mess.

The jungle would kill Detroit

Wednesday, February 25th, 2009

Andrew Barnard-

“Natural selection, working for the selfish interests of each party, has resulted in a complex, finely tuned system that benefits both layers. These improbable arrangements are perhaps among the most tangible ways in which to comprehend the tremendous creative potential that resides in chance and the vast expanse of evolutionary time. ”

I would agree that it is necessary to view the free-market economic system through an evolutionary lense; to do otherwise would, in many ways, take the humanity or even the end out of the capitalist system.  Schumpeter called it “creative destruction”, the authors of Tropical Nature prefer the more pleasant “creative potential”, but either way both agree the grace and beauty of free competition is in the product.

As it says in “Eat Me”: “to attract these dispersers (consumers), a plant (producer) must stridently proclaim: “EAT ME!” Its message must be heard above the tangled visual noise of the forest and it must reward its takers well.”

In bringing the lessons of the jungle to our modern situation, it is quite obvious the Big 3 of Chrysler, GM, and Ford of failed to raise about the tangled noise of the automotive industry.  They have failed to adapt and develop a product worth the money of consumers, at least as compared to their competitors.  If Detroit was a plant in tropical nature it would have died years ago.

Schumpeter’s term of creative destruction, while not pleasant, is the most fitting.  Such a destruction need not be a call for despair however.  As the authors remind us: “There is a more tangible sense of hopefulness in seeing the matapolos of the world and marveling at the manifold ways in which the living take life from death.”

Ultimately, we can only progress by admitting, paying for, and learning from our mistakes.  There is no bailout in the jungle.

Matapalos and Social Programs

Tuesday, February 24th, 2009

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Nate Whitaker

One of the most interesting things about the forests of Costa Rica and Panama are the matapalos. These are trees that kill other trees and are the only thing left standing in a given area. This could be a good comparison between nature and our economic system, and especially our social programs. The wood from said trees is of bad quality and these trees pretty much destroys all other competition around. It can be argued that if these trees weren’t here and nature (or the market) would be allowed to take its course, more abundant and diverse trees would be allowed to flourish.

Although these “tree killers” came by force, the people do not cut them down; this is due to the fact they provide shade as well as life to other creatures in the area. Social programs do the same; they “shade” people from the harm of the sun as well as provide some food and shelter. Regarding the trees, if competition was allowed and not stifled by these tree killers, better wood could be produced as well as more efficient fruit producers. Social programs do the same thing; although they do some good to some people, if competition were allowed to flourish the market would produce better, more efficient products.

I believe the “hangers on” could be thought of in the same light. They live off of a host tree which will eventually lead to the host tree’s demise. They are able to get more sunlight but will have to tap into the host tree for nutrients. As with social programs, though people can get more “sunlight,” they will be dependant on the host tree which might eventually lead to the tree’s downfall.

coffee, chocolate, and erradication of malaria in developed countries for example

Tuesday, February 24th, 2009

“Life almost everywhere on our planet involves a complex intermingling of resources and energy by hundreds of different species, and these patterns are not static.  They shift and change not only with the vagaries of weather and season but also with evolutionary changes in the organisms themselves.”  If life were replaced with society or economy this quote would have no less truth.  This opening statement in Tropical Nature essentially alludes to the nature of economic and social systems.  When nature is left alone to evolve and transform as it will it cleanses, replenishes, strengthens, and renews itself.  Without the “all knowing” touch of the human hand nature lives, grows, and flourishes on it’s own.
On the other hand, there are incredible uses for nature that when it is left alone are not realized.  Although nature will sustain and even progress on it’s own, it doesn’t mix in perfect proportions to create life saving medicine.  Nature doesn’t genetically enhance enhance itself to ward off natural predators, increase growth rate, or up nutritional value.  These are things that nature does not do alone, it does not need to.  Plants, animals, and other natural things do not occupy this planet alone.  Humans are the intelligent beings over these resources and as such we manipulate these materials to fit out needs and wants.  We are able to take what is natural and will exist on it’s own and control parts of it to better fit our needs.  The same holds true with markets, economy, and social systems.  People, without touching them will exist and sustain life.  The nature of social and economic systems will lead to survival and some degree of success.  We have the capacity and knowledge however to enhance nature and improve our living conditions and life systems.

Interdependency

Tuesday, February 24th, 2009

“The complex interactions – the food webs, dispersal systems, and mutual interdependencies – that thread through the rain forest are the true essence of tropical nature.” And so it is with the global market system. It was interesting to me to draw parallels between the natural phenomenon found in tropical nature, and the nature of the free market. For example, the idea that rainforest plants and flowers have grown and adapted to create alluring colors and attractive patterns to those they are trying to draw another creature. It is the same with those creating goods trying to expand it’s market; they create attractive advertisements to draw customers in. Another interesting part I thought was a quote from chapter10: “To a naturalist who understands natural selection, it is a dramatic embodiment of the notion that adaptation is not a simple matter of efficiency. All is compromise.” I never thought of the natural selection in nature as “compromise;” it was always to me, the survival of the fittest. I felt the same way about the free market system. Those that were weak or could not compete, were over taken by a new product or service, but as partakers of the free market system, that was a risk the participants were willing to take. As Schumpeter said, we all go into the game, knowing we will at some point lose. But it is a compromise. Although we may lose, there is always a new opportunity that we can take advantage of. It is a give and take system, one that involves compromise.

When I try to envision a free market system, I see a tangled, intricate, and extremely complex structure that extends beyond one person or one group of people. Not many things are as complex as this global system, but it can compare to the interdependecy and complexity that is observed in the tropical rainforests of South America.

– Erika

Flower Power

Tuesday, February 24th, 2009

Jamie Wilson– The flowers of the tropics are amazing innovators. Their ability to work out solutions to their problems would make the best engineers envious. For example, Tropical Nature tells how flowers must attract the right pollinators to spread their genetic material across the vast expanse of the jungle. Some use bright colors and sweet nectar, others use trickery and deceit to achieve their means. It is fascinating how a flower can mimic the female of a particular bee species or reproduce the right colors to attract hummingbirds, all without use of sensory organs or machinery. Even more impressive are the ways flowers and plants protect themselves from insects. Chemical warfare has been waged for eons in the jungle, and as insects gain resistance to the plants’ insecticides, the vegetation strikes back with new tactics, such as camouflaging leaves with egg-like spots to prevent butterflies from laying their eggs on the plant.

Humans must be free to innovate as the flowers of the Amazon basin. By unleashing our creativity, problems long considered unsolvable fall with breathtaking speed. Whether in economics (free market principles), in government (the Constitution), or in society, those systems that encourage individuals to think for themselves do the best. In the jungle, those plants that refuse to innovate will always die. If we let people face the risk of failure for their lack of enterprise, our nation will benefit greatly. This single lesson, if learned, would forever bless whatever society that took it to heart.

Survival of the Fittest

Tuesday, February 24th, 2009

In Adrian Forsyth and Ken Miyata’s classic, Tropical Nature, the author mentions Charles Darwin’s vision.  They said: “the ‘endless forms’ that Darwin’s vision brought forth from a static world are not just the limbs and colors of the individual, but the rich and sill dimly understood relationships that thread among them.”  As we look at the progression of society in a Darwinian like manner, we can see how progression has both affected the individual and the relationships in our current economic systems.     

Although William Blake claimed that “to generalize is to be an idiot,” we are forced to do just that as we look at the relationships among the progressing individual in context of their relationships to others.  Throughout history, the average individual has progressed in his or her level of education.  This education allows the individual to be esteemed as a greater asset to the community and thus be rewarded proportionately.  As well, society has made progressions in regards to how we relate to each via technology and other means.  This has made the “relationships that thread among them” more meaningful and easier to cultivate.

We can to generalize by looking at how the same competition that led to specialized animals, also led to the progressions in the economy.  As Joseph Schumpeter discussed in Capitalism, Socialism, and Democracy, we can view how the concept of creative destruction leads to progression.  Similar to biological progression mentioned in Tropical Nature, the economy has progressed in the same way.  Firms or individuals have either adapted or succumbed to Darwin’s idea of the survival of the fittest.  Under normal economic conditions, firms that are failing either go bankrupt or adapt to a new market in which they can succeed.  The economy could be viewed as the evolution of individual’s relations to the whole.