US economic historian here. The idea that the US government funded the construction of the first Transcontinental Railroad and Panama Canal to trade with China is very, very weird.
- 1850-1890 was a period of high protectionism, highest tariffs on imports in the US history.
- A good approximation of share of traded goods in the railroads would be the share of imports+exports in the GDP. Together, exports and imports were not more than 15% of GDP. Source: https://www.nber.org/system/files/working_papers/w4710/w4710..., Table 3.
- railroads transported a lot of agricultural products and also passengers, and were hugely profitable from that. I doubt they would recover any cost by transporting porcelain and whatever other goods China exported at the time.
- "But that answer is wrong, as can be shown by examining historical records of the time." - citation needed.
"(Bonus question: what did the U.S. give to China in exchange for its china?)"
"(the answer to the question I posed above about what the U.S. traded to China in the 19th century is "fur")"
My understanding is that in this period, the most valuable China->US exports were tea, silk, and porcelain. The USA didn't produce anything the Chinese were interested in buying (unlike the Spanish, who had had torrents of silver coming from South American silver mines), and so British and American traders in the Canton System and Thirteen Factories period traded opium from British India to China, which of course led to the Opium Wars, British control of Hong Kong, etc.
I've never read anything about fur exports from USA to China being a big part of 19th century USA trade, but I have read a about mid-19th century booming East Coast and European demand for beaver pelts.
The answer to the bonus question is opium. In particular the Forbes family (not related to the magazine folks) traded about 20% of all the opium sold in China during this period with the other 80% coming from the British East India Company and other UK-based trading houses.
Fun fact, the Forbes family is still one of the wealthiest families in America, they own their own massive private island called Naushon Island right next to Martha's Vineyard. They also have their own family museum in Boston where you can learn about their trading history in Asia which I'm super eager to visit And the patriarch of the Forbes Family today is... wait for it... John Kerry. When Obama made Kerry his secretary of state the Chinese weren't super thrilled, they have a long memory.
Fur exports from North America to China were the major reason for the European exploration of western North America in the 17th and 18th centuries, and into the earliest 19th century. The Chinese elite used fur pelts to line their robes. Sea otter, which has the highest follicle density of any mammal, was the most favored (and I believe imperially mandated for the highest ranking mandarins) and the pelts were incredibly valuable. The Spanish and English exploration of the Pacific Northwest was largely done by trade expeditions which would trade various goods for pelts with the various Native tribes, and then sail to Canton to trade the pelts for Chinese goods. The Russians more or less enslaved some of the tribes of the Aleutians (the Unangan people) and brought them as far south as central California in their trade ships; the Unangan hunters hunted from sea kayaks by day.
Both the North West Company (British) and John Jacob Astor (US) set up transcontinental overland trade networks in the late 18th and early 19th century focused on the fur trade, with China being a primary customer for pelts.
I think in the first few decades of the 19th century, Chinese Imperial fashions changed and much of this system collapsed, although not fast enough to prevent the near-eradication of the sea otter population.
A good pop history of the US Overland component is Astoria by Peter Heller. It is also addressed a bit in more scholarly work such as the Columbia's River: Voyages of Robert Gray, by J. Richard Nokes.
America exported things to China in the 19th century. One random example is many rickshaws used in Asia back then were made in Burlington NJ. New Jersey built up a huge light industrial base over the 17th & 18th centuries as they were the initial colonial iron source. They also had a special surface water high in tannic acid which was key to successful transoceanic navigation. That water stayed clean. So even as those two industries declined they had plenty of timber and steel machinery to make into finished products which were easy to ship on the rivers from there to the ports on the Delaware river.
I don't know about the Panama Canal, but the rest is true (mainly UK).
" ... transporting porcelain and whatever other goods China exported at the time."
China exported Silk, porcelain and tea like the is no tomorrow but did not buy anything. At one point China accumulated a huge part of the world silver reserves, sucking liquidity out of the western economy. Opium "solved" this problem.
It was my understanding that the Opium trade was mainly a GB thing. I was not aware that the US was involved.
You may be interested in this article, "How Profits From Opium Shaped 19th-Century Boston" [0]
> Perkins' ships deposited tremendous wealth in Boston too. Chests of tea, bolts of silk, crates of porcelain and cakes of opium -- which was legal in the U.S. -- were hauled off ships onto giant scales outside Boston’s Custom House. The goods were tallied and taxed in basements and warehouses around Faneuil Hall and Quincy Market. Tax revenue from the trade funded Massachusetts police and fire departments, roads, bridges, courthouses and schools.
That wasn't a new problem, the Roman Empire was stripped of gold to pay for Chinese silks, to the point that several emperors made wearing silk illegal.
If trading opportunities were the answer it would have been reported as much at the time imo. Here is the justification from the U.S. house of representatives about the project at the time, in 1856:
"The necessity that now exists for constructing lines of railroad and telegraphic communication between the Atlantic and Pacific coasts of this continent is no longer a question for argument; it is conceded by every one. In order to maintain our present position on the Pacific, we must have some more speedy and direct means of intercourse than is at present afforded by the route through the possessions of a foreign power" (1)
The reason seemed to be just geopolitics rather than trading opportunities. I'm curious if you know what route they were referring to in this quote that routed through a foreign power? An oversea route maybe? In 1856 we had territory coast to coast already so the caravan routes were within our possessions.
I am not that familiar with the history of railroads, but I will speculate:
- take the railroad as far west as possible, then a stagecoach (expensive, slow, uncomfortable). The land route was created after the Gold Rush: https://en.wikipedia.org/wiki/California_Trail
- ship to Panama, cross by land in Panama, ship from Panama to California (cheaper, slower, risk of disease like malaria)
- ship around South America. Yep, all the way to Antarctica, through Magellan Strait. (even cheaper, even slower, risks from travelling by the sea). This route seems crazy if you look at the map. However, for goods, it was very much in use before Panama Channel was built. Sea is so much easier than land.
I am not sure what "foreign power" this quote refers to though. Panama? Chile? Maybe you could also go through Mexico?
1853 is when Admiral Perry showed up in Japan with gun boats and said "You will trade with us." Whatever the confusing economics were of trade with East Asia, we were not only active over there, we were being rudely pushy about it.
I’ve always wondered if one of the reasons was to protect the Union. Would be a lot easier to prevent states from seceding, and defend US borders when you can quickly transport soldiers (plus equipment, food, etc.) to where they’re needed.
I don't think there is a single answer to "why the US built railroads", but both the railroads and the Eisenhower's Interstate Highway System certainly had something to do with the military needs.
I would imagine so. The CN railroad was specifically built to transport soldiers from eastern Canada to BC to defend against American machinations. (Not for expansion, nope, no way, we didn't want Alaska anyways!)
That seems mostly irrelevant, aside from maybe providing credit. The way in which you "co-opt" it in this piece is not as some questionable hypothesis, whose veracity is unimportant - which seems to be your intent based on this comment and the rest of the actual piece. It's hard to see how you are not explicitly endorsing this hypothesis when you have unquoted lines like "but that answer is wrong, as can be shown by examining historical records of the time." You are not saying that Donald Gibbs thinks this is wrong, you are saying you think it's wrong.
Yes, that's a fair criticism. If I were to rewrite this article today I would try to make this clearer. I think at the time, having recently seen Gibbs speak, I found his argument compelling. But I clearly could (and should) have done a much better job communicating it. Mea culpa.
That's true, but my blog is not a peer-reviewed publication, it is a personal journal, and as such my policy is not to make substantial changes to posts after they're published. I want my blog to be a reliable representation of who I am (or, in this case, who I was) warts and all. Sometimes I'll post corrections and updates, and maybe I will in this case, but geez, it's a twelve-year-old post and this is the first time anyone has brought this up. This probably isn't be the most egregious uncorrected error I've ever made.
I don't think it would be as trivial to fix as you think. I can't just say, "This is Gibbs's position, not mine" because I don't actually know that to be a fact. This happened 12 years ago, and my recollection could be wrong. It's entirely possible that this was actually my position at the time and I just don't remember. So before I can confidently attribute this position to Gibbs I'd have to verify that this was indeed Gibbs's position at the time, and that seems like a non-trivial undertaking.
I'll tell you what, though, if you can find a reference that this really was/is Gibbs's position I will make the correction.
It is trivial. No one's expecting you to find and state the exact current state of the literature, just to clarify that you were overstating the case at the time.
The problem is, you stated it as undisputed fact, when you didn't actually know it to be. Posters are only asking you to correct that overconfident "fake it til you make it" misrespresentation.
"Update: I was going off of my memory of the literature at the time, it turns out I was just parroting what I understood Gibbs's position to be; there are good reasons to believe China wasn't a major factor."
That didn't seem so hard. OTOH, if you're just optimizing for sounding confident and smart, I guess none of that matters. But you've spent at least as much effort complaining about changing as it would have taken to correct it.
Fair enough, I will fix this one way or another. Thank you for your patience. (Just out of curiosity, why do you care about this enough to put so much effort into persuading me? Surely this is not the most destructive bit of misinformation floating around on the internet?)
P.S. I decided to actually look into the actual fact of the matter, and it appears Gibbs's claim may actually have some merit:
"[The] chief promoter of a transcontinental railroad was Asa Whitney, a New York merchant active in the China trade who was obsessed with the idea of a railroad to the Pacific. In January 1845 he petitioned Congress for a charter and grant of a sixty-mile strip through the public domain to help finance construction." [Emphasis added]
The article doesn't specifically say that China was the principal motivation, but in 1845, before the discovery of gold in California, there weren't many other reasons to build a transcontinental railway. And since the railroad didn't actually get built until long after the gold rush was well underway, the actual motivation is probably a mix of different factors. But given Whitney's role, the idea that China was a factor seems like it could turn out to be defensible after all.
Great article. I’ve always been fascinated by the question “where does the value of things really come from?” And this article touches on that. Everything ultimately goes back to the fundamental ways we create wealth, and how much time and energy we expend doing it.
The article mentions No.3 as containing most services which involve transforming goods. I wonder where do personal services like massage, and prostitution come into that?
Or what about friendship or a romantic partner? A husband or wife cannot be converted into money but I’d say having one is to most people a definite kind of wealth.
You might call these ‘emotional services’, and group them in with art and entertainment in general. I would say this is at least different enough from manufacturing to warrant their own category. Edit: rewording
One of the core strands of postwar feminism has been examining how much uncompensated domestic labour women are expected to perform, not just for their partner and their children but also for other family members. Especially in the context of care for the old or sick.
The term "emotional labour" is the more common used one for what you've described as "emotional services".
While this is how the term is misused in some segments of pop feminism, it actually refers to the (usually uncompensated) emotional labor expected of employees in service industries.
It doesn't really make sense in this context unless you only think of the emotional management homemakers do as labor and not all the other stuff they do. You already provided a perfectly suitable phrase in your post: "uncompensated domestic labour"
Eh, I've mostly heard it used correctly in feminist articles. E.g. "The rise of the gig economy is forcing a lot of men to perform emotional labor for the first time."
The most interesting part of emotional labor to me is its connection to tipping culture in America. It's the reason why you usually tip a waiter but not a bus boy, and why you tip the room service person but not the delivery guy. The rule of thumb is: if someone's doing a job where they're expected to put on a smile even if their dog died that morning, they're eligible to get compensated via tips for that additional emotional labor.
Emotional Labour is definitely the better term for it. Thank you for giving me the right term to google.
I wonder how much of the ‘economy’ (in terms of work done and the dollar figures we put on that) is actually a part of this undocumented category.
The GDP-PPP of countries doesn’t take this sort of thing into account as far as I’m aware, but I’d like to know what would happen to those numbers if everyone simply stopped doing unpaid emotional labour. You could get a sense pretty quickly of how much society is undervaluing it.
The reason that the economy is defined in terms of transactions that involve an exchange of money is that such transactions can be quantified objectively. If no money is exchanged, then assigning a valuation to an activity is pure speculation. Of course, this doesn't stop bureaucratic number-crunchers from attempting to do so anyway (e.g. the inclusion of "owner-occupied implied rent" in CPI calculations) but it's not hard to see the slippery slope it creates. Assigning a name to something ("emotional labour") doesn't mean that it somehow becomes quantifiable in any tractable or objective manner.
Wasn't always true in all jurisdictions, and certainly not in 1972 when the campaign started.
Even today there's a distinction between "is theoretically entitled to half the assets by court order on divorce" and practical day to day access to that money.
It comes up commonly in discussions about how poor GDP is as a measure of societal wealth. For example, if we would strike a bargain to do each others' laundry for a trillion USD per year each, the GDP would "magically" go up by two trillion compared to if we would just do our own laundry. However, no additional value is created compared to the current situation.
GDP is not a measure of economic wealth (much less "social wealth", whatever that is) and never has been. GDP is a measure of economic activity. I.e. transactions, spending. But since one year to the next, the structure of a nation's economy doesn't change dramatically, it can be used as a proxy for changes in wealth.
However, the longer time period you look look at between two GDP figures, the less comparable they are. And finally, since different nations have different economic structures, a direct currency translation may be misleading, hence PPP (which is misleading in a different way, but <shrug>).
Arguably this is the situation in Europe, compared to America, as there isn't a comparable tipping culture.
In Germany, there is a word to describe how this has tipped over into a "Service desert" - "Servicewüste", a complete lack of acceptable customer service.
However I think a non-tipping culture is preferable.
I think domestic work does fit into the framework of the article as "Transforming Things". Turning dirty clothes, carpets, dishes, etc into clean things that can be used again; transforming raw ingredients into nice food; shopping is moving things. These are productive activities that increase wealth.
While economics might have some insight into how people value things, humans don't really treat everything as a transaction.
The story that comes up from time to time is a day-care that charged fees to parents who arrived late, and that caused more tardiness, because now the parents didn't feel guilty; now they were buying something.
I think #7 should be modified to "reduce suffering" after which it will accommodate not just healthcare but any pursuit that addresses a person's mind or body. That would include your examples of massage and prostitution as well as others like therapy.
Friendship and romance would fall under #9 as an industry since the goal is to match people with potential friends and partners. I'm not sure the 'emotional services' that you receive from friends, family, and romantic partners should be evaluated as a commodity. To make that clearer, if I manufacture something for a loved one or purchase it while I'm travelling and then transport it back to them I don't measure the value of that action in terms of money and I'd sincerely hope they wouldn't either.
I remember asking in school if you charge more for what something was originally worth, how do you not end up with debt as a net outcome (bucket of money analogy).
For a transaction to create wealth the two parties must collectively be more wealthy than they were before. If they are collectively as wealthy then no wealth has been created. Some criminal activities destroy wealth in aggregate even though money or goods changed hands in a way that superficially resembles a trade.
I suspect though that the distribution of money itself between people can increase net wealth, because it shifts how that money will then be used economically in useful ways. The same $1 in the hands of a minimum wage worker might have different economic value than if it was in the hands of a millionaire because how it is likely to be used in the economy is different. I don't know which is better though, will the minimum wage worker pay for services that are more beneficial, or will the millionaire invest it in a company that creates jobs and provides services? We need both things to happen though to some degree, so maybe the answer shifts with the economic cycles.
If I buy a coffee and drink it have I just decreased net wealth by destroying valuable coffee, or have I increased it by transferring the money to somewhere it can do more useful economic work in downstream transactions?
You make a good point. A realistic definition of wealth is
1. Everyone is better off.
2a. Nothing of lasting value is damaged...
2b. ...*unless* that damage is accounted for and explicitly accepted by all concerned parties, including those who are not immediately involved in any negotiation.
If you use this definition, very few things that are called wealth creation actually create real wealth.
It's actually a stability consideration. Any wealth creation which attempts to grow and doesn't follow this definition cannot be persistent and stable, because damage will always tend to exceed the nominal wealth created.
>The same $1 in the hands of a minimum wage worker might have different economic value than if it was in the hands of a millionaire because how it is likely to be used in the economy is different.
It's clearly better off in the hands of the minimum wage worker. It's funny how people deride governments as central planners when companies and their owners are committing that very same central planning at a smaller scale. The only difference is that the government is much bigger and when it isn't then local governments will lick the boots of the CEOs. When people talk about trickle down they are basically advocating for more central planning. 300 million brains aren't good enough, there is no way they could possibly know what they want, instead some rich millionaire or billionaire gets to tell them what they should want.
>It's funny how people deride governments as central planners when companies and their owners are committing that very same central planning at a smaller scale. The only difference is that the government is much bigger and when it isn't then local governments will lick the boots of the CEOs.
It's not the only difference. Another important difference is that the central planners aren't spending their own money. The way they get money is through taxes - they use the threat of violence to get people to pay, because government has the (legal) monopoly on violence. You can't opt out from paying either.
You're not wrong the large companies have the same central planning problem. One upside though is that people aren't forced to do business with a specific company - they can choose a competitor instead. That's part of why monopolies are a problem. They have the central planning problem and no alternative.
The billionaire gets to tell others what to do because he's paying for it. The central planner takes your money and then tells you what to do. If you don't comply you go to prison.
Also, the central planning problem does become less of a problem the smaller the scale.
Ironically, it's poor people that hoard cash in a can or a mattress, not rich people. Rich people invest it. Even cash in the bank isn't cash in the bank, the bank promptly loans out a multiple of it.
The $1 is relatively more valuable to the worker than the millionaire, but is it more valuable to the economy? I intuitively suspect so, but I don’t know why and I also suspect intuition could easily lead us astray on this.
Government is just an extreme form of monopoly. All monopolies are bad because they undermine the property of a market, competition, from which all the other good things flow.
The coffee would become cold and undesirable of it were brewed and not purchased. The grounds of the beans would lose their flavor if not purchased and brewed.
The land the beans are grown on, though, might be used for other purposes, including to restore natural habitats and thus derisk the whole economy.
Some commodities have more elasticity on the supply side than others and that changes the economics. You only have so many options with coffee, you have to sell it sooner rather than later. Gold bars are easier to store, but also more attractive to steal. Other than that maple syrup heist in Canada a few years back, we don't usually see bulk, perishable goods getting stolen because it's too much of a pain. I think they only did it because of the element of surprise. Who steals syrup??
> I don't know which is better though, will the minimum wage worker pay for services that are more beneficial, or will the millionaire invest it in a company that creates jobs and provides services?
One way of measuring this is by looking at the "velocity of money." [1]
IIRC a dollar spent at a local, family-owned restaurant travels 7x further than one spent at a mega-chain restaurant before . The restaurant owner might use that dollar to pay their cook, who might use it later that week when he gets a haircut to pay his barber, who might later use it to buy a coffee, etc. Because value is created for both parties with each transaction, this is considered much better for the economy (and especially the local economy) compared a dollar spent at McDonald's, where it might just go into a bank account and stop moving.
I don't have the data to back it up (someone here might?), but I'd be tremendously surprised if a dollar put in the hands of a millionaire circulated more than a dollar put in the hands of the minimum wage worker, or if it created more value in the overall economy.
> where it might just go into a bank account and stop moving.
Banks don't make money by storing your dollar in a vault. They make money by loaning it out. They loan deposits out as fast as possible.
People who get the loans don't sit on it, either. It's madness to be paying interest on money just to let it set. They borrow money in order to promptly spend it.
Wealth, as the author defines it, depends on subjective valuations. If I value x more than y and you value y more than x, then I can give you my y for your x and we are both wealthier.
I think it is missing something foundational. People have preferences over both production and consumption. Perhaps Mr A likes to consume X, but hates the work involved in producing X. Meanwhile Mr B likes to consume Y but hates the work involved in producing Y. Rather that A doing without X and B doing without Y, they could team up, swapping chores. Mr A makes Y for Mr B and Mr B makes X for Mr A. That clearly makes them better off, and needs to be on the list of wealth-creation mechanisms.
But it sits awkwardly with the materialistic focus of the catalog. There are two people, producing the same things and consuming the same things, but with two scenarios with different levels of wealth. Ron's catalogue aggregates preferences; no difference in what work gets done? No difference in wealth.
That raises an awkward question about language. Do we say that wealth comes from diversity of preferences? Or do we say that wealth comes from specialization and trade? Sometimes the two mechanisms operate conjunctively. A diversity of preferences does not, in itself, generate wealth. The wealth only comes if, in addition, one does the trading to exploit the diversity of preferences. But that specific kind of trading only generates wealth if there is a suitable diversity of preferences to exploit.
That makes me doubt the value of a catalogue written as linear list. One needs to catalogue the package deals (for example: preference diversity AND trade).
From what I recall, this distinction was the subject of vigorous debate among early economists formulating theories of value, especially among the Austrians. The “textbook” undergraduate explanation is that diversity of productive endowments leads to gains from specialization and trade, but the subjective theory of value perhaps enriches this notion: the “cost” of using up a scarce productive resource may be subjectively determined, which means that two humans who appear to have the same productive endowment nonetheless may have different preferences of what to produce.
Also, your comment about package deals strongly reminds me of stuff I recently read in Thomas Sowell’s *Knowledge and Decisions.
I think the challenge here is that when people think about wealth creation they directly associate it with a net productive activity.
In theory A & B can satisfy their own needs in the above scheme. Or we could have a village where everyone satisfies exactly one other persons material needs. These activities do not result in net wealth creation.
On the other hand if A makes X and X is consumed by B through Z then A has freed up B through Z to do something other than making X. Even then there is an argument to be made that some forms of production are self-limiting in that society as a whole cannot continue to be more productive if everyone is involved in specific kinds of high labor, low scalability activities which do not lend themselves to improvements over time.
This seems like it's covered under 3 and 9a. Mr. A has a demand for X and Mr. B has a demand for Y. Wealth can be created by a combination of 3 (making whatever it is they have a demand for) and 9a (creating a marketplace that matches their demands with whoever can supply them).
Number 3 exhibits the over simplification that I claim misses something important. Number 3 leads you down the path of thinking that society can only get more wealth by more transformation. Nothing in 3 allows for creating wealth by swapping jobs round to make workers happier.
9a does not, in itself, go beyond the Marginal Revolution. In the basic version of marginalism, the demand curve slopes down because every-one, uniformly, has less appetite for extra when they are already well supplied. And the supply curve slopes up as production is pushed to include less fertile land or to refine from less concentrated ore.
Diverse preferences over production and consumption are an extra twist to the story.
The article is a good summary of typical business models! I also learned a lot by trying to answer the (Bonus question: what did the U.S. give to China in exchange for its china?) - fur and opium.
The article lists the following: Move, Store, Transform, Farm, Build, Mine, Health, Research, Information (Supply/Demand, Law, Journalism).
I'm pretty sure this is a comprehensive list. Can anyone think of anything I've left out?
Music and art come to mind as not being "useful information" but still appealing, because they reflect and enhance culture, which brings people together.
As for wealth storage, I heard another list of investment advice being told on a Sunday morning: stocks, bonds, and property.
I winced, because I don't trust the stock market (even though I do believe that some companies have great potential. Government bonds require political stability, which I worry about. Property values are destroyed in war or natural disasters, both of which I expect are likely to occur in my lifetime.
What could we invest in instead? Philanthropy. We could just give it all away! Building guanxi will endure even huge economic changes. Laptops and phones come and go, but Hacker News karma is forever ;-)
This is a great catalogue of wealth creation mechanisms at a societal or global level, but it misses the question of wealth acquisition: How does an individual gain personal wealth? There are, in my opinion, three fundamental categories:
1. Create value (this encompasses most of the catalog)
2. Deplete valuable resources
3. Extract value from a transaction stream
The idealized engineer creates utility out of chaos. This value creation, however, is limited in its ability to cause them to gain wealth: They typically sell their time during which they perform this activity for a salary. A company that employs an engineer and pays him $100,000/year might make many times that amount with the products that he designs.
An oil company, coal mine, or non-sustainable farmer owns some land rights and takes out resources. The things they remove are valuable, but the profit does not come from the creation of the resource - they already existed. This category also applies to other activities which might not actually take a resource away but which harm the commons.
There are some activities which are useful, but where practitioners make far more money than the actual value they create. Someone who organizes and who employs many workers and sells the sum of their output is in a position to profit from the difference in that transaction. Jeff Bezos might hypothetically be smarter, luckier, stronger, and overall able to pack more boxes than any of his warehouse workers, but he's still human - he's not gaining wealth to the tune of more than $13,000,000 dollars per hour while his employees are making $18 an hour because he's creating about a million times more value. Instead, of the three categories, he (and anyone else who makes more than approximately a standard deviation above the median GDP) is primarily extracting more value.
My personal problem is that I take particular satisfaction in creating something valuable. I find resource extraction to be unsatisfying to the point of being demoralizing, and I find leveraging power to extract more value than I think I'm due to be shameful.
> he's not gaining wealth to the tune of more than $13,000,000 dollars per hour while his employees are making $18 an hour because he's creating about a million times more value
He gains that wealth because he took the risk and invested his money into a company that provides a huge amount of value to a massive amount of people. A large amount of people now increasingly value his company highly, believing that it has good future prospects.
He is extracting practically nothing from the company itself or the workers. His wealth increases only because people in the market value the company highly, and he owns a large portion of the company.
The company itself is performing things that are valuable, but he's not doing those actions personally. Of the three types of wealth acquisition, making money from an ownership position is extraction.
If the workers don't show up to create value for him and for the company, they don't get paid. They're creating some value by packing boxes, that contribution might be worth $25/hr, but they've only been able to negotiate $18/hr of that value creation. They're probably handling goods worth tens of thousands of dollars per hour where that wealth is exchanged between end consumers and manufacturers, but they're not charging a commission to the buyers based on a percentage of that transaction.
For Jeff, though, he's not personally adding value to the company in proportion to his personal contributions of labor or ideas or memos. Instead, because of his ownership of approximately 10% of the company, he's a dead weight on transactions regarding the other 90%. He extracts some of the money moving between those other people on the market.
I admit that there's definitely an element of risk that's not well covered by this simple three-category model, but I question whether taking a risk from a position as a VP of a hedge fund (another primarily extraction-based operation) morally ought to have an upside worth $200B.
> If the workers don't show up to create value for him and for the company, they don't get paid. They're creating some value by packing boxes, that contribution might be worth $25/hr, but they've only been able to negotiate $18/hr of that value creation. They're probably handling goods worth tens of thousands of dollars per hour where that wealth is exchanged between end consumers and manufacturers, but they're not charging a commission to the buyers based on a percentage of that transaction.
Or their contribution might be worth $16/hr. Value is subjective. If they agree to work for $18/hr, then that work is worth at the most $18/hr for them. They do charge a commission to the buyers by proxy. Sure the company does some averaging across time, which is valuable to workers and both sellers and buyers on the marketplace. It makes it much easier for everyone involved. Do you really think workers want to get paid based on commissions? Do you think someone moving a box containing something priced $1000 deserves to be paid more than someone moving an identical box containing something priced $1?
> The company itself is performing things that are valuable, but he's not doing those actions personally. Of the three types of wealth acquisition, making money from an ownership position is extraction.
Extraction from what? What does extraction even mean? This applies to any investment or holding any stocks. Investment benefits the company (and I guess the workers and consumers by proxy) by providing resources for companies to develop. It's a two-way thing: investor takes on risk by giving money to company, company promises to give investor some amount of profit in the future. If anything, investment is creation of wealth from risk.
One can legitimately (within the set of rules we give ourselves as a society) possess and earn a lot of wealth without actually creating most of that value. If all the employees - en masse - could not go any more to work, would the company still be providing that huge amount of value? Probably not. At the end of the chain there is always a group of people creating the value through work. That doesn't mean that the wealth is not legitimately earned even if that person -alone- did not create million times more value.
Start out from a very simplified scenario: You do all work yourself.
It's pretty easy to see why this is inefficient. You need to duplicate equipment and experience. You need to travel long distances. You cannot work 24/7. Some work needs more than one person.
Since labor is the fundamental building block of a society you are better off if you can do something with less labor. You let someone else do the work because they can do it in less time than you can.
Jeff Bezos isn't rich because he is creating more value or wealth, he's rich because he is delegating work to lots of people. The CEO of a company is basically a monopoly no matter how big the company is.
I'm debating with myself over whether to write it up. The TL;DR is that I have come to believe that the situation is much more dire than anyone seems to realize. The big short-term problem is going to be changes in rain patterns, which will cause crop failures, which will result in world-wide famines, which will lead to political unrest, which will lead to WW3, and that all this could happen in my lifetime. The really scary part is how fast things are changing. I live in northern California, and the changes we've seen here just in the last ten years are dramatic. People think about climate change as playing out over centuries or maybe decades, but it's not. Things are changing year-over-year. The scariest thing is that even if we cut emissions to zero tomorrow (and obviously that is not going to happen) that would not solve the problem. We have to actually go to net negative emissions to avoid catastrophe. So an actual solution seems out of reach in any realistic scenario. We've taken carbon that nature has sequestered over a period of hundreds of millions of years and released it in a period of a few hundred. That genie will not go quietly back in her bottle.
There is literally nothing that would make me happier than to have someone convince me that I'm wrong about this.
On the issue of rain fall in California, I'm reminded of "However, imagine that California had to get its entire water supply of 35 million acre-feet per year by desalinating sea water at the Santa Barbara price. This would come to $70 billion per year, which is on the order of ten percent of the state's GDP. We'd survive, but it would be a blow to our standard of living, and the arguments about whose fault it was and how the cost should be allocated would be exciting."
which agrees with you about political unrest, but not about famine. Before I read that, I assumed that desalination was only for drinking water, and far to expensive for agricultural use. That is probably about right for poor countries, but rich countries might get through the total failure of the rains without famine (and without WW3).
Significantly lower. Agriculture accounts for about 5/6th of CA's water usage for a sector that generates 2% of its GDP.
To be clear, I love getting my food from the Central Valley, but I also think there are overdue discussions to be had about where the water's going and how much utility we're getting from it.
You're not alone lisper. I thought of another way to grow your wealth to add to your list, risk reduction. If you can reduce the risk of losing wealth, you stand to gain more wealth.
For example, it's great to have crop lands, healthy national parks and coastal cities, but if you don't address risks to this wealth, you stand to lose it. When you lose wealth, you also forfeit gains you might have otherwise had from them. So taking care of your downside also adds to your upside.
I sometimes have trouble with the idea of “creating wealth”. I am not sure if people like Bezos or Gates have created wealth but instead have managed to funnel wealth into their pockets. They may even have destroyed wealth by suppressing competition and potentially better ideas.
It seems the real wealth creators are inventors and scientists who create new things . From then it’s more if zero sum game between different businesses.
It's all about how you define "creating wealth". So indeed in todays liberal capitalist society we might say that an investor who's share trades were ultimately a zero sum game is "creating wealth" but a mother raising a child, which is hard work, is not.
> Wealth is a measure of how much stuff people have that they actually value for its own sake. Food, housing, clothing, shelter, and artwork, are all examples of wealth. Money, by way of contrast, is merely an accounting mechanism that humans have invented in order to facilitate trade.
I think this is pretty accurate, except the description of money as "merely" an accounting mechanism. Trade is facilitated through a variety of accounting mechanisms, and money is obviously an item in this list insofar as it is the unit of account for economic entities that maintain accounting books. However, money is also a concrete economic good in and of itself, subject to forces of supply and demand much like any other good.
The author correctly states that wealth is derived from subjective valuation, so money could be seen as something like the "limit" (categorically) of wealth, which aggregates the value judgments over all (person x good) combinations.
> > However, money is also a concrete economic good in and of itself.
Just playing devil's advocate... if you're stranded on an deserted island with a suitcase full of US $100 bills or perhaps flash drives with bitcoin in them, does that provide significant concrete value to you in and of itself?
Same question, but this time you have "food, housing, clothing, shelter, or artwork (e.g. some songs loaded in your out of range phone)"?
There are a lot of concrete economic goods that don't have value on a deserted island. Iron ore, gold, or really any natural resource that requires a lot of processing will be useless on a deserted island.
In fact, the entire point of the "move things" category in the article is that things have different value in different places.
Gold surely has value as it’s the most malleable of the metals. Having a gold cooking pot is a vast increase in wealth on a deserted island compared to no cooking pot.
If you put a bit of imagination a lot of random things can have value in an extreme enough situation.
>However, money is also a concrete economic good in and of itself, subject to forces of supply and demand much like any other good.
There is an infinite supply of money out there for very obvious reasons. The USD is primarily a unit of account. The store of value function has been delegated to debt. The reason why debt stores values is that people promise to provide value in the future. Every asset meaning every dollar has to be backed by a liability meaning a dollar of debt. The reason for that is quite simple. The dollar has no inherent value, therefore the net worth of the dollar must be 0.
The medium of exchange function isn't provided by only the dollar itself anymore. Nowadays people use a wide variety of payment services ranging from bank accounts and credit cards to Paypal and the lightning network and of course, the good old dollar bill is providing a offline payment service.
The supply of money is unbounded because the amount of promises we make and the economy we can create in the process is unbounded. What is in short supply is labor.
Simply saving money creates no net real wealth in the economy because the money that has to be saved has to be created first through debt. Instead, net wealth is created in the real economy by the borrower who is using the money for an investment. If there aren't any borrowers willing to get into debt (=demand for labor is low) but people keep saving their money (=they increase the supply of labor) then the interest rate has to fall to balance the demand and supply for labor on an individual level. If the interest rate is low or negative it means there are lots of people who are working but do not intend to consume or invest the fruits of their labor and it also means there are lots of people who cannot find employment opportunities that earn enough to cover their own consumption.
Fasten, widen and simplify communication space.
Entertain communicants for free.
Boost individuality and ego of communicants or tweak according to demand.
Sell the inflated souls to the highest bidder.
> There is one major category of wealth-producing activity that I just thought of that I did leave out. I'll leave it as an exercise to see if anyone can figure it out :-) I'll post it in a couple of days if no one gets it.
That was over ten years ago, I don't see a followup.
Entertainment and distraction? A majority of theater, music, and art provide a distraction without providing knowledge or information. For the record, I think that is good. We need a break from our lives.
> But historically, the most reliable and the most socially beneficial way of making money is to create wealth.
Is it? It seems almost universally true, historically, that those with the most money are those which create the least value: nobles, landowners, heirs, etc.
There are definitely a lot of rich people that don't do anything useful, but looking at the Forbe's list, it's populated by business people who, regardless of the usefulness of their businesses, have worked a lot. (https://www.forbes.com/billionaires/)
It's a guide for the people running Charlemagne's holdings. Naturally the nobility aren't doing the hardest work, but they're responsible for at least overseeing the creation of a lot of wealth if they want to keep their position.
The question wasn't how hard they worked, but how must value they created. As a trivial example, digging a ditch and then filling back in has work X and value 0, wheras digging the same ditch and then digging slightly further to connect it to a river and provide convenient water for irrigation has work X/2(+1) and value 1 (in some arbitrary units). Forbe's list is populated by people whose work ultimately consists primarily of creating problems for others to solve.
That seems obviously untrue as well. The business world runs on Excel. Before Amazon, shipping so cheap and so fast was unimaginable, not to mention being able to find anything, anywhere. SpaceX is making getting stuff into orbit possible again after a very long time. Despite the fact that ads suck, Google has created a ton of value in my life. All of this stuff is far from perfect, but it's definitely value.
(To take the most straightforward example.) Bill Gates did not write Excel. None of the programming or other actual, object level work involved in creating the value of Excel was done by Bills Gates, personally. It was done by programmers and other employees at Microsoft. Not even much, and not "obviously" even any, of the meta-level work of separating those who benefited from Excel from their money (nominally, and to a limited extent actually, to support those who did the object-level work) was done by Bill Gates. The question is what value Bill Gates produced, not his employees.
Ok so he wrote an operating system. And then you'll say that wasn't actually valuable, leaving aside the question of whether Microsoft would have existed at all without him.
They have not worked hard to earn their billions so much as used their power and influence in a clever way to suit their own ends. Most wealthly people also started with an inheritance.
Most wealthy people do not end up with billions, and most of them end up with less than their parents had. While I don't disagree that they've used power and influence to suit their own ends, there's practically not a single person on that list who isn't a workaholic. I don't hold any of these people in high esteem but in my opinion, it's silly to suggest they haven't worked hard. Of course, they haven't worked a million times harder than anyone else, but they have "worked hard to earn their billions."
>I'm still a little unclear what this has to do with the power being cut off, but I'm told be reliable sources that yes, this is the law in California. It's almost enough to make me want to vote Republican.
I don't see anywhere that Automation fits into that list. We can create value by automating many of the other items on the list. Relevant today is the automation of serving information (web developers!), but automating transformation (factories) was a game changer for industry.
Also,
> Google makes money via 9a, not 9c.
I don't think that's true. Google makes most of its money on ads, not market making. While there is an aspect to ad serving that is market making, I think it's fair to characterize their primary revenue stream as money-for-eyeballs, which is very much monetization of Information.
I agree, but would add the importance of #3. You can't transform/manufacture things without some process for doing so (or doing so more efficiently or effectively than was previously possible), and the physical means to this itself needs to be created/manufactured. It's 'tooling' and there's a kind of chicken-egg thing going on. Also related to the distinction between algorithms in the abstract sense and the infrastructure (software or otherwise) that enables their implementation.
I think automation could probably be considered a subset of each item. Automation is a process not really a product. At least in this context the fundamental unit of wealth is the value to people. Automation per se doesn’t really have value to people, it’s the fruits of that automation that has value. If use a robot which uses automation to make a car, then the car is the thing that has the ‘created’ value.
If I write an automation program for some computer task like sending people information that they want, then it’s really the info that drives the wealth creation in this context. The Automation is just a means to an end, not the goal by itself.
Having said all that, I think Automation is absolutely the main driving factor in the massive acceleration in the amount of wealth being created. What will be really interesting is if we ever get to a point where whole industry verticals are entirely automated. If there is no human input or labour involved in mining, manufacturing and distribution of a product, especially if that product is only used by other autonomous system; what value can we as humans place on that item? Does it add value in any tangible way?
> If there is no human input or labour involved in mining, manufacturing and distribution of a product, especially if that product is only used by other autonomous system
Creation, energy and maintenance of machines are not free. People who provide this things to site need money too, so it adds to price of mined items. Then moving and transforming/smelting those things costs too. Watch springs are several orders of magnitude more valuable per kg than raw mined iron.
I think Google does make money via 9a based on who pays for it. Consumers don't pay for the information. Advertisers do pay for matching their ads to likely buyers.
Since this list is so broad it includes pretty much any professional activity, as a counterpoint, compare to Adam Smith, who had a lot more rigorous definition, and for who wealth creation can only happen when labour is applied to the production of useful commodities, or in the market making for such (crudely summarized).
e.g. "curing disease" did not create wealth. Instead, he put physicians on the same level as house maids and clowns, in that they are unproductive in the strictest sense (although still necessary of course).
I think the main category the author misses is providing experiences. He lumps "novelist, screenwriter, composer and choreographer" as creating information that is "useful in and of itself", but I think that's a real stretch.
Experiences can be directly subjectively enriching to the consumer even if they don't provide any "useful information". By "useful" here, I assume the author means something like "able to be used to produce value later".
If I take you on a boat to watch the sunset, I have given you an experience that has value, so I have created some intangible wealth. But I haven't given you anything you could reasonably categorize as "information". It's not like you didn't know sunsets were pretty already.
I think this category is important because in many ways it is both the most fundamental and also the most unlimited. Ultimately most of the other categories of wealth exist to eventually provide experiences. Why do I want things? So that I can experience having or using them. Very few material objects in our life exist for purely utilitarian reasons.
But the real magic of experiences is that they can provide value without using anything up. When I take you to see the sunset, the sunset is still there for others to see too. When I read a book, the book is still able to be read by others.
This is important because as we get closer and closer to using up the resources of the Earth, it's good for us to focus on intangible experiences that don't actually consume anything.
>> It's important to keep in mind that there is a distinction between wealth and money...
I think this goes astray here. I think the operative distinction is between "wealth" in the abstract "wealth of nations" sense and the aggregate of wealth in the "net worth" sense.
The first definition is pretty closely related to value. The second is more closely related to the value of assets. If real estate, shares, bonds and such have a high market value then we have more wealth in the "net worth" sense.
The gross market cap of the education sector is not high, but it does generate value, for instance.
A long time ago I tried to categorize wealth mechanisms like this. There are tons of concepts, depending on how high or low you are generalizing.
For instance, providing something only the wealthy have to the masses (private drivers, smartphones, etc)
I found on the highest level everything could technically be boiled down to "paying money for a product or service to remove uncertainty".
(Buying a hamburger so you don't have to make it yourself, insurance, everything)
I am surprised education does not figure more prominently in 9. In a sense all wealth is created through education (a newborn child knowns nothing about "wealth").
NB: Education is not just the "provision of information" or "help with figuring out the rules" (although there are aspects of both).
I would be more inclined to do so if you hadn't opened by accusing me of supporting white supremacy. I consider that a very serious charge. What did I say that makes you think I deserve it?
I didn't say you consciously support it. I said your take reflects it.
I suspect your definition of "white supremacy" is "the KKK". For me and many others, it has a much broader definition: White supremacy is the Eurocentric/racial analog of patriarchy. As with patriarchy, it is a deeply integral part of the dominant culture. It is part of the social and historical milieu within which we all came into being. See also https://www.pym.org/annual-sessions/wp-content/uploads/sites...
One doesn't have to be a misogynist or even a man to view things through the lens of patriarchy, or fail to realize one's perspective is so narrated. Likewise you can have black friends, participate in BLM protests or even be black and still have a white take on things ("white" here refers to culture, not skin color), because that is the culture that dominates, the economic system that dominates, the political power that dominates.
Patriarchy, white supremacy, capitalist and heteronormative culture is woven into the fiber of even my own being. We all must work to unravel it.
I haven't watched your documentary on homelessness, but obviously you are a thoughtful bloke. We could converse over email if you'd like. See my HN profile.
> For me and many others, [white supremacy] has a much broader definition.
I call this the Humpty Dumpty theory of language [1]. The term "white supremacy" already has a well-established definition: the belief that white people are genetically superior to non-white people and therefore white people should dominate society [2]. I would give you the benefit of the doubt that you were unaware of this, but that is manifestly not the case. You just decided to use your own definition, and to do so tacitly. I think that is reprehensible. Imagine if someone called you (say) a rapist and then tried to justify that by saying, "I suspect your definition of rapist is different than mine." Yes, my definition (a.k.a. the dictionary definition) of "white supremacist" is different than your postmodern SJW version. That doesn't make what you said any less pejorative.
And yes, I'm a white European male living in a culture that has been largely shaped and is currently still dominated by other white European males. And yes, there are a lot of white European males out there doing all kinds of fucked up things. There's not much I can do about that. If you think that I should be ashamed because I have a Y chromosome and my skin is white then you are no better than the people who say the same thing about women and black people.
> We all must work to unravel it.
Why must we do that? Personally, I think it's enough if we treat our fellow humans with respect and judge them by what they say and do rather than their skin color or gender or ethnic and cultural background. But apparently even that is too much to expect in some quarters.
It doesn't seem to make sense to continue our discussion given your angry and defensive reaction. You even ignored the second half of the dictionary definition that YOU supplied, the very definition you used to dismiss the words that you put in my mouth, strawman words, not once showing you even tried to understand what I am actually saying. And no, you don't understand, but you don't want to understand. You would have to set aside your defensiveness and be open to considering uncomfortable thoughts.
On the other hand, as the other commenter pointed out, you wrote "Conservatives Can't Handle the Truth", so you very well understand how ego and our instinctive reactionary defense of our self-image are barriers to understanding truth.
And in "Can facts be racist?" you clearly understand that there is a systemic problem. What you are resistant to accepting, despite your liberalness, despite caring enough to write anti-racism blog posts, is the possibility that you have thoughts and perspectives and even values that still reflect the culture behind the "white nation, founded for and by the white man". If such a man as Abraham Lincoln, considered our greatest president, the man who led us into civil war against slavery and wrote the Emancipation Proclamation, was a white supremacist[1] (using your narrower definition!), is it not possible that you are not one, but nonetheless harbor at least remnants of such a mode of thinking? Is it not rational to think that someone who benefits from said system and culture is less inlined (if not inclined in the opposite direction!) to be aware of their own blindspots in this respect?
I in fact live in Bedstuy, one of the neighborhoods you mention in the latter blog post. And every year there are more and more white people moving in and more black people being pushed out. All these white people moving in are liberals, anti-racist and no doubt proudly tell their white friends that they live in a black neighborhood. But yet again white people are taking over something that they once rejected as undesirable and segregated blacks within, because now they consider it desirable (and profitable!). This isn't integration (that would be beautiful!). Integration is black and white segregation melting away as they move into each other's neighborhoods. That's not what's happening. White people are spreading outward, pushing black people further out. They don't send their white children to go to school with their black neighborhood children, instead sending them to white private schools. Imagine what that does to the psyche of a black child! The whites moving in don't patronize existing black businesses. They go to all the new white-owned upscale cafes and restaurants popping up, to expensive for most of the black people, and too much a betrayal for those who can. So you see a pockets of white people in white-tailored restaurants while black people eat at black places. NOT integration. The outspoken younger generation of black people here call these gentrifiers "colonizers", because they invade and occupy, same as before, only now using the tools of capitalism rather than guns (though we all know the latter makes the former possible). They also call it a manifestation of white supremacy. I call it "liberal white supremacy", to shine a light on the fact that scapegoating conservatives is just a way for liberals to push off all moral responsibility as the continue to benefit from the system.
My offer of a good faith discussion remains, but as I said, if your primary drive is defensiveness, it won't go anywhere useful, and will if anything push you toward those conservatives you criticize.
In any case, Peace.
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[1] There is a physical difference between the white and black races which I believe will forever forbid the two races living together on terms of social and political equality. ~ Abraham Lincoln, during the Lincoln-Douglas debates in 1858
I hope you reread this exchange when you are not in defensive mode, and see to what degree you made arguments against words you put in my mouth instead of what I actually said, not to mention falsely charging me of "tacitly" and "reprehensible"ly sliding in a made-up definition of white supremacy, which your own link points out is a widely accepted meaning[1]. At the very top I said my criticisms were of your take, not your skin color, nor even of your intent. I took pains to point out we are all subject to this problem, regardless of skin color.
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[1] white supremacy
2. the social, economic, and political systems that collectively enable white people to maintain power over people of other races
… [William] Kelley turned his considerable intellect and imagination to the question of what it is like to be white in this country, and what it is like, for all Americans, to live under the conditions of white supremacy …
— Kathryn Schulz
When I said, "You got that right" I was not just being snarky. I really do think you got it right, and that it doesn't make sense to continue this discussion. The reason I think this is not because I'm angry at you. I have productive exchanges with people that I'm angry with all the time. The reason I think that it doesn't make sense is because I think your thought processes are so deeply and fundamentally broken that it would take vastly more time and effort to fix them than I'm willing to put into this.
Case in point: the very first sentence you wrote to me was:
"This is such a patriarchal/capitalist/libertarian/white supremacist take."
Either you intended this to be pejorative or you did not. If you did not, then you need some basic remedial training in the use of the English language and the subtleties of human communication, and if you did then it is disingenuous of you to get on your high horse and mainsplain to me why I should not be angry.
Another example: yes, it is true that "white supremacy" has two definitions. But you did not use the phrase "white supremacy", you used the phrase "white supremacist", which has only one definition [1]: a person who believes that the white race is inherently superior to other races and that white people should have control over people of other races.
Even if I give you the benefit of the doubt and infer a different meaning of "white supremacist" based on the second definition of "white supremacy" that merely renders your statement non-sensical (rather than mistaken and offensive). What could it possibly mean for a "take" to be "white supremacist" on the second definition? Yes, there are social, economic, and political systems that collectively enable white people to maintain power over people of other races. That is just a fact. That I acknowledge this fact does not mean that I'm happy about it or that I endorse it or that I don't think something should be done about it. You might as well have said "This is such a Newtonian/thermodynamic/Darwinian/round-earth take" for all that either statement could contribute to a constructive discussion. The quality of your argument is on par with flat-earthers and lunar-landing denialists. (Actually, yours is worse, because at least with the flat-earthers and LLDs I don't have to wonder what their thesis is.)
One final word of advice: I have no idea what you are hoping to accomplish here, but I suggest you try to achieve clarity on that, because whatever your goal is I'm pretty sure you are not achieving it.
You are wrong in a very classical, meaning half of earthlings believe this misconception.
Trade can make both sides richer. Some would say any voluntary trade makes both sides richer, but that depends on your definition of voluntarism and exploitation of someone's weakness.
I disagree (again) because knowing something sells for a lower amount in X but sells for higher in Y is classical information arbitrage and opportunity cost.
This is such a patriarchal/capitalist/libertarian/white supremacist take.
What about the birthing and raising of children? What about the schooling of children? Of course in a man's world this is never assigned any value.
What about slavery? America was built on chattel slavery, indentured servitude, and lessor degrees of coercion and exploitation that leverages asymmetries in wealth and freedom. While the first two are technically outlawed, the latter thrives as strong as ever. If coercing resources out of the ground (#6) is a wealth creation mechanism, isn't coercion of labor out of human bodies to do the actual work of #1-6 another wealth creation mechanism, even if it's one we don't want to admit, or at least talk about honestly?
What about Rentier Capitalism[1]? Is it something we want to avoid talking about?
- 1850-1890 was a period of high protectionism, highest tariffs on imports in the US history.
- A good approximation of share of traded goods in the railroads would be the share of imports+exports in the GDP. Together, exports and imports were not more than 15% of GDP. Source: https://www.nber.org/system/files/working_papers/w4710/w4710..., Table 3.
- railroads transported a lot of agricultural products and also passengers, and were hugely profitable from that. I doubt they would recover any cost by transporting porcelain and whatever other goods China exported at the time.
- "But that answer is wrong, as can be shown by examining historical records of the time." - citation needed.