Pro Commerce

Uncle Dick and Carol

Dick was married to my father’s sister. Carol was a San Francisco supervisor.

Uncle Dick had his own advertising agency and hired me to work when I was in college.  It lasted a week. One job he gave me was to write radio copy for a Japanese restaurant.  Part of the copy I wrote was “Savor the cloying aroma of the succulent sukiyaki.”  Dick fired me for that sentence and he was right.  Dick didn’t live long enough to read my best selling book, 25 years later, Marketing Without Advertising. (Co-author was Salli Rasberry.)

Fifteen years after I was fired, Dick and I were still on good terms.  By then I was a well known hippie business leader and Dick was tight with the San Francisco police crowd.  I ran into him at Sansome and Bush around lunch.  Dan White had recently murdered Mayor George Moscone and Harvey Milk, both friends of mine.  Dick asked what punishment I thought White would get and I said ‘The electric chair.’  Dick said “No,” the deal had already been worked out by the DA. Joe Freitas and White’s defense lawyer, Doug Schmidt, agreed to an 8 year sentence.  Dick probably got the insight from his friend Doug Schmidt. The sentence turned out to be 7 years and White got out after 5 years. (photo George Moscone)

The trial was in late May. I was dating Carol at the time, One of six women I was dating then. Carol was a supervisor.  She had gone to the University of Chicago, which we had in common, she was very bright and lots of fun.  As a supervisor Carol carried a pistol on her all the time, on the right front of her belt. Sexy from my point of view. She drove a pick-up truck and usually wore pants with a belt.

We had a date the day before the Dan White trial started and I told her what Dick had told me.  She immediately told DA Frietas and the judge she wanted to testify.  Which she did.  

She testified that on his way out of City Hall, after killing Harvey, he went into Carol’s office to kill her. She hid under her desk.  Like most people, even with a gun in her waist, she hid and he left.

Frietas lost his reelection later that year.

I’ve never told that story in print.  Most of it can not be found anywhere else.

On my blogs I’ve told what Margo St. James told me. She repeated what Dan White’s two close police buddies told her.  They had coffee near City Hall with Dan before he went to crawl in a window in the basement of City Hall. He came by to talk to them after the murders and told them what he had done. He asked what he ‘should do next.’  They told him to go to the nearby St. Mary's Cathedral and confess to a priest and then call their friendly police detective.  (photo Harvey Milk)

The context, that we all knew at the time, was that the police were furious at the Mayor for appointing Charlie Gain as police chief. Gain was a reformer and an outsider in a very inbred police force. To keep from being murdered by other cops,  he never carried a gun and had all press conferences in front of a U.S. flag, a California flag and the San Francisco Flag.

You now know more of this specific history than anyone else alive.  There is one more silent piece no one knows.  On the night before Mayor Moscone was shot, my close friend Bob Gnaizda visited him to make sure he didn’t reappoint Dan White to the Board of Supervisors because the legal court order to integrate blacks into the hierarchy of the police department still had to be voted on by the Board and White was sure to vote against it. Bob told me about that visit only two years ago, shortly before he died.

Big Inflation Ahead

The current annualized inflation of 8% is going to continue to rise.

I identified the Biden-caused oil/gas price rise as the primary cause of the current global inflation which will undergird about eight years of inflation as the consequences play out in steel, cement and fertilizer. The price rise will work its way through the economy with a ratchet effect in wages.

Now we see the Phillips curve kick in.  The Phillips curve isn’t me, it was William Phillips who showed a statistical correlation between rising labor scarcity and rising inflation.

We currently have a very historically low unemployment rate which is labor scarcity.  This will begin kicking in to the inflation scenario.  The labor scarcity is due to three primary factors.  

• The first and most important is that many workers dropped out of the labor force during Covid-19 when they decided that the service industry was too precarious and sought training and opportunities in other fields.  
• The second was a sheer drop out of the labor force with the realization that the American work standard is too intense for comfort and easier living was a reasonable goal. 
• Third is the close income competition created by government largess that means middle-income workers saw that non-workers were earning nearly as much and decided to join the non-workers on the dole.

Inflation will be increasing.

Old Man Observations

I turned 84 years old last week.  I love it. No one has expectations of me. Not even simple repairs or clean-ups.

The greatest thing has been my recent insights, the product of having lived a fully engaged and enjoyable life.   I get to read, meditate and think, all day every day.  What an incredible blessing!

Even the most horrible consequence of old age has its silver lining. I’ve had six close friends over the past fifty years. Wonderful close friends who are all dead now.  Their departure has provided one of my greatest insights.

We aren’t homo sapiens, we are homo slow-to-learn. Very slow. We are not as smart or wise as  many animals; not even close.

We demonstrably had the greatest invention possible, fire, for more than a million years and the hands to use it.  A million years and we were barely more than a crude tribal minor mammal for all but the last five thousand years and only a small number of us became sapiens for the past two millennia. A fraction of the time (½ of 1% of our history) we were upright mammals and we did nothing noteworthy.

Only three things changed all that for the tiny number of we homos who created the modern world and the small number of us that use the modern world.

One, is the ability to read/write which gives us the ability to share, store and accumulate knowledge.  It isn’t an exaggeration to say that it was ‘God’s chosen people’  who did this first in a functional way.

Two, was the ability and willingness to cooperate with other homos who are not in our tribe and especially people who seem different than us.  For that we owe gratitude to the fortuitous evolution of urban areas and commerce.

Three, was and is the willingness to make empirical observations, test those observations and consolidate them into a coherent cluster.  Only a tiny number of people can do this, even today.  The others rely on magic, theories and fantasy. 

Four, we are primates who are unable to learn after we reach adulthood (age 23).  A few of us, 1 out of 300, can learn in adulthood.  In some homo societies, others can learn from the infinitesimally small number of people that learn in adulthood. 

1.

It is accurate to think of humans as stupid louts with small brains and limited memory capacity.,

That only changes when we can readily access the knowledge of people around us.  And that only changes when we can access the accumulated knowledge of the people around us.  The word ‘accumulated’ is only meaningful with the advent of reading/writing and the associated skill to debate and study.  

This I learned from having a close circle of friends (now gone) to use as information sources.  The cluster of us was my functioning brain and functioning memory.

2.

We are tribal animals. The ability to have friends outside the tiny insignificant cluster of tribal members is necessary to learn a meaningful amount about the world around us.

For this we are fortunate to have evolved trading cities where diverse humans are able to congregate and share knowledge.  Bless commerce.

3.

Most humans have their minds and memories filled with stories, magic and theories of the world that are fantasy.  Only a few humans have a significant knowledge base that is empirical. Empirical means tested and verified by repeated testing in the world around us. The difference between engineering and theory.  The difference between Hamilton and Jefferson, between Descartes, Kant and Isaiah Berlin. 

4.

My only source for this is the ‘Hundredth Monkey’ stories about Imo, a macaque, on the Japanese island of Kojima.  Only the young macaques were able to learn new behaviors.

‘Thinking’ is not what most people refer to when they use the word. Thinking is not choosing the right clothes to wear today or the best place to put the new air fryer. Thinking is taking two conflicting ideas in your mind and synthesizing a novel concept that fuses both together.  For example, theory and religion are overlapping terms.  Recognizing that is ‘thinking.’

Three New Insights

Three New Insights from the Covid-19 pandemic shutdown.

1. Oil/gas basis for inflation.
2. Big business vs under 50 employees and productivity.
3. Accomplishments in the new digital world and digital communication.

1.

The president of the United States with one stroke of a pen, in the White House, caused a severe inflation for the entire planet that will last eight years or more. 

At the same time the act revealed that economic theory is stuck in the 19th Century.  The prime builder of commerce before the year 1850 was manual labor supplemented by animal power. That shaped economic theory. After 1830 coal and wood heated water to generate steam which added new power to the commercial world. By 1900 the addition of oil and gas added geometric levels of power to commerce.  In the 20th Century oil/gas became so important that it was the substrate of all commerce.  Economic theory never noticed.

By 1973 a Coalition of oil producing nations led to an oil embargo which in turn disrupted all forms of commerce. This connection was incorrectly understood by economic theorists.

2.

A mild virus caused a pandemic in 2020 that infected the world.  In the U.S. and other major commercial nations a large swath of retail business and services were closed for many months to a year.  The GDP of the U.S. continued to grow while businesses with 50 employees or less were disproportionately closed.

This shows that economies of scale are the major, primary and possibly the only real source of economic growth. 

3.

The same pandemic led many employees to carry on their work at a distance away from the administrative core of the business.

This shows the extremely well developed level of communication made possible by (a) the recent digital and communications revolutions and the (b) insignificance of physical interaction between employees of modern commerce.

In a place like San Francisco, at the upper end of digital productivity, nearly 70% of office space was and is unoccupied.  It turns out that face to face physical contact is not necessary for the conduct of most business.  The primary need for in-person contact is for promotion within the hierarchy of the administration, little else.

One is an astounding discovery about the centrality of American oil and gas to world commerce. Two are more astounding pieces of new understanding of commerce that was provided by a global pandemic.

Eureka! Two of Two

An expansion of my previous blog.

Humans are not much smarter than other animals.  Me included.  Even in several hundred millennia, we have only created the modern world in the last quarter of a millennium.  Humans must cooperate to create anything and must accumulate knowledge.  Many institutions keep that from happening.

The ‘we’ of this modern creation is primarily one nation.   One nation out of nearly 200 in the U.N.  Only 25 of those 200 nations can create a bicycle without importing parts of it. One nation has created 90% of the technology of the modern world.  Israel is the second creator and only recently and Japan is the third.

So how did this happen?  That has been my lifetime quest for an answer.

The cargo cult piece of the puzzle was recent.   Humans seem to want to imitate the abundance of modern commerce.  In the Polynesians and Melanesians which saw the incredible wealth of the Japanese and American militaries that were brought with planes and airdropped came incomparable abundance.   The natives tried to reproduce the airplanes, radios and everything they saw out of bamboo and jungle products, expecting the gods to be delivered to them in abundance again.

Most of the humans on the planet have tried to do what the Polynesians and Melanesians did; they copied the behavior they saw and in most cases they imported the components of the modern world that they wanted.  The Bedouin tribes in Abu Dhabi and Dubai had oil/gas to buy and import a simulacrum of the entire modern world made of steel and concrete instead of jungle materials.

Now, my other question has been ‘What made the modern world possible?’  More accurately, what kept other humans from creating the modern commerce that created the modern world?  The question really is what institutions kept cooperation from happening?

That is what is in my Eureka email.  First empirical knowledge has to be accumulated.  Otherwise each separate human is pretty useless. 

We Jews gave that to the world with writing, debate about the empirical world and multi-generational education.  

Second, cooperation with a very large group of diverse people was needed.  That was what modern commerce allows.  The employees of my morning coffee shop are from every nationality, every religion and every other human distinction.

How did we get modern commerce?  That is what I outlined in my blog.  The tribe had to be destroyed, the hereditary elite had to be destroyed and empiricism had to be elevated to its central role in human knowledge systems.

Eureka! One of Two

I have put the last two pieces together in the puzzle.  

The puzzle is how an animal as limited as humans can build such a beautiful and complex society as we have today. The two pieces I have just found are ‘cargo cult’ and ‘empiricism.’  Other parts of the puzzle I have found during my life and can be found in my eleven books and my blogs.

Let’s begin with the ‘cargo cult.’

I have been baffled by the existence of Dubai and Abu Dhabi. How can a Bedouin tribe build a modern functioning city?  The answer is a cargo cult with oil/gas, steel and concrete instead of bamboo.

‘Empiricism’ comes from Yoram Hazony, who figured out that what created the modern dichotomy between Jefferson and Hamilton was that the former was a platonist and the latter was an empiricist.  That is the missing piece in the evolution of the modern world.

The modern world was created by modern commerce,  I have spent my life trying to understand how this highly improbable system came about.  Now I know.

First came the Jews who focused an entire tribe on the idea of a unitary god.  That created a coherent group who had to debate and understand how the world around us could have been created by a single entity. The Jews mastered writing and debate which elevated empirical wisdom and recording of that wisdom along with education to create an historic chain of learning.  We Jews have been the social lubricant of empiricism throughout history.

Second came the European Catholic Church which slowly, over a millennium, enforced the idea and institution of a marriage that demanded the isolated and efficient nuclear family.  Tribes could not create the global world of colonialism.

Third came Columbus, Kepler and Galileo, who used empiricism to begin the discovery of the world around them.  Immediately following these great technologists was the Dutch Republic, the first home of Protestantism and modern global commerce. 

Fourth were the pioneers of the empirical world, mostly in England after the Dutch invaded it.  Newton, Adam Smith, Priestly and James Watt.

Fifth was the creation of the modern commercial national structure by Hamilton and Franklin.

Sixth were the Colonial world, the Masonic Order and the Great American West that allowed for the destruction of the hereditary elite and the freedom of the other siblings to emerge.

Seventh, the discovery of Bessemer steel and oil, the key physical ingredients of the modern world.

Eighth was World War II, which caused the collapse of the American hereditary elite in 1960 that in turn made the spread of the modern innovative corporation and meritocracy a global reality.

Now I have it.  That is the modern world.  Just add the cargo cult and we see how the world of modern commerce became established.  Totally fortuitous.

The world of Modern Commerce, the world that I discovered, has allowed countless individual small-minded humans to cooperate and share their small units of knowledge to create magnificent technology and complex institutions.

Let us hope, that my greatest fear, that the world of Plato, Descartes, Jefferson, Kant, Marx and the Wokies will not destroy what we have accidentally created.

Victor Davis Hanson

Brilliant paper on America's decline by Victor Davis Hanson.

Great Uncle Abe on Global Warming

My great uncle Abraham Lincoln Phillips was born in Petaluma California in the late 1870s.  Sometime in his 20’s uncle Abe, whom we called A.L, became a Christian Scientist.  As he explained, “Science is very successful.”  

He remained a Christian Scientist faithful until he was 92 when he had prostate surgery. 

I bring this up because I never cease wondering how more than a billion people worldwide can believe in Human Caused Global Warming and the consequent Armeggedon.  After all, the temperature of the surface of the earth is 57.4 F today as it was in 1950.

I think the reason may be the same. ‘Science is very successful,’ and the billions who believe in the Global Warming thesis are terribly impressed with the incredible products of science they see in the world around them.

That is how I explain this mass hypnosis.  

----------------

People who have been reading this blog for years know that I took a class at the U. of Chicago from Niels Bohr, who taught that the history of science was the history of people explaining the physics behind the series of constants being discovered by engineers and technologists.  It is really the engineers and technologists to whom we are indebted for the miracles of the modern world.

Human Caused Global Warming Still Not True

I’ve been saying this since I first looked at the evidence in 1983.  The false nature of this thesis is recently well evidenced in a Congressional hearing. S71022-20132171-302668.pdfs 

Just for my records.

Homeless in Chinatown?

Yesterday, at 10am, I drove up Grant Ave. and down Stockton St. (San Francisco) and didn’t see one homeless person or tent. Those two streets are Chinatown. Stockton St. had more people than any other part of the City.

Why are there no homeless when they cover sidewalks in most of the retail blocks in the rest of the City?

My tool for analysis of this issue is Social Sorting.  I describe Social Sorting as my original idea #8 which you can find here.  

The geography of an individual’s location or job is defined by three elements: the flag, the screen and the overflow.

The flag is what draws a homeless person to any location.  The flag for a homeless person is

•  a place that is safe, 
• where people give money to beggars and 
• where other homeless congregate. 

The screen for a homeless person is a place 

• where food is available, 
• where protection from the elements is available and 
• where hostility is minimal. 

The overflow is where the homeless person will be threatened and/or chased away.

Chinatown is mostly populated by Cantonese Chinese. The area was settled in 1824 by Cantonese and they have owned businesses in that location ever since.  

Most Chinese do not give money or food to beggars or the homeless. Chinatown does not offer a flag to attract homeless unlike the rest of San Francisco which gives them money, food and safety.  

The screen in Chinatown is that Chinese openly dislike and have disdain for people who won’t work.  In China an adult healthy person who won’t work is allowed to starve to death.  In the rest of San Francisco the homeless are treated as decent people who are ‘unfortunate,’ probably mentally ill or addicted to drugs.

The overflow in Chinatown is the broom and a bucket of water.  A homeless person who tries to settle in Chinatown will be driven off with a broom and bucket of water.  In the rest of the City, the police might be called and they will tell the homeless person to ‘move along’ and will be ignored.

That is why there are no homeless people in Chinatown.

(photo of Shanghai.)