A few people recently have asked me questions about my diet, mainly because I refuse things like cakes, sandwiches and pies when offered them. The diet I eat is most commonly known as a paleo diet, but also goes by its full name, Paleolithic diet, and also Stone Age, caveman or hunter-gatherer diet.
Wikipedia has a page on the subject called Paleolithic diet, but I wanted to summarise things from my perspective. I’ve been eating this way with fairly strict adherence for 7, nearly 8 years, so I’ve got quite a bit of “practical experience”, and I’ve done enough research in that time to satisfy myself that my choices makes sense.
I’m not going to be especially detailed here, I’m not going to be comprehensive (I don’t say much about mental illness or cancer), and I’m certainly not going to reference every claim I make. I’m no biologist, and everything I know about nutrition is from casual part-time research. Treat this entirely as my opinion, as I will state as fact things that many people contest. Assume confirmation bias by default, but read with on open mind.
Why should you care?
I believe that the vast majority of disease we consider mysterious and incurable is caused by a mismatch between the environment we evolved to live in, and the one we have created for ourselves, and that the biggest (although by no means the only) difference is the food we eat. I count among these: heart disease, cancer, diabetes, multiple sclerosis, scizophrenia, Alzheimer’s, even short-sightedness. But this post is an attempt to explain what a paleo diet is, not why I believe it causes all these things, and many more. I will not justify everything here, as that would turn a blog post into a book, and there are already many better ones on the subject.
Other reasons you may care include: you met me in real life and repeatedly tried to offer me pie so I directed you here, or you stumbled across my blog/Twitter bio, saw “paleo” and thought I might be some sort of crazy hippy.
What is a paleo diet?
The principle behind the paleo diet is fundamentally that all biological life thrives best in the environment it evolved in. This is the environment it is best adapted to cope with, even if it could survive in others. For this reason, polar bears survive best in the arctic, camels in the desert, and an exchange of the two will see neither animal survive for long. As well as climate and physical terrain, the kinds of food available to an animal is a major part of what it is adapted to. Again, this is is why rabbits do well eating leaves, lions do well eating meat, and an exchange would be equally disastrous for both.
However, as a civilisation, as a species that has effectively domesticated itself, we humans are remarkably blind to the idea that we evolved to eat certain foods. While I’m fairly sure nobody I’ve ever met would be surprised if a monkey fed on cornflakes, beans on toast, lasagne and ice cream would get sick, my experience is that the thought this could apply to us is met with anything from disbelief to outright hostility.
What food did humans evolve to eat?
Humans are primates, and are omnivorous like many (or most) other primates. As far as I’m aware, we eat comparatively more meat than other primates. We are evolved to eat a wide range of foods, including meat, vegetables, fruits and nuts. The usual paleo rule of thumb is if you could you eat it “naked and armed only with a sharp stick”, although we should probably add “and a big heavy stone” to that, since that helps with eating nuts. Fire has been around long enough that has probably had an influence on our dietary evolution: I consider the ritual of the barbecue fairly strong evidence of that. So my broad definition of paleo is:
Paleo foods are ones you could eat if you were in the wild, naked and armed only with a sharp stick and a big stone, ideally enhanced by cooking
It rolls slightly less easily off the tongue than the original, but it’s more complete.
What foods did humans not evolve to eat?
This part is much more complex, as to understand what we didn’t eat, you have to understand how the foods available to us have changed during the agricultural revolution. What we did not evolve to eat is the foods introduced into our diets in the last 10,000 years, which require agriculture and machinery to process. The main groups here are grains, dairy products (anything derived from milk), legumes (pulses), refined sugars and vegetable oils.
Grains in their natural state are inedible to humans, as they are to most animals. They are physically inedible, being encased in a hard protective husk. They contain many toxins and anti-nutrients, which make eating any quantity of them dangerous. The effect of grains to leech calcium from bones is why they are used by biologists to induce rickets in rats when they wish to study the disease – why it has never occurred to these same scientists that they are staring at the cause of the problem exasperates me.
The proteins in grains, especially gluten, are dangerous to humans, and to people with high sensitivity to them can be fatal.
The other main problem with grains is the high starch (carbohydrate) content. Now, listen very carefully, for I shall say this next bit only once: eating fat does not make you fat, high insulin levels make you fat, and high insulin levels are caused by eating excess carbohydrate, not eating fat. The idea that we need to balance our calories in and calories out to avoid becoming overweight is complete nonsense. The human body is not a combustion engine, and does not work on such a primitive mechanism. All animals are programmed to overeat, to feast in times of plenty to compensate for times of famine. If the calorie theory of weight gain was correct, we would all be morbidly obese, every single one of us, except for the few too poor to afford even an excessive amount of bread.
Dairy products are also a recent introduction to the diet. Most mammals stop producing the lactase enzyme necessary to digest milk around the time their adult teeth have grown; humans are the only one to continue drinking milk into adulthood. And even then, humans don’t drink the milk of their own species into adulthood, they drink the milk of other species. It should come as no great surprise that human milk is best suited to the needs of baby humans, and cow’s milk to the needs of baby cows. Indeed, the protein and fat content of each is considerably different. (Human milk is higher in fat, for a start.)
It is actually cow’s milk that got me on to studying about paleo nutrition, as I have a strong milk intolerance that left me with crippling fatigue until the age of about 22. I gave up milk first, and within 3 days I felt like I’d slept for the first time in over a decade. Sadly neither doctors nor certain family members wanted to believe the connection, but I’ve learnt to ignore people who put their own agendas over the actual real life experience of people affected by degenerative disease. Or as I usually put it: “People who believe something impossible should not interrupt those who are doing it”.
Most of the world’s population is actually lactose-intolerant, and westerners are the exception here. I’m constantly bemused by lactose-free milk and similar products – surely it should be apparent that if so many people can’t digest milk, then it can’t be an essential part of the human diet. I’ve had no milk since I switched to eating paleo, and my bones have yet to start crumbling. (If we needed to drink milk for calcium, the human species would have been wiped out from bone disease literally ages ago. We would simply not be here.) There’s more than enough calcium in vegetables and nuts, and (of course), bones: sardines are an excellent source of calcium as the small soft bones are easily digested. But you can give a lamb chop or chicken leg to a small child and get very little back except a bit of gristle.
Cheese on toast
The combination of grain and dairy is so common that I’ve come to call some places “cheese on toast restaurants”, for aside from the shape of the food, that’s all they serve. Pizza, lasagne, cheese sandwiches, quiche and cheesecake are all fundamentally the same food. Since starting to eat paleo, I’ve introduced many new things into my diet I didn’t eat before, for example: spinach, olives, sardines, avocado, pecan nuts and redcurrants. These are all different foods, and so it’s ironic that since apparently restricting the foods I eat (by about 5 things), I eat a much greater variety than I used to.
Legumes range from soy beans, castor beans and kidney beans to lentils, chickpeas, peas and runner beans, but the group also include peanuts (a fact not as widely known as it should be).
Castor beans are the source of ricin: a handful of raw beans will kill a human.
Soy beans are also toxic raw, which is why I find it somewhat ironic that the Wikipedia page for the subject has a section titled “Health benefits”. Soy has an oestrogen-mimicking effect: drinking soy “milk” is like drinking contraceptive pills, a fact apparently lost on the stream of health-conscious women I see ordering soy lattes in Starbucks. Mercifully, I haven’t yet heard of any parents feeding a soy “milk” to an infant, but I daren’t Google anything along those lines. Phyto-oestrogens (plant oestrogens) are also harmful to males, as they disrupt the normal hormone balance even more.
I’m very fond of Chinese food (which is very easily adapted to paleo eating), and many dishes are made with soy sauce. However, it’s in small enough quantities that I make an exception here. Beancurd (aka tofu), is something I steer wide clear of. This has been one of my guiding principles to make eating paleo practical, I’ll eat “contaminated” food (eg a sauce thickened with a small amount of flour), but not a food made substantially from a non-paleo food, eg bread. How far you can get away with this depends on your tolerance to certain foods.
The prevalence of peanut allergy compared to other “nut” allergies is entirely in line with what the paleo theory predicts.
I don’t have a strong opinion on potatoes compared to some paleo eaters. They’re the root of a nightshade plant, and related to tomatoes, peppers, aubergines, chillis (and tobacco). Some hardcore paleo eaters avoid all these as they fail the “New World” test: they were imported from the Americas a few hundred years ago, and are therefore technically more recent introductions to the western diet than grains and milk.
Nightshade plants, include potatoes, include toxins called glycoalkaloids. Wild potatoes are dangerous to humans, but they’ve been bred to be safer. On this basis, and the observation that they are not as widely allergenic as many other non-paleo foods (although by no means not a health risk), I tend to consider them a low-quality food rather than something to strictly avoid. The mistake I see with potatoes is that people treat them as a staple rather than as any other vegetable: I’ve never seen anyone eat, say, turnips in the same dietary proportion as most people eat potato.
Hunter-gatherer diets often include poor-quality or even poisonous plants if they can be prepared to be safe enough to eat, but these are foods of a last resort. The anomaly in the west is that we’ve taken starvation foods and made them 75% of our diet.
This is something off most people’s radars, yet it’s actually an important topic. Over the last few decades there has been a shift from cooking with natural animal fats to mechanically and chemically processed vegetable oils. These are no more a part of the human diet than grains or cow’s milk.
There’s a misconception that saturated animal fats are bad for you (they “clog your arteries”, allegedly), and unsaturated vegetable oils are good for you (they “lower your colesterol”, if you believe the Flora marketing spiel). This is a huge topic, and possibly the most contested point in medicine today. If you want an authoritative opinion, see the work of the medical professionals who joined The International Network of Cholesterol Skeptics. Don’t think of animal fats as thick, artery-clogging materials: at body temperature they are liquid. But do think what happens to vegetable oil around the neck of a bottle: as it oxidises, it goes hard and rigid (which is why linseed oil makes good varnish).
The fat/cholesterol-heart-diseases hypothesis makes no sense according to paleo theory. Meat is a natural part of the human diet, and fat is the predominant source of energy in meat. The clearest counterexample is the Inuit people of the arctic circle, who were discovered in the 19th and early 20th century to be completely absent of heart disease and cancer, despite living on a diet of almost pure meat. The most famous explorer to study them was Vilhjalmur Stefansson, who subsequently ate a diet of pure meat for a whole year under medical supervision, to prove that it is possible.
I can corroborate Vilhjalmur Stefansson’s experience. In August 2010, as an experiment, I ate nothing but meat for the whole month. It is perfectly sustainable, and the only downside is it can get boring after a while (in part due to the lack of sudden, spectacular death or other side-effects that most people predict). On the plus side, after a couple of weeks to adjust, I had by far the best digestion I’ve ever had – my stomach has never been happier. Nowadays I rarely eat a diet of pure meat for prolonged periods, but I happily go several days in a row eating only meat when I’m travelling, as I find it convenient. I don’t actively recommend this to others, but it suits me fine.
Fat and carbohydrate
Many people, when I tell them that I don’t eat grains and potatoes, draw the false conclusion that paleo is a “low carb” diet. The naked-with-a-sharp-stick-and-a-big-stone(-and-maybe-a-fire) test says nothing about the carbohydrate content, fat content, or even the shape or colour of the food. But paleo diets tend to be relatively lower-carb than western diets simply because of the physical impracticality of eating typical western carb-levels on a diet of meat, fruit and veg.
This incidental reduction in carbohydrate leads, however, to a very important fact: it is vital on a paleo diet to eat enough fat. The human body can only extract so much energy from protein; we’re not designed to live off lean meat. Attempting to do so leads to what the american colonialists named “rabbit starvation”: death from starvation even despite eating huge quantities of lean meat. Unfortunately, the fat aversion we’ve been indoctrinated with makes it psychologically difficult for many people to go from a diet of trimmed steak and skinless chicken breast to untrimmed belly pork and duck.
The other important point to remember when reducing carbohydrate intake is that if you’ve lived your entire life predominantly off carbohydrate, your fat metabolism will be lazy. The first time involves a few unpleasant days of headaches at best, and it can take many weeks for some people to acclimatise to living off fat. After that, it’s easy to switch from burning fat to carbohydrate. Humans run much smoothly off fat, as we carry a plentiful supply. We store relatively little carbohydrate, and our bodies prefer to conserve it for intense exercise.
I remember quite early on being faced with the contradiction that logically, it must have been safe for the Inuit to survive off a diet of animal fat, yet I’d been scared into believing that animal fat was bad for me. Eventually I chose the logical consistency and documented evidence of the former over the contested commercial interests of the latter, and have never once since been concerned about the consequences of the amount of animal fat I eat.
A common question I hear goes something like “didn’t cavemen lead short, brutish lives?”. There are two separate concepts here: quantity of life, and quality of life. All domesticated animals have longer life expectancies than wild ones, simply being safer from injury and death from predators, accidents, competition and starvation. Also, life expectancy figures include infant deaths, the most common age of death in the wild (and in civilisation, until recently).
The concern of a paleo diet is not life expectancy, but quality. In fact, the effect of civilisation to increase life expectancy has only exaggerated the detrimental effects of an agricultural diet. People weakened from diabetes, cancer, heart disease, dementia, and uncountable other diseases of civilisation, suffer far longer than anyone in a hunter-gatherer society would have, from disease that did not used to exist, and not merely because they “didn’t live long enough”.
There is no reason to believe someone living on a paleolithic diet today would not achieve the same or longer life expectancy than someone on a western diet, but they would do so with a far better quality of life. A good example is in Michael Eade’s comparison of Jack LaLanne vs Ancel Keys. Jack LaLanne was warning about the dangers of sugar, and our population of Sugarholics back in the 1950s; Ancel Keys was the original vocal proponent of the idea that animal fat and cholesterol causes heart disease. Look how they both ended up.
What does a paleo diet look like?
Basically, take everything you see in a western diet, subtract the things I’ve listed above as being non-paleo, and you have a paleo diet. Paleo is exclusionary, not inclusionary. There are no “paleo supplements”, no foods that weren’t otherwise eaten.
My own diet is basically meat and vegetables. I eat some fruit, but not a lot, and some nuts, but again, not a lot. I go for fatty meat over lean meat, for reasons explained above, and I’m especially fond of belly pork. Most of my meals look like a Sunday roast dinner. It’s generally only when I refuse something such as cake or ice cream than anyone asks me any questions.
I eat less frequently than most people, generally only eating in the evening, with a light snack (eg a piece of fruit) at most during the day. To some, this is a form of intermittent fasting, a subject I’ve largely glossed over here. I’ve found my appetite sufficiently reduced eating a paleo diet that I don’t need to eat more often. Initially I suffered from the indoctrinated fear that if I didn’t eat three times a day, and certainly, if I didn’t eat every day, I’d drop dead from weakness. Fortunately, common paleo sense is in line with reality here, and there are no such deadly consequences.
Most of the exercise I’ve done has been weightlifting for strength training. I eat relatively little carbohydrate, sometimes none, which has baffled people I’ve trained with in the gym, as they assume I should have no energy. I never eat before training, which led one person to wonder why I don’t just collapse during a workout.
I’ve also trained on a more extensive intermittent fasting schedule, eating only in an 8 hour window every two days (ie, 40 hours fasting, 8 hours eating). I’ve regularly trained twice in one of these cycles period, ie at some point lifting weighs after over 24 hours of not eating. And I’ve done all this while gaining around 1kg of muscle per month. All of this should put to rest any nonsense about needing to “carb up” for anything but the most extreme endurance exercise. I have no interest in being an Ironman contestant.
As with the times I eat zero carbohydrate (when I’m eating only meat), intermittent fasting is not something I active recommend to people. But it’s possible, and it completely disproves many of the false claims about what a “healthy” diet must look like.
There are some excellent books on paleo and some not so. These are the ones I recommend. The only one I don’t recommend is Loren Cordain’s The Paleo Diet, solely on the basis of the absurd recommendation to eat lean meat. This is something I know from personal experience to be wrong, and it’s such a fundamental mistake I refer people to more consistent authors. This is not to dismiss Cordain’s otherwise extensive knowledge of the subject, but I can’t recommend this one book.
The simplest introduction is Ray Audette’s Neanderthin. It’s very much a layman’s book, which is why I like it. It also contains a lot of recipes, if you like that sort of thing. It’s an excellent starting point.
An excellent hidden treasure is Richard Mackarnass’s Not All in the Mind, written by a doctor practising mainly in the 1970s. I first found a copy of this for 60p in a second-hand bookshop on the Isle of Wight. It’s a more technical, but still accessible book, nominally about “food allergy and mental health”. The diet he prescribes is almost entirely paleo. The story I find most memorable was a woman who’s schizophrenia was cured, and, through excruciatingly stringent blind trials, demonstrated to be caused by food (including potatoes in this case).
The most thorough book I’ve read, and it’s almost encyclopaedic in nature, is Barry Groves' Trick and Treat. This book is the result of some twenty years of painstaking research into “healthy eating”, and is meticulously well-referenced. It’s hard work to read cover-to-cover, simply due to its length, but it’s worth having a copy just to be able to look up specific topics.
I’ll end with a mention of Gary Taubes' The Diet Delusion. I own a copy of this, but due to its size have not got round to reading it. It’s highly regarded in paleo circles though, so I’ve listed it to avoid looking like I was avoiding it like Cordain’s The Paleo Diet. It’s certainly one I’m keeping on my shelf.
I’ve eaten a paleo diet happily for nearly 8 years now, starting in early 2004. I haven’t fully recovered from the effects of the milk intolerance I suffered, but my health is in a different league now to what it used to be. I’m almost completely withdrawn from the addictive, harmful foods that make up the majority of most western diets. I have absolutely no desire to eat cakes, biscuits, cheese, pasta, pies or anything else of the sort.
I’m doing what many dieters believe impossible, so please be considerate enough to not interrupt me while I’m at it.
But if you have any questions, I’ll be happy to answer them in the comments.
This is a review of The Law (by Frédéric Bastiat), Economics in One Lesson (by Henry Hazlitt), What Has Government Done to Our Money? (by Murray Rothbard), The Road to Serfdom (by Friedrich August Hayek), and Economics for Real People (by Gene Callahan).
Note: This article is quite long, being as it is a review of five books, along with its context, conclusion and other notes. You may wish to skip ahead to the sections Which to read? and Conclusion after reading the introduction, as this may help you select parts to look at first.
Why did I read these books?
Recently I picked up a copy of Henry Hazlitt’s Economics in One Lesson (links follow after each book’s subheading). The first page inside the cover, under the title Praise for Economics in One Lesson, contains the following testimonial from US Congressman Ron Paul:
I strongly recommend that every American acquire some basic knowledge of economics, monetary policy and the intersection of politics with the economy. No formal classroom is required; a desire to read and learn will suffice. There are countless important books to consider, but the following are an excellent starting point: The Law by Frédéric Bastiat; Economics in One Lesson by Henry Hazlitt, What Has Government Done to Our Money? by Murray Rothbard; The Road to Serfdom by Friedrich Hayek, and Economics for Real People by Gene Callahan.
If you simply read and comprehend these relatively short texts, you will know far more than most educated people about economics and government. … If you care about the future of this country, arm yourself with knowledge and fight back against economic ignorance.
Well I’m not American (I’m British), but since the UK is in much the same financial state as the US (and the rest of the western world) I’m no less concerned about our economic, financial and political future. Ron Paul speaks a lot of sense about economics, so I set myself the task of reading the full list of books he recommends. What follows is a summary of each book, and a selection of my opinions.
The Law – Frédéric Bastiat
The Law is a very short text (my edition is formatted to 86 pages) first published in 1850. It asks the question: what is law? To Bastiat, it is the “collective organization of the individual right to lawful defence”. Bastiat’s foundation is that life, liberty and property are enduring human concepts that pre-date law, and that every individual has a right to defend them, by force if necessary. From this it follows that a group of people has the right to organise a common force to protect these rights. Because no individual may use force to deprive anyone else of life, liberty or property, and the law is merely the organisation of the individual rights, it also follows that the law may not by right be used to deprive and individual of these things either.
The current situation, where the law is used to for “lawful plunder” (think of most forms and uses of taxation, eg protective tariffs, and industry protection laws, eg copyright), Bastiat blames on a combination of “stupid greed” and “false philanthropy”.
It has been long seen that many people will choose to acquire wealth by plunder rather than labour as long as the former is easier. The law is intended to protect citizens from others who would choose this route. But if the same citizens who would plunder rather than labour are allowed to make the law, they now have an officially sanctioned route to plunder: to pervert the law for their own gain under the guise of “justice”. Bastiat neatly sums up the inevitable result:
As long as it is admitted that the law may be diverted from its true purpose – that it may violate property rather than protecting it – then everyone will want to participate in making the law.
The behaviour we see today, of course, is that every big business will want to participate in making the law.
The other source of perverted law – false philanthropy – is more complex, and Bastiat’s description overlaps with the other texts in this set. He criticises the socialists for acting as if they “have received from Heaven an intelligence and virtue that place them beyond and above mankind”. That is, if you accept all involuntary redistributions of wealth as forms of plunder, the best hope you have of it being done right is that it is planned by a superior intellect. The explanation for why this will fail is economic in nature, so I’ll defer it to the summary of the other books.
Bastiat gives a rule that can easily be applied to any law, existing or proposed, and determine whether it is in the spirit of the “Rule of Law”, or is actually just disguised plunder. That this distinction is so often muddied or not made made at all is the compelling reason to read this book. The Law is so short and makes its point so clearly, I can hardly not recommend it. And given that its full text is available free, there’s no excuse not to, unless you believe perversion of the law does not affect you.
Economics in One Lesson – Henry Hazlitt
Economics in One Lesson is a book with a very simple premise. It’s divided mainly into three parts – Part 1: The Lesson, Part 2: The Lesson Applied and Part 3: The Lesson After 30 Years (the last of which I will skip). Part 1: The Lesson consists of just one chapter, The Lesson, which is only five pages long, and explains that the lesson itself can be reduced to a single lone sentence:
The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.
While he never refers to it as such (in general, the Austrian economists don’t), Hazlitt is effectively describing economics as a systems thinking problem.
Hazlitt argues that “nine-tenths of the economic fallacies that are working such dreadful harm in the world today are the result of ignoring this lesson”, and goes on to demonstrate the effects in Part 2: The Lesson Applied, with 24 chapters each exposing a form of incorrect economic reasoning. I’ll pick three as examples, based purely on ones I notice myself most often. These summaries are not complete, so if you suspect they are incorrect I recommend reading the original chapters first (they are all quite short).
The Broken Window fallacy is the belief that if, say, a vandal throws a brick through a shop window, the work generated for the glazier to replace it is an economic stimulus. The logic is that by the shopkeeper giving the glazier, say, $250 for the window, the glazier has extra money to spend with merchants of his choosing, who will in turn spend that money with others. The reasoning is flawed because what is ignored is that the shopkeeper wanted, say, to spend that $250 on a suit, which he must now forgo. So rather than having a window and a suit, the shopkeeper now has only a window, and the world is a poorer place. The tailor is overlooked in the original analysis simply because he never enters the scene. While this is a simple example, the same argument applies to damage from civil unrest (I saw it myself on Twitter regarding the UK riots in August 2011), revolutions, and even world wars. There is no net economic benefit in rebuilding what was prematurely destroyed during a war.
The desire to Save the X Industry arises when members of industry X lobby the government to protect it, by tariffs, subsidies, price guarantees or similar. It’s argued that without saving the X industry (we’ve seen it happen in agriculture, manufacturing, banking and others), that industry will provide jobs, and the money it generates will be spent elsewhere, on the machinery it needs, and by its employees with butchers, bakers and other consumer merchants. To take the most direct solution as an example – subsidy – it could be argued that taxation used to subsidise this essential industry will redirect money for greater overall benefit. But every consumer taxed to pay for this now has less money to spend in other elsewhere, in industries that lose out. And, as demonstrated by the fact that industry X needs support, money is being diverted from more efficient businesses to prop up the failing ones. This means the productivity of the society is now lower, and overall everyone has lost out.
As a final example, Minimum Wage Laws initially appear to benefit workers, who will now receive a higher wage and be able to increase their standard of living. Hazlitt argues that wages are prices no different than any other (like the prices of oil, wheat or gold), but that our thinking about them have become emotionally clouded. Making it illegal for someone to charge less that a certain amount for their time does not automatically make them worth more. Businesses affected by minimum wage have to either charge more or reduce their margins. If they charge more, customers may buy less of the product, or switch to alternatives. By reducing the profit on products, marginal producers in the industry will be thrown out of business, which deprives consumers of the products they previously enjoyed. There is no guarantee that workers made unemployed by minimum wage laws will be sufficiently productive in other industries to justify paying them the minimum legal amount. All roads lead to lower productivity and higher unemployment overall.
Economics in One Lesson explains many more points, and does so in a very concise, readable way. While the topics are connected, each chapter is a short, largely self-contained application of “the lesson”. It’s very straightforward to read, and gives you powerful toolset to analyse the changes in government policy discussed in the news. I highly recommend it if you’re skeptical of the consistency of economic arguments put forward by politicians in the news.
What Has Government Done to Our Money? – Murray Rothbard
Murry Rothbard’s short text is a three-part book that explains first, what money is; second, how governments have meddled with it; and third, the history of the breakdown of money.
Money is introduced as coming naturally from exchange.
Clearly Robinson Crusoe had no need for money. He could not have eaten gold coins. Neither would Crusoe and Friday, perhaps exchanging fish for lumber, need to bother about money.
Initially people traded with barter, but this is hampered by finding people willing to exchange at the right time. Eventually someone will realise they can trade their own goods for something more desirable to the person owning what they want, and complete a trade by indirect exchange. Over time, some goods become more useful than others for indirect exchange, and eventually one a society will settle on one or two most exchangeable goods as money. People “buy” money when they exchange their goods for money, and “sell” their money when they exchange it for goods. Rothbard’s explanation of this and a few other related ideas is piercingly clear and concise.
The story of how Governments have meddled with money is equally intriguing and shocking (even if you are not new to the story). Rothbard starts with the nature of governments:
Governments, in contrast to all other organisations, do not obtain their revenue as payment for their services. … In a barter economy, government officials can only expropriate resources in one way: by seizing goods in kind. In a monetary economy, they will find it easier to seize monetary assets, and then use the money to acquire goods and services for the government. Taxation, however, is often unpopular. … The emergence of money, while a boon to the human race, also opened a more subtle route for governmental expropriation of resources … counterfeiting.
We now imagine that an economy has 10,000 gold coins, and that a counterfeiter can introduce 2,000 more, undetected. The early holders of this new money will be at an advantage: they can buy goods at the old prices. But this spending bids prices up, and people last to receive the new money will find that prices have been going up long before their income. “Whenever the newly issued money is used as loans to business, inflation causes the dread ‘business cycle’”. (This asymmetry of the effects of inflation is also discussed in Economics in One Lesson and Economics for Real People.)
Initially, governments monopolised the minting process, taking the right to produce coins from the previously free economy. Governments chose the denominations, not the people, and they named them so as to disassociate them from the underlying weight of metal: marks, francs, dollars etc, instead of grams or grains. This paved the way for debasement. The Saracens of Spain had a coin, the dinar, the which in the mid-twelfth century contained 65 gold grains. The Christian kings conquered Spain, and by the early thirteenth century the coin, now called the maravedi, had only 14 grains. Soon it was too light to circulate, and was replaced by a coin containing 26 silver grains. This was in turn debased, and by the mid-fifteenth century contained only 1.5 silver grains, again too small to circulate.
Governments learnt another trick: legal tender. By defining what money could be, rather than leaving it open to the market, governments gave themselves the power to define the poorest form of money as legal tender. For example, worn coins can be defined as good as new ones. The real power of this came with the introduction of paper money, when the metal backing each unit of currency could be gradually decreased. People redeeming gold still threatened the extent of this inflation, because banks that over-printed paper money would eventually lose their gold as suspicious depositors withdrew it. This inconvenience was resolved with central banking. Giving a false confidence in the backing of the banking system and centralising (co-ordinating) control of the money supply allows the banking system to almost inflate at will.
What Has Government Done To Our Money? is the shortest of the economics books in this list. It’s focused more on money that general economics, but the stories it tells should encourage you to pick up some of the longer ones if you want more details. If you think you may have an interest in the broader economic issues but want a short taster, this is a good place to start. If you’re relatively new to concepts such as fractional reserve banking (the current situation, where the banking system is inherently insolvent) and fiat currency (as opposed to a free money market), this book is an essential read. I especially recommend it if you’re angered by the constant banking bailouts: the act debasing our money by turning on the printing press and throwing the inflated supply at what Hazlitt shows is inevitably the least efficient businesses.
The Road to Serfdom – Friedrich August Hayek
Friedrich Hayek (an Austro-Hungarian) wrote this book in the early 1940s in Great Britain, as a warning to a country he thought was unwittingly walking the same path that Germany took decades before. It is a description of how even the most well-intentioned socialist ideals will eventually lead to totalitarianism. In contrast to Bastiat’s The Law, which is focused on one point (justice), The Road to Serfdom traces a complex story at the boundary of politics and economics, and shows how and why justice and freedom are ultimately sacrificed on the path to collectivism.
According to Hayek, when “we find ourselves threatened by the evils associated by the past ages of barbarism, we blame naturally anything but ourselves.” So naturally, the unexpected situation that “the relative ease with which a young communist could be converted into a Nazi or vice versa” was not considered inherent in socialism itself.
Collectivism involves orienting a society around a “social goal” such as “general welfare”, but this “presupposes … a complete ethical code in which all the different human values are allotted their due place”. But “no such complete ethical code exists” because “people will have either no definite views or conflicting views on such questions”. As well as the conflict inherent in trying to co-ordinate a diverse society, trying to scientifically organise a society towards some end runs into the economic inconvenience that “far from being appropriate only to comparatively simple conditions, it is the very complexity of the division of labour under modern conditions which makes competition the only means by which such co-ordination can be adequately brought about”. Both Hazlitt’s Economics in One Lesson and Callahan’s Economics for Real People show that trying to make centrally co-ordinated economic decisions inevitably lead to failure and waste, as no central planner can have access to, or process, enough information to make an informed choice.
Hayek emphasises the distinction between the Rule of Law (in Bastiat’s sense of “law” – justice) and arbitrary law. In the former, “the government confines itself to fixing rules determining the conditions under which the available resources may be used”; in the latter “the government directs the use of the means of production to particular ends”. While it might be done in the name of “fairness”, “one could write a history of the decline of the Rule of Law … in terms of the progressive introduction of vague formulae into legislation”. Outright economic arbitrariness appears to have fallen out of favour, structural manipulation (eg central banks setting interest rates and buying government bonds) having taken its place; although we do still have redistributive policies via the EU. The most popular form of arbitrary law at the moment is probably anti-terror legislation.
That anti-terrorism is the fracture being used to wedge in arbitrary law today is not surprising according to Hayek. “It seems to be almost a law of human nature that it is easier for people to agree on a negative programme, on the hatred of an enemy, on the envy of those better off, than on any positive task”. Collectivism tends towards nationalism (to gain support) and to support a particular group (conflict would destroy it otherwise). To these ends, it must exclude or suppress intelligent opposition, and use the principle of negativity to rally the rest around its cause. No complex society can agree on all the issues towards one common goal, so large-scale central planning must be done by force. Hayek uses this explains the inevitability that “the worst get on top”, despite even the best intentions of the initial idealistic socialists.
In the UK today, we don’t see such a strong trend towards socialism that Hayek saw in the middle of the last century. But The Road to Serfdom is valuable even without imminent totalitarianism, as he explains step-by-step the various economic and political decisions, and the corresponding political and economic consequences. Maybe we won’t see National-Socialism again in its archetypal form. If not, I suspect it may be even more important to read this book sooner rather than later, as we may see the world play out in a more subtly oppressive way: most of the causality Hayek describes is quite timeless.
Economics for Real People – Gene Callahan
Economics for Real People is the densest and most detailed of the economics books here. But like What Has Government Done to Our Money? it’s written with such clarity that it’s accessible to anyone with the patience to read it.
Rather than derive economics from a Robinson Crusoe environment, Callahan uses a more contemporary metaphor:
In our alternative universe, Rich is still the winner [of the first series of Survivor], but as the film crew packs up, they decide that they are fed up with his antics. Instead of transporting him home, they quietly slip off while Rich is getting in a last session of nude sunbathing.
Rich arises to find that he is alone. He is now facing the most elementary human problem, how to survive, in the most basic of settings. What can economics say about his situation?
Callahan takes his definition of economics from Ludwig von Mises: “Economics … is the theory of human action. Human action is purposeful behaviour. Or we may say: Action is will put into operation and transformed into an agency, is aiming at ends and goals”. Where the Austrian school’s definition of economics differs from the popular conception is that it has no basis in money (money is explained as emerging at a later point). If you have a sense of dissatisfaction, say you are “disturbed by a buzzing sound”, and you can determine a cause in your control, say “you look around … and see a mosquito”. You now “have to make a choice. Being rid of the mosquito would be grand, sure – but you’ll have to get up. And that’s a bummer. The benefit you expect to receive from being rid of the mosquito comes at the cost of getting up”. Human preference is subjective. “We take the thoughts and plans of humans as an ultimate given, and begin our investigation there.”
An astonishing number of concepts are introduced before even a second person appears on the island: economisation of means, preference, utility, marginal units (one extra bucket of water), the law of diminishing marginal utility, error and regret, consumer goods, capital goods, capital stock, complementary goods, time preference. All of which might sound overwhelming, but is actually told effortlessly in the story of Rich choosing to invest his time in making barrels (to collect water) and traps (to trap rats, which is the primary local food supply), all while deciding at which point he’d like to go back and sit in his hammock.
An economic community forms when Callahan introduces a second person to the island: Helena Bonham-Carter.
What does Rich decide to do? One possibility is that Rich might react like a bear does, [and] try to drive the intruder away. Now, he might refrain from doing so due to moral constraints or benevolent feelings. But there is another reason for him not to drive Helena off – as long as there are sufficient unused resources on the island, it will materially benefit both of them to co-operate rather than fight. They can initiate the vastly enriching process of the division of labour and voluntary exchange.
In Callahan’s version of this post-Survivor scenario, “Rich, the more dexterous of the two, will make traps, while Helena, the more cunning, will do the hunting”. From here we are taught the way direct exchange plays out, in terms of each of their subjective preferences for rats and traps. As more people join the island, we see goats and corn introduced, and a market start to form. But, notably, there is still no money on the island.
As the economy in “Richland” grows more complex we see the difficulty in economic calculation, and finally money emerge, but as the most marketable medium of exchange. No special status is granted to money, it’s merely an economic good that meets certain criteria, and is subject to the same supply and demand rules as any other.
It’s in this careful, step-by-step way that Gene Callahan works through a broad range of other economic topics, including: fluctuations in money supply, socialism, government interference, business cycles, externalities (for example pollution, which is connected to tragedy-of-the-commons situations), and a brief summary of political economics. With a couple of minor exceptions, everything is as clear and grounded as the foundations in chapter 1.
This was by far the most enlightening book in the list to me, although it took correspondingly the most investment in time.
Which to read?
If your interest is mainly politics, the choice is easy: either read The Law if you want something quick, or The Road to Serfdom if you’re prepared to invest more time. The Road to Serfdom glosses over the economic principles behind its arguments though, so I’d still recommend picking up one of the other books on the list.
If your interest is more in economics there is more choice. If you would prefer a quick read, or are mainly interested in the history of how we ended up with such a disastrous monetary system, start with What Has Government Done to Our Money?. If you suspect that most of what you read in the mainstream media is based on faulty or even absent reasoning, start with Economics in One Lesson, it’s also a quick read, and to an extent you can even pick and choose the topics that interest you. If you’re prepared to invest more time (although at under 350 pages it’s hardly immense), or want a more thorough grounding, choose Economics for Real People. This last book is my favourite by some distance, and whichever of the others you choose, I highly recommend picking this up after.
Note that all but one of these books is available to download free (see the “Full text” links) – even Economics for Real People, which was only published in 2004. So you don’t even have to pay to read the full texts, never mind get a taster.
Ultimately, the purpose of my experiment in reading these books was to see if I’d achieve the claimed goal of “know[ing] far more than most educated people about economics and government”. It’s a little premature to judge if that’s true, I’ll need to read many more news articles and have many more conversations. But there are already many, many things I see in the papers whose fallacious logic is directly identified in one of the books here, so it has certainly got off to a good start.
What did you think? Were you persuaded to read any of these? Have you already read them and agree/disagree on my summaries? I don’t claim to be an expert on this subject matter (far from it), so I welcome other perspectives.
Thanks to Martin Rue for proofreading this and picking up many typos and unclear sentences. Any remaining errors are, of course, my own.
At BarCamp Nottingham on Sat 23-Jul-2011 I ran an introduction to Bitcoin. Slots were only 20 minutes so I had to fire through the slides like a machine gun, and we filled the 10 minute changeover with questions.
My goal for was to stir some interest in Bitcoin and hopefully have people research it in their own time after. I don't know yet if that has been achieved.
The session fitted in well with the unexpected (to me) emergent economic/sustainability theme. Among others, @RichardSmedley ran a great session Inventing Money on the history of money and banking (seriously, it's amazing how much that guy knows), and @squiggle ran We're Screwed (he occasionally used alternative words in the actual session).
Please note: I'm not an expert on the Bitcoin protocol, so among the deliberate simplifications, I may have made factual errors. I'd be very grateful for any corrections, so please feel free to comment.
Many thanks to @martinrue for letting me test-drive the presentation on him. Without his input (especially regarding the mechanics of a transaction), this would be in no way coherent. The remaining errors are mine.
References / Further Reading
- Bitcoin Wiki
- Bitcoin: A Peer-to-Peer Electronic Cash System - the original Bitcoin paper is really accessible, and I recommend reading it if you want to understand how the network works
- Money Supply (Wikipedia) - source of the UK money supply graph
- Block Explorer - which lets you browse & search transactions, blocks, addresses etc
- Bitcoin Charts: Markets - excellent way to monitor Bitcoin exchange activity
- Britcoin (Intersango Ltd) - the exchange I use personally
- MJB Monetary Metals - a small precious metal dealer I've traded with (anyone who remembers the Canadian Silver Maple coin I passed round, it came from here - I paid 2.9BTC for it)
- Money as Debt - I didn't actually mention this video during the presentation, but I highly, highly recommend watching it. It's Economics 101, and if I had my way, it'd be shown in schools. (That will never happen, though.)
Neuromarketing is a book about marketing built on the premise that customers make decisions in the old, reptilian brain, and therefore marketing tactics must be aligned with the way the old brain works. I reviewed it on Goodreads here. These are the mindmap notes I made, which I'm posting in case they help anyone make a buying decision (or just pick up a few ideas).
[I used to write a lot of book reviews, but I stopped mid last year. I don't intend to re-start on a regular basis, but The Choice was so good I felt compelled to make an exception. I also posted this to my Goodreads account, the review is here - the only difference is that this blog post contains the mindmap notes I made.]
The Goal introduces the concept of the Theory of Constraints by starting in a factory and identifying a manufacturing bottleneck. Towards the end, it talks about the idea that the thing constraining a business may not be physical, but mental - an idea or policy. The Goal's key idea is a process of ongoing improvement, targeted at whatever the current constraint is.
The sequel to The Goal, It's Not Luck, takes this further, and shows (among other things) how to use logic maps to break down complex problems to find the root cause of the constraint. I've used this process several times, although I learnt the detailed mechanics from The Logical Thinking Process: A Systems Approach to Complex Problem Solving, and it's the most effective problem-solving tool I've found, by an order of magnitude.
The Choice adds a whole new dimension by taking the essence of The Goal (focussing on the constraint) and It's Not Luck (thinking in cause-and-effect) and explains in simple terms how to apply it to, no less, the problem of having a "full, meaningful life". To do this, Goldratt claims - we must have enough successes, which depend on our stamina to overcome setbacks, our ability to create opportunities, and our ability to collaborate with people.
Goldratt's argument is that to achieve these steps to a full life, we must be able to think clearly. But, we are blocked from thinking clearly by four obstacles:
- We see reality as complex, rather than (as Newton showed) a thing of Inherent Simplicity
- We accept conflicts as a given, rather than seeking to remove them
- We blame, rather than assuming goodness and looking for explanations of other people's behaviour
- We think "we know", rather than challenging our assumptions and looking for breakthrough ways to change a situation
I've used Theory of Constraints tools to tackle big- and medium-sized problems before. But I've come away from The Choice enthused to practise day by day, hour by hour. It's an enlightening and inspirational guide to "thinking clearly".