Showing posts with label corporations. Show all posts
Showing posts with label corporations. Show all posts

Wednesday, May 11, 2016

Darwin's Revenge



The popular science media are raving about the latest news – Darwin was wrong!

Researchers have detected a gene in mice that propagates rapidly through mouse populations at much higher than the expected rate. Termed R2d2 (no, not after the Star Wars droid but “Responder to meiotic drive 2”), this gene not only promotes itself like a cheap politician but actually harms evolutionary health by reducing fertility. Female mice carrying this gene give birth to fewer litters.

It is this last bit which has popular science writers giddy with glee.

Charles Darwin theorized that creatures evolve by natural selection. A gazelle which is slightly quicker is more likely to pass on its genes to offspring than one which is slightly slower.

But the R2d2 gene confers an evolutionary disadvantage on mice (fewer litters) while propagating itself vigorously. How can this be? Oh, poor Darwin, spinning in his grave.

Rest easy, Sir Charles, your elegant theory is intact. The rapid propagation of R2d2 is occurring only in laboratory mice. Scientists have observed that in wild mice, R2d2 is far rarer than they had predicted.

This phenomenon is easily explained. Laboratory mice are fed and watered daily by their human caretakers. No ferrets or hawks or snakes are permitted within their cage. Wild mice, on the other hand, have to deal with reality. Wild mice with stronger evolutionary traits (such as higher fertility) tend to survive and pass on their genes. The others (e.g., R2d2 mice), are out-competed.

What is missing in the laboratory is the evolutionary hammer, the enforcer, the ultimate judge: death.

Death by starvation. Death by predation. Death by any means determines which genes do not progress to the next generation .  And the flip side – those organisms with a survival advantage are more likely to pass on their genes to the next generation.

A classic example is the rapid adaptation of cliff swallows. In a 30 year longitudinal study of these birds living under bridges and underpasses in Iowa, researchers found that the birds evolved shorter wings over this time. As a result, these more maneuverable birds were able to dart and twist more quickly and avoid collisions with cars and trucks. Evolution doesn’t always proceed at a snail’s pace.

But evolution requires death. It cannot weed out weak or ill-suited organisms without terminating them before they can procreate.

In the simplest terms, an organism is a natural “computer” utilizing energy and processing information in a bid to successfully propagate its genes. For those that fail, it’s the end of the line for their particular genetic code.

Survival of the fittest surprisingly applies in unexpected places. Corporations, while their status of “personhood” is the subject of intense debate, are nonetheless organisms that compete and struggle for survival. They utilize energy and process information in a bid to thrive. Corporations which make poor decisions or don’t adapt to a constantly changing business environment will wither and die. Those which read the tea leaves and execute well are successful, creating profits and jobs and paying taxes into the public fisc. The key to this diaspora of commerce is competition, forcing out those who cannot.

Uber and Lyft are thriving, exploiting new technologies and reading the public’s desires. Kodak bowed to the ubiquitous smartphone camera. Hostess (Twinkies and Sno Balls) misread the public’s growing health preferences.

At the other end of the spectrum are government programs and their bureaucracies. These behemoths never die, whether successful or not. Government programs, in spite of claims to the contrary, are not subject to competition or benchmarking. Their budgets inexorably climb upward and we poor taxpayers are continually burdened to make good. There is no competition from an alternative to drive the unsuccessful programs out of business. (Except, perhaps, in the realm of successful charter schools – hated bitterly by pro-government folks).

And then there is us – humans. Long ago we reached the stage where starvation and predation ceased to be a major factor in inhibiting propagation. We birth our young with few impediments, perhaps only a few car wrecks or medical mistakes or an odd disease. In the United States, the infant mortality rate in 2014 was 582 infant deaths per 100,000 births. While every such death is a tragedy, the infant survival rate is an astounding 99.4%.

No, Darwin’s law no longer applies to us or our government bureaucracies.

This may be a good thing. Or, perhaps, not.

Monday, April 8, 2013

More free stuff!



What a week it’s been in politics.

On the campaign trail in California, President Obama cried out, “Free stuff! More free stuff!” The administration is again pushing banks to make taxpayer-subsidized mortgages to those with weaker credit ratings. While it is laudable to want folks to own houses, we continue to pursue policies that increase risk in the housing market. Have we learned nothing from the Great Recession?

While those on the left love to hate corporations and their profits, it is instructive to observe how the profit motive works. A corporation is simply a group of people. Groups of stockholders amass capital, labor, and know-how to provide something that the public wants. They do this because they desire to make a return on their capital investment. In the process, they create jobs, pay wages to employees, and shell out huge sums of taxes to state, local, and Federal government coffers. Evil stuff, huh?

Now the key to making a profit is to avoid booking a loss. In the banking scenario, that means loans must be granted conservatively. Defaulted loans (such as home foreclosures) are very expensive, and many successful (performing) loans are required to offset the expense of each failing one. As a result, banks extend mortgages very carefully, controlling the risk they are undertaking by assessing the ability of mortgagees to repay their loans. You might say that banks are conservative precisely because of their profit motive.

And that they are, until Uncle Sugar steps in with promises to subsidize losses. This reduces the risk that banks face and makes them less conservative, more willing to make loans to those who wouldn’t otherwise qualify. This is precisely what happened in the run-up to 2008 and we are still all paying for the collapse.

There is another path. The safest and most effective way of getting more folks into their own homes is to make sure that they have good jobs. Government policies should focus on economic growth and job creation. (A recent Pew poll revealed that both Democratic and Republican voters agree on this simple priority). Instead of more free stuff, let’s rely on economic growth and the dignity of work.

Because, at heart, we really understand that nothing is free. Someone always pays.