Monday, September 1, 2014

Labor Day Celebrates Productivity

“Productiveness is your acceptance of morality, your recognition of the fact that you choose to live—that productive work is the process by which man controls his existence, a constant process of acquiring knowledge and shaping matter to fit man’s purpose, of translating an idea into physical form, of remaking the earth into the image of one’s values—that all work is creative work if done by a thinking mind…--that your work is yours to choose, that your choice is as wide as your mind…” – Ayn Rand, “Galt’s Speech”

Before the industrial era of capitalism, social celebrations were an escape from labor.  In the 19th century, workers in Europe took the traditional first day of summer, May 1, for themselves.  But in America everything is new and labor unions in New York City took the first Monday in September for their celebration in 1883. President Grover Cleveland declared the first national Labor Day holiday in 1887.  Apparently, he acted in reaction to the Europeans and communists, and in fear of May Day, but the impetus came from the labor unions of New York City.  Furthermore in those four years, 30 states, starting with Oregon, already recognized the day.  Labor Day was a spontaneous American celebration in honor of productive labor, not class war. After all, in America, workers could become capitalists.

Jeff Yagher as Jeff Allen in Atlas Shrugged Part II

Typically the American Labor Day is a family event, the last weekend of the summer for swimming, picnicking, or vacationing.  Just as Thanksgiving is for celebrating our productivity with a bountiful family meal, Labor Day is our enjoyment of the leisure we bought with our purposeful, marketable efforts.  And it is a day, not of sloth and idleness, a surcease from drudgery, but a day of activities, of plans carried out.  It is a bit ironic that after the busy holiday we find actual paid employment a welcome relief.

In 1972, Edwin Newman interviewed Ayn Rand for his show “Speaking Freely” on NBC-TV. Among other statements, Ayn Rand said: “I am not an enemy of labor unions. Quite the contrary. I think that they are the only decent group today, ideologically. I think they are the ones who will save this country, and save capitalism, if anybody can.”  She went on to say: “But the one flaw is that labor unions are government-enforced and become a monopoly and can demand higher wages than the market can offer. This union power creates the unemployable. It creates this vast group of people, the unskilled laborers who have no place to go for work. The artificial boosting of the skilled laborer’s income causes unemployment on the lower rungs of society. Every welfare measure works that way. It doesn’t affect the so-called rich, if that the humanitarians are worried about it, always affects the poor.”

A few minutes earlier, on the same show, speaking of the proper role of government, she said
“But on the matter of protecting people from physical danger, if certain conditions of employment, let us say, are unsafe and it can be proved that there is a physical risk – I don’t say that we have to wait until somebody dies – then the employer who is creating this risk can be sued, and can be severely punished financially. In other words, there can be a law protecting a man from physical injury by another man. In this case, the employer who puts men into conditions of danger – not accidentally, but intentionally or carelessly – can be penalized because he is infringing the right of his workers not to be injured physically.”  
The entire interview and many others are collected in the anthology Objectively Speaking: Ayn Rand Interviewed, edited by Marlene Podritske and Peter Schwartz (Lexington Books, 2009). Necessary Facts September 2, 2013.
Usually, she rode free: her pins for the Commercial Telegraphers Union of American and the Order of Railroad Telegraphers were her pass.  They were different lines of work.  Railroads were 20 years slow in figuring out that they could manage and control trains with the only thing that traveled faster.  In addition, commodities brokers, hotels, banks, and many other enterprises also needed telegraphers.  Mattie Kuhn worked for both.  So, she belonged to both unions. Ma Kiley: Railroad Telegrapher by Thomas C. Jepsen, reviewed on Necessary Facts 

Previously on NecessaryFacts

Sunday, August 24, 2014


Colin Gullberg’s book, Chopmarked Coins: A History; the silver coins used in China 1600-1935, provides an overview of interesting artifacts often seen but little understood in numismatics.  In China, trust was low; the solution was chopmarks.  Specially trained clerks, called shroffs, tested and counter-struck coins to validate them. 
Chopmarks, Gullberg, page 87
Similar counter-stamps are known on ancient Greek and Roman coins; we call them banker’s marks. Generally, they are rare.  In American history, they are unknown, even as the same Spanish and Mexican coins supported trade commerce here as in East Asia. In China, chopmarks were profuse. 

Before he was chairman of the Federal Reserve Board, Alan Greenspan wrote an essay on trust for Ayn Rand’s anthology, Capitalism: the Unknown Ideal.   “The Assault on Integrity” was a response to those who claim that capitalism is a rapacious system serving swindlers at the expense of the public.  In fact, said Greenspan, capitalism depends on trust.  Writing in 1966, Greenspan reminded us that millions of dollars of value in fiduciary instruments could be transferred with a telephone call.  Twenty-five years later, speaking to a Republican Party dinner, Newt Gingrich made the same point: you call an 800-number to make an airline reservation, give your credit card information, and the next morning show up at the airport actually expecting a ticket to be waiting. 

Frontier America 1600-1935 and China of the same period shared much: the same global commerce carried by the same forms of money; a rough-and-tumble laissez faire business environment; benign neglect by the central authorities; even periodic booms and busts that could have been linked to each other. Yet, we never chopmarked our coins.

Bob Schreiner’s “Spanish Coins on American Notes”   provides ample evidence that U.S. federal coinage was a secondary medium.  Banks promised cents and dollars; but they showed reales as their guarantees.   Until 1857, many foreign gold and silver coins were recognized as legal tender. The U.S. Mint periodically published tables showing exchange rates for the issues of Spain, the UK, France, the Netherlands, Brazil, German states and Italian states. 

Of all the US coins, the Capped Bust Half dollar 1807-1836 was most commonly counterfeited.  Varieties of counterfeit “busties” are popular among some collectors who call them “bogos.”  Fifty cents represented about a day’s wages for the average industrial or crafts worker, about like $100 today.  (The modern $100 bill is the most frequently counterfeited both at home and abroad.)  Through the nineteenth century, we had privately struck “pioneer” gold coins from the Bechtlers (1831-1850), to the California gold rush mints, to the Mormons, and beyond. Yet, America never developed an institution similar to the shroffs. 

Causes may be hard to find.

Religion is an easy guess.  In the punishment triangle of "swift, certain, and severe", all that really matters is certainty.  Prove to a criminal that he will 100% surely be punished lightly 20 years from now and you deter the crime.  It is better to take a chance on not getting caught, no matter how severe the threat.  God is omniscient, knowing not just your actions but your thoughts. For Christians and Muslims, punishment is certain.  Nothing equivalent exists in Buddhism or Confucianism, even as both do teach the importance of right action.  But neither do the Jews have any strong fear of punishment (or much reward) in the afterlife.  Despite being the bankers of the West, and having little reason to trust their Christian customers, Jews never established factories to manually counter-strike millions of coins.

Max Weber’s The Protestant Ethic and the Spirit of Capitalism opens with an extended quote from Benjamin Franklin’s Way to Wealth (1758)Franklin’s advice is to rely on yourself: “But with our industry we must likewise be steady, settled, and careful, and oversee our own affairs with our own eyes, and not trust too much to others; . . . Trusting too much to others' care is the ruin of many; for In the affairs of this world men are saved, not by faith, but by the want of it”. 

The religious basis for trust may be only sublimated.  We do have social structures for establishing reputation.  In numismatics, we have third-party grading.  Electrical apparatuses come with the UL from Underwriters Laboratories and other stamps of approval.  Standard & Poor and Moody’s rate fiduciary instruments.  Our memberships in social organizations also validate us. 

Perhaps the most curious fact about Chinese chopmarks is that they did not actually identify anyone. According to Gullberg, only the British tea trading firm, Tait & Co., used an identified mark, two characters giving its name.  While the myriad others must have been recognized in their times and places, no table was ever constructed, even though Canton (Guangdong), Shanghai, Hong Kong, Taipei, and other centers all had schools for training shroffs.
Chopmarked Coins: A History; the silver coins used in China 1600-1935 
by Colin James Gullberg (iAsure Group JEAN Publications, June 2014, 
187 pages, 8-1/2 x 11, color ill., $40 + S&H).
The book is for sale directly from the author.  
Send an email to Colin Gullberg

Also on Necessary Facts 

Saturday, August 23, 2014

The Shroff

In Arabic lands, the shroff was a money-changer, a banker. Into the 20th century, the shroff was also known to Europeans who traded in China and India. According to The Anglo-Indian Dictionary by Yule and Jobson, the word shroff referred to "the experts who are employed by banks and mercantile firms to check the quality of the dollars." The word shroff also meant the shroff's commission, his fee for testing coins.

(Originally appeared in the MSNS MichMatist in 2006. It can be found on the Web.  This version was retrieved from where I posted it April 6, 2006.) 

In Hebrew, the word appears in the Biblical book of Malachi as soref. It says, "He shall sit as a refiner and purifier of silver; and he shall purify the sons of Levi." In modern Arabic, the word "sherif" has come to refer to direct descendents of Mohammed through his daughter, Fatima. However, wealthy people often backdate their lineage, and this is a claim shared as well by those who lead the Shiites and Druse.

Some numismatists cite shroff as the origin for the word "chop," the banker's marks found on large silver coins that circulated in Chinese finance. Chopmarks are often found on American Trade Dollars (1873-1878), as well as Spanish 8-reales, and other coins. Another etymology for that word points to the Chinese "chop" meaning "fast" or "quick" as in "chopsticks." It is true that chopmarks are seldom true Chinese characters but rather a shorthand. A third origin is in the Hindi word "chap" meaning a stamp, seal, or brand. Ultimately, that word may itself be a dialect pronunciation of "shroff."

Actor Omar Sharif
Like many foreign words adopted into English, there are variations in spelling including sharif and sheriff. Sharif is the stagename of Michael Sharoub, known as Omar Sharif, the star of the movie Dr. Zhivago. Other variants include sherif and sheriff. (The latter is not related to the name of the English and American county law officer, which comes from shire-reeve.) Shroff also appears as xeraf. Interestingly, this led to the plural xerafin, meaning the coins of the xeraf or shroff. The word became a pun, since the xerafin or serafine was also the name of "angel" gold coins of Portugal's Indian colonies. These xerafine were known to and happily welcomed by colonial American merchants.

In Portuguese commerce of the colonial days, the "xaraffo" was a customs officer whose job it was to "see to the money." Another reference speaks of "... very wealthy carafos who change money." The fee, the shroff or shroffage, appears in a colonial report from Goa, the Portuguese colony in India, in 1585. "This present year, because only two ships came to Goa, the reales have sold at 12 per cent of Xarafaggio (shroffage), as this commission is called from the word Xaraffo, which is the title of the banker."
Indian film star and producer
Jackie Shroff
In a 1750 report to the home office of the East India Company, a merchant in Madras wrote: "...the Irruption of the Morattoes into Carnatica, was another event that brought several eminent Shroffs and wealthy Merchants into our Town..." The word appeared in many such letters through the 1800s. 

In an 1878 digest: "Shroffing schools are common in Canton, where teachers of the art keep bad dollars for the purpose of exercising their pupils; and several works on the subject have been published there, with numerous illustrations of dollars and other foreign coins, the methods of scooping out silver and filling up with copper or lead, comparisons between genuine and counterfeit dollars, the difference between native and foreign milling, etc., etc."

During the American colonial era new money and new commodities would not have been transported but for the distant attractive force of the shroffs. Chili, tomatos, potatoes, and tobacco moved both East and West. According to David Ludden of the University of Pennsylvania's School of Arts and Sciences: "Europeans in the Indian Ocean system relied on this system and on the value of money in circulation -- even as they introduced more precious metals from their new world territories -- from which the Spanish imported huge quantities of silver into China via the Philippines, and from which money coming to Spain and Portugal then travelled east along the old routes of trade from the western Mediterranean through the Ottoman territories into the Asian trading system."

Americans who smoke tobacco may recall that Camel cigarettes advertise their fine Turkish tobacco. Tobacco, of course, did not originate in Turkey, any more than tomato sauce and noodles originated in Italy. We see England as the most powerful force in the global commerce of the American colonial period. England pulled the tides of our shipping, but the true course of our commerce was defined by the distant yet powerful attraction of the shroffs.

This is supported by Bill Swoger's June 23, 1997, Coin World article about the circulation of gold "chequins" in colonial America. The chequin (sekkah in Arabic) was first a Venetian coin in the 1200s. Trade with Arabs introduced the coin into their currencies. The coin was well-known in the 1600s. It appears in Ben Johnson's play Volpone (1606): "... every word your worship but lets fall is a chequin." According to Swoger, for most of the 17th century, these gold coins came to America along with the slave trade and as a result of our easy virtue with pirates. They are known to have circulated in New York and Virginia. They are cited as colonial currencies in Sylvester Crosby's 1875 book, The Early Coins of America.

It is important to note that two relevant references do not cite this Arabian money. America's Foreign Coins by Schilke and Solomon and Money and Exchange in Europe and America 1600-1775 by John M. McCusker are both mute. It might be that these omissions come from eurocentricism. Of course, Schilke and Solomon focus specifically on the Federal period 1793-1857 and on the coins that had legal tender status. Swoger's underlying thesis is that the chequin was a coin of illicit trade. Even though slavery was legal, the procedure was supposed to be "molasses for rum for slaves" rather than the purchase of American goods by ships of foreign flags via gold coins of heathen pirates. Yet, undeniably, such trade took place.
Ratnakar Bank, privately owned, now rebranded as RBL Bank
Shroff Arcade, Sodawala Lane, Mumbai
Shroffs were clearing houses for the purchase, transport, and sale of imports and exports. For over 300 years, European merchants of all nationalities doing business in southern Asia even looked to local shroffs to provide venture capital. By 1850, the British world economy based on the industrial revolution and laissez faire economics ultimately eclipsed the Asian networks of shroffs in China, India, and the Islamic lands. Even so, the shroffs did not simply evaporate. Writing about life in Shanghai in the 1930s, Canadian aviator Pat Patterson makes several references to "shroffs" some of whom were merely bill collectors for bordellos. 

Oxford International is Chit Fund a kind of lottery pool

You can still find bankers on Shroff Lane in Colaba, near Bombay [Mumbai], India. Until a couple of years ago, The Far East Economic Review of Hong Kong used to have a regular column called "Shroff" about mergers, acquistions, and other financial transactions.


Tuesday, August 19, 2014


“Today there are more than 20 cities with over 10 million inhabitants. Some are sleek, modern, and hightech; others are filled with slums. BBC journalist Andrew Marr visits five megacities: one of the oldest (London), the fastest-growing (Dhaka, Bangladesh), the largest (Tokyo), one of the most dangerous (Mexico City), and one that considers itself the new world capital (Shanghai).” From Athena Learning and Acorn Online  I believe that these three one-hour episodes can open a door, if not to the right answers, then perhaps to the right questions.  Though I disagreed some of narrator Andrew Marr's opinions, the presentation was important and timely.  

Episode 1: Living in the City
The need to strike a balance between community and efficiency is nowhere more apparent than in megacities. Marr examines Shanghai’s bursting-at-the-seams growth and the isolation of Tokyo. He also spends the night in a Dhaka slum—and despite its crime, pollution, and congestion, finds Mexico City an overwhelmingly friendly and livable place.

Episode 2: Cities on the Edge
How do you protect a city of 20 million people? Some of the dangers of the megacities are natural—earthquakes, floods, typhoons—while others are manmade. Marr takes an evasive driving course in the kidnap capital of the world and volunteers for the London police’s riot unit. In Tokyo, situated on three of the world’s most unstable geological fault lines, he learns how locals have planned for disaster.

Episode 3: Sustaining the City
Highways, roads, rail lines, and subway systems are the arteries of the megacity—and just like human arteries, they can become dangerously clogged. Marr pedals a rickshaw taxi in Dhaka, flies with Mexico City’s airborne traffic cops, and rides a high-speed magnetic railroad in Shanghai. He also finds out what London’s fast-food obsession is doing to its Victorian-era sewers.

I do note that "mega" is relative.  Today over 300 cities have over one million inhabitants. We live on an urban planet. On May 23, 2007, the population of Earth crossed to 50% urban (ScienceDaily). Most of us live in cities.  Are megacities just very large towns or really huge villages; or do they have social structures with special functions different from their predecessors—if indeed, the village is the ancestor of the city.  It may not be.

Historically, cities seem to have blossomed all at once, even as other places have remained villages for 8,000 years.  Sumer and Babylon are gone, but Athens, Rome, London, Shanghai, Tokyo, and even New York, have long continuous histories of almost-uninterrupted growth. 

But even they are not unrelieved deserts of concrete and steel. For a graduate class in Remote Sensing (2010), I wrote a paper on agriculture within megacities.  Moreover, about half of us urbanites are in small cities of fewer than half a million inhabitants. Only about 12% of us live in one of the 28 megacities.  (Christian Science Monitor here and National Geographic here.)
“Ugne Saltenyte, an analyst at the market research firm Euromonitor, recently calculated that 24 percent of the world's population over 15 years of age and with the equivalent of a two-year degree or more is concentrated in the world's 100 largest cities (report here). These same 100 cities — Saltenyte is counting full metropolitan areas here — are home to just 11 percent of the world's total population.” Washington Post here.

City Air Makes You Free
Capitalist Culture
Engines of Creation
The Genius of Design

Monday, August 18, 2014

Science versus Common Sense

The Unnatural Nature of Science by Lewis Wolpert (Harvard, 1993) is a small book that offers a wide range of big ideas.  Wolpert’s title thesis would make a good paper; and not much more would need to be said.  From that, he launches into personal views ever wider from the main idea.  Most of his claims are accepted assumptions and conclusions from within the culture of professional science.  They are easy to agree with.  His initial assertion that science is not common sense is the novel idea worth wrestling with.  The first corollary is that science is not technology.  That, too, pays dividends if you stop to think about it.

Common sense tells us that ice gives off coldness and that plants get their nutrition from the soil.  Scientists discovered truths that contradicted and disproved such “obvious” perceptions.  Science is a very specific and self-conscious way of exploring beyond the obvious. 

While technical advances were generally anonymous and often controlled by guilds, science is personal: scientists assert and argue in their own names.  Technologies seem to be rediscovered or reapplied as needed among different people in across history and geography.  Science was the unique invention of classical Greece.  No one else had it. Our time is new and unusual specifically because science does inform technology. Traditionally, the two were distinct, with technology being a consequence of common sense.

Paradoxically, the history of science provides many examples of competition or independent work on similar problems.  Ultimately, individual scientists might be replaceable in ways that individual artists never could be.  Without Crick and Watson, another laboratory would have teased out the structure of DNA.  Without Shakespeare, there could have been no Hamlet.

Wolpert only suggests several interesting observations of his own about creativity in science, without daring a scientific explanation of it.  While the scientific method demands that published papers follow a rigid format of reporting within an established methodology, no method for creativity exists.  It is not mere accident, though such chance events are easy to perceive.  Whatever the trigger, the visible event always depended on a broad and deep exploration by hard thinking about careful experiments.  “Fortune only favors the prepared mind,” said Pasteur.

Even though competition is keen, and egos are large, science is a group effort.  Individual scientists work together; seclusion is rare.  Moreover, scientists publish their findings, reporting to each other, so that their work can be re-tested and validated.

Wolpert refutes the postmodernist critics of science. If, as they claim, science is only a socially-constructed set of opinions, then is not that same claim itself not just another subjective viewpoint from a self-approved sect?  According to Wolpert, at best today, sociology is a “premature science” about where biology was in the eighteenth century.  In the closing chapters, Wolpert explores the “social responsibility” of scientists, advocating for openness, rather than secrecy.


Friday, August 15, 2014

Liquid Assets

You can monetize anything.  Despite the insistences of conservatives, libertarians, and objectivists that only gold is money, in fact, as F. A. Hayek suggested, money is whatever people accept as money.  

Still in business. 10 people in the bar right now.

Right now "18 or 20 people" in the bar.

Halfway between the U.P. and Minnesota, there eh.
But no longer open, apparently.

Lots of friendly places in New Ulm,
even "kid-friendly"
but this is not one of them...

Also on NecessaryFacts

Sunday, August 10, 2014

Turing's Cathedral

Before the flatscreen liquid crystal display, there was the cathode ray tube or CRT. Those electronic furnaces were the standard display device of desktop computing in the 70s, 80s, and 90s.  Before then, back when 1024 bits was a very large memory array and the largest computer in the world had 40 of those, the CRT was a storage device: numbers were written to the screen as blobs of light; and those blobs of light - 0s and 1s - were read by another beam.  And yet, for all of the seeming primitiveness, much that we do was done before in just that environment.  

Weather modeling was tested and proofed. Thermonuclear reactions were modeled - and so was stellar evolution... and so was the evolution of the digital world, the computer modeling itself as a projection of the binary future we now live without question.  Stanislaw Ulam, John von Neumann, Oswald Veblen, Robert Oppenheimer, Freeman Dyson, and Alan Turing were among about 25 or 30 pioneers, innovators, and visionaries of applied mathematics and frontline engineering, defined by a Platonic vision of the smartest people given free rein to do what they wanted without worrying about money.

In this detailed history of the earliest days of computing, the guest star, Alan Turing, is only a visitor.  The center belongs to John von Neumann, easily a man of Newtonian genius who thought deeply and clearly from the broadest abstractions to the minutest technical detail.  The atomic age and the information age brachiated from the trunk of Budapest's noble Jewry, its cafes, its huge homes of commerce.  It was reflected in the fineries of university culture across Eastern Europe and within the heart of Europe, Germany. And when the weeds of ignorance and hatred overran the garden of culture and learning, those who could came here.  Among them, also was Alan Turing. Though England was nominally a democracy, Turing would eventually be hounded to suicide by the oppressive and repressive politics of national security.  That same drive enveloped the Institute for Advanced Study and drove barbed tendrils into its structure, stinging Oppenheimer, and then those who had sided with or against him.  

Through all of that, the ENIAC ran continuously, a niggling 40 banks of 1024 bits modeling thermonuclear explosions and therefore the evolution of stars.  We can click on because meteorologists 70 years ago proved their theories with a 24-hour forecast that took 24 hours to run on the world's first computer.  Our digital world of iPads and Androids and wearable tech evolved from an array of vacuum tubes that was used to model the Darwinian evolution of an array of bits in a competitive environment.