43. Charles Fisher, Meditation in the Wild: Buddhism’s Origin in the Heart of Nature (Alresford, UK: John Hunt Publishing, 2013).
44. Adams, 1931, p. 404.
45. “A Martin Luther King Center to Open in Phila.,” Philadelphia Inquirer, November 23, 1983, p. 4-B.
46. “President Calls for Expanding Opportunities to Home Ownership, Remarks by the President on Homeownership,” St. Paul AME Church, Atlanta, Georgia, June 17, 2002, https://georgewbush-whitehouse.archives.gov/news/releases/2002/06/20020617-2.html.
47. Pecotich and Ward, 2007.
Chapter 12. The Gold Standard versus Bimetallism
1. Quoted by Ralph Benko, “President Trump: Replace the Dollar with Gold as the Global Currency to Make America Great Again,” Forbes, February 25, 2017.
2. https://www.bankofcanada.ca/rates/related/international-reserves/.
3. World Gold Council, https://www.gold.org/what-we-do/official-institutions/accounting-monetary-gold. There are 32,150 troy ounces in a metric ton, and the price of a troy ounce of gold at this writing is US $1294.
4. Daniel Indiviglio, “Bernanke to Ron Paul: Gold Isn’t Money,” Atlantic, July 13, 2011.
5. See Flandreau, 1996.
6. Atlanta Constitution, April 19, 1895, p. 4.
7. “The Treaty,” New York Times, February 10, 1897, p. 6.
8. “Silver in the West: Some Easterners Misjudge the Sentiment for It,” Washington Post, July 28, 1896, p. 4.
9. International Bimetallic Conference, Report of Proceedings (London, 1894).
10. Today’s University of Chicago opened in 1890. It had as one of its first professors J. Laurence Laughlin, who, before his Chicago years, wrote a book, The History of Bimetallism (1886), which strongly opposed bimetallism. The real Professor Laughlin then challenged Harvey to a real debate in which Laughlin did much better than in the fictional exchange, and so became a leading public intellectual with influence on the Gold Standard Act of 1900 and on the creation of the Fed. See André-Aigret and Dimand, 2018.
11. “Silver in the West: Some Easterners Misjudge the Sentiment for It,” Washington Post, July 28, 1896, p. 4.
12. “M’Kinley on Hard Times,” New York Times, October 7, 1896, p. 3.
13. “NO MORE: Do Silverites Ask about General Prosperity,” Courier-Journal, September 11, 1897, p. 6.
14. Noyes, 1898, p. 190.
15. In New York, there was a subtreasury office on Wall Street near the New York Stock Exchange. You can still see the open vault today, with an explanatory plaque, but the office no longer redeems in gold. The building is now a museum.
16. “The Pedigree of the Gold-Bug: The First Pair Imported from Nevada,” Louisville Courier-Journal, July 28, 1896, p. 2.
17. “The Pedigree of the Gold-Bug,” p. 2.
18. See Sargent and Velde, 2002.
19. Howard, 1895, p. 7.
20. Howard, 1895, p. 76.
21. Henry L. Davis, of the California Optical Company, quoted in “San Francisco Business Men Tell Why Times Are Hard and Name the Remedy,” San Francisco Chronicle, August 21, 1896, p. 8.
22. Charles Merrill, quoted in “San Francisco Business Men,” San Francisco Chronicle.
23. Official Proceedings of the Democratic National Convention Held in Chicago, Ill., July 7th, 8th 9th, 10th and 11th, 1896 (Logansport, IN: Wilson, Humphries & Co., 1896).
24. “Where Bryan Got Them,” Louisville Courier Journal, July 29, 1896, p. 4.
25. “Fiat Oratory,” New York Times, July 24, 1896, p. 4.
26. Louis Sloss, quoted in “San Francisco Business Men Tell Why Times Are Hard and Name the Remedy,” San Francisco Chronicle, August 21, 1896, p. 8.
27. The law was enunciated by Scottish economist Henry Dunning Macleod in 1857, at the very beginnings of the bimetallism controversy, and he generously attributed his law to British financier Thomas Gresham (1519–79). The law is very simple: if a bimetallic standard’s ratio is contrary to the ratio established in world markets, people will generally choose to pay in the less valuable currency, which will drive the other metal out of circulation.
28. “Voice of the People: A Correspondent’s Sensible Letter on the Money Question,” Chicago Daily Tribune, August 26, 1893, p. 14.
29. On top of the puzzle of the amazing success of this story, there is another puzzle. Baum’s book appears to be a parable on the gold standard and the Free Silver movement, but this was not generally recognized until 1964, when an article by Henry M. Littlefield pointed out the allegory. How odd that the parable was not noted in print for the better part of a century afterward. Littlefield is convincing, though, that Baum did intend to refer to the gold standard and the Free Silver movement, especially since Baum, as Littlefield points out, was himself active in the Free Silver movement, went to some of its parades, and lived in a free-silver-leaning rural area. Also despite defeat in the 1896 presidential election, Bryan was gearing up to run for the second time, in 1900, again advocating free silver, against McKinley again, and so the issues were still under public scrutiny in the book’s publication year.
30. Eichengreen and Temin, 2000, pp. 206–7.
31. Mark Sullivan, “Inflation’s Danger Begins When People Scramble to Get Rid of Their Dollars,” Hartford Courant, November 26, 1933, p. D5.
Chapter 13. Labor-Saving Machines Replace Many Jobs
1. Our word automatic goes back to the seventh century BCE, Homer’s Iliad, bk. 18, line 376: “Him [Hephaestus] she found sweating with toil as he moved to and fro about his bellows in eager haste; for he was fashioning tripods, twenty in all, to stand around the wall of his well-builded hall, [375] and golden wheels had he set beneath the base of each that of themselves (αὐτόματοι) they might enter the gathering of the gods at his wish and again return to his house, a wonder to behold.” http://www.perseus.tufts.edu/hopper/text?doc=Perseus%3Atext%3A1999.01.0133%3Abook%3D18%3Acard%3D360.
2. Aristotle, Politics, trans. Benjamin Jowett, bk. 1, pt. 4.
3. Argersinger and Argersinger, 1984. However, Walter Smith, in his 1879 book on the causes of the depression of the 1870s, makes no mention of labor-saving machines. The narrative did not reach everyone.
4. Visitors’ Guide to the Centennial Exhibition and Philadelphia (Philadelphia: Lippincott, 1876), https://archive.org/details/visitorsguidetoc00phil.
5. Visitors’ Guide to the Centennial Exhibition and Philadelphia.
6. Charles M. Depuy, “The Question of the Hour,” Philadelphia Inquirer, February 3, 1876, p. 1.
7. “Labor-Saving Machinery,” Daily American, December 11, 1879, p. 2.
8. “Labor-Saving Machinery.”
9. George, 1886 [1879], pp. 227–28.
10. “The General Omnibus Company of Paris,” Times of India, June 4, 1879, p. 3.
11. “Labor-Saving Machinery and Overproduction,” Los Angeles Times, June 28, 1894, p. 4.
12. “Labor-Saving Machinery and Overproduction.”
13. “The Great Problem,” San Francisco Chronicle, April 22, 1894, p. 6.
14. “Stores Are Merely Labor-Saving Machines,” Chicago Daily Tribune, March 14, 1897, p. 26.
15. “Trade Unionists’ Remedy,” Boston Daily Globe, April 24, 1899, p. 5.
16. https://www.ele.uri.edu/faculty/vetter/Other-stuff/The-Machine-Stops.pdf.
17. “Robot Cop Dictator: Rules Five-Way Intersection,” Los Angeles Times, July 29, 1929, p. 1.
18. Phillip Snowden, M.P., “Snowden Fears Trade War,” New York Times, June 10, 1928, p. 133.
19. “Unemployment Called Serious,” Atlanta Constitution, March 27, 1928, p. 4.
20. “Mayor Scored for Failure to Help Jobless,” Baltimore Sun, April 16, 1928, p. 22.
21. Chase, 1929, p. 209
22. Chase, 1929, pp. 215–16.
23. Chase, 1929, p. 323. Chase used the phrase “technological unemployment” (p. 212), but only rarely.
24. “Steno in the Future May Be a Robot, Show Indicates,” Chicago Daily Tribun
e, November 12, 1929, p. 45.
25. “Cause of the Crash,” Washington Post, November 9, 1930, p. S1.
26. George, 1886 [1879], p. 259.
27. “Topics of the Markets: Another Gloomy Day on the Stock Market,” Globe and Mail, October 29, 1929, p. 8. “Ford Would Raise Wages, Cut Prices Down to Actual Values,” St. Louis Post-Dispatch, November 21, 1929, p. 2a.
28. Cassel, 1935, p. 66.
29. “Text of Governor Roosevelt’s Address Opening His Campaign,” New York Herald Tribune, August 21, 1932, p. 17.
30. Chester C. Davis, “Underconsumption of Goods: A Challenge to the Nation,” New York Times, December 9, 1934, p. XX5.
31. See Balderrama and Rodríguez, 2006.
32. “Senators Invoke Ancient Rights Declare War on Dial Phone,” Baltimore Sun, May 23, 1930, p. 2.
33. Fred Hogue, “Robots Menace World’s Wage-Earners,” Los Angeles Times, February 1, 1931, p. 23.
34. “Fear of Losing Job Makes Worker Curtail Spending,” Boston Globe, November 1, 1931, p. A60.
35. “Einstein Sees U.S. Troubles Internal,” Boston Globe, January 24, 1933, p. 17.
36. Fred Hogue, “Robots Menace World’s Wage-Earners,” Los Angeles Times, February 1, 1931, p. 23.
37. Wayne Parrish, “Ten-Year Survey Points to End of Price System,” New York Herald Tribune, August 21, 1932, p. 1. The “Technocracy” group fell apart in discord by January 1933.
38. “Technology Cult Is Now on the Wane,” New York Times, January 29, 1933, p. N1.
39. Aubrey Williams, “A Crisis for Our Youth,” New York Times, January 19, 1936, p. SM4.
40. “Nazis to Bar Replacing of Men with Machines,” Hartford Courant, August 6, 1933, p. B5.
41. https://www.youtube.com/watch?v=n_1apYo6-Ow.
42. “Yale Scientist Proposes Building Robot Army,” Nashville Tennessean, January 25, 1941, p. 1.
43. “Robots Not War-Winners,” Globe and Mail, July 7, 1944, p. 6.
Chapter 14. Automation and Artificial Intelligence Replace Almost All Jobs
1. Elmo Roper, “What People Are Thinking,” New York Herald Tribune, December 28, 1945, p. 15A.
2. Ralph Reed, “1946 Sees First Traveling Vacations since the War,” Daily Boston Globe, April 14, 1946, p. B9. The term “victory vacation” had also been used earlier, since 1942, to refer to an economical stay-at-home vacation motivated by a desire to save money and resources for the war.
3. Slide projectors have a long history (https://www.ithaca.edu/hs/vrc/historyofprojectors/), but Ready-Mounts, the convenient slides mounted in cardboard by the photo lab, were first advertised in 1946.
4. Harry T. Montgomery, “Confidence Marks Business Outlook,” Los Angeles Times, January 3, 1950, p. 35.
5. Alfred L Malabre, Jr., “Automation Alarm Is Proving False,” Wall Street Journal, December 23, 1965, p. 6.
6. “Automation Strike Deadlock in U.K.,” South China Morning Post, May 3, 1956, p. 17.
7. John Hoggatt, “What Automation Means to You,” Austin American, December 16, 1956, p. SM1.
8. Roscoe Born, “Men & Machines: Industrial Unions Fear Automation Will Cut Membership and Power,” Wall Street Journal, April 7, 1959, p. 1.
9. Samuel Lubell, “Disturbing Paradox: Insecurity Blot on Recovery,” Boston Globe, May 5, 1959, p. 19.
10. “Automation Blamed for Recession,” Washington Post, April 23, 1958, p. A2.
11. https://www.youtube.com/watch?v=244SeRiP__M.
12. Michaels, 1962, pp. 13–14.
13. US Department of Health, Education and Welfare, National Commission on Technology, Automation, and Economic Progress, Technology and the American Economy (Washington, DC: US Government Printing Office, 1966).
14. Alfred L. Malabre, Jr., “Automation Alarm Is Proving False,” Wall Street Journal, December 23, 1965, p. 6.
15. Mark Potts, “Personal Robots: The Future Is Now,” Washington Post, December 12, 1983, p. WB33.
16. https://www.pastemagazine.com/articles/2015/11/the-100-greatest-movie-robots-of-all-time.html?p=5.
17. Andrew Pollack, “A New Automation to Bring Vast Changes,” New York Times, March 28, 1982, p. HT1.
18. Pollack, “A New Automation.”
19. G. Pascal Zachary, “Worried Workers,” Wall Street Journal, June 8, 1995, p. A1.
20. Stock prices measured by the nominal price per share of the S&P 500 index, not corrected for inflation or share repurchase.
21. A year earlier, in 2010, Google Voice Action allowed verbal commands to be executed.
22. Silver et al., 2017. There are also AlphaZero skeptics, who doubt the program works as claimed, https://medium.com/@josecamachocollados/is-alphazero-really-a-scientific-breakthrough-in-ai-bf66ae1c84f2.
23. Harari, 2018.
24. http://www.cnn.com/2011/11/03/tech/innovation/steve-jobs-book-sales/.
25. “Proposing to Tax Labor-Saving Machines,” Sun, January 18, 1933, p. 8, and Mady Delvaux, Draft Report, European Parliament, May 2016, http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//NONSGML%2BCOMPARL%2BPE-582.443%2B01%2BDOC%2BPDF%2BV0//EN.
26. George, 1886 [1879], p. 395.
27. George, 1886 [1879], pp. 395–96.
28. Quoted in “An Engineer Turns Diagnostician,” St Louis Post-Dispatch, June 5, 1932, p. 1.
Chapter 15. Real Estate Booms and Busts
1. For example, the correlation between the monthly Michigan Consumer Sentiment Index and the S&P/CoreLogic/Case-Shiller home price index corrected for inflation January 1978 to September 2018 is only 0.035.
2. Observer, “Making Auger Holes with a Gimlet,” Cultivator, September 1840, p. 146.
3. “Where They Live,” St. Louis Post-Dispatch, December 29, 1889, p. 18.
4. Davis and Heathcote, 2007.
5. A “traditional” ratio of land value to home value was 10%. Paul F. Kneeland, “This Land Boom Is a Land Boom with a Difference,” Boston Globe, June 15, 1958, p. A31.
6. For example, during the baby boom in post–World War II US home prices, one article described rising construction costs as the cause: “U.S. Construction Costs Grind Upward: Prices on New Homes Follow Suit: Experts Differ on Why Prices Should Zoom,” Christian Science Monitor, August 18, 1950, p. 13.
7. Grebler et al., 1956, p. 358.
8. “Housing Prices Nip Low Income Groups,” Arizona Republic, January 25, 1957, p. 43.
9. McGinn, 2007, p. 6.
10. Festinger, 1954.
11. “Own Your Own Home,” Washington Post, May 19, 1919, p. 9.
12. Arizona Republican, January 1, 1900, p. 3.
13. US Supreme Court Justice Joseph McKenna in Hall v. Geiger-Jones Co., 242 U.S. 539 (1917).
14. “Ponzi’s Florida Wizarding Pays Big—for Ponzi,” Chicago Daily Tribune, January 16, 1926, p. 9.
15. Notably, the US federal government now regulates interstate land sales with the Interstate Land Sales Full Disclosure Act of 1968 (ILSFDA), and the law clearly discourages the kind of advertising and sales tactics that caused land booms in the past. See Loyd, 1975, and Pursley, 2017. ILSFDA now falls under the jurisdiction of the Consumer Financial Protection Bureau, which was created by the Dodd-Frank Act of 2010, and it has been actively prosecuting land promoters who fail to comply.
16. See Gyourko et al., 2013 for such a model.
17. Saiz, 2010.
18. “In fact, from the point of view of the median husband-wife household considering the consumption of a marginal unit of housing services, the after-tax cost is estimated to have declined by 30 percent from 1970 to 1979. This was due primarily to a decline in the before-tax real cost of capital and a large inflation-induced increase in the tax subsidy to owner-occupied housing.” See Diamond, 1980, p. 295.
19. “WSJ ‘Mansion’ Section Makes Its Debut,” Wall Street Journal, October 4, 2012, http://www.wsj.com/video/wsj-mansion-section-makes-its-debut/5BAD7D1C-77FA-4057-9E3A-19446C5F2F52.html.
20. Katherine Clarke, “Tech CEOs: Lie Low or
Live Large?” Wall Street Journal, November 17, 2017, p. M1.
21. “House Prices: After the Fall” cover story, Economist, June 18–24, 2005.
Chapter 16. Stock Market Bubbles
1. For example, the correlation between the Michigan Consumer Sentiment Index and the Cyclically Adjusted Price Earnings (CAPE) Ratio for the Standard & Poor’s 500 Stock Price Index from January 1978 to November 2018 is 0.57. The correlation between the CAPE ratio and real home prices over the same interval is 0.42.
2. “Movie Ticker Blamed for Wild Trading in Stocks,” Austin Statesman, May 24, 1928, p. 3.
3. Kempton, 1998 [1955], prelude, location 153.
4. Alexander Dana Noyes, Globe (Toronto), October 22, p. 8, 1928, quoting “Financial Markets,” New York Times, October 22, 1928, p. 36.
5. Rappoport and White, 1994.
6. Robert Shiller, “Lessons from the October 1987 Market Plunge,” New York Times, October 22, 2017, p. BU3, https://www.nytimes.com/2017/10/19/business/stock-market-crash-1987.html.
7. Galbraith, 1955. He contradicted others’ claims: “Rise in Suicide Rate Laid to Depression: National Survey Shows 20.5 of 100,000 People Took Their Lives in 1931—Highest Figure since 1915,” New York Times, June 23, 1939, p. 24. Webb et al. (2002) show a modest positive correlation between unemployment for the past year and suicide, especially for white men.
8. Johnson and Tversky, 1983.
9. “When Youth and Beauty Go—What Then?” Louisville Courier-Journal, January 19, 1930, p. 87.
10. Terkel, 1970, p. 67.
11. Terkel, 1970, p. 376.
12. Terkel 1970, p. 164.
13. Kempton, 1998 [1955], prelude, location 118.
14. Jody Chudley, “JFK’s Father Used a Simple Trick to Spot Market Bubbles—and You Can Too,” Business Insider, October 12, 2017, http://www.businessinsider.com/how-to-spot-stock-market-bubbles-2017-10.
15. Baruch, 1957.
16. “Conservatives Begin to Realize Value of War Specialty Stocks,” Minneapolis Morning Tribune, July 26, 1915, p. 15.
Narrative Economics Page 35