SteemFest interview

The first ever international Steemit conference was held on November 11, 12 and 13. I loved the positive vibe that radiated from the community and I enjoyed meeting people I have had known only from the Steemit online platform.

Steemit is a social network that looks quite similar to Reddit and that rewards people with the cryptocurrency Steem for blogging and curating content. SteemFest, consisting of 206 attendees, had a remarkable mix of people from different nationalities. They joined the event from 32 different countries including Russia, China, India, Japan, Panama, Lithuania, Cambodia, Mexico, and the US. There were also many female attendees, something that you don’t see often in other cryptocommunities. 35% were female and 25% were developers. The event attracted famous writers like for example Neil Strauss, bitcoin artists like Tatiana Moroz, and Ned Scott who is the co-founder of Steemit. I loved listening to people’s stories and how they got involved with Steemit. I met someone who lived together with Vitalik Buterin (founder of Ethereum) in Barcelona, a homeless person who tries to get by by living on the cryptocurrency Steem, and so many other interesting people.

I was one of the 35 speakers at the event, and was also interviewed on some of my libertarian philosophical views. You can see the interview above.

If you’d like to know more about Steemit, then visit Steemit.com to see what it’s all about.

The Genetics of Success

In this article, I will explore the latest science on how our genetic makeup is correlated to our ‘life success’. This post is not for egalitarians who believe that everyone is equally beautiful and talented or that everyone can become an Aristotle through immense self-effort. No, this post argues that our genetic differences result in different expected life outcomes.

genetics-of-success
Image source

We are living in extremely interesting times. We may have reached a tipping point in genomic research. It seems that we can now weakly predict life outcomes based on genetic tests. Daniel Belsky from Duke University and his team of researchers have recently released a paper asserting that genetic tests can predict adult life outcomes. The magnitude of correlation between genomic tests and adult life outcomes is still very modest, but I believe that the predictions will grow more accurate once we gain more knowledge about the genetic makeup of ‘success’. I believe that this is big news, since this is the first well-developed psychometric/genetic research I have read so far that asserts that life success is to some extent related to our genetic makeup.

When Belsky et al looked at the genetic profiles and the people they studied, they found that people with higher polygenic scores did not only have greater educational attainments, but also had more prestigious occupations, higher incomes, more assets, greater upward social mobility, and were more likable and friendly.

Main research findings

The main research findings can be summed up as follow:

  1. polygenic scores predicted adult economic outcomes even after accounting for educational attainments;
  2. genes and environments were correlated: Children with higher polygenic scores were born into better-off homes;
  3. children’s polygenic scores predicted their adult outcomes even when analyses accounted for their social-class origins; social-mobility analysis showed that children with higher polygenic scores were more upwardly mobile than children with lower scores;
  4. polygenic scores predicted behavior across the life course, from early acquisition of speech and reading skills through geographic mobility and mate choice and on to financial planning for retirement;
  5. polygenic-score associations were mediated by psychological characteristics, including intelligence, self-control, and interpersonal skill.

Belsky’s main research question

In 2013, Rietveld et al reported the first successful genome-wide association study (GWAS) of educational attainment. They analyzed millions of genetic variants in more than 100,000 individuals and found a genetic map that was related to people’s educational attainment. This genetic map could even explain differences in educational attainment between siblings in the same family.

The main research question that Belsky et al ask is: “do genetic discoveries for educational attainment predict outcomes beyond schooling?”

If so, what are the developmental and behavioral pathways that connect differences in DNA sequences with divergent life outcomes?


Image source

Belsky’s research methodology

1,037 people born between April 1972 and March 1973 in Dunedin, New Zealand, were tracked through a 38-year assessment of their socioeconomic development. This study became known as ‘the Dunedin study’. The cohort represented the full range of socioeconomic status (SES).

The researchers derived polygenic scores from the approximately 2.3 million genotypes that according to Rietveld et al would make up the genetic predisposition to educational attainment. In addition, adult-attainment scores were derived from extensive analyses of Dunedin members’ life developments. See table 1 for developments that were tracked and the methods through which these developments were measured.

The researchers have for example measured SES, determined from the higher of either parent’s occupational status throughout the Dunedin Study members’ childhoods. Educational attainment was measured, looking at the highest obtained degree. Attainment beyond education were measured by members’ reports of occupation, income, assets, credit problems when they were 38 years old and from social welfare and credit-score records. Reading abilities, taken when the Dunedin Study members were 7, 9, 11, 13, 15, and 18 years old, were measured as well. What I find extremely interesting is the fact that the researchers have measured not only cognitive ability through picture vocabulary tests and IQ tests, but also certain personal traits like self-control, impulsive aggression, hyperactivity, lack of persistence, inattention and interpersonal skills.

More substantive research results

I will list all research results here:

  1. people with higher polygenic scores tended to achieve higher degrees;
  2. people with higher polygenic scores tended to be more socioeconomically successful, holding more prestigious occupations, earning higher incomes, having more assets, relying less on social-welfare benefits, having higher credit scores and reporting fewer difficulties paying expenses;
  3. children with higher polygenic scores tended to come from families with higher SES;
  4. children with higher polygenic scores tended to attain more regardless of whether they began life in a family of low SES or high SES. Children from low SES with high polygenic scores tended to have greater upward social mobility than their low SES peers with low polygenic scores;
  5. children with higher polygenic scores were more likely to talk earlier and quicker to begin communicating using sentences;
  6. children with higher polygenic scores were able to read at younger ages;
  7. adolescents with higher polygenic scores had higher educational aspirations at the age of 15;
  8. adolescents with higher polygenic scores performed better academically and outperformed their peers on standardized tests;
  9. people with higher polygenic scores were more likely to pursue occupational opportunities outside of New Zealand;
  10. people with higher polygenic scores were more financially planful;
  11. people with higher polygenic scores tended to find partners with higher socioeconomic attainments;
  12. people with higher polygenic scores were not more satisfied with their lives;
  13. people with higher polygenic scores performed better on IQ tests and showed more rapid cognitive development during childhood;
  14. people with higher polygenic scores had stronger noncognitive skills, such as self-control, friendliness, confidence, being cooperative and communicative;
  15. children with higher polygenic scores were no healthier than their peers.

Tough questions

Knowing that our genetic makeup partly determine our success in life, would it be ethical to screen embryos for genetic signs of success in life? In some cases, embryologists already check embryos for major diseases, but should we allow parents to select embryos with the greatest genetic odds of future success?

These are interesting questions that, I believe, we will be facing in the near future.


Image source

Reference

Belsky et al – The genetics of success

Early childhood memories of a Cambodian refugee camp

In 1991, sixteen Khmer families from Cambodian refugee camps (mostly from Khao I Dang) received asylum in the Netherlands. This Saturday, November 5, we will celebrate the 25th anniversary. To commemorate our stay in the Netherlands, I would like to share some of my early childhood memories about being born in a Cambodian refugee camp in 1986.

I understand that my story is just one small, but essential part of my family’s overall journey for safety from the civil war (1967-1975), Khmer Rouge (1975-1979) regime, and the subsequent Vietnamese occupation. According to some estimates, 2 million out of 8 million people died during this long period. This figure has been contested many times. I don’t think anyone knows how many people have actually died, but if I look at the family members of my parents’ households: 40% from my mum’s side died and 25% from my dad’s side.

Khao I Dang, the refugee camp where I was born

My parents were forced to work in labour camps in the countryside in Battambang by the Khmer Rouge. They eventually met each other while fleeing from Battambang to the Thai border when the Vietnamese invaded Cambodia. As with most fleeing Cambodians, my parents decided to get together – not out of love, but more out of the need and desire to share their hardships. This was after all, a months-long journey through the heart of the Cambodian jungle in which my father lost his father, the granddad I never came to know. My mother lost her brother and her father. As my mother was separated from her brother early on during the Khmer Rouge regime and never witnessed his death, she had always held hope that one day she would find him again.

My parents’ long journey towards Thailand brought them to the Sa Kaeo camp which was the first organized refugee camp that opened in 1979. Within just 8 days, the refugee population grew to 30,000. The camp eventually closed down half a year later, because of unfavorable conditions. The drainage in the campsite was for example so poor that several refugees, too weak to lift their heads, drowned from a flood as they laid on the floor in tents made of plastic sheets.

One month after the opening of Sa Kaeo, the Khao I Dang camp was opened and many people were repatriated into Khao I Dang. My parents eventually ended up there as well.

Khao I Dang camp

Khao I Dang was a refugee camp on the Thai-Cambodian border where I was born. It was a bamboo village with dirt roads, barbed wire, and armed guards. Within just 5 months, the camp’s population reached 160,000. Population wise, this would make the camp the 11th largest municipality in the Netherlands.

Although the camp gave us more safety, violence and theft ran rampant.

Religion and death

People continued their religious activities and some houses were transformed into places for Buddhist ceremonies. In this picture you see my two brothers, my father, and I wearing our best clothes. We just came back from a visit to a local ‘temple’. The husband of my aunty, who had just been allowed to find refuge in Australia, had recently died in the camp.

My two brothers, me, and my father

Behind me is a grave of him. My father hired a photographer to take this picture so that he could send it to my aunty. I am the one barefooted.

Hospital

My father worked at the hospital. The hospital was a large hall with beds placed next to each other. I remember that I visited the hospital where I was given a doctor’s gloves to play with. I would blow it and enjoy a child’s kick out of it.

Hospital in Khao I Dang

Night raids

I remember that during some nights, rebels with guns would raid people’s houses to steal their belongings. Often, the word about night raids spread faster than the rebels themselves, and so most of the times we were warned before the rebels reached us. I remember very well one incident when we did not flee early enough.

My brothers and I ran after my father, while my mother took my baby sister in her arms to flee in separate directions. My father brought us into a nearby canal to hide there. When the Thai patrolling soldiers within the camp arrived at the scene, shooting between the two groups erupted. When I think back to this moment, I can still clearly feel the fear I had. I wanted to cry, but my father put his hands tightly on my mouth so that I would not make any sound. We then fled to the hospital where my father was working, and stayed there during the night. We were too afraid to go back home, and waited until the next morning.

In another incident, our neighbors were too late to flee and somehow for reasons unknown, a rebel threw a hand grenade inside their little home that killed the whole family.

Kindergarten

Despite the violence and misery, people tried to rebuild their normal lives. I went to kindergarten and remember so well one incident that I played hooky.

I was 4 years old and walking to school by myself, I stopped and decided to return home to my mother’s small shop. This is an incident that I am personally extremely proud of. As long as I can remember, I have always detested school. I hated to sit still and to be told what to do and what not to do. I took this attitude with me to the Netherlands, and still today I am very critical of schooling. My mother, a soft young woman, let me stay with her at the shop. But then my father came by, got angry with me, and spanked me for not going to school. Until this day I still don’t think that I did anything wrong.

Our little shop

Trade went on. Although it was illegal, industrious people were trying to make money by starting small businesses. This shows to me that entrepreneurship is natural to us human beings, and that economics and trade are naturally emerging processes as people are always looking for ways to improve their lot and to fulfill their needs.

Thai merchants would come to the fences, away from the Thai soldiers who were patrolling, in order to sell food to the refugees inside. Such activities occurred during night-time. When Thai soldiers would find out that we were trading with outsiders, they would beat us and take away our belongings. We, refugees, were also not allowed to get outside of the camp or we would risk being shot dead by Thai soldiers.

My mother, my brothers and I at our little shop. I am the one in the blue jersey

During day-time, people inside the camp would expose their new belongings and small shops would emerge. My mother sold small products of convenience. Some of it was smuggled by Thai people into the camps that we, Cambodians, were selling to other Cambodians. Other things like oil and sugar were given to us as part of a food relief program that we used sparingly so that we could sell it further. With the money we earned, we could then buy other goods that we needed more.

Other ways through which we made money was by brewing alcohol made from rice and apples. Although alcohol was illegal, it did not stop my parents from brewing it. Whenever a Thai soldier would come to our house for inspection – I don’t think you can really hide the alcoholic odor that was surrounding our little house when we were brewing alcohol – my parents would bribe him with money so that he would leave us alone.

Continuing story

These are some of my childhood memories of our lives in Khao I Dang. Maybe next time I can tell more about our life in the camp, share some of my older brothers’ memories, our cat that was lost, killed and eaten by someone or my first encounter with inspiring Superman and Spider-Man comic books. Maybe, I will also write about our continuing journey to the Netherlands and the psychological impact my experiences in Khao I Dang had on me. I can tell about the nightmares that haunted me until my teenage years, how I always felt alienated from the people here and the inferiority complex towards Dutch people that I developed as a little child for feeling different. Feeling different made me feel insecure. Every time I met someone, and I think it lasted until my later teenage years, I would always ponder whether the person would kill me if he would be put in similar circumstances as those many killers from the Khmer Rouge period. In other words: as a child, I already wondered excessively about the “banality of evil”. These thoughts were of course extremely unhealthy, especially when you are as young as 4 or 5 years old.

The biggest lesson I have learned from my childhood is that both good and bad experiences are important in our lives. Happiness, in my opinion, is very much overrated and hardship is at least as valuable.

I have not written this so that people pity me. Pity, and in particular self-pity, is an extremely damaging emotion. It multiplies our suffering and reveals an extremely pathological egoism. When I look back at the hardships my family has overcome, I like to remind myself of Haruki Murakami’s saying that “only assholes feel sorry for themselves”.

Invitation to Steemit – a blockchain based social media platform

As some might already suspect from some of my previous posts, I am a cryptocurrency enthusiast. As of now, there is another crypto-project founded by two libertarian anarchists that I find extremely interesting and that I would like to share with you.

In this post, I’d like to introduce this project called Steemit, a new social media platform where content creators (bloggers) can earn money with every ‘upvote’ (comparable to ‘likes’ on Facebook) they receive from the community. I am not encouraging my fellow note writers to quit posting articles on Notes on Liberty, but I would recommend them to share their articles both here and on the Steemit platform.

So what is Steemit?

“Collectively, user-generated content has created billions of dollars worth of value for the shareholders of social media companies, such as Reddit, Facebook, and Twitter. Steem supports social media and online communities by returning much of its value to the people who provide contributions by rewarding them with virtual currency.”

Steemit is most similar to Reddit, but with the important difference that you can monetize your blog. You can take a look at my first two ‘hits’ on Steemit for proof that you can monetize your blogging skills:

Steemit was founded half a year ago by entrepreneurs Ned Scott and Daniel Larimer. Daniel Larimer has been a familiar face in the cryptocurrency scene as the founder of Bitshares, which currently ranks as the 19th largest cryptocurrency in market cap on www.marketcap.com. Steem itself, the currency that drives steemit, has risen in prominence among other cryptocurrencies. According to www.marketcap.com, Steem is now the 4th largest behind Bitcoin, Ethereum and Ripple.

The concept behind Steemit is very simple, and you don’t need in-depth knowledge of the workings of cryptocurrencies to start writing (and curating posts) and earning some money. If you have a facebook account or a reddit account, you can sign up at www.steemit.com. At first sign up, you will receive $10 worth of Steem Power – I will later get to Steem Power to explain what it is. Once you sign up you can immediately start submitting posts or comments on other people’s submissions. You can earn money through both ways.

The website is still in beta, and you may argue that it is not as user friendly as Reddit or other social media networks, but the pace in which applications have been rolled out on the platform in the one month that I have been using it is impressive!

A chat functionality with private messaging, a functionality to follow other writers, and weekly insights in your earnings have for example all been added in the past four weeks.

Steemit roadmap

This, however, is just the beginning. The founders of Steemit have far larger plans than just creating a blockchain based social network. The social network is the means to attract enough users of its currency (Steem and Steem Dollars) that a full-fledged market place based on these currencies can emerge. The first step is to increase the user base, but next steps are to create a market place in which people can trade goods with Steem and Steem Dollars and where Steem will grow in such prominence that it will compete with already existing fiat currencies like the USD, Euro, GBP, Yen, and RMB. We are still far off from this actually happening, but it’s great to see these kinds of experiments with the free market.

Is Steemit a scam?
I have read about people who have called it a scam, but the funny thing is that you don’t need to put any monetary investments in the platform to submit an article and earn some money. Normally in scams, you are encouraged to give away your money for little or nothing in return. With Steemit, all you need is to create content that the community values and in return you will receive some money.

Steem, Steem Power and Steem Dollars
Lastly, I’d like to say some words about the three tokens you can hold when using Steemit: liquid Steem, Steem Power and Steem Dollars (SBD).

Liquid Steem, or simply Steem by name, is immediately convertible to bitcoin and fiat currencies as USD. People who would like to speculate on the price of Steem can hold it to sell at a higher price.

You can also convert your Steem into Steem Power. Steem Power gives you, if I am not mistaken, interest of approximately 0.7% in Steem Power per day. Holding Steem Power is like holding a stake in the long-term development of Steemit as you can only convert 1% per week of your Steem Power in Steem and exchange it for bitcoins and fiat currencies.

Steem Dollars are tokens pegged to the USD at an exchange rate of around 1 : 1. People who don’t like the volatility of cryptocurrencies can hold Steem Dollars.

For more information about Steemit, you can read the Steem White Paper or watch this excellent interview of its founders:

I hope that I have triggered your curiosity about Steemit, and I hope that you will take this invitation to post your content not only on Notes on Liberty, but also on www.steemit.com. Please don’t forget to follow me once you are on Steemit. You can find me at www.steemit.com/@chhaylin.

Why a Nexit would be good for the Netherlands

Past Friday, 51.9% of the British have voted to leave the European Union against 48.1% of those who have voted to remain. The details of the EU referendum can be found on BBC’s EU referendum page. Although it is still unclear what shape the relationship between Britain and the EU will take, I expect that the Brexit will offer good economic opportunities for Britain provided that they can reach free trade agreements with all nations within the EU and provided that they will continue to open up their markets for free trade with other countries outside of the EU.

An Exit of the Netherlands, or a Nexit, will have more consequences than a Brexit as the Netherlands are also participants in the European Monetary Union. A Nexit could therefore lead to an end of the Euro. An analysis of the EU is a political analysis and as politics is always complemented by power, this analysis should hence incorporate insights on power struggles and competing visions. Each country has its own interests within the EU, just like any politician within the EU has his own special interests that he is serving. Participation in the EU is often represented as an exercise of solidarity and political appeasement, however it is still politics with politicians’ usual desire for self-enrichment.

There have always been two competing visions of the EU. The first one is a classical liberal vision, led by German speaking Christian democrats Schuman (France), Adenauer (Germany) and Alcide de Gasperi (Italy) with the Treaty of Rome (1957) as the greatest achievement of this classical liberal vision for Europe. The Treaty sought to deliver the following four freedoms: free movement of goods, freedom of movement for workers, the right of establishment and freedom to provide services, and free movement of capital. The other vision was a socialist vision led by mainly French politicians, such as Jacques Delors and François Mitterrand whose goal was to create a supranational state.

Treaty of Rome signed
Treaty of Rome.

Classical liberal vision
The first vision promotes political competition between the EU’s member states by opening up borders. When a person is discontent with the excessive taxes in his country, he could leave his country for another. Competition between member states would lead to smaller governments, lower taxes, and political respect for people who would want to pursue their individual freedoms in another member state. It would represent a return to the political model that was prevalent in Europe from the Middle Ages to the 19th century when different political systems coexisted independently. There were independent cities or city states in Flanders, Germany and Northern Italy. There was the kingdom of Bavaria, the republic of Venice, and small city states like Ghent and Bruges embraced their autonomy. The German writer and poet Johann Wolfgang von Goethe (1749-1832) had expressed the beauty of such a political system as follows when he discussed a Germany that was still splintered in 39 independent states:

“I do not fear that Germany will not be united; … she is united, because the German Taler and Groschen have the same value throughout the entire Empire, and because my suitcase can pass through all thirty-six states without being opened. … Germany is united in the areas of weights and measures, trade and migration, and a hundred similar things. … One is mistaken, however, if one thinks that Germany’s unity should be expressed in the form of one large capital city, and that this great city might benefit the masses in the same way that it might benefit the development of a few outstanding individuals. … What makes Germany great is her admirable popular culture, which has penetrated all parts of the Empire evenly. And is it not the many different princely residences from whence this culture springs and which are its bearers and curators? … Germany has twenty universities strewn out across the entire Empire, more than one hundred public libraries, and a similar number of art collections and natural museums; for every prince wanted to attract such beauty and good. Gymnasia, and technical and industrial schools exist in abundance; indeed, there is hardly a German village without its own school. … Furthermore, look at the number of German theaters, which exceeds seventy. … The appreciation of music and song and their performance is nowhere as prevalent as in Germany, … Then think about cities such as Dresden, Munich, Stuttgart, Kassel, Braunschweig, Hannover, and similar ones; think about the energy that these cities represent; think about the effects they have on neighboring provinces, and ask yourself, if all of this would exist, if such cities had not been the residences of princes for a long time. … Frankfurt, Bremen, Hamburg, Lübeck are large and brilliant, and their impact on the prosperity of Germany is incalculable. Yet, would they remain what they are if they were to lose their independence and be incorporated as provincial cities into one great German Empire? I have reason to doubt this.”[1]

In addition to the advancement of political competition, the vision also promotes economic competition. A German employee would not be obstructed from working in France anymore, a Dutchman would not be taxed by the government if he transfers money from a Dutch to a Spanish bank or when he decides to buy stocks on the Italian equity market. Nobody would withhold a Belgian brewery from selling beer in other countries within the European free trade area.

Socialist vision
The second vision promotes a European central state that holds the power to enact more regulations, redistribution of wealth, and harmonization of legal systems within the whole Union. A strong central political body is to coordinate such efforts. The consequence is that its member states would increasingly have to give up their sovereignty. This is clearly visible from the political events in Greece and Ireland during the financial crisis of 2008 when Brussels demanded from Greece and Ireland how they should deal with their deficits and what austerity measures they should take. The socialist vision of Europe is an ideal for the political class, bureaucrats, interest groups and the subsidized sectors that want a powerful central state for their self-enrichment. Political competition among its member states, something that the classical liberals supported, should be eliminated. Doing so, Europe becomes less democratic and political power is increasingly shifted into the hands of bureaucrats and technocrats in Brussels. Historically, such plans for concentrated political power had been realized by such figures as Charlemagne, Napoleon and Hitler. The difference with our times is that the creation of a modern European superstate does not directly require military means. The introduction of new institutes like the European Central Bank, a common currency like the Euro, and extended power of the European Commission would suffice. Similar socialist intentions were already visible from the start of the European integration in the European vision of Jean Monnet, the intellectual father of the European community. Fearing an independent and emerging Germany after the second World War, an integration of Germany into Europe was considered to be a good thing. Next to that, the French wanted to have control over the Rühr area and they wanted to keep other vital German resources out of solely German hands. After losing her colonial powers in Indochina and Africa, the French ruling elite were also looking for new influence and pride which they eventually found in the European community.[2] The French premier in 1950 had for example proposed a plan to install a European army under the leadership of the French.

Why it is good for the Netherlands to leave the European Union
I believe that the EU should never have had more ambitions than the free trade zone that requires no supranational institutes, except for a European Court of Justice that is restricted to supervising conflicts between the member states and guaranteeing the four freedoms. The EU has become so far removed from the classical liberal vision of political and economic competition that it is not worthwhile anymore for the Netherlands to participate. It has declined into a malignant cartel of states that can tell its members with whom and how they should conduct their trade. A good example were the quotas and import levies on Chinese solar panels in 2013 under the disguise of ‘anti-dumping’ measures. Several countries like the Netherlands and Germany had first opposed to these measures as they would like to maintain good relationships with China. Nonetheless, the European Committee, apparently under influence of solar panel lobbyists like those of the German producer Solarworld AG, introduced ‘anti-dumping’ measures. The eventual winners of such measures are European solar panel producers and its victims are the European people that simply want to buy cheap solar panels. Another example are the sanctions that the EU had imposed on Russia since the Ukrainian conflict – a conflict that was provoked by American imperialists and NATO.[3] The deteriorating trade relationships between the EU and Russia is also detrimental to the wealth of ordinary European citizens. Another recent example is the prohibition of high-powered vacuum cleaners and possible future bans on other energy appliances such as kettles and hairdryers in order to reach environmental targets.[4] Those who profit from such measures are mainly large legacy organizations such as Bosch and Siemens that have enough capital to meet the strict EU regulations.

Another reason why a Nexit would be good for the Netherlands is that it offers an opportunity to extricate oneself from the Euro and the implicitly pledged financial aid when a future financial crisis will tear through Europe.

The tragedy of the Euro
The introduction of the Euro has proven to be a huge mistake, because it has enabled fiscally irresponsible governments of such countries like Portugal, Italy, Greece, Spain etc. to conduct unsustainable economic policies. In the past, when these states had their own currency, their governments had to finance their budget deficits through the sales of government bonds which resulted in higher government debts. The higher government debts manifested itself in higher interest rates on their government bonds, and a greater money supply would lead to devaluations of their currencies.

To illustrate how the process of government bonds financing works in the European Monetary Union, we could look at the development of 10-year government bonds. The graph below shows the interest rates that governments have to pay to the financiers of their 10-year government bonds from 1995 to 2011:

Development in Interest Rates on 10-year Government Bonds
Interest rates on 10-year government bonds from 1995-2011.

The y-axis represents the rates of interest that an investor receives from 10-year government bonds. Countries that are economically stronger and fiscally more conservative are rewarded with lower interest rates due to the smaller risk that these governments will not pay back their loans. In the case of Germany, a country with traditionally a stronger economy, a more conservative Bundesbank, and a fiscally more responsible government than many other European nations, investors received 7.5% interest on their 10-year government bonds in 1995. Greek government bonds had a yield of 18% in 1995. 1995 was the year in which the European Committee had announced that the Euro would arrive in 2002. Interest rates on government bonds consequently converged in the following years. At the end of 1997 all rates of interest on Portuguese, Irish, Spanish, Italian, French and German 10-year government bonds were more or less equal despite the fact that many of the governments of these countries still spent more than they received in tax incomes. The consequence of sharing a common currency with fiscally more responsible countries like Germany and the Netherlands is that fewer price signals in the form of higher interest rates on government bonds of fiscally irresponsible governments emerge. Irresponsible governments can issue government bonds to the banking sector that transfer these bonds as collateral to the ECB in return for loans. The interest rate that banks pay for the loans of the ECB are issued as profits to their governments. This is in short how ‘seigniorage’, the profits derived from money creation when the costs of money production and the distribution of money are lower than the value of money itself, is created.

Sovereign debt financing in EMU
Sovereign debt financing in the European Monetary Union.

This process leads to inflation, but the costs of inflation in the EMU are not solely borne by the respective country that issues the government bonds, but by all countries that participate in the EMU. A country like Spain can for example issue government bonds that traditionally would correspond with 10% inflation. However, when other countries like the Netherlands and Germany issue an amount of bonds that corresponds with 5% inflation, Spain benefits from seigniorage as the inflation created by Spain is higher and borne partly by the Netherlands and Germany. A Euro in this regard is beneficial for fiscally irresponsible governments. It is actually a “Tragedy of the commons”. Abusing the Euro in this way is exactly what countries like Portugal, Italy, Ireland, Greece, Spain and France have done. This works until a financial crisis shows how insolvent the governments of these countries actually are. That has happened in 2008, the moment when interest rates on European government bonds started diverging. The ECB had even decided to buy up Greek government debts in May 2010 in order to lower the interest rates on Greek government bonds. In June 2010, a temporary European Financial Stability Facility (EFSF) was founded with guarantees of up to €440 billion to combat the European sovereign debt crisis. It has provided financial assistance to Ireland, Portugal and Greece. The EFSF was later replaced by the European Stability Mechanism (ESM) in October 2012 with a total described capital of around €700 billion of which the Netherlands has pledged €40 billion in capital participation. The Dutch prime minister, Mark Rutte, had promised the Dutch in 2011 that the Netherlands would receive back the money it has loaned out to Greece in May 2010.[5] The total sum that was loaned to Greece by the Dutch was €3.2 billion. However, in 2012 when the Netherlands loaned out €14.5 billion of the second financial aid package of €130 billion that was pledged by Europe and the IMF to Greece, the Dutch minister of Finance, Jeroen Dijsselbloem, admitted that the Netherlands were losing money. Rutte also admitted that he could not guarantee that the Dutch loans to the Greeks would not be forgiven.[6] Three years later, on July 13 2015, the Netherlands loaned out another €22.6 billion to Greece.[7] It has become clear that such financial pledges of the Netherlands to fiscally irresponsible governments like that of Greece are not beneficial for the Dutch. Even in the long run it is not beneficial for the EU as it supports and prolongs a socialist European system that is deeply rotten to its core and destined to fail. What the EU needs is a radical return to decentralization and political competition.

The EU has become a sinking ship. It appears to me that the Netherlands should leave the Union as soon as possible. I do not see how Europe can maneuver itself safely through the next financial crisis that is at the point of breaking out as more banks are on the brink of collapse.[8] I also expect greater centralization of political power within the EU and a greater loss of individual member countries’ sovereignty. On June 27, 2016, the Polish media had reported that France and Germany were taking matters into their own hands and are using the Brexit to unveil their plan to morph the continent’s countries into one giant superstate. Under their radical proposals,

“EU countries will lose the right to have their own army, criminal law, taxation system or central bank, with all those powers being transferred to Brussels.”[9]

Conclusion
A sensible Netherlands would leave the European Union and the European Monetary Union in order to preserve political and economic sovereignty. They would have free trade agreements with all countries within and outside of the EU. EenVandaag, a popular Dutch TV programme, had published the results of their 27,000 large online poll on Sunday June 26, 2016 in which 54% of the Dutch would like to hold a referendum about the Netherlands’ participation in the EU. 48% of the poll wanted the Netherlands to leave the EU against 45% who would like to remain in the EU.[10] In the meantime, the Remain camp will continue their nauseating snobbery accusing the Leave camp of being racist, nationalistic, isolationist or simply ignorant.

References
Bagus, P. (2010). The Tragedy of the Euro.

BBC. (2016). EU referendum: The result in maps and charts.

China Courant. (2014). Mogelijk nieuwe straffen voor producenten Chinese zonnepanelen.

Dijkstra, M. (2015). Griekse crisis: wat heeft het allemaal gekost?

DutchNews.nl. (2016). Dutch PM rejects referendum calls: not in the Netherlands’ interest.

Fullfact.org. (2016). First they came for the vacuum cleaners: will it be kettles next?

Gutteridge, N. (2016). European SUPERSTATE to be unveiled: EU nations ‘to be morphed into one’ post-Brexit.

Hoppe, H.H. (2001). Democracy the god that failed.

Judt, T. (2006). Postwar: A History of Europe Since 1945.

McMurtry, J. (2016). Ukraine, America’s “Lebensraum”. Is Washington prepared to wage war on Russia?

NOS. (2011). Rutte verwacht Grieks geld terug.

NU.nl. (2012). Rutte geeft verbreken verkiezingsbelofte toe.

Zerohedge.com. (2016). Deutsche Bank tumbles near record lows as yield curve crashes.

Footnotes
[1] From Johann Peter Eckermann’s Conversations with Goethe (1836-1848).

[2] Tony Judt writes in Postwar: A History of Europe Since 1945 (2006) that “[U]nhappy and frustrated at being reduced to the least of the great powers, France had embarked upon a novel vocation as the initiator of a new Europe” (p. 153). He also writes that “[F]or Charles de Gaulle, the lesson of the twentieth century was that France could only hope to recover its lost glories by investing in the European project and shaping it into the service of French goals (p. 292).”

[3] See for example Prof. John McMurtry’s “Ukraine, America’s ‘Lebensraum’. Is Washington prepared to wage war on Russia?” for an analysis how Washington had provoked the Ukrainian conflict with Russia.

[4] See “First they came for the vacuum cleaners: will it be kettles next?”

[5] See “Rutte verwacht Grieks geld terug” (2011). http://nos.nl/artikel/275035-rutte-verwacht-grieks-geld-terug.html

[6] See “Rutte geeft verbreken verkiezingsbelofte toe” (2012). http://www.nu.nl/algemeen/2968363/rutte-geeft-verbreken-verkiezingsbelofte-toe.html

[7] See “Griekse crisis: wat heeft het ons allemaal gekost?” http://www.elsevier.nl/economie/article/2015/07/griekse-crisis-wat-heeft-het-ons-allemaal-gekost-2657386W/

[8] See for example “Deutsche Bank tumbles near record lows as yield curve crashes.” http://www.zerohedge.com/news/2016-06-13/deutsche-bank-tumbles-near-record-lows-yield-curve-crashes

[9] See “European SUPERSTAT to be unveiled: EU nations ‘to be morphed into one’ post-Brexit.” http://www.express.co.uk/news/politics/683739/EU-referendum-German-French-European-superstate-Brexit

[10] See “Dutch PM rejects referendum calls: not in the Netherlands’ interest.” http://www.dutchnews.nl/news/archives/2016/06/92520-2/

Black Women are not the most educated group in the United States

Several news media have published in the past weeks that Black Women are the most educated group in the United States or that they are the most educated according to race and gender. I decided to look into the statistics, ran some numbers, and found out that this is not the case. Black Women don’t perform as well as Caucasian and Asian Men and Women.

Here are examples of articles that wrongly claim that Black Women are the most educated group:

These media outlets have misrepresented the statistics from the National Center for Education Statistics and have misunderstood the report’s finding that

“From 1999–2000 to 2009–10, the percentage of degrees earned by females remained between approximately 60 and 62 percent for associate’s degrees and between 57 and 58 percent for bachelor’s degrees. In contrast, the percentages of both master’s and doctor’s degrees earned by females increased from 1999–2000 to 2009–10. Within each racial/ethnic group, women earned the majority of degrees at all levels in 2009–10. For example, among U.S. residents, Black females earned 68 percent of associate’s degrees, 66 percent of bachelor’s degrees, 71 percent of master’s degrees, and 65 percent of all doctor’s degrees awarded to Black students.”

From this, they conclude that Black Women are therefore necessarily the most educated group. What it shows however, is not that Black Women are the most educated, but that they have the highest proportion of graduates in comparison to their male counterparts by race. See here the data from the NCES:

Degrees conferred to Black Women
Table 1: Number of degrees conferred to females.

The data shows the following:

  • of the total Black population with an Associate Degree, 68% are female and 32% are male;
  • of the total Black population with a Bachelor’s Degree, 66% are female and 34% are male;
  • of the total Black population with a Master’s Degree, 71% are female and 29% are male;
  • of the total Black population with a Doctor’s Degree, 65% are female and 35% are male.

These findings indicate that Black Women have been much more successful in their educational endeavors in comparison to Black Men, but tell us nothing about the educational performances of Black Women compared to those of other or similar sexes of other races.

What is striking about the statistics of the NCES is that women far outperform men for all races. This graph is a clear depiction of that finding:

Degrees conferred to females
Table 2: Degrees conferred to females.

We can therefore conclude that women are more successful in obtaining degrees in Higher Education than men, but the gender gap is nowhere as wide for other races than for Blacks.

In order to have more insights in how well educated Black Women are compared to other groups, I have looked at statistics from the NCES on the educational level of people that are 25-29 years old:

Bachelor's degrees or higher for people ages 25-29 by race
Table 3: Bachelor’s degree or higher conferred by race.

According to the NCES, 60.1% of Asians aged 25-29 have at least a Bachelor’s Degree. Hispanics are the lowest performing group with 15.7%. Blacks have 20.5% and Whites 40.4%. Since the obtainment of Bachelor’s Degrees decreases the obtainment of Associate Degrees, it is more meaningful to look at the percentages of Bachelor’s Degrees or higher than to the percentages of conferred Associate Degrees. This graph however, has not specified the proportion of degree holders by gender. To approximate the degree holding male-female proportion, I have looked at table 1.

I have not found statistics that indicate the proportion of exclusively Asian degree holders by sex in Higher Education so I will make the assumption that the percentage of conferrals to Asian Women among the Asian population is approximately the same as that for Asian/Pacific Islander Women at around 55%. Hence, among the Asian group of which 60.1% aged 25-29 hold a Bachelor’s degree or higher, 55% are female: 33% of the total Asian population is female and holds a Bachelor’s degree or higher. 20.5% of Blacks aged 25-29 hold a Bachelor’s degree or higher of which around 68% is female. This means that around 14% of the total Black population is female and holds a Bachelor’s degree or higher. We can thus conclude that Asian Women perform much better educationally than Black Women with a ratio of almost 2:5.

How do Black Women perform in comparison to White Women? If we say that around 58% – this may not be entirely accurate, but from the NCES statistics it is reasonable to assume this number – of Bachelor’s Degrees and higher conferred to Whites are conferred to Women, we can assert that approximately 23% aged 25-29 of the total white population that have obtained these degrees are Women. According to my calculation, White Women thus perform far better than Black Women as well.

What if you would compare Black Women with Asian Men? According to my calculation, around 27% of all Bachelor’s Degrees and higher that have been conferred to the Asian population were conferred to Asian Men. Asian Men hence outperform Black Women with an approximate ratio of 1:2.

If you would compare Black Women with White Men, we can find that around 17.4% of the white population aged 25-29 that have obtained a Bachelor’s Degrees or higher are Men. This again is higher than the 14% of Black Women.

You can find a clear overview of my findings in the following table:

Group by gender and race Percentage holding Bachelor’s or higher degree w.r.t. their race
Black Men 7%
Black Women 14%
White Men 17%
White Women 23%
Asian Men 27%
Asian Women 33%

Conclusion
Black Women are by far not the most educated group within the United States. According to my calculations Black Women proportionally hold fewer Bachelor’s Degrees or higher compared to White Men, White Women, Asian Men, and Asian Women. An Asian Woman aged 25-29 is almost 2.5 times more likely to hold a Bachelor’s Degree or higher than a Black Woman aged 25-29. An Asian Man is almost 2 times more likely to hold a Bachelor’s Degree or higher. White Women more than 1.5 times more likely. I have not included Hispanics into my calculations, but I can see in one glance that Black Women do perform better than female and male Hispanics. Comparing Black Men with Asian Women, I find it shocking that an Asian Woman is almost 5 times more likely to hold a Bachelor’s Degree or higher than a Black Man.

I find it a shame that many news media have misinterpreted the data from the NCES and have spread the untruth that Black Women are the most educated group in the United States. Lastly, I would like to add that in order to gain more insights in how much better educated a group is we should also look into the type and quality of the courses and universities where these degrees were conferred. This is something I have not looked into.

References
Black Women Are Now The Most Educated Group In The U.S.
National Center for Education Statistics
Report: Black Women Have Become The Most Educated Group In The U.S.
Study: Black Women Most Educated in U.S.

Elon Musk on the Heroic Journey for a Fantastic Future

In ‘The Entrepreneur on the Heroic Journey’ (1997), Dwight Lee and Candace Allen write that entrepreneurs are heroic figures of society whose accomplishments are worth celebrating. Elon Musk is certainly an entrepreneur whose ingenuity and drive to create a fantastic future are admirable. In our current times when it seems fashionable to castigate entrepreneurs and those who have earned a fortune, it is nonetheless hard to read Ashlee Vance’s biography of Elon Musk and not to be in awe of his accomplishments. Elon Musk perfectly matches Lee and Allen’s description of our modern day heroes: individuals who shape society by serving the people and adding value to society through their entrepreneurial activities.

According to Lee and Allen, a hero travels through three stages.

1. The first stage of the modern entrepreneurial hero is a venturing away from the world of accepted norms. The hero asserts “There is a better way, and I will find it!” Deviating from familiar social norms and customs, he travels into unknown territory while risking failure and loss for some greater purpose or idea. That is exactly what Elon Musk did several times in his life. First, as a teenager when he dropped out of the University of Pretoria to leave South Africa for Canada. For someone who has an early inclination toward computers and technology – Musk had taught himself the BASIC programming language at the age of 9-10 and created homemade explosives and rockets – South Africa was like a prison. Although he did not know back then what exactly he wanted to achieve in Canada, his curiosity and intrinsic desire to leave an everlasting impact on the world led him to the United States. His daydreams at Queen’s University and the University of Pennsylvania usually led him to the conclusion that the Internet, the Renewable Energy, and the Space industries were the areas where he could make a huge impact. Back then, Musk already vowed to pursue projects in all three. This was in 1994 when few could’ve predicted the many ways in which the Internet would change people’s lives, when the last successful American automobile startup (Chrysler) was dates back to 1925, and when the American aerospace industry was dominated by only Boeing and Lockheed Martin. A vow like this was surely considered super-crazy. Musk pushed himself, characterized by energy, vision and bold determination into the unknown.

2. In the second stage, the entrepreneurial hero sacrifices himself for a vision or dream he has, putting his own comfort at stake. The two Internet companies he founded were Zip2, the Web’s first yellow pages, and X.com that would eventually merge with Confinity to form PayPal. The second stage of the entrepreneurial hero is his overcoming of hardships and challenges. With just $28,000 invested in Zip2, Musk seemed to never leave the office and slept on a beanbag next to his desk. He would take showers at the YMCA and when Heilman, an early Zip2 employee, would come into the office at 7:30 or 8:00 AM he would give him a kick so Musk would wake up and get back to work. Musk’s slavish devotion to the success of his startups is best expressed when he told a VC investor, “My mentality is that of a samurai. I would rather commit seppuku than fail.” (Vance, 2015, p. 72)

Zip2 would eventually be taken over by Compaq Computer for $307 million and would earn Musk $22 million for his 7% stake in the company.

Musk’s second start-up was X.com which was an initial attempt to create an online bank. During his internship at the Bank of Nova Scotia, he found out that “bankers are rich and dumb” (p. 83) and that this provided a massive opportunity to disrupt the industry. Realizing that money is nothing but an entry in a database, Musk thought that he could enter the industry with relatively little investment. This could however not be any further from the truth. The regulatory issues they were facing seemed insurmountable and several of the early employees of X.com soon left the company after believing that Musk’s vision to disrupt the banking industry is unrealistic. One other X.com employee said, “There were a million laws in place to block something like X.com from happening, but Musk didn’t care” (p. 92). Despite such issues, Musk held on and secured a banking license, FDIC insurance and formed a partnership with Barclays.

Musk had also faced many other misfortunes in the two companies that he founded soon after he left X.com: Tesla and SpaceX. In 2008, he was almost broke while divorcing his first wife – fearing he had been wasting almost all of his $180 million he earned from the sales of PayPal to eBay. SpaceX had just enough money for its fourth Falcon 1 launch, and possibly the last launch of SpaceX. Tesla had still not delivered on its promise to produce its Roadster and needed a government loan at a time when other automobile and financial corporations were also struggling. In Musk’s words: “I remember waking up the Sunday before Christmas in 2008, and thinking to myself, ‘Man, I never thought I was someone who could be capable of a nervous breakdown.’ I felt this is the closest I’ve ever come, because it seemed… pretty dark.”

3. In the third stage, the heroic entrepreneur returns to the community with his product, service, or new process. Having been just days or weeks away from bankruptcy for both Tesla and SpaceX, Musk had eventually survived and created the first successful car company since Chrysler in 1925 and was now competing with Boeing, Lockheed Martin, the Russians and the Chinese in the aerospace industry. Tesla has since delivered the Roadster, the Model S, X and is planning to deliver the Model E which will have a starting price of $35,000 by late 2017. Tesla is on its way to alter the automobile industry. SpaceX had produced rockets that can return back safely on earth which significantly lowers the costs of sending rockets into space. Elon Musk’s reward for increasing benefits to society are his profits and his wealth that he could only have accumulated when people value his products enough that they are willing buy them.

Looking at the many accomplishments of Musk and how he has served the public with his products, I believe that he can truly be considered a modern hero. The greatest contribution I think is that he has given people hope and renewed faith in what technology can do for mankind.

References
Allen, C., & Lee, D.R. The Entrepreneur on a Heroic Journey, 1997
Vance, A. Elon Musk: Tesla, SpaceX, and teh Quest for a Fantastic Future, 2015