Book Review: "The World Before Yesterday"
Board: Macro Economics
Professor Jared Diamond's books are always intriguing and well-written.
I am in the middle of his latest, "The World Until Yesterday: What Can We Learn from Traditional Societies?"
Prof. Diamond writes about the dangers in traditional societies. Starvation is a constant threat, due to both predictable scarcity (seasonal food shortages) and unpredictable scarcity (drought, insects, etc. ruining crops).
To help spread the risk of unpredictable scarcity, traditional farmers often farm many widely-separated plots of land. They may farm 10 or more separated fields. Traveling to these separate plots to take care of them costs the farmers a lot of additional time, effort and energy compared with "more efficient" consolidated plots in one place. However, trial and error showed that separated plots reduces the risk of total failure and starvation because one plot may be damaged while a separated one might be undamaged. The consolidated plots have a long term average higher yield, but may totally fail occasionally, causing death by starvation.
Prof. Diamond relates this to investing strategy.
If an investor has so much capital that he can afford years with zero or negative returns, it makes sense to invest for higher long-term average return. However, if the investor requires a certain minimum income to cover expenses from the investments, even during market drawdowns, it is safer to diversify even if the long-term average may be lower. He uses the Harvard University endowment as an example, since the 2008-9 financial crisis cut their income, which funds half of Harvard's operating costs.
A completely separate section of the book describes care of the elderly in traditional societies. Due to the high dangers, fewer people survive to old age and the average life expectancy is half of modern Western life expectancy.
How elders are treated depends upon their contributions and the resources of the group. In many traditional societies, elders directly contribute by child care (grandparents freeing parents to forage) and also by skilled craftsmanship that takes years of experience to master.
However, if the resources are low, elders may be abandoned or killed. Survival of productive members trumps survival of less-productive members. (Newborns and children may also be killed in times of scarcity.)
There has never been a time in history like the modern Western societies, where many people people live extremely long lives and the population pyramid has become a rectangle. Realistically, families may be able to help take care of one or a few elders, but it's not realistic to take care of many.
This article discusses the development of robots to take care of the elderly.
There are questions about the ethics of allowing elderly people to develop emotional bonds to robots. This does make me feel a little creepy, but it's a whole lot better than abandonment. (Not to mention being buried alive.)
The world before yesterday has some lessons for today. I recommend this book.