Posted by Marc Hodak on June 8, 2007 under History | 
Well, there is no news in Belgium, where I was this morning on my way to Switzerland. I don’t know if there is much news here, either, but I find Switzerland a much more fascinating place. While most people think of Switzerland as a peace-loving country, it’s history is among the most violent in Europe right up to about 150 years ago. In fact, it’s long history of being literally at the center of conflicts between ever-shifting Great Powers led them to eventually figure out that they could only be the bone between big dogs. But they also figured that if they stuck together, given their home field advantage in highly rugged terrain, they could impose a very high cost on invaders. The Swiss used this combination of circumstances to form a federation that could assert its neutrality. Once accepted as a neutral country, they were left alone to develop.
Anyone who doubts the costs that wars impose even on the victors need only look at Switzerland versus her neighbors today. Beyond its stunning topography, Switzerland has all the cultural, legal, and economic elements of a remarkably stable society. Integrity is very big here–being a person of your word. That is the ultmate source of credibility when violence has been taken away as an option. Though peace-loving, they retain their original success formula of defensive preparation. Every man has military training, sustaining the credo that preparation for war is the best insurance that you may never have to fight one. Today, being surrounded by the E.U., war is the furthest thing from the Swiss mind–a remarkable void in mindspace, given the arc of civilization in Central Europe. And they won’t fight other people’s wars either, given their less than proud past as a major supplier of mercenaries.
More later as we travel from the French west to the German east. I don’t mean for this to be a travelogue, so I’ll think some more about the lessons Switzerland has for incentives–perverse and otherwise.
Posted by Marc Hodak on May 26, 2007 under History |
After 15 years of Montessori, private and boarding school, about 100,000 hugs and endless other embarrassments suffered at the hands of his dad, Max graduates high school tomorrow! We’ll be partying all weekend with assorted family coming from all over.
Have a safe Memorial Day!
Posted by Marc Hodak on May 4, 2007 under History |
This day in 1626, Peter Minuit landed on this rocky island at the mouth of the Hudson. As everyone has been taught in school, the natives sold Manhattan to Minuit for $24 of beads and trinkets.
Rubes or victims? The $24 sale price has been used, in turn, to show how naive the natives were, or how badly the Europeans abused the natives in land transactions. Very likely, neither view is warranted. While it’s true that native Indians did not have the same view of property rights as the Dutch, there is plenty of evidence that they did trade in similar rights. According to one scholar, the rubes, in this case, were not the Indians, but the Dutch. You see, Minuit bought Manhattan from the Canarsee tribe–a Lenape tribe from Brooklyn. The Canarsee didn’t yet have a bridge to sell Minuit, so they made do instead with selling the Dutch an island they did not own. The tribe that was really screwed, here, were the Weckquaesgeeks, an Algonquin tribe that hunted the island, but favored the more forested, northern parts.
A good deal? The sale price and centuries that have passed are often used to illustrate the power of compound interest. The $24 figure itself is rather dated–it was calculated in the 1840s based on the value of cloth, trinkets, hatchets, etc. then estimated at 60 guilders. The translation of 17th century Dutch guilders to modern US currency would equate to roughly $600–still quite a bargain. The finance textbooks tells us that if the Lenape Indians had invested that sum at a rate approximating the 6-7% average real return on investment of American assets over that 350+ year period, that they could easily buy back all of Manhattan–land and buildings–with their profits.
Of course, the natives, even if they had been disposed to such an investment, had no financial markets available to provide such an opportunity. That would have to await the development of the very properties they had just sold.
