Category: Zoo Theories

Octopus Nuggets II

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“Beware the Kraken!”

The Vikings of Nordic lore cried after encounters with the primal, savage beast we call the octopus, and to the uncharted waters in which they feared encountering larger and more primal, savage beasts, the Vikings added: “here, there be monsters”. They knew the extent of their travels and the beasts they encountered there, and anything beyond that excited their imagination in the most horrific ways. We can laugh at such assumptions now, as we know more about those uncharted waters, the octopus, the squid, and the various cephalopods that roam our seas, but we still have the propensity to fill in the gaps of our knowledge by designating anything we don’t understand as monstrous. The subjects of our fear might vary, but our animal instinct provokes us to fear that which we don’t understand.

When the Vikings witnessed these boneless sacs of flesh display high levels of intelligence and emotion, the cephalopods they encountered probably freaked them out so much that they assigned evil characteristics to it. When they didn’t understand it, they assigned a “here, there be monsters” moniker to their unimaginable extent of their intelligence. We know enough about the psyche of the octopus now that we’ve removed that moniker, but we’re still fascinated by the capacity for their levels of intelligence, emotion, and even friendliness.

The problem for those of us with more modern knowledge and understanding is that when we witness the characteristics that freaked the Vikings out, we tend to exaggerate our findings in the opposite direction, in our attempts to right the wrongs of the bygone era. “They’re not beasts or monsters. They are emotionally complex, very intelligent creatures,” observers of the octopus now report. “They’re sophisticated beyond our comprehension, and we just don’t know what we don’t know yet, but I can tell you what I know and what I saw.” Our propensity to exaggerate what we don’t understand can be equal to the Vikings’, in the opposite direction. The Vikings assigned primal, beastly, and supernatural characteristics to that which they didn’t understand, and we assign anthropomorphic, spiritual, and ‘beyond our current comprehension’ qualities to fill in the blanks of what we don’t understand. As with the Vikings, we see what we want to see, and we deduce what we want to deduce from our observances, and the truth probably lies somewhere in the middle.  

“Octopuses may have originated from another planet!”

If you’re anything like me, you’ll click on any article that lists the octopus in its title. I don’t know if the popularity of such stories speaks to the popularity of the octopus, aliens from another planet, or our love of scary stories that play on our fear, but the story that someone suggested that octopuses may have originated from another planet was everywhere in my newsfeeds. 

Before reading these articles, I realized that the whole idea that octopuses-are-aliens from another planet, offers a very natural gravitational pull that links them together in our psyche. All we have to do is look at them to think there might be some link. If you’ve ever run your hands along their suckers, it doesn’t take much to imagine that they are not of this planet. As much as some of us love them, we don’t get defensive when someone suggests that the way they move is a little creepy. Then, when we hear that researchers suggest that the octopus might have a level of intelligence beyond our comprehension and alien enthusiasts always say that if we ever meet an alien, we’ll discover a level of intelligence “beyond our comprehension,” it makes sense that they might be from another planet. The latter is speculative, the former might be so exaggerated as to be speculative. I know, we don’t know what we don’t know, but that’s pretty much what speculative means when it comes to conjecture of this sort. If we take a step back and view these two separately, it makes sense that so many of us link them together.

The other thing these stories did for me was reignite my fascination with the octopus, and in my research I found a scientifically-backed theory that might blow your mind. I’m not going suggest that the reader take a seat, as I am almost biologically predisposed to avoiding clichés like, “You might want to sit down for this,” but if anything happens to anyone while reading the final third of this piece, I hereby absolve myself of any responsibility for injuries that occur if you’re not making sure you’re seated by the time you reach this info. Some readers might also want to consider purchasing the pelvic strap and waist restraints the medical supplier Pinel provides before continuing. 

Those of us who love stories about the surprisingly complex brain of the octopus have heard a myriad of stories regarding the ability the octopuses have to figure out puzzles and mazes. We’ve also heard tales of how they can escape the best, most secure aquariums, and we’ve heard about how a couple of SCUBA divers played hide and seek with an octopus, but have you ever heard that scientists now suggest that octopuses might be able to manipulate their molecular structure? Woh! What? I know, hold on, we’ll get to that. 

Why do We Study Them?

A writer for Wired, Katherine Harmon Courage, has presumably heard all of the stories, and she has an interesting, provocative idea for why we should continue to explore the octopus for more stories though research, as they might prove instrumental in developing a greater understanding of the human mind.

“If we can figure out how the octopus manages its complex feats of cognition, we might be closer to discovering some of the fundamental elements of thought –and to developing new ideas about how mental capacity evolved.”

Arms Have Rights Too!

As stated in the previous installment of this series Octopus Nuggets I, the octopus has more neurons in its arms than it does in its brain, and we all assume the arms and brain work in unison to achieve a prime directive, but what if one of the arms disagree? As Scientific American states, “Like a starfish, an octopus can regrow lost arms. Unlike a starfish, a severed octopus arm cannot regrow another octopus.” So, if the octopuses central brain directs one of the arms to perform a particularly dangerous task, do the arms have the cognitive capacity to rebel against the central brain? Do the arms ever exhibit self-preservation qualities? Does an arm ever say something equivalent to, “I saw what you did to arm four last week, and I witnessed you grow another arm, good as new, in such a short time. I do not consider myself as expendable as arm four was. As you’ve witnessed over the last couple years, I am a quality arm who has served you well,” the sixth arm says to brain. “Why don’t you ask arm number seven to perform what I consider an unnecessarily dangerous task? We all know that he has been less productive year over year.” I am sure that no arm has an independent consciousness of its own existence in this sense, and that they largely function to serve the greater need, but how much autonomy do these arms have?

Blue Bloods 

How many of us believed the tales our grade school friends passed around that human blood is actually blue, and that it only turns red when introduced to oxygen? I believed it in grade school, because why wouldn’t I? I could see my veins, and they were blue. One plus one equals two. The fella who dropped that fascinating nugget on me was far more intelligent than I was, and he was far more sciencey. Laurie L. Dove writes in How Stuff Works that the octopus actually does have blue blood, and it’s crucial to their survival.

“The same pigment that gives the octopus blood its blue color, hemocyanin, is responsible for keeping the species alive at extreme temperatures. Hemocyanin is a blood-borne protein containing copper atoms that bind to an equal number of oxygen atoms. It’s part of the blood plasma in invertebrates.” She also cites a National Geographic piece by Stephan Sirucek when she writes, “[Blue blood] also ensures that they survive in temperatures that would be deadly for many creatures, ranging from temperatures as low as 28 degrees Fahrenheit (negative 1.8 degrees Celsius) to superheated temperatures near the ocean’s thermal vents.”

Freakishly Finicky

A Wired piece reports, “If you asked Jean Boal, a behavioral researcher at Millersville University about the inner life of octopuses, she might tell you that they are cognitive, communicative creatures. To illustrate her claim Jean Boal told a story about how she attempted to feed stale squid to a row octopuses in her lab. She says that one cephalopod, the first in line, sent her a clear message: It made eye contact when she returned to it after feeding all the others, and it used one of its arms to shove the stale squid down a nearby drain, effectively stating that anytime Jean Boal attempted to feed it stale food in the future, it, too, would be discarded in a similar manner.”

Most animals are not finicky. Animals who fend for themselves in the wild, in particular, will eat just about anything they can find to sustain life, but depending on what they eat, it could cause disease and death. They don’t know any better, of course. The idea that a more domesticated animal, might display more preferences is not the fascinating element of this story, as for most of them food is not as scarce. 

The freaky almost unnerving elements of this story, for me, lay in the inferred details of the Jean Boal’s story. The idea that an animal might exhibit a food preference relays a higher level of intelligence, but I’m not sure if that level of intelligence surpasses that of the dog or the cat. The eerie part occurred in contemplating how the octopus relayed its message to Boal. Boal suggested that she fed the stale squid to a number of her octopus subjects, in their respective tanks, but after she finished feeding all of the octopuses, she returned to the first octopus she fed, and in her characterization of the episode, she declared that it waited for her to return. It looked her in the eye when she returned, and it established eye contact with her. Once it felt it established that it had her attention, the octopus shoved the stale squid down the drain, maintaining eye contact with her throughout the act. We weren’t there, of course, so we can only speculate how this happened, but Boal makes it sound as if the octopus made a pointed effort to suggest that not only was it not going to eat stale squid, but it was insulted by her effort to pass it off as quality food, and it wanted to correct her of engaging in such foolish notions in the future.

We all anthropomorphize animals. Even if it operates from a flawed premise, it’s entertaining. It helps us connect with some animals from our perspective on the world. Dogs and cats might display dietary preferences, for example, but how many of them wait for their human owners to return, so they can be assured that the message will be received that they don’t care for the food they’re being served, and how many will look the humans in the eye before discarding the food in such an exclamatory manner? I don’t know if you’re like me, but the thought that creeps me out is I thought I had a relatively decent frame for how intelligent these beings were, and that frame was a generous one. Boal may have been more generous in her characterization of this moment, but it remains fascinating to think the octopus might have these capabilities.  

Rewriting the RNA

The following section contains elements I warned you about in the disclaimer. If you’re anything like me, you’ve found the details of the research on the octopus as fascinating, illuminating, and a little unsettling as I have. I write unsettling, because we find comfort in the idea that humans are so much more intelligent than than every other species. In many cases, our superior intellect is the reason we’ve been able to survive so many scrapes with other animals, and it’s the primary reason we’ve survived so long. It’s for this reason, and others, that I consider this next part so mind-blowing that I feel the need to reiterate the need for the reader to set up some reinforcements behind you if you insist on remaining upright while reading. 

Recent scientific discoveries suggest that the octopus can edit their own ribonucleic acid (RNA). Boom! How are you doing? Did you forget to remove all sharp objects behind you? If the only thing keeping you upright is that you kind of, sort of, don’t know what RNA is? Don’t worry, I had to look it up too. The Google dictionary defines RNA as an enzyme that works with deoxyribonucleic acid (DNA) in that it “carries instructions from DNA for controlling the synthesis of proteins, although in some viruses RNA rather than DNA carries the genetic information.”

For those who don’t consider the octopuses ability to edit its RNA a “Holy stuff!” fact, think about this. The next time you’re in your man cave engaged in a spider solitaire marathon, some octopus somewhere is in their cave re-configuring their molecular structure to redefine their characteristics in a manner that they hope will help them survive their next shark attack. An example of this might be the defense tactic we discussed in Octopus Nuggets I: the pseudomorph. The difference between the regular ink cloud an octopus shoots out and the pseudomorph is a little murky, so let’s illustrate it with an octopus named Ralph who we’ll anthropomorphize for your reading pleasure. 

Ralph just barely escaped a harrowing shark attack unharmed. It scared him of course, and as he cooled down in his den, allowing his heart rate to slow, he realized that that shark was nowhere near as confused by his ink cloud as shark’s had been his whole life. Was that shark an aberration, Ralph wondered, or do I now have to develop an adaptation to the shark’s adaptation? Ralph didn’t know if what he just survived was a freak occurrence, in that one shark had such experience with ink clouds that it knew better, or if all sharks had adapted, but he knew he could no longer rely on a simple ink cloud if he wanted to survive. Ralph decided he needed to reconfigure his normal ink cloud settings. If Ralph were human, he might add texture additives to his paint, some kind of gel medium, or modeling paste, but as much as we want to anthropomorphize Ralph, he doesn’t have the ability to run out to an art store for supplies. No matter how much octopus enthusiasts speculate about their intelligence being beyond our comprehension, Ralph also doesn’t have the wherewithal necessary to earn the money necessary to complete such a transition, and even if he did, most enthusiasts would concede that Ralph doesn’t have the physical or cerebral capabilities necessary to complete such a transaction. Even if he does, one day, Ralph’s interactions with the clerk might lead to whole bunch of confusion, screaming, and possible violence that would inhibit Ralph’s attempts to get the materials he needs. Ralph’s store of supplies is almost entirely internal, and we add the word almost because some octopuses use tools. For this particular need, however, Ralph has few external resources. He knows he must create a more substantial cloud to fool predators better, because today’s narrow escape was way too close for him. Next time, he decides, he will need to add more mucus to his ink cloud to make it more substantial. He needs to make a better, more convincing self-portrait that we call the pseudomorph. As I wrote in Octopus Nuggets I, the pseudomorph may not be so rich in detail that anyone would confuse it with the pieces Van Gogh left behind, but as long as they’re able to confuse sharks for a necessary second, it will serve its purpose.  

Octopus researchers aren’t sure why they edit their RNA, but we have to assume it has something to do with predation, either surviving it or finding nuanced ways to perfect their own. If you’re nowhere near as fascinated with this idea as I am, at this point, you will have to excuse my crush on these cephalopods in the ensuing paragraphs.

An article from Business Insider further describes the difference between DNA and RNA as it applies to editing, by stating, “Editing DNA allows a species to evolve in a manner that provides a more permanent solution for the future survival of the species. When a being edits their RNA, however, they essentially “try out” an adaptation to see if it works. I consider this practice impressive on its face, but imagine how many humans fail to edit their RNA enough to practice the ‘if one thing doesn’t work, try another’ principle. 

One other note the authors of this piece add to this subject is that “Unlike a DNA adaptation, RNA adaptations are not hereditary.” Therefore, we can only guess that if an octopus discovers a successful RNA rewrite that could be used as a survival tactic, they would have to teach it to their friends and offspring, or pass it along by whatever means an octopus passes along such information. (Octopuses are notorious loners who don’t communicate with one another well, and they’re often dead before their offspring reach maturation, so I don’t know who they might be teaching.)

A quote from within the article, from a Professor Eli Eisenberg, puts it this way: “You can think of [RNA editing] as spell checking. If you have a word document, and you want to change the information, you take one letter and you replace it with another.”

Research suggests that while humans only have about ten RNA editing sites, octopuses have tens of thousands. Current science is unable to explain why an octopus edits their RNA, or when RNA editing started in the species. If this is the case, I ask current science, how can we determine, with any certitude, that an octopus edits their RNA. I’m sure that they examine the corpses of octopuses and compare them to others, but how can they tell that the octopus edits their RNA themselves? How do they know, with this degree of certitude, that there aren’t so many different strains of octopuses that have a wide variety of different RNA strands? How did they arrive at the different strands? Did they edit them themselves, or did they come equipped with them by another means? This topic fascinates me, but I’m sure an octopus enthusiast, a researcher, and a geneticist can tell how ignorant I am on this subject, and I’m sure these findings are scientifically sound, but I’ve read numerous attempts to study the octopus, and almost all of them characterize the octopus as notoriously difficult to study. Some have described the octopuses’ rebellious attempts to thwart brain study as obnoxious. If that’s the case, then I have to ask if the conclusions they reach are largely theoretical based on these notoriously difficult studies of octopus corpses.

The final answers to my questions might circle us back to Katherine Harmon Courage’s provocative notion that “If we can figure out how the octopus manages its complex feats of cognition, we might be closer to discovering some of the fundamental elements of thought in general –and to developing new ideas about how mental capacity evolved.”

If we are able to do that, Gizmodo.com quotes scientists who suggest we might be able to root out a mutant RNA in our own strands to see if we can edit them in a manner that might aid in our own survival. 

We can marvel at the adaptations the octopus is able to make, and as the article illustrates, I will join you in that open-mouthed awe, but do they prove intelligence? They can solve puzzles though, and those who work with octopuses know that if they don’t provide an octopus mental stimuli the octopus gets bored, frustrated, and unruly. Most zoo patrons enjoy the experience of viewing otherwise wild animals, but they also feel sorry for them for being caged up. The latter is often misplaced, in my opinion, because I think most animals enjoy their experience. They no longer have to hunt for food, because they know they’ll receive a feeding at about three o’clock every day. Plus, most of them have never known a wild existence, as they’ve been semi-domesticated their whole lives. The idea that the octopus needs constant mental stimuli and cerebral engagement, even among those who have been semi-domesticated their whole lives, does suggest a level of intelligence beyond most in the animal kingdom, but how much do we glamorize and exaggerate our observances and findings to fit our narratives in the same manner the Vikings of Nordic lore did with theirs centuries ago?    

There are a wide variety of reasons the octopus has managed to survive, in various forms, for 330 million years. Is it intelligence, emotional intelligence, or an incredible, almost unprecedented, ability to adapt. All animals have a survival instinct, and they use all the tools at their disposal to achieve it. Some of the tools they have can blow our mind, such as those mentioned above, camouflage techniques, and the ways animals and plants mimic one another for the purpose of defense and predation. To equate those incredible tools to incredible levels intelligence, however, strains credulity at times. The species has survived 330 million years, but the individual octopus dies after five years, and they do not pass knowledge onto their offspring, so how much intelligence can they accrue and pass along?   

There is a conceit in the human brain (of the ever-present present tense) that these are the best of times in terms of knowledge, understanding and science, but some scientists concede that we just don’t know what we don’t know yet. We know our level of knowledge is great in the present tense, at least compared to the past, but some part of us knows that the leaps and bounds we’ve achieved will be achieved by leaps and bounds by future researchers and scientists to a degree that future scientists will regard our level of scientific knowledge as almost primitive by comparison. To those future scientists who seek guidance on the idea of further editing RNA, the authors of the Business Insider, David Anderson and Abby Tang suggest that they, “Can learn a thing or two from these cephalopod experts.”

We can now read the first article by clicking on this link: Octopus Nuggets

Historical Inevitability

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The idea that history is cyclical has been put forth by numerous historians, philosophers, and fiction writers, but one Italian philosopher, named Giovanni Battista Vico (1668-1744), wrote that a fall is also an historical inevitability. In his book La Scienza Nuova, Vico suggested that evidence of this can be found by reading history from the vantage point of the cyclical process of the rise-fall-rise, or fall-rise-fall recurrences, as opposed to studying it in a straight line, dictated by the years in which events occurred. By studying history in this manner, Vico suggested, the perspective of one’s sense of modernity is removed and these cycles of historical inevitability are revealed.

To those of us who have been privy to the lofty altitude of the information age, this notion seems impossible to the point of being implausible. If we are willing to cede to the probability of a fall, as it portends to a certain historical inevitability, we should only do so in a manner that suggests that if there were a fall, it would be defined relative to the baseline of our modern advancements. To these people, an asterisk may be necessary in any discussion of cultures rising and falling in historical cycles. This asterisk would require a footnote that suggests that all eras have creators lining the top of their era’s hierarchy, and those that feed upon their creations at the bottom. The headline grabbing accomplishments of these creators might then define an era, in an historical sense, to suggest that the people of that era were advancing, but were the bottom feeders advancing on parallel lines? Or, is it possible that the creators’ accomplishments might, in some way, inhibit their advancement?

“(Chuck Klosterman) suggests that the internet is fundamentally altering the way we intellectually interact with the past because it merges the past and present into one collective intelligence, and that it’s amplifying our confidence in our beliefs by (a) making it seem like we’ve always believed what we believe and (b) giving us an endless supply of evidence in support of whatever we believe. Chuck Klosterman suggests that since we can always find information to prove our points, we lack the humility necessary to prudently assess the world around us. And with technological advances increasing the rate of change, the future will arrive much faster, making the questions he poses more relevant.” –Will Sullivan on Chuck Klosterman

My initial interpretation of this quote was that it sounded like a bunch of gobbeldy gook, until I reread it and plugged the changes of the day into it. The person who works for a small, upstart company pays acute attention to their inbox, for the procedures and methods of operation change by the day. Those of us who have worked for a larger company, on the other hand, know that change is a long, slow, and often grueling process. It’s the difference between changing the direction of a kayak and a battleship. 

The transformational changes we have experienced in technology, in the last ten years, could be said to fill a battleship, occurring with the rapidity of a kayak’s change of direction. If that is true, how do we adapt to them at such a breakneck pace? Those 40 and older can adapt to change, and we incorporate those changes into our daily lives at a slower pace. Teens and early twenty somethings are quicker and more eager to adapt and incorporate the latest and greatest advancements, regardless the unforeseen, and unintended consequences.

Some have suggested that if the technological changes we have encountered over the last 10 years occurred over the course of 100 years, we might characterize that century as one of rapid change. Is it possible for us to change as quickly, fundamentally, or is there some methodical lag time that we all factor in?

If we change our minds on an issue as quickly as Klosterman suggests, with the aid of our new information resources, are we prudently assessing these changes in a manner that allows us to examine and process unforeseen and unintended consequences before making a change? How does rapid adaption to technological change affect human nature? Does it change as quickly, and does human nature change as a matter of course, or does human nature require a more methodical hand?

These rapid changes, and our adaptation to them, reminds me of the catch phrase mentality. When one hears a particularly catchy, or funny, catchphrase, they begin repeating it. When another asks that person where they first heard that catchphrase, the person that now uses the catchphrase so often now that it has become routine, say they don’t remember where they heard it. Even if they began using it less than a month ago, they believe they’ve always been saying it. They subconsciously adapted to it and altered their memory in such a way that suits them.  

Another way of interpreting this quote is that with all of this information at our fingertips, the immediate information we receive on a topic, in our internet searches, loses value. One could say as much with any research, but in past such research required greater effort on the part of the curious. For today’s consumer of knowledge, just about every piece of information we can imagine is at our fingertips. 

Who is widely considered the primary writer of the Constitution, for example? A simple Google search will produce a name: James Madison. Who was James Madison, and what were his influences in regard to the document called The Constitution? What was the primary purpose of this finely crafted document that assisted in providing Americans near unprecedented freedom from government tyranny, and rights that were nearly unprecedented when coupled with amendments in the Bill of Rights. How much blood and treasure was spent to pave the way for the creation of this document, and how many voices were instrumental in the Convention that crafted and created this influential document?

Being able to punch these questions into a smart phone, and receive the names of those involved can give them a static quality. The names James Madison, Gouvernor Morris, Alexander Hamilton, and all of the other delegates of the Constitutional Convention that shaped, crafted, and created this document could become nothing more than answer to a Google search. Over time, and through repeated searches, a Google searcher could accidentally begin to assign a certain historical inevitability to the accomplishments of these otherwise disembodied answers. The notion being that if these answers aren’t the correct answers, another one could be.

Removing my personal opinion that Madison, Morris, Hamilton, and those at the Constitutional Convention the composed the document, for just a moment, the question has to be asked, could the creation of Americans’ rights and liberties have occurred at any time, with any men or women in the history of our Republic? The only answer, as I see it, involves another question: How many politicians in the history of the world would vote to limit the power they wield, and any future power they might attain through future endeavors? How many current politicians, for example, are likely to vote for their own term-limits? Only politicians who have spent half their life under what they considered tyrannical rule would fashion a document that could result in their own limitations.   

How many great historical achievements, and people, have been lost to this idea of historical inevitability? Was it an historical inevitability that America would gain her freedom from Britain? Was the idea that most first world people would have the right to speak out against their government, vote, and thus have some degree of self-governance inevitable? How many of the freedoms, opportunities, and other aspects of American exceptionalism crafted in the founding documents are now viewed as so inevitable that someone, somewhere would’ve come along and figured out how to make that possible? Furthermore, if one views such actions as inevitable, how much value do they attach to the ideas, and ideals, created by them? If the answers to these questions attain a certain static inevitability, how susceptible are they to condemnation? If an internet searcher has a loose grasp of the comprehensive nature of what these men did, and the import of these ideas on the current era, will it become an historical inevitability that they’re taken away in a manner that might initiate philosopher Vico’s theory on the cyclical inevitability of a fall?

I’ve heard it theorized that for every 600,000 people born, one will be a transcendent genius. I heard this quote secondhand, and the person who said it attributed it to Voltaire, but I’ve never been able to properly source it. The quote does provide a provocative idea, however, that I interpret to mean that the difference between one that achieves the stature of genius on a standardized test, or Intelligence Quotient (IQ) test, and the transcendent genius lies in this area of application. We’ve all met extremely intelligent people in the course of our lives, in other words, and some of us have met others who qualify as geniuses, but how many of them figured out a way to apply that abundant intelligence in a productive manner? This, I believe, is the difference between the 1 in 57 ratio that some have asserted is the genius ratio and the 1 in 600,000 born. The implicit suggestion of this idea is that every dilemma, or tragedy, is waiting for a transcendent genius to come along and fix it. These are all theories of course, but it does beg the question of what happens to the other 599,999 that feed off the ingenious creations and thoughts of transcendent geniuses for too long? It also begs the question that if the Italian philosopher Vico’s theories on the cyclical nature of history hold true, and modern man is susceptible to a great fall, will there be a transcendent genius who is able to fix the dilemmas and tragedies that await the victims of the next great fall? 

Trickle-Down Economics or Trickle-Down Government?

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““Trickle-down economics”, also referred to as “trickle-down theory”, is a populist political term used to characterize economic policies as favoring the wealthy or privileged.” –Google definition.

One of the primary duties of a search engine is to provide concise definitions for their customers. So, I do not fault Google for providing what I consider an incomplete definition. To my mind the ideal definition of the term would be the following: ‘Trickle-down economics’, also referred to as ‘trickle-down theory’, is a populist political term used (primarily by opponents) to characterize economic policies (with which they disagree) as favoring the wealthy or privileged.’ (Those who helped to write the definition of the term, for Wikipedia, have included the first (“primarily by opponents”) parenthetical addition.)

(Credit: Center for Media and Democracy)

I realize that, in some ways, these additions might result in the perception that the search engine is taking a side in the argument, but as economist, Dr. Thomas Sowell, writes in his book Basic Economics that “the term trickle-down is not a proper characterization of the laissez-faire, supply-side economic theory. Their goal is attained through a lowering of regulations on business, a lower capital gains tax, and a lower corporate tax rate, would not provide benefit specific to the wealthy or privileged, as much as it would all enterprising risk takers, regardless of their income.”

One of the biggest myths that those overwhelmed by the intricacies and complexities involved in understanding economic theory buy into is that an increased tax rate always leads to more revenue for the government. It seems like simple math to suggest that if the government taxes a corporation one percent on 100 million of their profit, the government will receive one million dollars, two percent equals two million, and the higher the tax rate the more a government receives to then redistribute accordingly. This is what supply side economist Arthur Laffer has characterized as the “arithmetic effect”.

What the arithmetic effect does not account for is the effect high taxes have on the amount of taxable activity that occurs. As economist Arthur Laffer points out, “Everyone knows that if you tax a corporation 0%, the government will receive 0% in revenue. What may not seem as logical on the face of it is, if the government taxes a corporation 100%, the government will also receive 0% in revenue, because the taxed individual, or corporation, will begin to lessen their activity to avoid greater taxation.”

What this illustrates, by means of exaggeration, is that there are points in between at which companies, and individuals, decide that it doesn’t make good business sense to continue to engage in taxable activity, at full capacity, if the tax rate on that activity is too high. There is a point in between, suggests Laffer, a point that some now call the Laffer Curve, that suggests that there is a sweet spot in the tax rate that encourages more taxable activity, broadens the tax base by encouraging greater employment, and can end up increasing the tax revenue for the federal government.

If the supply-side argument were solely concerned with a “trickle-down” effect, one would think that they would be obsessed with the rich keeping more of their money. If that were the case, the supply-side argument might suggest that the tax rate should be as low as possible. They might even suggest that the tax rate should be 0%, or a single-digit tax-rate. That is not the argument that Laffer, Sowell, or any supply-side economists put forth. Rather, they call for a tax rate that encourages greater economic activity that they believe will result in more taxable activity that they believe should result in more revenue for the government. If they directed their sole focus at the rich keeping more of their money, their arguments would also focus more on the federal income tax rate. What they are more concerned with is lowering the corporate tax rate, the capital gains tax, and lessening burdensome government regulation to allow for a more stratified economy by encouraging more middle class investment and risk taking. The middle class risk takers comprise a large percentage of employers of our society, and most of them are not successful in their efforts, much less wealthy. The politicians who raise these taxes often talk about how they need to create jobs, but if the supply side economist theories are to be accepted, these politicians do more harm than good to those who employ when they tax beyond the sweet spot.

Warren Buffett and the Already Wealthy

Ask any wealthy, or privileged, individual about paying taxes, and they will inform inquisitive minds that they don’t mind paying taxes, that they’re not paying enough in taxes, or that they think they should be paying more. The listener cannot help but consider such an answer wonderful, altruistic, and patriotic. What Warren Buffett will not add is that paying more in taxes will not hurt him, because he already has his money, and he doesn’t mind paying as many taxes as he could possibly pay, until the IRS comes to collect those taxes, and Warren Buffet takes them to court and succeeds in keeping more of his millions.

A person like Warren Buffett may have been for lower taxes, decreased regulations, and a lessened role of government in the economy when he was starting out, but it no longer benefits him in the manner it may the enterprising risk taker that deigns to compete with one of the blue chip companies in Warren Buffett’s stock portfolio. The already wealthy and privileged few –like Warren Buffett– would be more apt to encourage federal regulators to regulate and tax the industries of the companies from which he has shares. In doing so, a wealthy and privileged type like Warren Buffet hopes the government can aid him in diminishing current competitors and drive away any future risk takers who might aspire to compete with a Wells Fargo, IBM, Coca Cola, or any of the other big, blue chip companies in which he owns shares. Yet, any time Warren Buffet appears on TV, everyone is surprised to hear him sound more like Barack Obama than Ronald Reagan. Why wouldn’t he, it benefits him to do this, and he already has his.

The Straw Man Argument

Some trace the term “trickle-down economics” to the humorist, Will Rogers, and his attempts to demonize the policies of President Herbert Hoover to the benefit of the Franklin D. Roosevelt campaign. Those, in certain circles, use the term now to voice opposition to such theories, as a straw man argument of what the other side believes. 

As Thomas Sowell writes in his book Basic Economics:

“No recognized economist of any school of thought has ever had any such theory (Trickle Down) or made any such proposal. It is a straw man. It cannot be found in even the most voluminous and learned histories of economic theories.

“What is sought by those that advocate lower rates of taxation or other reductions of government’s role in the economy is not the transfer of existing wealth to higher income earners or businesses but the creation of additional wealth when businesses are less hampered by government controls or by increasing government appropriation of that additional wealth under steeply progressive taxation laws. Whatever the merits or demerits of this view, this is the argument that is made – and which is not confronted, but evaded, by talk of a non-existent ‘trickle down’ theory.

“Whether in the United States or in India, and whether in the past or in the present, ‘trickle down’ has been a characterization and rejection of what somebody else supposedly believed. Moreover, it has been considered unnecessary (by opponents) to cite any given person who had actually advocated any such thing.

“The real effect of a reduction in the capital gains tax is that it opens the prospect of greater future net profits and thereby provides incentives to make current investments that create current employment.”

If one were to corner me in a supermarket and ask me about supply side economics, based on the curve that Arthur Laffer reintroduced to the world, that opponents call trickle-down economics, I might have conceded to the idea that those who formed the economic theory intended it to favor the wealthy and industrial types first. I believed that those who espouse the theory state intend for the fruits of this process to pinball its way down. Even back then, back when I thought it was a decent theory on its face, I didn’t think it made sense. How does one answer for the argument that in a trickle down economy, the idea of greed counters the idea that the money will ever find its way to the worker.

The answer is that our economy is more stratified, and a stratified economy calls for the success of the businesses across all classes, and when the government steps in with its invisible hand to determine winners and losers, it messes that dynamic up by crushing the little guys first. Thomas Sowell would say that even that is a fundamental misreading of the manner in which economic processes work.

“Economic processes work in the directly opposite way from that depicted by those that imagine that profits first benefit business owners and that benefits only belatedly trickle down to workers.

“When an investment is made, whether to build a railroad or to open a new restaurant, the first money is spent hiring people to do the work. Without that, nothing happens. Even when one person decides to operate a store or hamburger stand without employees, that person must first pay somebody to deliver the goods that are being sold. Money goes out first to pay expenses and then comes back as profits later – if at all. The high rate of failure of new businesses makes painfully clear that there is nothing inevitable about the money coming back.

“Even with successful and well-established businesses, years may elapse between the initial investment and the return of earnings. From the time when an oil company begins spending money to explore for petroleum to the time when the first gasoline resulting from that exploration comes out of a pump at a filling station, a decade may have passed. In the meantime, all sorts of employees have been paid – geologists, engineers, refinery workers, and truck drivers, for example. It is only afterwards that profits begin coming in. Only then are there any capital gains to tax. The real effect of a reduction in the capital gains tax is that it opens the prospect of greater future net profits and thereby provides incentives to make current investments that create current employment.”

The ignorance of the many (myself included) of the complications inherent in economic theory allows opponents of economic theories to frame and fragment that them in such a way that they are able to reduce it to a misleading soundbite that trashes Trickle-Down economics. I do not think I’m alone when I write that even though Dr. Sowell has a talent for making the complex understandable, the quotes I’ve provided here can lead to Irritable Cerebral Digestion (ICD) for which rereading is the only cure. In the midst of such confusion, opponents step in to provide relief from this confusion, and arduous reading, by giving us a ‘benefit the wealthy and privileged’ soundbite.

The Big Corporation and Big Government Relationship

One of the methods novices can use to try and understand a complex economic theory, such as that espoused by Dr. Sowell and others, is to understand what it is not. What is the opposite of lessened regulations, and lower business specific taxes? Some call it Keynesianism economics. Keynesian economists often call for more government intervention in times of crisis (i.e. recession or depression). Keynesians often call for “work ready jobs”, and what others call “shovel ready jobs”. Opponents characterize these jobs as one group of employees digs a hole, while another group covers that hole. The short-term purpose of such jobs is to get us over the short-term, temporary, bump of a failing economy. The problem that results from these temporary, short-term resolutions is that when government establishes a role in the economy, for emergency purposes, it rarely rolls those temporary measures back when the emergency has been resolved, as most politicians will not concede that an emergency, which voters elect them to fix, is ever resolved.

This ends up establishing a greater, and more accepted involvement of the government in the economy. Big Corporations hire accountants and lawyers to teach them how to survive in an environment of a burdensome federal government, until a mutually beneficial relationship is established. The mutually beneficial relationship is realized when Big Corporations learn how to not only survive, but thrive in such an environment, until an incestuous relationship develops to create a climate some call crony capitalism. Some may find this hard to believe, but Warren Buffett, his blue chip companies, and all of those listed in the Dow actually favor more regulations, higher corporate tax rates, higher capital gains rates, and a larger role of federal government in their respective industry.

‘Why would a Big, greedy Corporation call for more taxes, more regulations, and more complications within their own industry?’ some might ask. ‘Doesn’t that affect their profit margin?’ The answer lies in fine print of the reason that there are now more millionaires in Washington D.C., per capita, than in any other place in the United States. It is also the answer to the question how an indicator of the health of an economy, such as the Gross Domestic Product (GDP), can continue to grow at an anemic rate while the stock market soars to record levels. Crony capitalism results in Big Corporations (and their lobbyists) joining hands with government officials (and their agencies) to pass onerous regulations and high corporate tax rates on an industry. The result is that the rich companies in that industry get richer and the poor get poorer, and this creates a truer form of what could more appropriately call trickle-down economics with the government and Big Corporations holding hands at the top.

When the Food and Drug Administration (FDA) recently passed regulations on E-Cigarettes, or Vapor cigarettes, for example, they did so in a manner that should have shocked those who loathe corporate America and favor regulating Big Corporate America in a way that they believe benefits everyone else. The FDA regulations actually ended up favoring the Big Three Corporations in the smoking industry, or those that have the means, and the set aside money, to comply with all of the FDA regulations and the resultant applications. The Little Guys who attempted to establish brand names in the industry, and carve out their own niche in the industry, will eventually be unable to afford these expenses and still turn a profit on the product, so the Big Three will be the only ones left that can afford to sell and distribute E-Cigarettes and Vapor cigarettes. Why would these Big Three corporations do this, if they are already in the E-Cigarettes segment of the market, but not dominating it yet, or if they are not already in the market, but they have plans to be? They are utilizing Big Government regulation and taxation to crush the little guys in their industry. The very definition of what some politicos call crony capitalism.

Some may say that the FDA’s regulations in the E-Cigarette, or Vapor cigarette, industry may have inadvertently helped the Big Three in their plans to dominate this segment of the industry. They would add, however, that the primary goal of the FDA was to help the consumer understand that E-cigarettes and Vapor cigarettes either contain toxins that are harmful to their health, or that the companies in the industry must prove that they don’t, and they must warn the public if they can’t. In the case of this particular FDA regulation, however, Michael Siegel wrote that there were alternative routes the FDA could’ve explored to protect the consumer in the ways the FDA stated that these regulations would, but that the FDA chose the route most beneficial for the Big Three. 

One could deduce, based on the particulars of the regulations listed in Siegel’s piece that the FDA acted in a manner that the Big Three’s lobbyists called for, as evidenced by the fact that a member of the Big Three helped the FDA carve out the legislation. Even with all we’ve  written here, it still makes no sense that a Big Corporation would help write onerous legislation to crush the little guys if they are eventually going to take that industry over. They would then have to comply with those regulations. As we’ve written, after the legislation, they’ll buy up the little guys (as has happened in this industry), and they’ll be the only ones left standing. 

Long story short, a bunch of little guys gathered and carved out a niche in an industry that the Big Three had some difficulty dominating. The Big Three grew weary of the competition in that industry, and they “secretly negotiated” with advocacy groups and lobbyists to help form the legislation. 

As a spokesman of Altria, the biggest of the Big Three, Brian May, stated: 

“(Altria) did support FDA extension of authority over e-cigarettes and other tobacco products. Our goal is to be a leader in vaping space.”

“In terms of what they’re trying to do, (tobacco companies) want to limit competition and encourage the cartelization of their markets,” Jonathon H. Adler, the author of the “Baptists, Bootleggers” article, wrote in an email. “They want regulation of e-cigarettes because it lessens the competitive threat to traditional cigarettes and because it makes the remaining e-cigarette market something that’s easier for them to dominate.”

Some are also suggesting that the manner in which the Big Three in this industry conspired with the government to take over the E-cigarette segment of the business, lays a road map for how they will take over the marijuana industry if that product achieves legalization in the United States.

So the next time a powerful politician suggests that “trickle-down economics” does not work, remember that is in their best interests to re-characterize the supply-side economic theory, without informing their audience of the particulars of that theory. Also, keep in mind that if their theory on economics continues to prevail, the government will remain atop the various industries in this country. The politician will be in a seat of power that will continue to allow that politician to “trickle-down” benefits in all the ways listed above, and in the form of taxpayer subsidies, bailouts, and no-bid contracts that benefit the corporations that meet the politician’s political bullet points. (One also suspects that Big Corporations might line the pockets of such politicians with legal contributions.) 

Also, remember if supply-side economists had their way with the government’s economic policies, the regulations and tax code would have appeal that is more comprehensive for those individuals (little guys) who aspire to take a risk in our economy. The intended result would be greater prosperity among all economic classes. The method of doing so would involve removing the roadblocks that Big Corporations hire accountants and lawyers to help them avoid. The intended result would also involve freeing up of middle class risk takers in a manner than should result in a broader tax base, more diverse forms of employment for individuals across economic classes, and it should end up resulting in more money in the coffers of government.

The opponents have learned, however, that the best way to pettifog an issue is to get out in front of it, and proactively define the debate in question. When a person defends their personal motivations on an issue by saying it’s not about the money, the first thing the listener should know is that it’s all about the money. On a similar note, when a politician allocates tax payer’s hard earned dollars –in the form of tax payer subsidies– to one company in an industry, and they say it’s not about picking winners and losers, the listener can be assured that it’s all about picking winners and losers. That particular company just managed to hit most of the politician’s political bullet points, and he or she began transferring wealth to the company in a form of trickle-down economics in which the politician was standing alone at the top of the pyramid flexing their muscles for the rest of corporate America to witness.

I don’t know what the goals of other side of supply-side economics were hoping to accomplish in their end game, but I would guess that most honest businessmen now find it disgusting to watch their fellow businessmen panhandle government officials into drowning their competition in legal red tape, onerous regulations, and tax rates. I would think that most honest businessmen would, at least consider the practice unethical. I’m quite sure that the other businessmen –those declared to be unethical by their peers– would turn to their friends and say something along the lines of, ‘To succeed in this climate, you need to learn how to operate within it. It’s called crony capitalism.’