D is for Double-Entry

Cosmic balance sheet, drawn by Ledger Light.

We are bipedal creatures. We are symmetrical by nature. Two eyes, two hands, back and front, left and right. Our fundamental concepts reflect this: good and evil, dark and light, the Jedi and the Sith. It should be no surprise that multiple cultures–the Chinese, Indian, and Renaissance Italians–created counting systems built around two entries.

One of my favorite authors wrote a series where the people on another planet organize everything around threes instead. Two is infelicitous; you need three to balance. The eighth birthday is unlucky, the ninth harmonious. Scientists have to build models factoring in three. Dinner parties are a nightmare. It is possible to conceive thinking systems not built around two.

Or, imagine, if sentient creatures had five limbs like starfish. Instead of left and right, you’d build your counting around pentagons.

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C is for Clay Balls

Inventory. Tax records. Rations of bread and beer to the workers. Storage of food during the winter. The earliest civilizations were built on keeping track of things.

Accounting via clay tablet, tokens, cuneiform. Photo from the Oriental Institute at the University of Chicago

Before data warehouses. Before the invention of the steam engine, calculus, banking, or even the ox-drawn plow, somewhere between the wheel and the pyramids, the Mesopotamians created tracking systems.

We tend to think about the earliest people as hunter-gatherers. But nomadic hunters are the antithesis of foragers. Gatherers figured out eventually that if they stayed in the place with lots of bushes, bare survival turns into surplus food. Domestic the cow rather than chasing after it, figure out how to plant barley, and you have farming. Farming leads to population growth, and suddenly you have 40,000 people living in the Fertile Crescent, building cities and empires. You need armies to protect your grain, which requires the farmers to give surplus to a central authority to pay soldiers. Now you’ve invented taxation and a centralized administration.

Photo of broken clay ball with tokens inside, from the Oriental Institute, @8000 BCE.
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Going Once…Going Twice…

“Paul, it’s Bob Wilson. You’ve won the Nobel Prize.”

A security camera in front of Paul Milgrom’s home in Stanford, California, recorded Wilson and his wife Mary sidling up to Milgrom’s front door in the predawn darkness and repeatedly knocking and ringing the doorbell to wake him up. After a short pause to take in the momentous news, Paul Milgrom responded, “Wow, yeah. Okay.”

Story by Melissa de Witte at stanford.edu.
Robert Wilson and Paul Milgrom, photo by Andrew Brodhead.

The Nobel Prizes for 2020 were announced earlier this month. I thought I should take it on myself to understand what it was that earned these folks the Biggest Blue Ribbon for Brains in the world. I know just enough economics to get myself into trouble, so this could be fun. Economics (and science for that matter) are like languages that I speak badly (hablando de español…) I can almost read economic theory with a little wikipedia and dictionary.com at hand, but writing about it might generate some misinformation. Nevertheless, let’s dive in and alleviate your curiosity. I know you saw the awards but did you understand what they were for. I’m especially proud since northern Californians took four out of the eleven Nobel awards, two from my alma mater and two from its rival but still my peeps, woot woot!

Not All Auctions Involve Cattle or Eyebrows

My favorite award this year has to be the Prize for Economics, which usually annoys me in its advancement of “free markets,” which aren’t. This year, however, the theories were comprehensible and practical. Understanding the math is something else entirely, but never fear—we won’t go there. Two fellows from Stanford (take off that red shirt!) won for their development of Auction Theory.

When I think of auction, I always visualize a Texan with a big hat and microphone who sounds something like Leroy Van Dyke, in his “Auctioneer” song from the 1950s:…

I have a 600 dollar down here now 10 and now 25 and
Now 35 and now there 50 now 60 will ya’ give me 60
Now 75, 75 another 85 dollars and buy ’em there.

Either that or auctions make me think of a scene in a spy movie or comedy, where fancy people are seated in a room, and the British butler begins auctioning the mysterious painting or golden egg or Wonka ticket, which might hold a clue to the whereabouts of the Austerioserlian terrorists. Numbers are randomly repeated as he points at audience members who do nothing more than move an eyebrow or lift a pinky. Or, if it’s a comedy, the lady inappropriately dressed keeps accidentally bidding when she sneezes. To me, that’s an auction. It turns out that those are not the only types of auctions.

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