Thomas Piketty: We Are Heading Into a World Where We Do Not Want to Be, Pt 2

I review Piketty's Capital in the 21st Century, second and concluding part.

Thomas Piketty's "Capital in the Twenty-First Century" is the landmark economics book of our time, not because it is especially advanced in an academic sense, but because it situates basic questions of wealth and its distribution within a very long historical perspective, raising questions about where we want to be and go as a society. The profession of economics rose to prominence in the twentieth century, when high growth was the norm and when very significant disruptions happened which had reduced the role of inherited, accumulated capital. This turns out not to be a regime that could go on forever, but rather a very unusual condition that has blinded the profession to other forms of capitalism. Through the longer history, low growth and a very heavy weight of inherited capital, combined with its strongly unequal distribution, was the norm, creating feudal or feudal-like conditions. With the Occupy movement, this realization of where we are headed hit the wider culture, but Piketty provides the data, the in-depth research, the historical perspective, and the prescription for what to do about it.

While one cause of all this inequality was, traditionally, straightforward war and seizure (think of the Norman invasion of Britain), the other reason, and why such inequality becomes so entrenched, is (apart from political and social factors) that capital always commands a price, roughly 5% (typically as land rent, in the old days). So if an economy grows at only 1% or less, which is traditional, and capital returns 5%, then capital will grow continuously, relative to the rest of the economy, in perpetuity. And indeed, the more capital one starts with, the more efficiently it can be managed and the higher return it yields.

It is a bit like a casino where the house always earns 5%. Now imagine that the doors are shut and no one can leave. All the chips eventually find their way to the house, and economic activity winds down to nothing (or solely what the house spends for its own consumption, which may be minimal) due to the immiseration of the gambling masses. If the house makes loans to its customers, this only delays the inevitable, since they those customers will never have the means to repay. In the very old days when kings ruled the land, their generosity was critical for economic functioning. If they spent all their time hording their treasure instead of distributing it, everyone else lived in abject poverty.

The only countervailing factors are disruptions like war and revolution, unusual growth either demographic or technological, or, at the terminus after very high accumulation, a slackening of the return on capital, if there is truly too much of it relative to a slackening economic activity. Marx, incidentally, realized this, and assumed that wealth increases forever, and thus requires a revolution for corrective redistribution. Hopefully we can do better. The irony is that the French revolution, by Piketty's data, did very little to redistribute wealth, even as it did so much to redistribute heads. And the Soviet revolutions revealed the significant importance that private capital does have, even if it tends to become maldistributed over time.

All this was touched on in part 1. Now that capital has recovered in the rich countries since the disruptions of the twentieth century to a roughly normal level of five to eight times annual national income, the process of its concentration is proceeding to create a rentier society where a large aristocracy of wealth controls the economic system. In addition, it bids to control the political system as well, and will inevitably reshape the social system to reflect its dominance. Piketty also points out that such inequality saps the ability of a middle class to exist, exacerbates financial instability, and reduces overall prosperity due to a lack of income among the majority of the population. One only has to compare our current time, or the Belle Epoch of France, (for example as portrayed in the novels of Marcell Proust, whose narrator is endlessly besotted with social climbing up the aristocratic ladder of his day), to the very middle class post-war era in the US to understand this remarkable contrast.

"The history of the progressive tax over the course of the twentieth century suggests that the risk of a drift toward oligarchy is real and gives little reason for optimism about where the United States is headed. Is was war that gave rise to progressive taxation, not the natural consequences of universal sufferage. The experience of France in the Belle Époque proves, if proof were needed, that no hypocrisy is too great when economic and financial elites are obliged to defend their interests- and that includes economists, who currently occupu an enviable place in the US income hierarchy. Some economists have an unfortunate tendency to defend their own private interests while implausibly claiming to champion the general interest. Although data on this are sparse, it also seems that US politicians of both parties are much wealthier than their European counterparts and in a totally different category from the average American, which might explain why they tend to confuse their own private interest with the general interest. Without a radical shock, it seems fairly likely that the current equilibrium will persist for some time. The egalitarian pioneer ideal has faded into oblivion, and the New World may be on the verse of becoming the Old Europe of the twenty-first century's globalized economy."

So, here we are, and it isn't pretty. What does Piketty propose to do about it? He has several axes to grind, actually. But above all he points out the absurdity of living in an epoch of supposedly democratic capitalism, and not knowing who owns what ... not knowing where the money is. We have an income tax that reveals in quite thorough fashion (to the government, at least) what each person's income is. But wealth? That is a completely different story. Piketty has had to piece together his academic wealth data from all sorts of odds and ends, mostly unsatisfactory. He even descends to using the Forbes list of billionaires, hardly a rigorous trove of data. So goal one is basic transparency, so that we, as citizens, can see what is going on.

Second, and drawing his most vituperative comments, are the existence of tax havens like the tiny countries of Europe, Luxembourg, Switzerland, Cyprus, etc., which parasitise on their larger neighbors by relieving them of the taxes of their richest citizens. For us in the US, the Cayman Islands come to mind, home to much of Mitt Romney's wealth. This race to the bottom of financial governance is appalling, and has no place in a just and well-run world.

Third comes the actual aim of mitigating large fortunes so that they do not grow without end to create a parasitic class of rentiers. These aims come together in his proposal of a global annual wealth tax of, say, 1%. It would require reporting and thus transparency. Indeed it would involve reporting directly from the accounts held, much as income is currently reported directly and automatically by the W2 form in the US. It would be global and thus eliminate the possibility of escape, subterfuge, and regulatory competition. And it would be substantial, stemming the natural process of feudalization that is the path we are on, not just in the US, but world-wide.

Over a generation, this tax would be roughly equivalent to a 30% estate tax, which in my view is, frankly, not enough. Piketty does recommend that this tax be progressive, rising to as high as 5% on very large fortunes. But if their return is in the 5-10% range, then their growth will only be slowed, not stemmed. The very idea that priviliged children get not only their genes from their parents, and a lifetime of educational and social advantages, but also enormous piles of money, is abhorrent as well as wasteful. If they are so talented by way of their natural advantages, why should they, of all people, not benefit society by working? As a society, our interest is in harnessing the talents of everyone to the fullest extent. Allowing substantial wealth inheritance flies completely against this principle, and isn't very healthy for the recipients of such largesse, either. As a "rights" issue, the rights of the parent to bequeth as he or she sees fit should not extend to the right of children to come into enormous estates just because they happen to be born to Thistlewaite and Ambrosia Moneybags. Society at large needs to come in between to restore some semblence of justice here. It is the epitome of what used to be called "unearned income".

"In other words, Liliane Bettencourt, who never worked a day in her life, saw her fortune grow exactly as fast as that of Bill Gates, the high-tech pioneer, whose wealth has incidentally continued to grow just a rapidly since he stopped working. Once a fortune is established, the capital grows according to a dynamic of its own, and it can continue to grow at a rapid pace for decades simply because of its size. ... Money tends to reproduce itself."

Along the way, Piketty devotes a brief chapter to the public debt crisis. As an MMT acolyte, I am not sure why he regards it as a crisis, (apart from Europe, where the confused system of not-really-sovereign debt truly is in crisis), or why paying it off is seen as good, or what point there is in calculating the net wealth position of the public sector. (Which is zero:  public assets are typically balanced by public debt). Since it prints the currency and manages the entire monetary as well as military and taxation system, the wealth of a truly sovereign state is effectively (potentially) infinite, depending only on our collective desires and productivity. Piketty's biggest beef is that the public is obliged to pay its public bondholders interest in perpetuity- money that could be better spent elsewhere, like on education- and that the rich should be paying this money in taxes rather than lending in return for continual income. Which is a fair point. He offers that a one-time wealth tax of roughly 15% would suffice to eliminate public debt entirely. Not a bad thing, I am sure, but hardly the most important policy need, other than in Europe. I guess the basic issue is whether the interest paid on public bonds is onerous or not. It has been an extra burden during the time when inflation was winding down from the high of the seventies, involving a bonus payment for inflation risk, and monetary lag. But now, with rates roughly at zero, and probably destined to remain at the inflation level for a long time to come, the net burden for truly sovereign debt seems to be relatively low.

Piketty secondly promotes the idea of higher taxes on income at the highest brackets, going back to roughly 80%. He spends quite a bit of space demonstrating that the wealth divergence in the US owes more, as yet, to the amazing income of high-level executives than to the build-up of "old money". Old money will surely come as a maturing vintage, as it has in France. These super-high incomes are not due to the super-talented artists, athletes, and inventors. No, it is (95%) the suited class of high-level corporate managers, by far: people Piketty terms "super-managers". Not because they manage particularly well- the data shows conclusively that that is not the case. But "super" from how much corporate wages and profits they have been able to capture, out from under the noses of workers on one side, and shareholders on the other. And one proven way to discourage such greed - perhaps better called embezzlement - is to place confiscatory tax rates on excessively high incomes.

It goes without saying, of course, that unearned income such as dividends, interest, and capital gains, should be taxed at least as high, if not higher, than labor income. How we all got bamboozzled by the Reagan era's pro-capital ideology (double-taxation! entrepreneurialism!) is frankly hard to understand. (Piketty engages in a subtle discussion of the point of corporate income taxation while dividends and capital gains are simultaneously taxed.) When all is said and done, the Piketty program would thoroughly undo the "Reagan Revolution" of greed, which led as surely as night follows day to the inequality, the high indebtedness, the corporate short-term-ism, the lower-class misery, the public poverty, and the financial instability we see today. The question is whether our politics have already been so captured by the 1% that Piketty's program is as impossible as the entire commentariat seems to think. Stranger things have happened, in the US, not so long ago.

• Piketty on student debt. Another mechanism of class war.
• Piketty on Piketty.
• There's nothing quite like the death tax.
• Krugman on recent GOP budgets, involving trillion dollar asterisks: "Think about what these budgets would do if you ignore the mysterious trillions in unspecified spending cuts and revenue enhancements. What you’re left with is huge transfers of income from the poor and the working class, who would see severe benefit cuts, to the rich, who would see big tax cuts. And the simplest way to understand these budgets is surely to suppose that they are intended to do what they would, in fact, actually do: make the rich richer and ordinary families poorer."
• GOP, right on cue ... let's eliminate capital gains taxes!
• The media landscape of modern authoritarianism.
• We evidently have too much oil for our own good, let alone coal.
• Burned on both ends.. the real cost of coal.
• Defects in market capitalism, continued ... hospitals.
• We know it's fake, but do theology anyhow.
• Maybe the norms in housing and mortgage lending got out of hand.
• Let your people go!

Thomas Piketty: We Are Heading Into a World Where We Do Not Want to Be

I review Piketty's Capital in the 21st Century. Part 1

The tome of the (new) century turned out to be a surprisingly easy read. Perhaps Piketty pulls his punches, and dumbed the subject down a bit. He certainly has tried hard to make his arguments accessible, never tiring of citing Balzac and Jane Austin. His book is pleasantly clear and rewarding to attentive reading.

The Wall Street Journal sneers at the "redistributionists" among us, who are ready to steal the hard-earned wealth of the gifted and talented, pissing it to the wind of the poor who will always be with us. But that obviously assumes a few things about both the rich and the poor. Piketty's project is to map the evolution of wealth (and, to a lesser extent, income) over the last few centuries and across as much of the world as provides decipherable data. He makes many points, but perhaps the most significant is that over the vast majority of time, (which includes the past and future), wealth tends to be extremely unequally held, and is gained through inheritance and passive investment, not through boot-strap pulling, stick-to-it-tiveness, disruptive innovation, or other bromides of the comfortable set.

No, feudalism is the norm, and if we don't want a feudal society, (means of production being, in good Marxian terms, the template of social relations), we will have to do something positive about it. The mid-twentieth century was, in Piketty's analysis, an extremely rare time- something we look back on as a golden age that escaped this default feudalism, for several reasons. First was war and pillage, which obviously destroyed much of the wealth that had been built up over the guilded age, Belle Époch, and prior generations. Second was rapid population growth, which naturally increased the economic pie and diluted fortunes. Third is economic growth via technological advancement, which was truly astonishing through this time, and had the same effect of diluting old money with new. And last was war and rapine again, by way of the communal spirit it instilled, which inspired and justified remarkably progressive rates of taxation.

Piketty shows that during this unusual period, work was strongly rewarded, since even at the highest levels of wealth, (1%, 0.1%), it was labor income that was the principal source of income, rather than capital income. It takes generations for levels of wealth to rise from such a catastrophe back to the amount (of about eight times annual national income) that characterizes most societies, and is starting to characterize ours once again. Now, in these leading demographics of the 1% and above, which used to be termed the aristocracy, inheritance is becoming once again a more important source of income than labor. Incidentally, one might note the perspective this casts on the minority and especially black experience in America, which is one of perpetual oppression, especially economic, also generations in the making, which will take generations to remedy.

The structural reasons that Piketty supplies are relentless. Since capital tends to earn very regular returns, of about 5%, and still does, even with the vast amounts of capital floating around, thanks to the great elasticity of capital / labor subsitution in our age; and since economic and demographic growth are returning to more normal levels of about 1-2%, capital will always grow during normal periods.

There has always been some perplexity about what to do about this structural dominance of capital. Indeed, this book gave me a clearer understanding of the ancient antipathy towards usury:

Rent is not an imperfection in the  market: it is rather the consequence of a "pure and perfect" market for capital, as economists understand it: a capital market in which each owner of capital, including the least capable of heirs, can obtain the highest possible yield on the more diversified portfolio that can be assembled in the national or global economy. To be sure, there is something astonishing about the notion that capital fields rent, or income that the owner of capital obtains without working. there is something in this notion that is an affront to common sense and that had in fact perturbed many number of civilizations, which have responded in various ways, not always benign, ranging from the prohibition of usury to Soviet-style communism.

He also notes that in Victorian times, the rich at least didn't hide behind the fig leaf of meritocracy as they do now in a blame-the-victim ideology (job creators!, Steve Jobs!). No, they scrambled for good marriages and rich inheritances with hardly a look back at the immiserated masses or any "duty" to economic or social utility. But I would counter that the ideology of nobility and blood was even more pernicious than that of capitalist meritocracy.

Secondly, there are strong economies of scale to capital which Piketty illustrates using American university endowments. The biggest endowments like Harvard use professional managers and complex strategies for hedging, diversification, and finding unusually lucrative investments. And they make roughly double the return (~10%) as the smallest endowments, which afford virtually no money for management and make do with typical mutual fund returns of 5-6%. Thus inequality grows over time, as the bigger fortunes lose significantly less both to investment mediocrity as well as to consumption.

In addition to the purely structural reasons why, barring catastrophe or specific policy, capital tends to grow and inequality tends to grow along with it, the social pattern follows the pattern of production (or non-production in this case) to also favor capital. The Reagan revolution dramatically lowered rates of taxation, which are now, over most of the country in comprehensive terms, not progressive at all. Estate taxes have been lowered, and managers and financiers been unleashed to prey on working people who thought, for instance, that they were actually buying houses.

But what is the problem with all this anyhow? If some people save while others spend their way to the poor house, shouldn't each get her just reward? One problem is that these rewards take many generations to fully accrue, and it is simply impossible to justify the wealth of those who had no role in building it, even granting for the sake of argument that it was accrued in some virtuous fashion originally. A second problem is about the value of work in the society. If we have a class of essentially parasites who live off of capital, who are in addition the leading demographic of the whole society, that leads to the devaluation of labor and effort. It is not just that the talents of these people (whatever those might be) are lost to the common weal, but that their pinacle position, infects the society generally with an ethic of class over utility.

Returning to the mid-twentieth century, growth rates were extremely high, the social ethos was egalitarian and public-spirited, an historically unique middle class took hold, and the top tax bracket in the US was near 90%. Were companies managed better then, or now? I think they were managed better then, with a more balanced sense of stakeholders, and less intense focus on the short-term stock price. Certainly, US companies did very well in those days, without paying their managers obscenely. And this was a conscious social policy borne of the Depression, war, and slightly left-tinged social consciousness of the day- that extremely high pay to managers was obscene and economically counter-productive, thus should be strongly discouraged by way of confiscatory taxes. High tax rates also applied to estates, with no obvious detriment to our way of life. Equality turns out to be good economic as well as social policy.

But the causes, other than progressivism, were highly unusual conditions, (Depression, war), not ones that we want to see again. And sure enough, we are headed into what Piketty shows are historically normal conditions, where the top 10% own 70% of all wealth, the top 1% own 35 to 50%, and the bottom 50% own nothing. Someone like Bill Gates can't possibly spend his fortune, and seems to be unable to give it away fast enough. It just grows and grows, gobbling up more shares of global income and wealth. Were he interested in politics, we would have a very serious problem on our hands.

Next week, we will continue, considering Piketty's recommendations of what to do about it.

• More ways to blame the victim, and avoid the real work of redistribution.
• Most (good) governments do more redistribution than we do.
• Rent and position in the corporation.
• Inequality is corrosive, even morally obnoxious.
• Monetary ideology and class war, continued. Continued...
• ... Mixed with southern revanchism, continued.
• Active government is the key to development.
• But should regulators be for sale?
• Not only is governance a significant void (or free-for-all) in Islam, so is any definitive interpretation of Sharia more generally, for fear of supplanting Muhammed.
• Economic image of the week: The art formerly called currency in Zimbabwe.

Power, Glory, and Terror

Why all the terror, and why is religion involved?

What drives the Jihadists? It is a little hard to imagine, viewed from the comfortable vantage of the West, where the most salient issues tend to be the next iPhone or Playstation model rather than the pursuit of totalitarian power, let alone a stringent image of the deity. (Which is to say, taking for granted the overwhelming power of the West in virtually all aspects of modernity.) The package of power and religion is a heady one, however, and picking it apart from such a vast cultural distance is both difficult and essential, since we are mired in the fight.

The ideal Muslim society is a blend of piety and power, with Muslims in charge, but not through what we in the modern West would recognize as organized or legitimate means. Meetings of elders might result in the election of a leader, but just as valid is the taking of power by force. It is hard to remember, but in the West as well, holy warfare was common, and torture, in trials by fire, boiling, etc., justified by the theology of favor. The king has God's favor as long as he is popular and powerful, for instance. Enormous effort was devoted to methods of augury, but results would always speak loudest. It is a peculiar conflation of Darwinian fitness and theism. But the element of spiritual force (or communal psychology) is not to be denied. Those with deep commitment, even unshakable faith in their cause and in their talents, are vastly more powerful than those with mere technology.

One source of spiritual force might be culturally accepted forms of divination, augury and the like, providing some tentative positive thoughts. But another source is straight out bigotry by way of belief that one's scriptures are perfect, one's race pure, one's religion true, and one's enemies evil. Tribalism is not exclusively the province of religion, but religion tends to be the most powerful binder of groups, at least on par with nation states and soccer teams. All else pales before the transcendent purposes of the universe.

But why all the terror? That is what is most striking about today's jihadists, their method of projecting power through unspeakable cruelty, not to mention lovingly tended web sites and advanced video techniques. In the West, we have just gone through an extensive mea culpa / handwringing about torturing a few of those who have terrorized us (or, by our incompetence, who are innocent). We think it is bad, but clearly others have fewer qualms, notwithstanding their own propaganda using our practices of torture to paint us as unspeakable villains. They know it is bad, but that doesn't stop them from beheading and raping and pillaging. What exactly is going on?

It looks very much like our qualms are being turned against us. We have nuclear bombs after all, and could dispose of the problem very easily, were our morals sufficiently lax. If one is insulated against what might be called weakness, i.e. moral qualms that rise as one's level of civilization, empathy, and responsibility rise  ... by way of, say an ideology that tells one with absolute certainty that one is good even while one is doing evil acts... why then one can win the race to the moral bottom, and bend innocents to one's will, gathering power of the basest kind.

Power, in the form of coercing others to do what you tell them, on pain of death or harm, is the most execrable level of social relations, which grade upward through respectful competition, tolerance, self-interested cooperation, communal cooperation, and love. Why anyone would consider mixing a putatively great religion with such evil moral practices (outside of self-defense) is a significant question. One answer is that the scripture and early history of Islam in particular is no stranger to violence and terrorism. Unbelievers are terrorized on every page with visions of hell, discrimination, and ultimately, direct violence from believers.

Does this mitigate the attraction of the doctrine? Evidently not. That is what is so curious. Power is itself attractive. We record the history of the powerful, and forget all others. It hardly matters how cruel and blood-soaked the reign, the top cultural rungs are occupied by those who succeeded most thoroughly in terrorizing their friends and enemies- Genghis Khan, Alexander the Great, Napoleon, etc. and so forth. If Hitler had won, doubtless the same would have happened. His terror was evidently not thorough enough. The Darwinian logic of all this is depressingly clear- that power is its own reward and rationale.. nothing succeeds like success. Other societies like Rome and the Jim Crow South used terror as a regular feature of power within the social order. One might say this of most societies, really. Terror goes hand in hand with the enforcement of social order- even among us with our amazing rate of brutal incarceration, and our large and desperate homeless population.

Another answer is that practically any situation can be constructed as self-defense. We have to bomb people in far-away lands because of their destabilizing influence on the general world order, which we as the dominant power are committed to uphold. That is a bit of a weak rationale, but at least somewhat more reasoned than that of "homeland protection", which is entirely beside the point in our current engagements. For Muslims, their abject loss of cultural dominance vs the West is in itself an affront that constitutes victimization and justifies violent defensive measures. The influences of the West are infiltrating everywhere, in communications, in depraved art, in philosophical skepticism, and most horrifyingly, in women's rights. Where will it ever end?

Terror is then a natural method of force projection, multiplying influence when "normal" means of mass killing are not available, and "normal" status quo-supporting ideological constructs are not desirable or sufficient. Its rationalization by way of total-izing ideologies or self-defense is all too easy. But in a revolutionary context like the current Jihadist campaign, it also has very limited scope. Shock (and its attendant demoralization) only lasts so long, and soon this demonstration of ruthless dedication (and localized power) calls forth revulsion and regular military power from among its opponents, both inside and outside the Muslim world, if they have courage and their own ideological resources.

• Saudis spawned the purer forms ... ISIS.
• Al Qaeda negotiated regularly with Pakistan: "God is with us".
• God sure is a great therapist. But "is" it?
• GOP clown posse and the Ayatollahs... brothers from another mother?
• Re-segregation is in full swing in the schools. Private schools need to be abolished.
• This week in the WSJ, "There’s no need for the FCC to override the free-market agreements that make the Internet work so well."
• Genetics of savings propensity.
• Piketty on the Euro: "It can't work."
• On the institutional politics of capital, feudalism, slavery, etc. And the case for taxation.
• Wingnuts vs Obamacare: be careful what you wish for.
• The unique logic of Keystone: Give us that pipeline or we start blowing up cities.
• Dividend tax cut causes zero increase in investment.
• Homelessness.
• "... prison is a penalty that cannot be reimbursed by the corporate employer."
• Alice Rivlin on fighting the last (monetary) war.
• Economics graph of the week, on Federal social spending:

Brain Waves and Thought: Correlation or Causation?

A few studies start to use interventions to figure out what that symphony in the head is doing.

Electrical brain oscillations (waves) have been observed for over a hundred years, but it has been hard to pin down what they do. It has been extremely attractive to hypothesize that they knit together various areas of the brain in cognitive coalitions. The brain hosts a great deal of resting activity, and by this kind of theory, it is typically disorganized. The long-range rhythmic harmonization of various areas could form integrated cognition out of all this noise, both conducting information and linking it together, thus solving the binding problem in an elegant way that accords with the speed and spontenaity thought.

"Recently, it has become evident that these brain rhythms are not just a generic sign of the brain-at-work, but actually reflect a highly flexible mechanism for information encoding and transfer. In particular, it has been suggested that oscillatory synchronization between different areas of the cortex underlies the establishment of task-relevant networks."

But how can we tell whether all this is actually going on? Brain scanning can say what is active and when, to a rough degree, so we can trace a long train of activities that follow, say, the presentation of a face to someone's vision. But we can not see what is contained in those oscillations- the code remains rather secret. There are also many different oscillations, doing quite different things. Sleep involves some very heavy-duty slow waves, muscle coordination seems to involve medium frequency waves, as does restful but inattentive wakefulness, while the cognition-related hypotheses above generally invoke the higher frequency gamma waves.

Experimenters have started doing intervention studies that try to get beyond the correlation conundrum by actively manipulating electrical activity in the brain. Obviously, this is quite difficult to do. In rare instances, people are getting electrodes implanted in their brains for other reasons like treatment for epilepsy or Parkinson's, and allow limited research as a side project. The other option is to use transcranial magnetic fields or electrical stimulation, (shades of Frankenstein!), which are obviously rather gross interventions with little ability to focus effects to defined volumes inside the brain. Thankfully, however, some of the interesting activity of the brain happens close to the surface / skull.

The current researchers (review) use "transcranial alternating current stimulation", or tACS, which is pretty much putting current directly through the head with electrodes, presumably at low levels. They ask whether such stimulation, with its alternating current timed either in synchrony with the endogenous gamma rhythm (40 Hz), or against it, can alter a subject's perception according to the theory that brain oscillations constitute the cognitive binding of disparate brain regions.

Schematic of experiments. The visual area is in the rear of the brain.  Subjects were shown ambiguous dot designs that are interpreted as horizontal motion half the time. Then they were given direct electrical stimulation with electrodes at the back of the head, either in phase or out of phase with the endogenous gamma rhythm.

The perception they decide to use is visual motion, which has been correlated with gamma oscillation coherence between the right and left visual areas of the brain. An ambiguous motion on a screen can be interpreted as either vertical or horizontal motion, roughly half the time each. The subject is asked which one it is, and this reflects more about the state of their brain than it does about the visual stimulus. Some increased amount of coherence of gamma oscillations is known to correlate especially with (subjective) horizontal motion, intriguingly enough, and the researchers track that through their own subjects.

Then they apply the jumper cables. "A sinusoidally alternating current of 1,000 µA (peak-to-peak) was applied at 40 Hz continuously for 20 minutes during each session." What they found was that the perceived motion could be slightly, but significantly, shifted in the expected direction if brain oscillations are causally important to cognition. When applied in phase with the subject's endogenous cross-brain rhythm, subjective horizontal motion increased, while when it was applied out of phase, thus decreasing the cross-brain coherence, subjective horizontal motion decreased.

The result, that perception of motion is affected by the phase of the applied current.

Incidentally, the applied current causes slight but measurable change to the gamma coherence between the rear visual areas.

A couple of other papers use open-brain studies to reach the same conclusion, for other aspects of cognition:

"We found increases in high gamma (HG) power (70–250 Hz) time-locked to trial onset that remained elevated throughout the attentional allocation period over frontal, parietal, and visual areas. These HG power increases were modulated by the phase of the ongoing delta/theta (2–5 Hz) oscillation during attentional allocation. Critically, we found that the strength of this delta/theta phase-HG amplitude coupling predicted reaction times to detected targets on a trial-by-trial basis. These results highlight the role of delta/theta phase-HG amplitude coupling as a mechanism for sub-second facilitation and coordination within human fronto-parietal cortex that is guided by momentary attentional demands."

"Neocortical-ATN theta oscillatory phase synchrony of local field potentials and neocortical-theta-to-ATN-gamma cross-frequency coupling during presentation of complex photographic scenes predicted later memory for the scenes, demonstrating a key role for the ATN in human memory encoding."

So the role of high-frequency brain oscillations looks increasingly secure as a mode of information transfer, binding and management within the brain. Whether this phenomenon also constitutes conscious perception, forming the thoughts whose contents and sources are so disparate and wide-spread through the brain and body will be the next enormous question to tackle.

• What's up with the enlightenment, and the party of postmodernism and the ID?
• Too much of a good thing: people.
• What's so bad about inequality?
• Wingnut: Yes, I am a terrorist. And yup, I still want my guns. By the way, Christianity is true, Islam is a fairy tale.
• Rules, bureaucracy, freedom.
• "Several [studies] find that liberals score higher than conservatives on the need for cognition, which captures the individual’s chronic tendency to enjoy effortful forms of thinking."
• Judges caught taking millions to send children to private jails. Banks happy to do the money laundering.
• Lying ... pays extremely well.
• Worker's comp- another victim of class warfare.
• Grumpy bashes the US internet industry.
• Can one person drain a swamp of corruption?
• Can one person drain the world of hokum, lies, and magical thinking?