We Have Been Energy Hogs For a Billion Years

Mitochondria and the origins of eukaryotes.

Last week, we read about the origins of one important characteristic of eukaryotic cells- sex. But there are many more properties that distinguish eukaryotic cells from their bacterial forebears. These include the compartmentalized organelles like mitochondria, chloroplasts, nuclei, golgi, lysozomes, and the endoplasmic reticulum, a vastly expanded and junk-laden nuclear genome with introns, numerous new families of proteins, larger ribosomes, linear DNA with telomeres, separated transcription and translation, and centrosomes / cilia, among others. The mystery is how these many innovative characters all came to happen in one lineage that left no other discernable branches or traces, making the divide between the two forms of life truly gaping and hard to reconstruct. A paper from 2011 provides an illuminating attempt to explain some of these mysteries. Incidentally, it is well-written, and rewards a direct read.

Perhaps one of the most complex, yet at the same time simple, characteristics, is the mitochondrion. Though some eukaryotes live without them, such lineages all are known to have evolved from mitochondrion-containing ancestors. Thus mitochondria are truly part of the original equipment of eukaryotes as far as we currently know. Mitochondria are the descendents of bacteria completely distinct from the proto-eukaryotic host cell, (whether archaeal or something else), and became endosymbionts, whether by some dramatic engulfment / phagocytosis or something more cooperative and intricate. Thus the origin of the mitochondrion is simple- just take in a bacterial partner- even as the organelle and its effects on the host are highly complex. Indeed, mitochondria still have a tiny residual genome, encoding, 37 genes in humans, most of which are tRNAs. While the vast majority of its proteins are encoded far away in the nucleus, it runs its own replication, transcription, and translation apparatus complete with tRNAs and charging enzymes to make 13 proteins of its own, using a genome 1/200,000 the size of the host cell.

Mammalian cell with its nucleus labelled "N" and mitochondria labeled "M".

The current paper proposes that the partnership with mitochondria was the first step on the long road to the eukaryotic cell. The reason is that it is the one enabling change that unleashes all the others, by vastly increasing the energy available to the combined entity. The author goes through a lengthy calculation of the DNA carrying capacity of bacteria, which is clearly limiting and causes a ceaseless competition among bacteria to shorten and streamline their genomes, which account for roughly 2% of cellular metabolism simply for DNA replication, quite apart from all the other costs of gene expression, repair, etc.  Once the host cell convinced the endosymbiont to give up its excess energy (ATP) in return for safety and free food, the race was on to a very profitable division of labor.

If in the combined cell, each mitochondrion supplies the energy equivalent of a bacterium, but with only the genome of an influenza virus, the efficiencies of scale are substantial, perhaps transformative, enabling much larger cells and much larger central genomes. On the other hand, the eukaryotic cell has just as much protein, mRNA and other gene expression apparatus (by mass and energy) as the bacterial cell, (if not more), so the author's focus on the energy available per gene, which results in starting quantitative contrasts between the two domains, is not terribly persuasive.

Example of bacteria (Clostridium) in size comparison to human epithelial cells. The bar is 20 micrometers.

More persuasive is the advantage in membrane area. Bacteria, like mitochondria, manage their short-term energy via a proton motive force over their plasma membranes. Food sources are oxidized, generating electrons which power the pumping of protons out of the cell/organelle. That power, stored much like a battery, is used as needed by ATP-synthesizing machines that run off the power of letting those protons back in. Making a bacterium larger is a losing proposition since the cytoplasmic volume rises by the cube as the surface area rises by the square. While elongation is one solution, and many bacteria are filamentous, spiral, and other long-ish shapes, this poses other obvious problems of safety and internal management. The eukaryotic cell escaped all that by making of the mitochondrion an endlessly replicable internal energy unit, limited only by the host's ability to gather dinner on whatever scale it chooses to operate. And sometimes, operating on a large scale is very profitable.

This hypothesis leads to an interesting theory about the early phases of the symbiosis. However it happened, the earliest mitochondria were fully bacterial, conferring the membrane area advantage, but not the genome streamlining advantage. Given that many mitochondria can exist in each eukaryotic cell (up to several thousand), the advantage of minimizing the infrastructure and energy needed for the maintenance of each one is clear. In the first place, many of the free-living functions would have quickly become unnecessary. Mitochondria today have a complement of about 1000 proteins, far less than the ~ 5,000 proteins found in free-living bacteria. Getting rid of those and the DNA encoding them is a huge savings.

Second, this early mitochondrion would be constantly exposing the host to its own DNA, and the combined entity would gain a streamlining advantage every time the mitochondrion lost a gene that was integrated into the host genome. Putting aside the challenges of transporting all the proteins needed in the mitochondrion back from the host's expression apparatus, which are substantial, every time the mitochondrion lost a gene and had that function supplied externally instead, it became that much more efficient in terms of the genome it was carrying around, in addition to regulatory advantages from being centrally managed by the host.

Comparison of genome sizes, on a log scale. All eukaryotes have larger genomes than all bacteria. Mitochondria, at 16Kb, now fall into the viral range rather than the bacterial range.

Thus a sort of snow-balling process of mitochondrial genome miniturization took place, which had wide-ranging effects. The author speculates that controlling this exposure to external (mitochondrial) DNA, especially its primitive introns, may have led to the nuclear membrane as a form of protection and process management, which in turn created the space for new forms of eukaryotic regulation, like the spliceosomal processing that takes place during exit from the nucleus, and the myriad proteins that are specifically shuttled in and out of the nucleus for regulatory control. Overall, the union of a tiny mitochondrion and a central host genome provides a quantum leap of efficiency, compared to what is possible by scaling up single bacteria in any conceivable way (whether by invaginating their membranes, and / or multiplying their genomes to serve larger surfaces and volumes).

This in turn allowed energetic room for all sorts of new innovations and what a bacterium would regard as waste. A host genome full of introns and other junk DNA, a cytoplasm full of new cytoskeletal proteins devoted to shape control and internal cargo carrying, systems for internal membrane and vesicle management, and diploidy: carrying a full extra copy of its nuclear genome around, as part of the new sexual reproduction cycle. Also:

" The last eukaryotic common ancestor (LECA) had already increased its genetic repertoire by some 3000 novel gene families [over that of the presumed ancestral bacteria]."

Finally, the fact that this series of innovations seems to have happened only once and left no other lineages from along the way makes for a remarkable gap in the evolutionary record, far more profound than that observed around the Cambrian explosion of metazoan life. This paper is very eloquent about the many ways that prokaryotes are trapped in what might be called a version of fiscal austerity, always cutting spending, scrimping on infrastructure, and seeking efficiency über alles. That is no way to live! That any of them found a way out, to the endless vistas of higher complexity and cooperation that now cover the earth with beautiful, rich life, is worthy of wonder and gratitude.

• smORFs, another genomic frontier.
• But he's a winner, right?
• What is an undue burden? Who knows? And does the state have an interest in unused sperm?
• Whom do investment bankers work for?
• Let's make the FIRE sector pay its way.
• Corporate profits are sky-high. Is that investment, or rent?
• What defines the middle class?
• Is suffering an excuse for being  gullible?
• No one seems to understand national debt, after all this time.
• Green tip of the week: let's have fewer conferences.
• Barney Frank: You have to vote.
• Work is fundamentally important, perhaps more than trade.
• Republicans in the forefront of bad government.

Why have sex?

On the origins of meiosis.

Of the many innovations that occurred during the evolution of eukaryotes, one of the most mysterious and powerful was the development of meiosis and sexual reproduction. A paper from a few years back delved into how this process might first have started, given that it depends on several complex innovations. (And another paper more recently).

But first, why is sex so durable, evolutionarily speaking, resulting in an Earth where all large, complex life forms engage in it? The costs are quite severe, after all: partners must be found, which can be a particular trial for sessile plants, corals, etc.; selection for fitness can be waylaid by mate selection and other sexual games; Parents give up half their genes in creating each child, compared to creating complete copies as they would by traditional, clonal reproduction; likewise a sexual population has to have males, which double the resource needs compared to a clonal population where every member is functionally female.

The answer lies in population genetics. A clonal population, such as most bacteria, can generate mutations and adapt to external conditions. The development of antibiotic resistance is notorious. But evolution is a parallel process, where the whole population is tested, and many variants are more or less successful. Everyone has deleterious mutations mixed in amongst the beneficial ones, especially since they are always more numerous. So in a clonal population, any good mutation that occurs will be trapped in its current genome and have to compete against all the other clones with all their good and bad mutations. Another good mutation will have to fight the same battle, without the chance to team up with the first one, unless the first one has already taken over the population. This way many beneficial mutations are lost, especially those with weak effects, which are the majority, naturally.

Even worse, bad mutations tend to pile up in each clone lineage, since there is no way to get rid of them. Each mother gives the full complement of her mutations, both inherited and those that happened during her life, to her offspring. In humans, we accumulate about 175 mutations per individual before reproduction, of which roughly 1 or 2 are detectably deleterious. While astonishing repair processes have evolved to keep such errors to a minimum, there are always some, and in a clonal lineage, they are always building up, despite the ongoing selection against those which add up to worse than average problems, a process termed "Muller's ratchet".

What happens in a sexual population? Well, it is critical to realize that it does behave much more like a population- an evolutionary village, so to speak- than as competing clonal lineages. Individual alleles are recombined around and mixed up among offspring, so that there is far more diversity within the population, which allows, stochastically, for good mutations/alleles to come together in some offspring, and deleterious mutations/alleles to come together in others. Given selection where the latter die and the former flourish, the system enables far more effective use of the opportunities provided by mutations throughout the population then clonality does.

The autobiography of Julius Erving, "Dr. J", provides a graphic example. He is extraordinarily gifted in all respects, including writing. Yet his brother Marky was sickly and died very young. The difference is tragic on a human level, but routine on a genetic level. Embryos with especially deleterious alleles will frequently die before birth, hiding the true rate of this genetic "sweeping" mechanism.

Sex is so powerful that bacteria have developed several mechanisms for doing it on a small scale, such as extending pili to partners so that they can exchange limited amounts of DNA. This how antibiotic resistance spreads around so quickly, and helps bacteria exchange out some of their accumulated mutations by homologous repair, (which is common among all organisms), though at the cost of bringing in parasitic DNA elements like transposons and viruses. But bacteria have never developed the full monte: fusion of whole genomes with total remixture and sharing out to subsequent progeny, let alone obligatory sex before reproduction. Eukaryotic sex involves the fusion of complete, haploid genomes, which recombine pervasively, both by way of the independent assortment of whole chromosomes and by smaller sub-chromosomal recombintation events, to create unique, new haploid genomes, which are then sent out as new gametes.

Bacteria share small amounts of DNA though conjugation pili.

The rise of this process is a bit hard to understand because there are several complex events needed, none of which make immediate sense by themselves. First is the meiotic division, which uses most of the tools of normal mitotic cell division, plus some more (suppression of sister separation in the first division and then suppression of DNA replication in the second division) to turn a diploid genome into a carefully reduced haploid gamete genome. Second is the part of the process called synapsis where all chromosomes from the two parents align along their full length. Third is the recombination that is obligatory between these homologs in order to keep them attached at initial stages, and to interchange segments of the respective genomes. This is not to mention the fusion of gamete cells and other perphernalia of sex, which are less innovative from a molecular, and probably evolutionary, standpoint.

Basic model of meiosis, in comparison to mitosis.

The proposal made in this paper, by a luminary in the field, after whom the Holliday junction is named, is that synapsis of homologous chromosomes may have been the leading event in the development of meiosis and sex, and is understandable as a solution to a completely different problem. Quite apart from the recombination that happens when bacteria encounter DNA coming in from other cells, homologous recombination also happens after replication and before division to repair damage, of which replication is a frequent cause. But one of the hallmarks of eukaryotes is size- big cells and big genomes- they are the SUVs of cellular biology. As genomes grew, the chances of making an error in this internal recombination, with all the repetitive DNA and duplicated genes lying about, grew rapidly as well, and posed a serious danger of creating new damage. This led to the preferability of setting up a whole-genome alignment process, i.e. true synapsis, and confining it to the inverval between replication and division.

"To sum up, we propose that the selection pressures for homolog synapsis and the origins of meiosis were to improve recombinational accuracy and to restrict it to a safe interval, while retaining its short-term (repair) benefits. A cell lineage that had evolved this capability for diploid cells would be less error-prone in transmitting its genetic material."

In the original setting of haploid, single cells, as the first proto-eukaryotes undoubtedly were, this would have revolutionized post-replication homologous DNA repair, making the process far more systematic and reliable. Indeed, eukaryotes still have their DNA aligned during most of the cell cycle, though not in the elaborate synaptonemal complex now found in the first phase of meiosis. Since these organisms were not dipoid, but habitually haploid, the subsequent division would have already resembled the second division of meiosis, back to the haploid state.

"In principle, the molecular evolution of a new cohesin molecule that specifically promoted homolog pairing might have provided the crucial trigger for meiosis."

The next step to true sexuality by this model were to adopt the practice of mating between separate cells (which could have been related to the partial genetic exchange common among bacteria) to generate a diploid where truly different alleles over entire genomes are combined in one cell. While this could have worked on its own, (and exists today as parasexual cycles in fungi, where reduction back to a haploid set of chromosomes is more or less random), the addition of DNA replication, as well as synapsis and recombination as above, at this step would have necessitated a special variant of mitosis to become the first (reductional) division of meiosis, whereby the replicated homologs from the two parents align in a novel four-chromosome bundle and each segregate precisely in half, though with random polarity, prior to a second division.

"In many unicellular eukaryotes, haploid sex-cell fusion leads promptly to nuclear fusion, which immediately triggers meiosis, thus regenerating the haploid state. In contrast, in more complex, multicel- lular eukaryotes, meiosis is greatly delayed following the initial fusion of sex cells, taking place much later in the life cycle, during gametogenesis."

Subsequently, organisms would adopt the diploid state as the organismal default (not so difficult in microorganisms), which has powerful effects on genetic diversity, since it allows recessive alleles some breathing space to survive and even to fill strategic niches in the population. With the advent of multicellularity, the meiotic divisions could be re-scheduled to now-vestigial haploid cells as part of a special gamete generating process. Clearly there is a lot to chew on with this model, and a need to flesh out and gather evidence to support the many inferred steps. But it is a highly interesting idea for the stepwise development of a process that is now notoriously complex on the molecular as well as all other levels.

A problem, however, is that modern eukaryotic cells, though they use aligned sisters in a highly regulated fashion for post-replication DNA repair, do not use anything like true synapsis. That makes it difficult to suppose that synapsis ever played a role in this process, or that it was the leading element of the other steps of meiosis. One might counter that haploid cell fusion with para-sexual reduction was perhaps the first step in the sequence, (possibly even originating in a predatory setting), after which the development of replication, synapsis, diploidy, and the special homolog-separating division of meiosis I were developed to better clean up the mess. Anyhow, next week, we will delve into another theory about the origins of eukaryotes.

Overall, sex is a machine for speeding up evolution, generating a quantum leap of accessible genetic diversity within a species / population that allows bad genes to be left behind without discarding everything else in those genomes, and good genes to be concentrated in the winners. Do individuals benefit, or their genes, or the species as a whole? There is an element of group selection intrinsic to this rationale for sex, since the benefits accrue down the line to the genes of the species and the species as a whole, not to the individuals involved now, especially not those stuck with the short end of the genetic stick.

• An unusual meiotic short-circuit & genome mixing pathway in yeast cells.
• Women, and women's work, are not highly valued. Another lesson in the social construction of pay decisions.
• Seniors (and the rich) are doing relatively well, at least vs young workers afflicted by a terrible job market. "I suspect that most Fed policymakers receive relatively little input on the economy from people who are younger than 40."
• Does the US have any place for lower class workers?
• Or does it have the education and institutions to take them to a higher class?
• Mainstreaming MMT.
• Repression is hard work, and Trump, a relief.

Keynes Would be Spinning in His Grave

If he could see what is going on in the Euro Zone.

There are deep structural and policy problems in the Euro Zone which have prevented or muted its recovery from the recession. The policy problem, similar to ours, is a lack of stimulus spending to put an end to general deflation and recession. The structural problem is that the individual countries, while sharing the same monetary unit, can not adjust their levels of general economic activity relative to each other, or have independent monetary policy, except through trade. And their trade relationships are hopelessly unequal, with Germany in the lead, and the peripheral countries like Greece and Spain uncompetitive, at least in fixed Euro terms.

While the going was good, Germany was willing to lend the money which flowed in through trade back out to the southern and peripheral countries. But these were only loans, not fiscal transfers as would happen in a  more integrated country/zone. So then we had the drama of creditors asking for the money back, arranging for debt forgiveness, bailouts, etc., all when the debtor countries were on their knees.

In essence, the Euro Zone operates like an old-fashioned gold standard international system. A common unit of exchange and value is kept stable across supposedly independent countries which each have their own policies of trade, employment, corruption, public services, etc. This unit is not really shared out from the central bank on a per-country basis, let alone to correct specific trade imbalances, but generated in response to economic growth in sum across the whole zone, managing issuance and interest rates with the overarching goal of low inflation (since the Germans are running the ECB, more or less). Thus each country needs to accumulate what is to them a fixed unit of exchange through trade, lest they run into chronic debt to the other countries. Each country is moreover on the hook for its various economic disasters like insolvent banks, unemployment, and social unrest.

Here is what Keynes wrote about this kind of system, as opposed to a system of floating exchange between sovereign nations:

"Never in history was there a method devised of such efficiency for setting each country's advantage at variance with its neighbours' as the international gold (or, formerly, silver) standard. For it made domestic prosperity directly dependent on a competitive pursuit of markets and a competitive appetite for the precious metals. When by happy accident the new supplies of gold and silver were comparatively abundant, the struggle might be somewhat abated. But with the growth of wealth and the diminishing marginal propensity to consume, it has tended to become increasingly internecine."

"I have pointed out in the preceeding chapter that, under the system of domestic laissez-faire and an international gold standard such as was orthodox in the latter half of the nineteenth century, there was no means open to a government whereby to mitigate economic distress at home except through the competitive struggle for markets. For all measures helpful to a state of chronic or intermittent under-employment were ruled out, except measures to improve the balance of trade on income account."

".. those statesmen were moved by a common sense and a correct apprehension of the true course of events, who believed that if a rich country were to neglect the struggle for markets its prosperity would droop and fail. But if nations could learn to provide themselves with full employment by their domestic policy (and, we must add, if they can also attain equilibrium in the trend of their population), there need be no important economic forces calculated to set the interest of one country against that of its neighbors. There would still be room for the international division of labor and for international lending in appropriate conditions. But there would no longer be a pressing motive why one country need force its wares on another or repulse the offerings of its neighbor, not because this was necessary to enable it to pay for what it wished to purchase, but with the express object of upsetting the equilibrium of payments so as to develop a balance of trade in its own favor. International trade would cease to be what it is, namely a desperate expedient to maintain employment at home by forcing sales on foreign markets and restricting purchases, which, if successful, will merely shift the problem of unemployment to the neighbor which is worsted in the struggle, but a willing and unimpeded exchange of goods and services in conditions of mutual advantage."

One might add that this need for markets and trade also drove European countries toward colonialism which was so destructive, especially in the latter phases as laggards like Belgium, Italy and Germany got into the game. It is a wonder (of a negative kind) how, eighty years after Keynes's lessons were introduced in response to the Great Depression, and after several postwar decades during which they were put to such prosperous use, we, and especially his own continent, are struggling in the mire of older orthodoxies that he had laid to rest. I was about to note that we can at least be thankful that none of the current leaders advocate a return to an actual gold standard, but that turns out to be incorrect.

• How is the European Union doing generally?
• Trade plus redistribution.
• The Fed: is OK with continued unemployment, cont.
• Have you been left behind?
• Protest and diversity in Saudi Arabia - ends unhappily.
• Regulation remains important, despite corruption.
• Yes, education spending works.
• This occupation must end.
• Meanwhile the occupation of the Senate by retrograde do-nothings must also end.
• What happens when the Donald finds a mic.
• The species of our debt.
• Can we give half of the earth back to nature?
• Economic graph of the week. Not just wages, but benefits as well have dropped for the poor, while each has risen for the rich.

Shark Tank

Laissez-faire is a system of predation.

A few years back, I scanned through the TV listings and saw a show called "Shark Tank". Sounds nice.. one of those discovery channel nature shows, right? No, it turned out to be a celebration of cut-throat business, a reality show where many are called, few are chosen, and the rest are fired. Capitalism is a system of many faces and contradictions, but a central one is that while competition sometimes gives the consumer a better deal, the same competition also generates criminal activity, corruption at business and government levels, inefficiencies, conspiracies against consumers, and other antisocial effects, on the system as well as on individuals.

Take the sub-prime lending fraud that led to the recent recession. Mortgage lenders and brokers showered money on poor and uninformed purchasers who were pleased to find that they could afford far more house than they thought, virtually no questions asked. Who cared if the ultimate rate was a bit high or the balloon payment unimaginable? These mortgages were sold on to other suckers in an unvirtuous circle that sent millions of homeowners into bankruptcy and bondholders into insolvency. At the heart of this process were fraudulent practices that threw legal and underwriting standards to the winds so that the immediate mortgage lenders could make a quick killing, in return for lying to their clients about their ability to fully afford what they were buying, and for lying to their mortgage bundlers and buyers about the quality of their underwriting.

In advertising, fooling the customer is the standard of practice. Health insurance is a constant battle against adverse incentives. Buying a car is notoriously assymetric. Political corruption by companies and the rich buys favored treatment for them and unfavored treatement of the little people. Lying about the risks of smoking, or the reality of climate change ... the list goes on endlessly. The problem is that while the justification for capitalism, private enterprise, and laissez-faire relies on its efficiency and ultimate good services, embedded within that system is quite another system of brutal predation. While wolves would never represent to the moose that they are interested in its welfare and have some really great long-term care insurance to offer, the human economy runs on putative offers of service that all too often turn out to serve the servers much better than the recipients.

That, of course, is why regulation exists; to keep the knowledgeable from taking advantage of the rubes. One can rely that every time a Republican or libertarian bleats about the horrors of government regulation, they are shilling for business practices that belong on the predatory side of the ledger. Milton Friedman and his fellow prophets of laissez-faire were always careful to choose examples of appalling government corruption (communism, most commonly) to set against examples of efficient and competitive private enterprise. But corruption is possible everywhere. The 1% are set upon by private predators of their own, such as Bernie Madoff and the whole financial wealth management industry, more or less. Donald Trump exemplifies the type as well- a salesman suckering a succession of banks and investors into deal after deal, some of which turn out well, but more of which are losers, or even end up in bankruptcy.

On the other end of the spectrum, the destitute and disabled are cast out of this ruthless system entirely, homeless and on the street, forced upon the charity of those with a modicum of compassion, certainly not those at the top of the food chain who are preoccupied with finding their next unwitting meal.

How should we view this system? On the one hand, the "job creators" insist, with the fawning support of their endowed minions in academia, that they are the risk-takers and wealth creators. It is their phenomenal productivity and accumen that deserves the hundreds of times higher pay than other workers. But at the same time, is obvious that high pay, like that in the financial industry, for example, is able to extract for the priviledge of handling our money, involves virtually no societal benefit. The purveyors of 401Ks are right this minute fighting tooth and nail against being held to a fiduciary standard of service, because this would inhibit them (slightly) from stealing as much money from their marks as they have up till now. The financial industry in particular is the exemplar of competition without remorse, soul, or point, its sole justification being that they are the ones who control the sluices of money.

Likewise, CEO pay scale is clearly more related to how compliant the board is than how well the person or company performs. It also relates to the size of a company, which leads to a mania for acquisitions and debt, even if the business gets impaired in the long run. Pay relates to power much more than to productivity. Even the most morally upright get caught in the vortex heading to the lowest denominator, due to Greshams' dynamic, where the race goes to those most willing to bend and break the law (or have it changed by Congress!), forcing everyone else in the business to adopt the same practices or lose out. Regulation is the key bulwark against this dynamic, helping good businesses and good practices prosper.

But the problem of complexity and traps for the unwary exists at all levels and in government as well. The destitute are mired in a swamp of government programs that require offices to be visited, forms to be filled out, and rules to be observed, often far beyond their capability. It takes a PhD to do one's taxes. The expectations placed on regular citizens to nagivate through the mazes of modern society, including those of red tape and of business predation, can be overwhelming. Thus the society becomes, in toto, a competitive and dispiriting rat race where getting some kind of leg up, whether through family money, credentials, native intelligence, ruthlessness, charm, union or other organizational affiliation, or a particularly nefarious business plan, is the name of the game. Granted, the system in the US is far more civil, lawful and regulated that those elsewhere, such as Russia. But it still diverts far too much effort towards unproductive ends, rewarding antisocial behavior directly, and requiring everyone else to be on their guard with constant vigilence.

It can be granted that competition is pervasive in any case- in politics, in personal life, in the market for mates. There is no way to make life into a utopia of free love. The trend of human civilization and political philosophy, however, is one of reducing predation progressively. At first we put up with any kind of despot who could protect us from outside predators- i.e. the other despots. Then we came up with Magna Cartas, laws, justice, as ways to reduce predation inside the society, holding the rulers within some bound of decency. Next came democracy and civil services, which definitively put the reigns of power under popular control rather than the winners of a dynastic or military competition.

These have been great advances in making our societies more just and less subject to the baneful effects of total struggles for power. And these democratic states have over the last couple of centuries also made great strides in limiting & regulating the natural competitive forces pervading the rest of society, especially the private sector, to serve those whom we (collectively) want them to serve, rather than themselves. This project has taken an enormous step backward over the last couple of decades, under the ideology of laissez-faire. Predators were unleashed at all levels, and the result is the astonishing inequality from bottom to top that we see today. And contrary to its proponents, this regression has not served the overall economy or the middle class, which are sputtering and anemic.

Worst of all, this regression has corrupted our democracy itself. Donald Trump is ultimate expression of a system which does not attract its most talented members to political service, and whose elected officials depend utterly on begging the wealthy and corporations for their sustenance. We have seen the B-team in this campaign, and it has not been pretty. The voters seem to agree that the system must be blown up. But how and to what end?

Obviously raising consciousness about the bizarre defenses of the predatory system within the larger system is one place to start, which Bernie Sanders is doing so well. Republicans and Chicago school economists who sing the praises of freedom of organization for the employer and feudalism for the employee are, on the other hand, part of the problem. Then comes stronger regulation on behalf of workers and consumers. But above all, the political system has to be made safe from corruption by private and corporate interests. Right now it is open season. Trump himself crows about how his past political contributions were strictly business, nothing to do with good policy or public interest, but purely about access and corruption. And these kinds of statements have lost their ability to shock.

Many schemes for public funding of the political system have been advanced and work elsewhere. We could set up something like giving each voter a fund of golden credits, say $200, to contribute to any campaign at any level. This would add up to $60 billion, which is just a guess about how much the political system costs, in terms of elections. The credits would only turn into real money when given to a registered political candidate, with the money itself coming from the federal government, as part of the tax system. Secondly, public official contacts with private entities such as unions, corporations, and officers thereof, would all have to be strictly on the public record, such as in open hearings or other meetings, or in written form.

Such steps in our political system would help decouple it from the predatory private sphere as well as raising its level of transparency and fairness. That would in turn enable it to more seriously serve its constituents by progressively regulating to reduce the costly and unjust predatory aspects of the private sphere.

• Cooperation is risky, so making it pay off better through fair social policy fosters more cooperation generally across a society. Encouraging predation and victimization has the reverse effect.
• How it works in Norway.
• Pay and productivity... where is the relation?
• 401Ks are, and were designed to be, a disaster.
• The evolutions of the GOP.
• Does the economy have capacity to grow?
• Then let's do it. " .. the one policy that nearly all economists are confident will always have traction on nominal demand."
• Bill Black on control fraud and intimidation at the federal home loan agencies.
• Corruption just begets more corruption.
• Democrats and Keynes. Where are they?
• Labor mobility... is lower when effective unemployment is high, and wages are not rising.
• Here's someone who probably pays no income taxes: Donald Trump.
• The Afghan government keeps losing.
• IBM is dying.

Diamonds in the Junk: Medically Important Sites in Intergenic Regions

Finding human genomic variants that are relevant to disease, in regulatory regions.

The human genomes remains a complicated place, and to simplify its study, many researchers and medical screeners stay in the shallow end- the coding regions or "exome", which comprises what is transcribed from protein-coding genes. But there is much more in there, from the introns and other critical elements inside and near genes, to regulatory elements spread over millions of basepairs around their target genes, to junk DNA with no function known at all, yet.

A recent paper offered an improved analysis of these large intergenic regions, and claimed to find medically interesting mutations. The issue is that the vast regions surrounding genes are largely what could be called junk DNA, with occasional quite small and variable regulatory sites that are difficult to find. So mutations are frequent, yet most have no effect. Figuring out which might have medical significance is one of those finding-needles-in-haystacks problems. And doing it over a whole genome to an informative level is unprecedented.

Example of a mammalian genomic region (A) featuring 700,000 bases between neighboring genes. The genes are grey: Nom1, Lmbr1, Rnf32, Shh, Rbm33, Cnpy1, and En2. In color are various regulatory sites (enhancers), coded by their location and the region (B) where they activate gene expression of Shh in a mouse embryo. It is noteworthy that Shh is driven by enhancers lying throughout the intergenic region, and even within the Lmbr1 gene, 850 kbp away.

The researchers start with a few genomes from five people who have allowed their data- genomic and medical- to be used in the public domain. The other starting material is knowledge about 657 DNA-binding transcription regulator proteins, which is about half of all the regulators known in humans; especially what kind of DNA sequences they tend to bind to. Then they add in a phylogenetic conservation analysis of 33 other mammals, which allows them to find putative regulatory regions and sites in their human genomes.

The procedure is then to comb each genome, asking which probable sites in the vast non-coding areas differ from the average or reference human genome. And then of those, which sites are conserved with respect to chimpanzee and other species, indicating that the site is significant over evolutionary time, but was mutated in the person whose genome is being studied.

The innovative part of their analysis, aside from the scale being attempted in terms of numbers of sites, merging of evolutionary and regulatory binding pattern methods, and whole genome coverage, is in their statistical treatment. The object at this point was to describe the various mutated sites that were found in terms of possible medical or biological significance. This routinely depends on the annotation of the nearest gene, which would be the regulatory target and confer whatever ultimate function the site has. It has been customary to address only regulatory sites close to genes, since the demarcation from one gene's regulatory region to its neighbor's is not yet easily predictable from the gnome sequence alone.

Parenthetically, one can note that this demarcation is performed by "insulators". These nucleo-skeletal-tethered sites in the intergenic DNA are bound by specific proteins that form boundaries which keep nearby genes regulated independently. They are under study and will be the subject of a future post.

A second problem is that, if one does range widely over the intergenic spaces to look for relevant mutations and biologically significant sites, it can be statistically hazardous to equate the sum of annotations from huge regions (which tend to surround developmentally important genes, for instance) against the necessarily smaller sets that would come from regions where genes happen to be close together. A correction for the size of the sampled area is called for. These researchers have constructed tools that specifically correct for these and other issues, and sample up to two megabases of intergenic DNA. Their rule is that a gene's core region is 5,000 bases upstream and 1,000 bases downstream of the site where its transcription starts, and everything up to a megabase on either side, or to the core region of the next gene, is fair game for finding associated regulatory sites. This is a rather broad zone, but can only be improved once the insulator sites are better defined.

Since the three billion base human genome contains roughly 22,000 genes, there is an average of 136 kilobases per gene. So a two megabase bound per gene, while large and perhaps sometimes not capturing the largest possible extent of a heavily & diversely regulated gene, should easily capture most regulatory regions and cover most of the genome.

Cranking through the whole analysis, they come up with specifically enriched annotations tied to genes whose conserved regulatory regions have suffered detectable mutations, in each of the five people (acronymized as CoBELs). And the question is whether these annotations match the respective medical histories and problems. With only about 5,000 to 6,000 sites found for each person, these researchers are probably only scratching the surface of genomic variation, picking the very easiest fruit off this tree. It is thus is important that their data come up with significant matches, since if this data is not significant, more and deeper data is unlikely to be any better. And this is what they claim to do.

Outline of results from five individuals, correlating regulatory variants from this whole-genome analysis with their medical syndromes.

The total numbers of variant sites that were flagged by this analysis was:

• Stephen Quake: 6,321
• George Church: 5,291
• Misha Angrist: 5,775
• Rosalynn Gill: 5,861
• James Lupski: 6,447

Thus they come up with statements like:

"Prominent in Stephen Quake’s medical records is a family history of arrhythmogenic right ventricular dysplasia/cardiomyopathy, including a possible case of sudden cardiac death. Strikingly, when Quake’s set of CoBELs is analyzed using GREAT, the top phenotype enrichment (using default parameter settings, optimized for inference power in the original GREAT paper) is “abnormal cardiac output” (57 CoBELs, false discovery rate Q = 1.69 x 10−4). This enrichment is suggestive of susceptibility to heart diseases responsible for reduced cardiac output. Meaningful associations between CoBELs and personal medical records are in fact observed for all five genomes" 

"For example, 33 genes in the human genome are annotated for “abnormal cardiac output”. Their GREAT assigned regulatory domains cover 0.45% of the genome. Of the 6,321 Quake CoBELs, 28 (0.45%) are expected in the regulatory domains of these 33 genes by chance, but 57 CoBELs, over twice as many, are in fact observed." 

"The top enrichment for George Church, who suffers from narcolepsy, is “preganglionic parasympathetic nervous system development” (23 CoBELs, Q = 1.18 x 10−4). The autonomic nervous system is strongly suspected to be involved in narcolepsy. Misha Angrist, whose personal reporting indicates possible keratosis pilaris, a follicular condition manifested by the appearance of rough, slightly red, bumps on the skin, has “epithelial cell morphogenesis” as his top biological process enrichment (60 CoBELs, Q = 1.38 x 10−5)."

This analysis provides something that has been a dream up till now- a way to rigorously evaluate whole personal genomes, not just the coding areas, for medically relevant mutations. There is far more to do, since the 657 DNA binding regulators and their sites are far from the only action in town. There are more functions hidden in the intergenic DNA, like epigentic marks and non-gene transcription units. But this is a very promising start that can be scaled up and added to retail-scale analysis of anyone's fully sequenced genome, not only finding syndromes and weaknesses before they appear for individuals, but also helping the medical research enterprise find disease-causing mutations and pathways.

• Butterfly wings evolve by enhancer shuffling / variation.
• A remembrance of Scalia.
• We once took anti-black terrorism and nullification more seriously. A chilling account of the Klan.
• Trump and the white working class. Maybe the problem is bigger than Trump.
• Speaking of insularity, if orthodox economic models are wrong, why keep using them?
• Romers, Keynes, Freidman. And more on Keynes- imbeciles and delirium.
• Piketty on the Eurozone.. it is a mess.
• Example: Finland.
• Globalization, trade, and World War 1.
• This is why Bernie exists.
• The deeper psychology of Bernie.
• The Russian model for Syria: Chechnya.
• Clinton, State, and the IG.
• Carbon taxes work.

Philosophy on the Magic Mountain

Will humanists and theists be fighting forever?

Thomas Mann's Magic Mountain is a somewhat dreary, rigidly routine-ized, and heavily allegorical sanitarium in Davos, Switzerland. Its inmates while away their days waiting for (or not, as the case may be) clean bills of health from the ruler of this little state- the doctor, who performs occult operations to monitor their tuberculosis.

The hero of the book, Hans, comes to adopt the very static, passive, indeed patient, ethic of the place as a chosen way of life, drifting ever farther from normal conceptions of time, and from any regard for or social conenction with the "flatlands" below. The only fire in his story comes from a pair of philosophers who battle ceaselessly for Hans's mind (his soul is diverted by other temptations, such as a woman). Lodovico Settembrini is the die-hard humanist, atheist, and inheritor of the Italian enlightenment. Reason, and hatred of the old orders of aristocracy, church, and hierarchy are his watchwords. Later on in the book, his antagonist, Leo Naphta makes his appearance, a former Jesuit  and crypto-Marxist given to the most florid romanticism.

It is fair to say that Settembrini is given the best lines, and the most heroic action. Thomas Mann's sympathies are evident. But he portrays Naphta very thoughtfully, in perhaps the most interesting intellectual battle since the Brothers Karamazov.

"For even if the state's ungodliness were not branded on its brow, one need only note a simple historical fact- that its origins can be traced to the will of the people and not, as those of the Church, to divine decree- and thereby proves that the state is, if not exactly a manifestation of evil, then at least a manifestation of dire necessity and sinful shortcomings."

"The state, my dear sir-- "

"I know what you think of the nation-state. 'Above all else, love of the fatherland and a boundless hunger for glory.' That is Virgil. You amend him with a little liberal individualism, and call it democracy; but your fundamental relationship with the state remains completely untouched. you are apparently not disturbed that money is its soul. Or would you contest that? Antiquity was capitalist because it idolized the state. The Christian Middle Ages clearly saw that the secular state was inherently capitalist. 'Money will become our emperor'- that is a prophecy from the eleventh century. So you deny that it has literally come true, making life itself a veritable hell?"

...

"Can it be that your Manchester eyes have failed to notice the existence of a social theory that promises that victory of man over economics, a social theory whose principles and goals coincide exactly with those of the Christian City of God? The Church father called 'mine' and 'your' pernicious words, describe private property as usurpation and thievery. they repudiated private ownership, since, according to the divine law of nature, the earth is the common property of all mankind and therefore it fruits are likewise intended for the common use of all. They tought that only greed, itself a consequence of the Fall, defends the rights of property, since it also invented exclusive ownership. They were human enough, anticommercial enough, to call economic activity per se a danger to the salvation of the soul, that is, to humanity. They hated money and finance and called capitalist wealth fuel for the fires of hell. With all their hearts they despised the economic principle that declares price is the result of the workings of supply and demand, and they damned those who lived by the fluctuations oft he market as exploiters of their neighbors. Even more blasphemous in their eyes was another form of exploitation, that of time- the monstrosity of receiving a bonus, that is interest paid on money, from the simple passage of time and thereby perverting a universal divine institution, time itself, to one's own advantage and the detriment of others."

...

"Well, then- after having been buried for centuries, all these economic principles and standards have been resurrected in the modern movement of communism. The correspondence is perfect, down to the meaning of international labor's claim of dominion over international marketeering and speculation. In the modern confrontation with bourgeois-capitalist rot, the world's proletariat embodies the humanity and criteria of the City of God. ... Its work is terror, that the world may be saved and the ultimate goal of redemption be achieved: the children of God living in a world without classes or laws."

...

"'Form!', he said. And Naphta grandiloquently responded, 'Logos!'".

...

"In caustic words, Naphta forbade Herr Settembrini to call himself an 'individualist', because he denied the polarity of God and nature, and defined the question of humanity, the problem of man's interior conflict, as simply the conflict between the individual and the larger social units, and so was wedded to a bourgeois morality that was tied to life, understood life as an end to itself, saw its sole purpose in unheroic utility, and viewed all moral law as invested in the state; whereas he, Naphta- well aware that mankind's inner conflict was based instead on the contradiction between what the senses register and what transcends the senses- represented true, mystical individualism and was in actuality the genuine man of freedom and subjectivity."

...

"And at this Naphta begged them to forgive him for laughing out loud. The nihilism of the Church, had he said? The nihilism of the most realistic system for exercising authority in the history of the world? Could it be that Herr Settembrini had never been touched by that breath of human irony with which the Church continually made concessions to the world, to the flesh, cleverly acquiescing in order to disguise the ultimate consequences of the ascetic principle and letting the influence of the Spirit establish order by not opposing nature too sternly? And so he has never heard of the refined priestly concept of indulgence, under which even a sacrament was included- marriage, to be precise, which unlike the other sacraments was not a positive good, but a defense against sin, conferred solely to limit sensual desire and to instill moderation, so that the ascetic principle, the ideal of chastity, might be affirmed without defying the flesh with unpolitic severity?"

Etc... round and round they go, in a never-ending battle that remains just as active today between partisans of the transcendent Logos, and those of the embodied mind. Is a utilitarian, economically literate and politically moderate system sufficient for humanity, or is a romantic, mystical transcedence necessary? The truth of romantic & mystical propositions is quite beside the point. The Church was never a scientific institution. Religion cares about a truth behind the veneer of reality- however one calls it, it is a long-standing human fixation both to see ulterior conspiracies and realities behind all phenomena, and to demand the heightened drama and meaning from our lives and world that such fantastical realities generate.

It seems to be, in the end, a temperamental issue, between people with more imagination than sense, and others with more sense than imagination. Intuitions and artistic sensibilities point in one direction, and the facts of history and nature point in another. Whether we need both perspectives is a vexed question, but that we have them and may continue to have them perpetually is pretty clear.

The conflict between Settembrini and Naphtha is also, I think, infused with an allegorical relationship with World War 1 (spoiler alert!). Eventually, the combatants get so worked up that Naphta feels his honor impugned, and insists on a duel. Though Hans tries to mediate and diffuse tensions, seconds are chosen, arms are acquired, and the absurd ritual continues till the fateful morning comes. Settembrini has the first shot and fires into the air, declaring no intention to kill anyone. Naphta is so consumed by the conflict, his honor, and the romantic drama that he shoots himself in the head.

While one might view the rational side of the cataclysm in the system of alliances that were, not all the peaceful nations against the aggressor, as NATO is arranged now, but rather the Metternichian "balance" of the triple alliance vs the central powers, etc. But it was the romantic notions of a cleansing, dynamic, and manly militarism that were probably the more powerful motives toward that world war, and even more, the second.

***

Incidentally, Mann provides a Trumpian figure in this book as well, in the person of Pieter Peeperkorn. Given to great generosity and cryptic nonsensical utternances, Peeperkorn impresses everyone around him, especially Hans, who finds him charismatic and full of feeling, a welcome contrast to the ceaseless pedantry of Naphta and Settembrini. Indeed, Peeperkorn is irresistably magnetic, even if uncouth, incoherent, and generally oblivious, except when it comes to the deepest feelings, where he attacks mercilessly, or kindly, as his spirit moves.

• Thomas Paine on the fraudulence of all religions.
• DeLong on Piketty.
• Euthanasia of the rentier ... some numbers.
• House hunting while black...
• Bill Black on Wall Street's shocked disbelief that millennials are infatuated with Bernie. How could they be so blind?
• Let's pay a little attention to Rubio.
• Trump and the stupid party / religion.
• Lindsey Graham lets loose on the stupid party.
• FOX and its clown posse.
• Russia and the new cold war.
• Afghanistan, heading downhill.
• Is this who we are, lackeys of despots?

Mechanics of Influenza

The more we learn, the more amazing this tiny virus seems.

One of the few regular and severe diseases still prevalent in the developed world among people of all ages is influenza. It causes misery to millions and significant mortality, and can occasionally mutate to pandemic strains that kill millions; 2% of the human population in 1918. Nor is the current vaccination system very effective. We need something better.

What a simple organism it is, though! Only nine genes, in a genome of less than 15,000 bases, enveloped in a membrane coat carrying a couple of proteins on its surface. How does it cause all this misery? Well, each of its genes is intricately designed and multifunctional. The principal outer coat protein, for instance, called hemagglutinin or HA, is specially shaped to bind to the sialic acid on the surface of our respiratory mucosa cells. Then, when ingested into the endomsome/lysosome of the poor cell, it acrobatically flips its structure to thrust out a hydrophobic spear that punctures the lysozomal membrane. This same protein then refolds its shape once again to bring the viral membrane and the lysozome membrane into close enough contact that they fuse, releasing the viral contents into the cell. Not only that, but the HA protein plays a special role in mutating all the time in different viral strains so as to retain function on the exterior of the envelope, but evade the host immune system.

Sequence of refolding and membrane fusion events, by the surface HA protein. It takes only about three HA molecules to carry out membrane fusion between the surface of the virion and the endosomal membrane.

There are many other molecular functions encoded in this tiny parasite, such as a polymerase that both replicates itself and copies itself to message RNAs, an enzyme on the surface that allows the virus to eat through the mucus in our respiratory tract, structural proteins that assemble the new viral particles, an enzyme that steals the caps of cellular mRNAs and plants them on viral RNAs, and even a proton channel protein that allows the virus to equilibrate with the low pH of the endosome/lysozome and trigger disassembly of the virion, so that, given that the membrane fusion has taken place at the same time, its genome can get out to take over the cell.

Electron micrograph of two influenza particles inside an endosome, waiting for their chance to escape and take over the cell.

The inhibition of the host immune system deserves special mention, for its deviousness. The interferon response is one of the most powerful immune and especially antiviral responses, which influenza takes special care to counter-attack. This is a rapid and non-adaptive ("innate") part of the immune system, where once a virus is detected, a program of hundreds of genes is activated that renders a cell strongly primed to shut down viral replication and commit suicide. While the virus eventually succumbs to the much slower adaptive immune response, (B cells, antibodies, killer T cells, etc.), that only happens after it has already replicated and been sneezed back out to other targets. Evading the more prompt early immune response is absolutely essential, and is partly mediated by a viral protein called non-structural protein 1 (NS1). So-called because at the time it was discovered, researchers had no idea what it did.

Now, they know that it has at least four, and possibly more, functions.

1. It binds to a shuts down cellular TRIM25, a key part of the detection system that turns the interferon response on. 
2. It also binds to and shuts down cellular PKR, which is one of the prime components of the interferon response downstream, which shuts down most translation, including viral translation. PKR also promotes cell suicide and amplifies the interferon response through NFkB. 
3. Thirdly, NS1 binds and shuts down cellular CPSF4, which processes and tags cellular mRNAs for export from the nucleus. So while the interferon system is trying to shut down viral and cellular translation, the virus, through this single protein, is specifically shutting down cellular translation, and also shutting down the interferon response. 
4. Some researchers claim a fourth function is most important, which is the ability of NS1 to bind to double-stranded RNA, like the genome of the virus and its replication and transcription structures. This binding seems to hide the RNA from OAS, an interferon-induced protein that would otherwise bind the double-stranded RNA and initiate an RNAse L response to destroy it. 
5. Fifth, NS1 binds to and inhibits another cellular protein, PAF1, which is a regulator of transcription that has a central role in antiviral gene expression. 
6. Sixth, NS1 binds to and activates PI3K, a kinase that promotes cell survival, which is helpful in the face of attempts by the host cell to commit suicide. 
7. Seventh, a small portion of NS1 from some strains of influenza binds to PDZ domain-containing proteins DLG1 and LIN7C, thereby disrupting tight junctions between cells, and possibly helping the virus spread to other cells and tissues. 

It is simply astonishing that a small protein of 230 amino acids could do so much, and wreak such havoc.

Complete structure of NS1, colored by position in the protein, from the N terminal to the C terminal.

Portion of NS1 that binds to RNA, bound to RNA. The tiny stick molecules are  glycerol molecules from the crystallization mixture.

That is just a taste of the complexities that are known, and there is surely much else as yet unknown. But what to do about it? The current system of annual viral surveillance and specific vaccine production is routinely outsmarted by this tiny speck of a virus. We probably need a more serious program of vaccine research and testing from all parts of the virus, under the assumption that there may be epitopes not in the usually studied surface antigens that might be helpful in preventing infection, assuming that some cells manage to kill themselves and display the internal viral proteins to the adaptive immune system.

Likewise, study of all the virus products and screening of small molecule drugs against them in all their facets would be a significant research program directed to treat an infection once it has begun. This needs a broad approach that is possible with current technology, since it is hard to predict what all the functions of the virus are or which ones are most vulnerable in the body. The interfaces between the NS1 protein and its various targets are examples presenting many possible forms of therapy. Current drugs like Tamiflu are only modestly effective, if at all. This kind of commitment is something we should be doing much more actively as part of the NIH system. It would have higher and quicker payoffs than the war on cancer, while still at much lower cost.

• One reason that states have been going red.
• And going a little nuts.
• Scalia and the petulant right.
• Is willful stupidity part of the strategy? No, just a quest for bad government. Or no government.
• Next stop, civil war?
• Social Democracies do it better.
• War in Afghanistan ... between the Taliban and ISIS.
• On the duty to cheat on taxes.
• In appalling interview, the "reasonable" candidate Kasich vows to bring America together by supporting the Senate Supreme Court blockade.
• Bernie's economics are the real deal.
• Ideas matter.

Say's Law

The convolutions of economics, cranks, and class.

The class war has deep roots, and is fought on many fields, in many guises. One of the most interesting and influential is the field of economic theory, which as Paul Krugman persistently points out, has undergone startling episodes of battle, tide turning, and forgetting over the last century. One battle is over the meaning, interpretation, and validity of Say's law.

Enunciated by Jean Baptiste Say, who lived through the French revolution as an economist and businessman, and founded the first business school, the law states that production calls forth demand. If an excess of some good is produced, someone is sure to want it, at some price. More importantly, in general, if production in an economy increases, that production will be eagerly sold by its producers and bought by someone, even if the price might be less than expected. For instance, if a technological change makes it much cheaper to make computer memory, demand for that memory is sure to materialize, even as its cost and price go down. And if productivity decreases the prices of many goods, that allows consumers to buy more of other things, and have higher living standards. To some degree, this law makes assumptions about human psychology- that entrepreneurs meet a market, and that prices provide the flexible mechanism to bring supply and demand into agreement, pretty much at all times.

Unfortunately, Maynard Keynes claimed by the 1930's that Say's law was invalid. Then classical-minded economists tried to reclaim its validity by the 1950's and the debate has proceeded onwards, though mainstream economists give it little explicit credence these days. Its significance lies in the issue that if one grants that production can occasionally and on a wide scale be glutted, or demand be deficient in aggregate, that opens the door to solutions that come from elsewhere than the free, unfettered market- i.e the state as a manager of the macroeconomy. And this causes ideological heartburn to many on the right.

The Great Depression was an obvious case in point. Why did economic activity grind to a virtual standstill? The people still had the same needs they had before, and the skills, factories, and materials were the same as well. Yet a plague of unemployment and, frankly, deficient demand ripped through the economy causing misery for millions. Conventionally-minded economists, called "liquidationists" maintained that the financial fever would quickly work itself out if all businessmen cut their costs to meet the new (lower) demand, and if workers accepted the lower wages that they deserved given the reduced business conditions. A new equilibrium would be found at a new, if lower, level. Indeed, they argued that it was the perverse reluctance of workers to accept lower wages that led to the whole problem, preventing a new equilibrium from being achieved rapidly.

But we need to go back a step to the start of the process. How is it that business conditions could deteriorate so dramatically in the first place, if production always calls forth appropriate demand? Keynes didn't dispute that a supply-demand equilibrium, particularly of labor, would eventually be achieved, in the long run. But when? His quip was that in the long run, we are all dead. An event like the Depression, caused by a dramatic collapse of the financial system which drained wealth, consumption and investment, and thus effective demand out of a system whose actual, human demand was unchanged caused unprecedented misery, though milder depressions were common enough through economic history. This misery is prima facie evidence that Say's law is invalid in the short term in macroeconomic terms. Demand can be dramatically deficient, especially in modern economies with enormous financial superstructures whence investment and credit flow (or don't flow).

So why the continuing discussion? There are strong ideological forces at work. The Mises, Rand, Hayek, Austrian wing of the right, seeing themselves as the last pillars of human freedom, find it hard to accept that, into this breach of deficient demand should step the only actor with the wherewithal to do so: the state. Not only that, but the amelioration of the misery of the working class (though also the much more modest misery of the business class) by way of public works and other forms of macroeconomic management, (even including the printing of paper money in place of proper gold!), reduces the power of the employer class. Which is certainly relevant to the class war. This attitude is ironic, if one defines human freedom as the freedom of most humans, but that is how the class war works. It is the freedom of the upper, employer, feudal overlord class that concerns the Austrians and conservatives, not that of the workers who are dependent upon them. Under this system of thought, there can be no such thing as involuntary unemployment, there being always some work somewhere at some wage, for the worker willing to take it. If only workers were willing to be paid pittances, everyone could be happy!

Thus one gets quotes like: "The short answer is that there is still need and place to assert Say's Law whever anybody is foolish enough to deny it. It is itself, to repeat, essentially a negative than a positive proposition. It is essentially the rejection of a fallacy. It states that a general overproduction of all commodities is not possible. And that is all, basically, that it is intended to assert." - Henry Hazlitt, "The Failure of the 'New Economics'", 1959. Hazlitt's book is little more than a screed, but can still be found in my local library, proudly placed right next to Keynes' general theory, a sign of the seriousness with which it once was taken, and perhaps is, in some quarters.

Say's law was reflected more recently in the ideology of supply side economics, whose contention was that prosperity arises from unleashing job creators from taxes, regulation, unions, and other obstacles, so that production can increase and the benefits trickle down to everyone. Subsequent history has not been kind to this theory either, yet it remains the cornerstone of Republican platforms in this year's campaign, for obvious reasons of the class war.

Unfortunately, Keynes had an even deeper insight about Say's law, which was that even if the employers had their way, and reduced worker wages and positions as rapidly as they liked to bring their businesses back into equilibrium with demand, they would not, on a macroeconomic basis, be successful any more rapidly. As wages sank, so would demand, since over the whole economy, income equals demand minus savings. As income heads south in a massive depression, so would demand, in a downward spiral whose limit is reached when something changes in this dynamic- when money comes out of mattresses for consumption and capitalists eat into savings, setting a floor for demand, given the (reduced) stocks of money available.

How much more civilized if the demand can be made up before all the parties are reduced to extremis- if the state steps in with a tool kit that can include public works, tax cuts, reduced interest rates, and all the money required to make it happen, when the private financial system goes through one of its regular collapses. But that requires a state with great technical and moral resources. That was the work of the New Deal and the Greatest Generation, who not only won World War 2, but demonstrated in doing so that the state could dramatically re-establish demand through the economy and keep it going through efforts like building the interstate highway system and winning the Cold War.

One can argue whether the prosperity of that era was due to tremendous technological advances, the artifical demands generated by wars hot and cold, and / or the newly installed Keynesian macroeconomic management. But its wide demographic distribution was a matter of the power of workers, which was aided at the time by strong unionization and the Keynesian economic policy. These conditions required some decency on the part of the elite, to recognize their choice between reform and revolution.

The US has always been run by a rich elite, from the founding onwards. The question is whether these elites work for all, as Washington and FDR did, or for themselves, as the slaveholders did who wrote the evil lines into our constitution which took so much blood to expunge. The retreat and even forgetting of Keynes, under the assault from Milton Friedman, the Chicago school, and other ideologues of the right, which has resulted in the withering of the position of workers and the vast inequality seen today, results from a callous and short-sighted (not to mention corrupted) elite culture, mostly on the right, whose current candidates to a man (and woman) promote the interests of the rich in the most blatant ways, such as planning big federal deficits to give them money through the tax system.

So, we have to ask what is the point of freedom, and of the economic system. Governments are certainly capable of destroying freedom in a quest for economic and moral perfection (and power). At the same time an unfettered, unregulated capitalistic system destroys the freedom of its workers just as surely, ending up in feudalism. Predators are on every side. Say's law and the other ideological structures of classical and right-wing economics hide a presumption in favor of the capitalist, championing the freedom of the 1% while treating labor as a faceless, disposable commodity. We need a middle way, as exemplified by the mid-20th century compromise, and indeed the social democracies of Europe, where the democratic state acts as the balance-wheel to promote the freedom of all classes in rough proportion, as well as their prosperity.

• Continuing relevance and reaction to Keynes.
• The great depression before the Great Depression.
• The monetary straightjacket comes from abject and destructive fiscal failure.
• Message from the markets: We are looking at being Japan for the new decade or more, with little growth, especially in Europe. That is not good for any future-denominated investment. 
• Vulgar scientism, in economics.
• How to help Trump voters? Elect a Democrat.
• The Big Short, and what is legal.
• Low wages plus EITC plus food stamps ≠ American Dream.
• Koch enterprises.. the evil deepens.
• State of the UAW.
• State of the Russian economy.
• State of acid rain ... worse than it could have been.
• The Super Bowl halftime shows where America is going ... tie dye pinwheels and black power.
• Bill Mitchell on exchange rates and inflation.
• Quote of the week, on who is progressive.

"Twitter chatter aside, when it comes to judging who's more progressive than who, political scientists have an app for that—at least for those who've served in Congress, as Sanders and Clinton both have. It's the DW-Nominate first dimension, scaled from +1 to -1, which explains the lion's share of how members vote. For the two years when they served in the Senate together, Sanders had a score of -.717, making him far and away the most liberal member. Number two, Sheldon Whitehouse had a score of -.507, while number 15, Hillary Clinton had a score of -.403. The difference between Sanders' score and Clinton's was greater than the difference between Clinton and Evan Bayh, the second-most conservative member of the Democratic caucus at the time. So in short, the difference between them in terms of who is most progressive is both objective and huge."

• For instance, the Fed and Bernie Sanders.