Policy Institutes

The simplistic notion that organisms are “dumb” when it comes to changing environments goes like this: Species X lives in a relatively stable environment and with a certain defined range of temperature. So, if the temperature changes enough, species X will go extinct.

In resuming our series on biological adaptation to environmental change, we are going to be looking in depth at the evolutionary and environmental nuances that—with some limits—invalidate the simple point of view. And, in doing so, we will discover important implications for environmental and climate-related policies.

We begin with revolutionary classic in evolutionary biology published in 1984 by Peter Hochachka and George Somero called “Biochemical Adaptation.” It summarized and expanded on much of their earlier work on what they called “phenotypic plasticity”.

Pre-Hochachka thinking had it that our DNA codes for specific proteins, which do their thing (often serving as catalysts for complex biochemical syntheses) and are pretty much static, which would lead automatically to the “dumb” organism when it comes to environmental change. But, among other things, Hochachka and Somero can show that, depending upon temperature, many critical proteins actually change their shape as temperature rises (or falls), greatly broadening the environmental range of many species.

A wonderful example of this concerns marine fish living in tropical waters, which tend to experience much smaller seasonal variations in temperature than fish inhabiting other latitudes. Without phenotypic plasticity, there are concerns that tropical fish maintain narrow temperature tolerance and that they might presently be close to their optimal temperature limit. If temperatures were to therefore rise in the future in response to CO2-induced global warming, many tropical fish species might experience widespread decline and possible extinction.

Given plasticity, does this hypothesis hold any water?

A five-member Portuguese research team of Madeira et al. (2016) examined the cellular stress response of a tropical clownfish species (Amphiprion ocellaris) exposed to elevated temperatures over a period of one month. Their experiment was conducted in a controlled laboratory setting in which they subjected juvenile A. ocellaris to either ambient (26°C) or elevated (30°C) temperatures, while examining several biomarkers (e.g., stress proteins and antioxidants) in several tissue types (brain, gills, liver, intestine and muscle) at 0, 7, 14, 21 and 28 days of temperature treatment. What did their measurements reveal?

Amphiprion ocellaris

According to Madeira et al., “results showed that exposure time significantly interacted with temperature responses and tissue-type, so in fact time influenced the organisms’ reaction to elevated temperature.” First, at day 7 they observed significantly higher levels of biomarkers in fish in the high temperature environment that was indicative of a typical thermal stress response. Thereafter, however, they report that biomarker levels stabilized, showing either “a significant decrease in comparison with controls or no significant differences from the control” through the end of the experiment, which observations they suggest are indicative of temperature acclimation.

The fact that temperatures outside the “normal” range elicited clear biochemical changes (after a period of initial stress) is clear evidence for the much more nuanced view of organismal response to change.

Commenting on their findings, Madeira et al. write that “A. ocellaris probably lives far from its upper thermal limit and is capable of adjusting the protein quality control system and enzymes’ activities to protect cell functions under elevated temperature, adding that “these results suggest that this coral reef fish species presents a significant acclimation potential under ocean warming scenarios of +4°C.”

This is very good news for those concerned about the impact of global warming on tropical reef fish, and therefore for reefs themselves, as fish are an integral part of complex reef ecology.

One could speculate that—because most species alive today evolved on a warmer (pre-ice age) planet, that the genetic material that responds to heat is maintained, only to be expressed when they go back to their future, which is what is happening as we speak.

 

References

Hochachka, P., and S. Somero, 1984 (republished in 2016). Biochemical Adaptation. Princeton Legacy Library, Princeton. 520pp.

Madeira, C., Madeira, D., Diniz, M.S., Cabral, H.N. and Vinagre, C. 2016. Thermal acclimation in clownfish: An integrated biomarker response and multi-tissue experimental approach. Ecological Indicators 71: 280-292.

At least in Serbia, people know that politicians’ promises are ridiculous. NPR reports on a satirical candidate named Ljubisa Beli Preletacevic, or just Beli for short:

A new politician is here to save you. I’m pure and clean. Whatever the other politicians promise you, I will promise you three times more.

I’ll give jobs to everyone and big pensions to everyone. I’m going to move the sea here because we need a beach.

Satire it may be, but his new party won 12 council seats in his home town, and most of his party’s candidates are seriously seeking election. Reporter Joanna Kakissis continues:

There will be no corruption, excluding my own of course, he declares to one crowd. Please send all money directly to my pockets. Drama student Danka Svetilova laughs and asks for a selfie. She says mainstream politicians have lied to Serbs for years….

So that’s why she and her schoolteacher mom are voting for Beli in this Sunday’s presidential election. Better a fake candidate who tells the truth about lying, she says, than a real one who lies about telling the truth.

The Cato Institute recently released Monetary Alternatives: Rethinking Government Fiat Money, a collection of essays 30 years in the making. As George Selgin explains in the foreword,

The complacency wrought by the Great Moderation, not to mention the limited interest in fundamental monetary reform before then, resulted in a dearth of serious inquiries into potentially superior arrangements….Cato kept the subject alive, offering a safe haven, in the shape of its Annual Monetary Conference, for the minority of experts that continued to stress the need for fundamental monetary reform. Although fundamental reform has been a consistent theme of Cato’s monetary conferences, those conferences have never been dominated by one approach to reform. The articles in this book present a variety of ideas for improving the monetary regime — including proposals for a formal “monetary constitution,” various monetary rules, competing currencies, and establishing a new gold standard.

In sum, Monetary Alternatives explores fundamental and controversial ideas that would move our monetary system and economy beyond repeated crises to sustainable stability and prosperity. The contributors to the volume energetically question the status quo and provide compelling arguments for moving to a monetary system based on freedom and the rule of law.

A limited constitutional government calls for a rules-based, free-market monetary system, not the topsy-turvy fiat dollar that now exists under central banking. When the Federal Reserve was created in 1913, its powers were strictly limited and the United States was still on the gold standard. Today the Fed has virtually unlimited power and the dollar is a pure fiat money.

Central banking, like any sort of central planning, is not a panacea.  Concentrating monetary power in the hands of a few individuals within a government bureaucracy, even if those individuals are well intentioned and well educated, does not guarantee sound money. The world’s most important central bank, the Federal Reserve, is not bound by any strict rules, although Congress requires that it achieve maximum employment and price stability. The failure of the Fed to prevent the Great Recession of 2009, the stagflation of the late 1970s and early 1980s, and the Great Depression of the 1930s, raises the question, can we do better?

In questioning the status quo and widening the scope of debate over monetary reform, the fundamental issue is to contrast a monetary regime that is self-regulating, spontaneous, and independent of government meddling versus one that is centralized, discretionary, politicized, and has a monopoly on fiat money. Free-market money within a trusted network of private contracts differs fundamentally from an inconvertible fiat money supplied by a discretionary central bank that has the power to create money out of thin air and to regulate both banks and nonbank financial institutions.

There are many types of monetary regimes and many monetary rules. The classical gold standard was a rules-based monetary system, in which the supply of money was determined by market demand — not by central bankers. Cryptocurrencies, like bitcoin, offer the possibility of a private non-commodity monetary base and the potential to realize F. A. Hayek’s vision of competitive free-market currencies. Ongoing experimentation and technological advances may pave the way for the end of central banking — or at least the emergence of new parallel currencies.

In making the case for monetary reform and thinking about rules versus discretion in the conduct of monetary policy, it is important to take a constitutional perspective. As early as 1988, James M. Buchanan argued, at an international monetary conference hosted by the Progress Foundation in Lugano, Switzerland:

The dollar has absolutely no basis in any commodity base, no convertibility. What we have now is a monetary authority [the Fed] that essentially has a monopoly on the issue of fiat money, with no guidelines that amount to anything; an authority that never would have been legislatively approved, that never would have been constitutionally approved, on any kind of rational calculus [“Comment by Dr. Buchanan,” Economic Education Bulletin 28, no. 6: 32–35].

In 1980, just after Ronald Reagan’s election, Buchanan recommended that a presidential commission be established to discuss the Fed’s legitimacy. There was some support within the Reagan camp, but Arthur Burns, a former chairman of the Federal Reserve Board, nixed it. As Buchanan explained at the Lugano conference, Burns “would not have anything to do with any proposal that would challenge the authority of the central banking structure.”

Buchanan’s aim was “to get a dialogue going … about the basic fundamental rules of the game, the constitutional structure.”  There is, he said, “a moral obligation to think that we can improve things.” That is the spirit of this volume and Cato’s recently established Center for Monetary and Financial Alternatives.

This year marks Cato’s 40th anniversary and the 35th anniversary of the Annual Monetary Conference, making it an appropriate time to bring out this collection of articles devoted to rethinking government fiat money and to offer alternatives consistent with limited government, the rule of law, and free markets.

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Contributors to Monetary Alternatives include: Claudio Borio, Jeffrey Lacker, John Allison, Bennett McCallum, James Buchanan, George Selgin, Peter Bernholz, Charles Plosser, Leland Yeager, John Taylor, Scott Sumner, James Dorn, Edwin Vieira, Lawrence White, Richard Timberlake, Roland Vaubel, and Kevin Dowd.

[Cross-posted from Alt-M.org]

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