Ceiling Prices

We run though the day
And stare at the night
Is your head full of noises?
For me, well, it's just like
The Fourth of July
--Roger Daltrey

Among the dumbest of economic policies pursued by politicians is the price ceiling. The thinking is typical authoritarian. Think prices are too high? Then simply declare them lower. Set a maximum price for transactions on the market. Punish those who engage in transactions at a higher-than-mandated price.

What happens when producers are forcibly restrained from selling output at higher prices? Supply leaves the market. Shortages develop. 

Not only does present supply leave the market, but future sources do as well. Entrepreneurs are less motivated to develop marginal or substitute sources of supply when the profit signal of higher prices is suppressed.

Over time, prices are likely to be much higher--particularly if it takes a long time to replace capacity once it is taken off the market by the caps.

Cogitate on that as G-7 bureaucrats mull price caps on Russian oil.

Bear Crowd

Well, I got one foot on the platform
The other foot on the train
--The Animals

Tend to agree with this post. Lotta bearish sentiment. When sentiment gets this lopsided, trend reversals are often imminent.

AAII sentiment chart pictures the extreme field position.

Have been nibbling long here and there.

Gas Pump

My friend the communist
Holds meetings in his RV
I can't afford his gas
So I'm stuck here watching TV
--Sheryle Crow

Rocketing gas prices are not just the result of bad energy policy, but bad policy overall. Monetary, fiscal, economic, trade, etc...

When government regulation obstructs peaceful cooperation and exchange, outcomes will be compromised.

Woke Nightmare

Jared Cohen: This is bizarre. It's like a...dream.
Sam Rogers: Oh, I don't know. Seems like we actually may have just woken up.
--Margin Call

Facebook (FB) getting pounded after missing its quarter. Front and center was first ever decline in active users.

FB has been a vanguard in censoring and 'de-platforming' users for disinformation.

As Alex Berenson observes, censoring is not just un-American and, in the case of state-sponsored enterprises, illegal. It is bad business.

Discriminating against customer groups of any kind--based on skin color, political views, or what have you--restricts demand and market potential. It is liable to dent the wallets of the discriminators.

When permitted to function, markets become the bigot's nightmare.

This nightmare is currently haunting 'woke' bigots like Facebook.

no positions

Empty Shelves

Gotta do what you can

Just to keep your love alive

Trying not to confuse it

With what you do to survive

--Jackson Browne

Chronically empty store shelves are frequently associated with socialist regimes and hyperinflation (e.g. Venezuela).

Now that empty shelves are becoming an increasingly common occurrence here, the intuitive inference is ____?

One for Two

I'm falling down a spiral
Destination unknown
Double crossed messenger
All alone
--Golden Earring

Yesterday the Supreme Court blocked the federal government's vaccine mandate for large employers while upholding the mandate for health care organizations receiving federal funding.

The judges were one for two.

Private employers, i.e., those with no strings attached to government, should be able to set the terms for using their property. If those terms include a requirement for employees to be vaccinated against a particular pathogen, then private employers are within their rights as property owners to do so. 

Stated differently, employers should be allowed to discriminate as to how their property is utilized. They can discriminate between vaccinated and unvaccinated individuals--just as they should be able to peacefully discriminate on any other factor--including race and skin color. If this discrimination is ill-advised, then markets will punish their poor decision-making.

It is, of course, completely within worker rights to discriminate as well. Individuals can discriminate against producers with vaccine mandates by not seeking work with these employers, or by resigning when their employers pass distasteful policies. 

While private enterprises can establish their own internal health care mandates, the state has no standing to forcibly impose its own mandates or interfere with the rules governing private labor market transactions. 

Of course, it is questionable whether many 'private' enterprises are truly private anymore. When businesses receive resources from government (e.g., government contracts or subsidies), or are subject to favorable regulatory treatment, then they are by definition receiving government support or sponsorship. The more beholden organizations are to government, the more likely they are to do the bidding of government in exchange for political favor.  

This brings us to the second part of yesterday's ruling. The high court declared that health care facilities that receive federal funding must comply with federal vaccine mandates. Health care organizations that receive federal funding are poster children for organizations that are beholden to the feds.

Because of their dependence on federal government resources, health care organizations are extensions of the federal government acting as de facto government agencies. 

The Bill of Rights gives such federal agencies far less leeway to discriminate compared to private entities. Whereas a private employer can justly create policies that favor particular groups, federal government entities cannot. Doing so would violate individual rights to religion, speech, assembly, association, privacy, et al--all of which are expressly protected from federal government interference under the Constitution.

Thus, a federal mandate that requires vaccination for employees of organizations beholden to the federal government is blatantly illegal and unjust, regardless of what six high court justices claim.

Urban North as Old South

"Fate, it seems, is not without a sense of irony."
--Morpheus (The Matrix)

Victor Davis Hanson claims that major progressive regions of the US, particularly large northern and coastal urban cities, are increasingly taking on characteristics traditionally attributed to the Old South. One party political fiefdoms. A feudal class system lacking a vibrant, mobile middle class. Intolerance of dissent on issues held dear.

Just as people fled the Old South in droves to escape similar conditions, they are packing their U-Hauls once again to escape escalating oppression in the Urban North. 

Their destination? Why, the South. 

Texas, Tennessee, and Florida are among the states viewed as lands of opportunity.

Proving once again that the magnet of liberty, wherever it may be placed, never looses its capacity to attract.

Defending Shortages

Arthur Castus: What is his punishment for? Answer me!
Ganis: He defied our master, Marius. Most of the food we grow is sent out by sea to be sold. He asked that we keep a little more for ourselves, that's all. My ass has been snappin' at the grass, I'm so hungry!
--King Arthur

Transportation secretary defends widespread shortages, claiming that they are a product of a strong economy. Textbook central planner rationalization. 

The truth is that prolonged shortages occur only when markets are not permitted to freely function. In unhampered markets, increased demand motivates producers to increase prices. Higher prices signal opportunity to producers, who subsequently increase production rates and, in some cases, add capacity so that higher demand is met with more supply. 

Shortages persist if this process is impaired. If prices are not permitted to rise, or if producers are restrained from increasing supply (through, for example, regulations that slow supply chain activities), then demand continues to outstrip supply and shelves go bare. 

Those who defend shortages are typically the people who create them.

Specialization and Adaptive Strategies

If I go there will be trouble
If I stay it will be double
--The Clash

Last time we discussed the relationship between specialization and the external environment. Essentially, the higher the degree of uncertainty in the external environment, the lower the appropriate level of specialization. 

How can producers manage the tradeoff between productivity and adaptability inherent in specialized work? Two strategies seem plausible--both involving reduced degrees of specialization (or higher degrees of diversification) as uncertainty increases. 

The first strategy we'll call static diversification. The concept parallels portfolio theory in finance, except that instead of a portfolio of securities, producers deal with a 'task portfolio.' The narrower the task portfolio, the fewer the skills and the more specialized the portfolio.

In certain environments, task portfolios should be very narrow so that producers can reap the productivity benefits of specialization without concern for having to alter the portfolio to cope with environmental change. 

However, in uncertain settings, producers must spread it around, investing in various skills to hedge risk that some skills will be obsoleted by disruptive change. By embracing the adage of not putting all eggs in one basket, producers operate in various lines of work and perhaps in various markets so that they are not dependent on one specific skill set. This variety improves adaptive capacity.

How much static diversification is necessary? Returning to our core proposition that degree of specialization is inversely proportional to level of environmental uncertainty, the more turbulent and uncertain external contexts are, then the more diversified the task portfolio should be.

The second strategy is dynamic diversification. Using this strategy, producers broaden their task portfolios with learning skills that allow them to quickly adapt to changing environments. Ability to sense change, skill in new product and process development, and prowess in organizational change management all constitute 'dynamic capabilities' (Teece et al., 1997) that can be developed or acquired to improve adaptive capacity.

Such dynamic skills may not be directly useful in the production of output for today's market. Instead, they constitute resources that enable timely reconfiguration of production for tomorrow's markets. 

Because payoff associated with dynamic diversification is often delayed--perhaps for extended periods of time, managers may be reluctant to invest in it, preferring instead the immediate and visible fruits of static diversification. On the other hand, due to its potential for quickly shaping new, relevant skills when environments change, dynamic diversification may tie up smaller fractions of an overall task portfolio in diversification--allowing producers to specialize more in the here and now--and reap the associated productivity benefits.

So, if both static and dynamic diversification strategies are both viable approaches for dealing with the productivity/adaptability tradeoffs of specialization in uncertain settings, then which one is more preferable? Perhaps the better way to ask the question is this: Under what situations are static or dynamic diversification preferable?

That, my friends, constitutes an interesting research question--one that scholarship will hopefully help us answer at some point in the future.

Reference

Teece, D.J., Pisano, G., & Shuen, A. (1997). Dynamic capabilities and strategic management. Strategic Management Journal, 18(7): 509-533.

Specialization and Uncertainty

Do you remember
When you got your lucky break?
You're looking back now
And it seems like a mistake
--John Waite

In previous missives we discussed the benefits and risks associated with specialized work. Specialization promotes higher productivity through learning by doing and lower switching costs. Fully realizing these benefits requires free trade with other specialists in order to satisfy each producer's spectrum of needs. If trade is restricted, then some needs will go unmet--unless producers diversify into multiple lines of work, thereby reversing in full circle fashion the productivity gains from specialization.

Specialized producers also face elevated risk of obsolescence compared to more diversified producers. Due to technological change, competition, or evolving consumer tastes, particular lines of work may, at some point in time, no longer be necessary. Because specialized work typically requires commitments such as expensive schooling, investment in expensive narrow purpose equipment, and engrained work routines, adapting to changing environments can be difficult.

How can producers manage the risks associated with specialization? 

First, let's note the crucial role that the environment--particularly environmental uncertainty--plays in answering this question. While many conceptualizations of environmental uncertainty have been developed, an important one in our context involves what is called state uncertainty. Specifically, environmental uncertainty can be seen as the extent to which current or future states of the world can be understood or predicted. When events are understood or foreseen with less clarity, then environments are said to be more uncertain.

The central proposition for our purposes can be stated as follows:

Proposition: The higher the level of environmental uncertainty, the lower the appropriate level of specialized work.

If environments are completely certain and predictable, then high levels of specialization are appropriate. There is little risk of change, or at least surprise change, that could not be anticipated in ways that would place specialized producers in vulnerable positions.

As uncertainty increases, however, so does vulnerability. Due to the irreversibility of their production commitments, specialized producers may be incapable of responding to unforeseen events or conditions in a timely manner, thereby threatening their adaptability to changing conditions.

Consequently, degree of specialization should go down as level of environmental uncertainty goes up.

But what implications does the relationship between specialization and uncertainty have on production planning and work design? What strategies are available to producers that allow them to be as productive as possible--while maintaining adaptive capacity essential for coping with uncertainty?

We'll discuss next time.

Bad Breadth

The news is blue
It has its own way to get to you
What can I do?
I'll never remember my time with you
--Sniff 'N' the Tears

Despite new highs in major equity indexes, stock market breadth has been weakening. This means fewer and fewer names are propping up the averages.

When investors become more risk averse, they first rotate out of higher beta, racier names and into stocks deemed 'safer.' Money flows to mega caps thought to be market stalwarts and less susceptible to big declines. This means names like Google (GOOG), Apple (AAPL), Microsoft (MSFT), Amazon (AMZN), et al have been attracting disproportionate funds at the expense of smaller issues. 

Because of their huge market caps, these stocks can move the indexes higher even though most issues aren't going up. The bulls still feel good, however, because the indexes are still increasing.

As sentiment continues to shift, however, investors decide that even the big names are vulnerable and begin to unload them. When that happens, there is nothing left to support higher prices.

The bears then slide into the driver's seat.

no positions

Face of Freedom

You must have tried and defied belief
Maybe buried your head in insular grief
I need your hunger, you need mine
A million mouths can swallow up time
--Pete Townshend

Nice article the negatives associated with masks. The author reviews the ineffectiveness of masks from a technical standpoint. There remains no compelling scientific evidence in favor of masks. In fact, and this is me not the author, one would think that proponents of masks so convinced of the 'science' behind masks would be conducting studies, including random controlled trials (RCTs) by the dozens--or hundreds--that present incontrovertible theory and evidence in support of masks. 

But they haven't (and can't). Stunningly, the Denmark study remains the only large numbers RCT investigation of masking that has been published. To the consternation of the pro-mask crowd, the study found no significant difference in CV19 infections in masked vs unmasked groups. That, after 18+ months, no further such analysis has been conducted by public health agencies worldwide goes a long way toward explaining the 'science' of masking.

That said, the author's best contribution is his discussion of the social consequences of masking. Beyond discomfort and lack of hygiene associated with covering one's face, masks offend social sensibilities. Facial appearance and expression contribute to individual uniqueness and value. Faces, through their various expressions, efficiently convey information that is difficult, and in many cases far more costly, to obtain through other means. 

People, especially children, rely on facial expressions for their ongoing development. Indeed, Darwin (1872) observed that the face is "the chief seat of expression." A recent article in Forbes questions school masking policies primarily along this line of reasoning.

Masks erode communication and understanding. They compromise human interaction and reduce quality of life.

Why aren't public health officials being challenged to present their evaluation of the costs associated with policies that force people to mask?

Banning Vax Mandates

Say that you'll never, never, never, never need it
One headline, why believe it?
Everybody wants to rule the world
--Tears for Fears

Interesting development in South Dakota where Governor Kristi Noem, the most ardent opponent of lockdowns during the CV19 pandemic among state governors, refuses to back Republican-led legislation that would ban vaccine mandates by employers inside the state. 

On the surface, this may seem inconsistent. Opposing lockdowns but not opposing vax mandates? However, her position is actually well reasoned and consistent.

Noem has in fact banned vaccine mandates for state and local government workers under constitutional requirements that guarantee individuals the right to pursue their persons interests free of government interference without probable cause and due process.

However, those constitutional restraints do not extend to private businesses. Employers and employees are free to negotiate terms. Noem clearly recognizes this and does not want to set a dangerous precedent.

Her position demonstrates very good insight that, unfortunately, is very uncommon nowadays.

I do think that, to be thorough and completely transparent, Noem needs to address an issue that we have recently considered and one raised by one of the GOP legislators in the article behind the anti-vax mandate bill. Are 'private' businesses, especially larger ones, truly private?

There is an argument to be made that many companies are beholden to government for resources of some type, and thus subject to government influence. They are essentially government sponsored entities.

If this is the case, then there is an argument to be made that, by implementing vaccine mandates, these companies are doing the bidding of government. This is unconstitutional

As strong as her position is, an even more constitutionally consistent revision to Noem's position might be to ban vax mandates in corporations where it can be demonstrated that they are dependent on the government for resources of any kind. 

If companies want to be free to impose mandates on their employees, then they should first show that they free from government influence that might shape their decisions in ways that truly unhampered markets would not.

Pandemic Tyranny II

"Knights, the gift of freedom is yours by right!"
--Arthur Castus (King Arthur)

As evidenced by events over the past 18 months, rule of law has been supplanted by discretionary rule. Discretionary rule amounts to governing factions seeking to get away with doing whatever they can. In the public health arena, officials set rules by edict. In last fall's election, officials broke myriad election laws assuming that they wouldn't get caught. Even if they did, they figured that they would not be punished.

Judge Nap previews a new round of discretionary rule unfolding in the name of pandemic fighting. Once again, these discretionary rules aim to restrict personal freedoms protected by the Constitution. Most of the limitations that the Constitution places on federal government w,r,t. personal freedoms are written into the Bill of Rights. Since the passage of the Fourteenth Amendment, these same limitations apply to state and local jurisdictions as well.

The rights to thought (1st), speech (1st), press (1st), assembly (1st), worship (1st), self-defense (2nd), privacy (4th), travel (4th), property ownership (3rd, 4th, 5th), commercial activities (5th), association (5th), and fair treatment from government (4th, 5th, 6th, 7th, 8th) are plainly articulated or rationally inferred from the first eight amendments. The Ninth Amendment declares that all other individual rights not enumerated in the first eight amendments shall not be disparaged by government. The Tenth Amendment declares that powers not delegated to the federal government and not prohibited by law are reserved for the states, or to the people. 

These rights are considered to be natural--each individual is born with them. They are not granted by worldly rule. No president, king, governor, mayor, legislative body, judge, et al. has legitimate power to confer them.

The gist of natural law is that individuals are free to pursue their personal interests unencumbered by government intervention (a.k.a. 'liberty) so long as their pursuits due not forcibly invade the pursuits of others. This principle is sometimes referred to as the non-aggression principle.

Similar to previous rounds of pandemic-inspired interventions, new government mandates promise to interfere with rights protected by the Bill of Rights. Travel, assembly, exercise of religious beliefs, commercial activities, and how we dress (face masks) are among those threatened. The threats come from state and local officials who claim to have the power to unilaterally interfere with individual rights.

Their claims raise several constitutional issues.

1) Do state and local officials have the power to regulate behavior in the face of what they claim to be 'emergencies?' Article 4, Section 4 of the Constitution guarantees a republican form of government to each state (a.k.a. the Guarantee Clause). This means that government powers must be separated into legislative, executive, and judicial branches, and that one branch cannot assimilate responsibilities of the others. 

Because only representative legislatures can write laws that carry criminal penalties and incur the use of force, mayors, governors, and other officials cannot validly make unilateral declarations and call them law. There are no exceptions to this law in the event of self-proclaimed emergencies.

2) Can state legislatures delegate their lawmaking powers to governors during times of emergency? No. Again, drawing from the Guarantee Clause, republican forms of government require separation of powers, and one branch cannot abdicate its responsibilities in deference to another branch. Doing so would not longer constitute a republican form of government. If states abdicate their responsibility to provide a republican form of government then, by the Constitution, it is the federal government's responsibility to act in manners that fulfill the constitutional guarantee to the state's people.

3) Can state legislatures enact laws the governors desire to limit personal liberties enumerated in the Bill of Rights and to coerce compliance? No. Government at all levels in the United States is subordinate to the natural rights articulated in the Bill of Rights.

Given the straight 'no' answers to the above, the essential issue that the Judge doesn't address, unfortunately, is why these illegal mandates are not under full-fledged legal assault by people around the country seeking relief from tyranny. My growing fear is that if courts do not provide legal relief, then the pressures of institutional failure grow to the point where they will be relieved using other means.

Risks of Specialization

Max Kellerman: You and me, Tito. We've seen it all, eh? Bubba and Zedda serving the first pasteurized milk to the borders. Through the war years, when we didn't have any meat. Through the Depression, when we didn't have anything.
Tito Suarez: Lots of changes though, Max. Lots of changes.
Max Kellerman: It's not the changes so much this time. It's that it all seems to be ending. You think kids want to come with their parents and take fox trot lessons? Trips to Europe, that's what the kids want. Twenty two countries in three days. It feels like its all...slipping away.
--Dirty Dancing

Previously we discussed the benefits associated with specialized work. What about potential downsides? One risk is restriction of trade. In order to realize gains from specialization, specialized producers must be able to trade with each other. By engaging in trade, specialists can satisfy needs that they are unable to fulfill themselves. They also benefit from the increased productivity of other specialists. Prices should be lower and quality should be higher when specialists trade.

When trade is restricted (e.g., tariffs), then specialists must either forego some needs or diversify. Either way, standard of living is likely to decline. 

Another risk is obsolescence of one's specialty. Due to competition, technological change, or evolving buyer preferences, certain lines of work may longer be valuable on the market. To adapt to such disruptive change, specialists must learn new skills.

While the 'switching costs' associated with changing jobs may be relatively low for some specialists, they may be extremely high for others. Much retraining may be required. If large commitments were made to build previous now-obsolete skill sets (expensive schooling, investment in expensive narrow-purpose tools, etc) then those specialists may have difficulty justifying a career change due to high sunk costs. Moreover, the repetition associated with specialized tasks can be habit forming...and old habits sometimes die hard.

How can workers cope with the risk:reward trade-off associated with specialization? We'll discuss in a future post.

In-Kind Censoring

All my instincts
They return
And the grand façade
So soon will burn
--Peter Gabriel

A conceptual framework that guides yesterday's post is resource dependence theory. When organizations depend on outside entities for important resources, they are prone to create 'negotiated environments' with those entities to facilitate resource acquisition. 

The more dependent an organization is on an outside entity for resources, the more beholden that organization is to the entity. In markets for economic goods, this asymmetric influence is sometimes called bargaining power. Walmart, for example, wields sizeable bargaining power in negotiations with suppliers due to the resources that can be obtained via the Walmart channel.

In markets for political favor, the resources that organizations desire rest in control of government. Government contracts, tax breaks, monopolistic grants, favorable regulatory treatment, etc. In negotiations to obtain those resources, organizations might offer several politically valuable items in trade, including campaign contributions, out-of-office 'grants' (e.g, cushy jobs for the relatives of politicians or even for the politicians themselves once they leave office), and access to large voter blocs.

Organizations might also offer 'in-kind' political resources in trade. In-kind resources include housing, transportation, labor, and equipment that politicians can use to their advantage. An attractive feature of in-kind contributions is that they are difficult to account for and often fly under the radar of political contribution limit watchdogs.

Media companies offer particularly attractive in-kind resources for politicians. They can publish political endorsements, provide editorial space for politicians and their cronies, and slant content in favor of candidates/parties that offer prospects of resource gains. They can also slant content away from political opponents.

This is where Trump's lawsuit of social media companies comes in. Social media companies have been pushing content that favors leftist agendas, while censoring content that opposes those agendas. In fact, the federal government recently signaled that it wants to work closer with social media outlets to advance its 'messaging' further.

Must the Trump side prove that Twitter et al and the government have explicitly negotiated a trade that involves in-kind media gifts for political favor? 

In a just legal system, no.

What Trump should need to show is that these media companies are, or have been, subject to favorable government treatment. If they can do so, then these companies should be deemed extensions of government and thus subject to the same rules that limit the power of any government agency--including limitations on restricting speech.

Whether our legal system is in fact just is, of course, questionable.

Benefits of Specialization

Treating today as though
It was the last, the final show
Get to sixty and feel no regret
It may take a little time
A lonely path, an uphill climb
Success or failure will not alter it
--Howard Jones

Specialization is the extent to which individuals or organizations perform narrow groups of tasks, with commensurate limitations in variety of output produced. Specialization generally leads to higher productivity (i.e., output/labor hr) because of learning effects, lower switching costs, and other economies. The benefits of specialization explain why dividing tasks among workers (i.e., division of labor) is among the most intuitive of economic acts.

In order to realize those productivity gains, however, trade must flow freely. Because they produce limited variety, specialists are unable to produce the broad array of goods that they need to advance their standard of living. Those goods must be acquired from other producers--most likely from other specialists. 

When specialists can trade freely, then the economies of specialization are collectively realized. Prosperity improves for all.

The prospective reward associated with specialization is therefore high. But we also know that there is a positive relationship between reward and risk. Generally, endeavors that offer the prospect of higher reward carry more risk as well.

We'll consider the risks of specialization in an upcoming post.

1933 Double Eagle

Crapgame: Then make a deal.
Big Joe: What kind of a deal?
Crapgame: A DEAL deal!
--Kelly's Heroes

Yesterday the only 1933 double eagle decreed to be 'legal tender' by the US government sold at a small numbers Sotheby's auction for a record $18.9 million (listing here). It had previously been owned by shoe designer Stuart Weitzman, who bought it in 2002 for a then record $7.6 million.

Although the coin has not been 'slabbed' by PCGS, company experts examined it in-hand and formally assigned a grade of MS65 with a corresponding cert. Similarly, CAC has conferred a virtual 'green bean' on the coin.

In 1933, FDR issued Executive Order 6102 which essentially outlawed private ownership of gold. The mint had already struck nearly 500,000 $20 gold pieces (also known as 'double eagles' or 'Saints' after the coin's designer Augustus Saint-Gaudens) for that year, but none had left storage yet. In concordance with the president's order, issuance of 1933 double eagles was banned and the entire inventory was subsequently melted.

Well, almost the entire inventory. 

A few 1933 Saints snuck out the door. Despite tireless efforts of the 'gold police' to recover the rogue twenties, a few remained at large. One wound up in hands of King Farouk of Egypt, who repeatedly rebuked attempts by federal agents to confiscate the coin. As the mainstream media likes to tell it, after decades of due diligence (and who knows how many million$ in US taxpayer resources), the federal government finally seized the coin in what is sometimes referred to as a 'secret service sting operation.' 

In reality, the feds struck a deal with a British coin dealer with whom the coin surfaced. Rather than melting it down, the feds subsequently accepted a face value payment of $20 from private parties in exchange for a 'certificate of monetization' (above) declaring that the coin was legal tender for public trade and ownership. That ceremonial transaction directly preceded the 2002 auction. 

Did I fail to mention that the federal government and dealer shared the auction proceeds?

A few other 1933 Saints are known to exist. A couple reside at the Smithsonian Institution. About 15 years ago, ten examples were found in a Philadelphia attic and dutifully submitted to the feds by the finder. I'm sure that federal bureaucrats were more than happy to trade ten crisp $20 Federal Reserve Notes for the coins. 

Legal battles involving the the Philly hoard of ten (which, not surprisingly, has not been melted) are certain to intensify now that the market has priced the stakes in the hundreds of million$.

As for any 1933 Saints that have retained their freedom, perhaps yesterday's sale will motivate a few rogues to trade on a market where their freedom is not questioned--the black market.

Homesteading

"Do you mean to tell me, Katie Scarlett O'Hara, that Tara, that land, doesn't mean anything to you? Why, land is the only thing in the world worth working for. Worth fighting for. Worth dying for. Because it's the only thing that lasts."
--Gerald O'Hara (Gone With the Wind)

Today, if you want to own some land, then you generally have to buy it from someone who already owns it. But how did it work back in the day when land was not yet owned? Could you be like Christopher Columbus and just claim it? Finders, keepers?

That's often how it starts--claiming ownership of large tracts of land in your own name or in the name of someone else if you're that someone else's agent.

But claiming ownership by fiat is difficult to sustain for long periods of time. You have to defend the land against intruders. You have to maintain it. Most importantly, you'll likely want to elevate your standard of living by production on that land. 

You'll need guards, workers. You'll need tools and other resources. How to fund it? You'll probably have to peel off property to fund your interests. Those who receive land in payment have similar goals and needs. They undertake a similar process.

It may take a bit of time, buy hopefully you see where this leads. Gradually, apportionment of land approximates the ability to use it productively. Owners with too much unproductive land have to surrender some until they reach a scale that they can manage efficiently. The allures of specialization and trade drives even finer apportionment.

This early process is called homesteading. Land is apportioned according to productive capacity of the owners.

After the primary markets of homesteading wane, land begins to trade in secondary markets (like today).

However, in unhampered markets, the relationship between productivity and land ownership remains. The amount of real estate owned tends to be proportional to the owner's productivity.

New Dark Age

Dark side's calling now
Nothing is real
--John Cafferty & the Beaver Brown Band

The defining characteristic of a 'dark age' is stagnation, or lack of progress. In the medieval Dark Ages, general conditions of isolation led to lack of trade--of both goods and ideas. There were few written volumes or inventions. An intellectual darkness.

Today we have the opposite of isolation. The world has never been so connected. Yet, while much is being written, it seems that production and trade of ideas is in decline. Groupthink abounds as people plug into the echo chambers of social networks. Dominant logics shout down plausible rival hypotheses and evidence that conflicts with prevailing views. 

This time around intellectual darkness seems to be falling because of too much connection rather than of too little. Theory posits that institutional pressures for isomorphic behavior increase with connectedness (Oliver, 1991). 

Could conformity and compliance that flows from over connectedness be driving a different sort of intellectual darkness--one that leads to a new dark age?

Reference

Oliver, C. (1991). Strategic responses to institutional processes. Academy of Management Review, 16: 145-179.