Can you teach a chicken to dance?
Yes, you can.
A simple ‘click and treat’ technique can have your feathered friend ‘tripping the light fantastic’.
Here’s an extract from a site dedicated to Dr Sophia Yin — a Veterinarian and Animal Behaviourist:
‘For chickens, I often train the click treat association next. That is, I hold the food cup high and then click the toy clicker while remaining stationary. Then, within a split second, I deliver the food right in front of her face. Once she takes one peck of the treat, I move the food cup back to its starting point out of her reach. By doing so repeatedly, I can teach her that the click means a treat will magically appear in front of her face. By performing this pairing randomly but frequently to keep her interested in sticking near me, I can quickly train her that, when she hears the click, she can turn to me to get her treat.’
With enough ‘clicking and treating’ your chicken could become the feathered kingdom’s equivalent of Fred Astaire or Michael Jackson.
I can hear you saying ‘What does this useless piece of trivia have to do with the past, present and future of the global economy?’
It demonstrates the power of conditioning…for animals and humans alike.
As a society, we’ve been ‘clicked and treated’ for decades.
We are programmed to respond to certain ‘clicks’.
The ‘click and treat’ messaging is all around us.
Drink a carbonated concoction containing way too much caffeine and sugar and you’ll have ‘wings to fly’.
I thought you’d risk having heart palpitations, a bigger gut and rotting teeth.
And then there’s my old investment industry ‘click and treat’ favourite…’the share market always goes up’. Well, we’re still waiting for the All Ords to get even close to its late 2007 all-time high.
Political pork barrelling is another classic ‘click and treat’ technique.
A give-away here, to buy a vote there. We fall for it every time. With a Federal election in May, ‘clicking and treating’ will move into overdrive.
In the context of human existence what we’ve been conditioned to is a relatively recent phenomenon.
Advertising started in the mid-19th century only after the commercialisation of the printing press (a product of the industrial revolution) provided the capacity to produce newspapers.
Prior to that, the world went about its business without people being constantly bombarded with messages designed to influence their spending, voting and investing behaviour.
Billions of dollars are spent/invested/wasted in studying human behaviour. Trying to figure out the best ‘click and treat’ strategy to make us react in a certain way — buy a product or service, vote for a political party, hand over your retirement capital to an institution.
But every now and then, the chicken refuses to dance.
It could be too tired or too old.
During the Global Financial Crisis, the Fed’s ‘click’ strategy was to lower interest rates to nearly zero.
Whenever the economy is under threat, the Fed’s programmed response is to lower interest rates. It’s always worked a ‘treat’ in previous downturns.
The household sector ‘chickens’ rush the banks for access to cheap finance…the borrowed dollars pour into the economy and GDP readings are back into the positive.
But after the 2008/09 credit crisis, the US consumer ‘chickens’ were reluctant get on the dance floor.
Initially, the US household sector remained deaf to the Fed’s click of cheap money. Debt was no longer a treat, it was a burden. The chickens were a little older and had grown a little tired of debt.
This lethargic response from US households is why the Fed kept rates lower for longer and printed trillions of dollars. Click, click, click…went Bernanke and Yellen.
Eventually, borrowing resumed in the US — student loans, auto loans, credit cards and the big one (in the private sector) over the past decade has been…US Corporate debt.
In Australia it was slightly different. Our households responded much sooner to the RBA’s ‘click’. Property owners (particularly in Sydney and Melbourne) were treated to an increase in asset prices that far exceeded our economic growth rate.
We were conditioned to believe property prices only ever trended upwards.
But, nothing remains static. Conditions change…as homeowners in Sydney and Melbourne are finding out.
The world is a dynamic place. Trends (positive and negative) can take decades and even centuries to play out.
Understanding the drivers of these trends can hopefully provide us with an insight into whether the dynamics behind our conditioning are still in play or are about to undergo a dramatic transformation process.
In an attempt to divine the future, we need to look at the past.
This is the first in a three-part series on how knowing our past could provide a valuable insight into our future.
The way it was
The following chart is from a research paper published in September 2012 by Professor Robert J Gordon of Northwestern University, in conjunction with the Centre for Economic Policy Research.
Prior to 1900, the longest time series on economic growth was from the United Kingdom…a period in history when the British Empire was the world’s super power…see how things change.
Until 1700CE, economic progress was glacial. Even though the rate of growth, after 1700, shifted up a gear, it was still well below the growth rate we consider ‘normal’ for a modern economy.
When you distil it all down to the very basics, there’s only two ways an economy can grow.
An increase in the workforce and/or an increase productivity.
That’s it. The simple equation of economic growth.
If both occur, then you create a massive tailwind for economic growth.
Knowing these are the two drivers of an economy, allows you to recognise the parallels between the GDP growth rate and the global population growth rate.
There’s no coincidence that both charts go parabolic after 1900. One lead to the other.
Source: DSS Research
The following table — sourced from worldometers.info — illustrates the exponential rate of growth in the global population.
|Global Population||Year population milestone reached||Number of years to increase population by One Billion people|
|1 billion||Early 1800’s||Many thousands of years|
|2 billion||1930||130 years|
|3 billion||1959||29 years|
|4 billion||1974||15 years|
|5 billion||1987||13 years|
|6 billion||1999||12 years|
|7 billion||2011||12 years|
|8 billion (estimated)||2022||11 years|
Prior to the 1850s, average life expectancy (calculated at birth) remained relatively static — around the age of 40.
Wars and lack of hygiene were largely responsible for people not making it to ‘old bones’.
Source: Our World in Data
High levels of infant mortality contributed to the slow population growth and a lowering of the average life expectancy.
When infant mortalities are removed from the data, the average life expectancy does not increase significantly…contained within the 40 to 50-year age bracket.
This hardly qualifies as old age.
Which meant there was definitely no demand for an age pension.
Three hundred years ago, people died of ailments that today are treatable with a course of antibiotics.
Medicine was in the dark ages.
Source: Our World in Data
Prior to 1750, life had not change significantly for many centuries.
Most people lived and died in small rural communities.
Agriculture was the primary industry… producing enough food for their families.
Farming was a labour-intensive business.
Implements had not improved sufficiently enough to generate more crops from the same hours of toil.
Women tended to household chores.
Cleaning. Cooking. Fetching water. Latrine duty.
The spinning wheel was used to make clothing…a manually operated task.
People were self-sufficient — growing their own food, making their own tools, furniture and clothing. Any surpluses were traded (barter economy) for goods they did not have.
In every sense of the word, it was a ‘cottage industry’ economic model.
The combination of low population growth and minimal improvement in productive output (due to the extent of manual labour required to produce goods), meant economic growth progressed at a snail’s pace.
Based on centuries of conditioning, what do you think economic forecasters in 1750 (or for that matter, in 1800 or 1900) would’ve said if asked, ‘what’s your forecasts for the next century?’
The vast majority would have extrapolated the past into the future. Growth would continue to be glacial.
That’s what conditioning does…we think and react in accordance with our recent experiences and beliefs.
With the benefit of hindsight, we know the world is a dynamic place and nothing stays the same forever.
Stay tuned for Part 2 on Friday.
Editor, The Gowdie Letter