From The Genius of the Beast: A Radical Re-Vision of Capitalism by Howard Bloom, Prometheus Books, 2009. Reprinted with permission.

Why bankers are like bacteria

What has tumbled you and me into the pit of the Great Recession of 2008-2010? What causes boom and bust? Does economic catastrophe come from a perverse monetary system, from capitalism, speculators, overpaid CEO’s and greed? Does it come from conspiracies of illuminati and of power-grabbing families? Does it happen because of mistakes at financial institutions like Citibank, Lehman Brothers, and AIG? Does it ooze from the wreckage of wrong-headed fiscal policies like those of Calvin Coolidge or George Bush?

Over three billion years ago, bacteria already had a cycle of boom and bust built into their DNA. The cycle of boom and bust is a search strategy. It’s a cycle that uses us to explore the new, then to focus on the flaws in our latest innovations and to build fail-safe systems to prevent future outbreaks of the problems those innovations produce — whether those new innovations are credit default swaps, bundled mortgage securities, or super-banks that span the globe and make high-risk investments with their depositors’ money. And the cycle of boom and bust is built into our biology.

Bacteria, like you and me, are astonishingly social. They cannot live alone. Take one bacterium away from its neighbors, away from its colony, put it in a petri dish, and what will it do? If there’s food, it will divide. 72 times a day. It will multiply, surrounding itself with 144 daughters every 24 hours. Those daughters, in turn, will divide 72 times a day and surround themselves — and their founding foremother, the first lonely bacterium — with progeny. If the bacterial colony could find all the food and housing it needs, that one lonely mother in theory could have 5.2×10^151 kids, grand-kids, and great-grandkids in a week. That’s ten with one hundred and fifty one zeros, more than all the atoms in over a million universes.

At least that’s what bacteria can do in theory. In fact within a week your one solitary bacterium will have surrounded herself with a megalopolis, an entire colony. And a colony of bacteria is not a dumb and primitive crowd. It is one of the biggest and most complex societies this planet has ever seen. A single bacterial colony the size of your palm is so thin that you can’t see it with your naked eye. Yet it contains seven trillion individuals. Seven trillion citizens. More than all the human beings this planet has ever seen. All working in concert. All pooling their talents and their data. All communicating with a chemical vocabulary. And all working to solve the problems of the minute and the puzzles of the day. Working together to find new food. Working together to invent new ways to turn garbage into gourmet delicacies, to turn wastelands into succulent buffets, to turn tragedy into opportunity, to outrace and to outpace their rivals, and to win when competition turns into war. That’s why bacterial metropolises are discovery machines. That’s why they are breakthrough generators. That’s why they were the first life forms to experience boom and bust, the first to take advantage of the cycle of exploration and digestion, the cycle of expand then consolidate That’s why they were the first to have the pendulum of repurposing built into their biology.

The first bacteria were following the mandate of nature—helping each other reinvent themselves. Helping each other discover their possibilities. Helping each other pull together a clutter of antiques in whole new ways. Helping each other advance the enterprise of secular genesis, the enterprise of secular creation, the task of the evolutionary search engine. Helping each other advance the family of cells and DNA.

A bacterial colony is a search machine and a research and development team. It has to be. Put yourself in a bacterium’s place. Today’s food will soon run out. You and I will eat it to the last drop and crumb. Tomorrow we will need new groceries. Tomorrow our colony will need its equivalent of new potatoes and meat. Imagine that you and I are the bacteria¹ called Caulobacter crescentus². We live in an immense puddle of fresh water, a lake far from the sea. We are big eaters. We are sweet-tooth dessert devourers. We go for junk food, sugars–xylose, lactose, and galactose. High energy treats. We have four big jobs in life — eating, multiplying, finding new food and housing, and communicating our experiences, especially our extreme experiences, our life and death experiences and our lottery-winning experiences. Oh, and we occasionally innovate.

How can we find new food before hunger kills you, me, and our community? Boom and bust. The cycle of repurposing. You and I are comfortable adults. We look like pink string beans with, conveniently enough, a long string attached. That string is a thin, flexible tube like a soda straw that rivets us to our food. And I do mean rivet. Our straw is called a “stalk” because it looks like the stalk of a tulip. And at your stalk’s end and mine is a superglue so powerful that someday humans will be tempted to imitate its properties. But soon we will slurp up every tasty molecule in the bit of lake bed we’ve sucked up to. What will save us? Boom and bust. The pendulum of repurposing. And the way it crops up in our kids. Our children can be born as Cain or Abel, as hunters or settlers, as explorers or homesteaders. Yes, like you and me, our kids will look superficially like pink string beans with long threads. But in reality they will be born in two different forms. As spreaders or consolidators. As rebels or conservatives. As searchers or structure makers.

We old timers are built to stay in one spot and to glom up the goodies. We are built for boom. We do very poorly when the food supply goes bust. But some of our kids are natural-born bust-escapers. They are born to be dissatisfied, born to say good bye to our sedentary lifestyle and to our parcel of tasty property. Their “strings” are shaped for a restless quest. They are born to seek their fortune. How do we know their goals? Their “purpose in life” shows up in their physiology. Where you and I have stalks, our kids have propellers. They have whips (flagella) twirled by molecular rotary motors. And with those high speed rotors the young shoot and scoot. We old timers are built to hang on tight. But our kids are built to soar through the waters and hunt new food and territory. They are built to explore.

No bacterium explores the landscape on her own. It takes a group of roughly ten thousand to cut a path across the lake bed that hides new food. So from the dot of a colony that you and I have founded, our daughters swim outward in armies, forming circles around us like the bands of a target surrounding the bull’s eye. Those bands travel in deprivation and poverty. They forgo the luxury of reproducing³ and of normal comforts. When they find food, they settle down. And when they settle, they throw away childish things. They throw away their flagellar propellers⁴. And they put down roots. They develop stalks and they root themselves to the food bed of their new territory, their new home. Just like you and I did once upon a time. Then they reproduce. And some of their kids are born as restless rebels, curious discoverers who will spread outward even more. In the process, the armies of impatient youth, the masses of restless seekers, grow our colony. They grow it massively.

We have our bacterial equivalent of boom and bust–periods of vigorous eating and periods when everything good looks bad, when the old ways look poisonous and corrupt, when we are shaken out of our accustomed niche and forced to rein in our appetites and set out in search of something new. We have our bacterial cycles of exploration and digestion, of expansion and consolidation, of contentment and insecurity, of speculation and structure-making. Cycles of repurposing began with the cycles of a bacterial economy. An economic cycle was built into your foremothers’ biology. Is that cycle built into you and me?

***

What flicked the timer of the bacteria’s economic cycle–the timer of the bacteria’s equivalent to a business cycle? Was boom and bust triggered by real world scarcity? Was crash triggered by greed and mistaken policy? No. Even when the food supply is terrific, Caulobacter go through the equivalent of an utter loss of confidence in the riches they have known and a need to strike out, to explore, then to consolidate once again in a new home. Caulobacter bacteria cycle even when the underlying basics of their economy remain strong. They behave like you and I do when we’ve eaten too much of a rich dessert and have grown sick of it. Even if the food supply is bulging, the bacteria with travel-whips lose their taste for the sweets under their nose and are driven to find something new.

The story of the Caulobacter crescentus’s twitch from boom to bust and back to boom again is a tale of two timers. In Caulobacter, sometimes the cycle of boom and bust is switched from high-risk exploration to digestion, from spread to clench and from the equivalent of irrational exuberance to panic by internal timers. Sometimes it’s switched by the outside prod of bounty or scarcity. Both time clocks — the internal and the external — seem able to trigger the twitch from rise to fall and back again. Your sleep cycle is like this bacterial tale of two clocks. Sleep is a product of two timers. One of your sleep timers is tuned to the outside world. It switches as the sun moves and as the world around you darkens from day to night. Another of your timers is totally internal. It can put you to sleep at three o’clock on a Sunday afternoon when the sun is bright as can be.

Caulobacter have an internal timer that drives them to switch from stalks to propellers and back again. And they apparently have an outside timer, the timer of food and famine. Those two timers are apparently often out of synch. What happens when two timers drive a cycle? When two timers make waves? When two timers raise peaks and troughs in Caulobacter or in you and me? Two waves overlapping make an interference pattern. At some points where they meet they add to each other’s strengths and pile up their powers, making peaks. At other points, they cancel each other out and create peculiarly positioned valleys. Overlaid cycles — overlaid waves — can make things look random and chaotic.⁵ But under the mask of randomness, two very simple time-clocks are at work.

The irregularity of two overlapping cycles may explain the seeming unpredictability of boom and crash. The spikes and troughs of the two timers may help explain why the Kondratiev Wave theory of boom and crash, the hypothesis that technology-waves bring big swings in the financial cycle, is only sometimes right. Thanks to internal timers, our biological clock can flick us into panic even when a new technology has many decades to go before it peaks.

If a cycle we’ve inherited from our bacterial ancestors is, indeed, alive in us today, what does that mean for the boom and bust of 2008 and for the bubbles and busts yet to come? How does it help us understand past cycles of exuberance and panic, of exploration and digestion, of speculation and structure-creation, of expansion and consolidation — the tulipmania crash of 1637⁶, the South Sea Bubble and Mississippi Bubble crash of 1720, the Panic of 1797, the Depression of 1807, the Panic of 1819, the Panic of 1837, the Panic of 1857; the Great Depression of 1870,⁷ the Panic of 1873, the Panic of 1893, the Panic of 1907, and the Great Depression of 1929? What does it mean for the changing global economy of today? Does the wrong-headed fiscal policy of a president like Calvin Coolidge really set off a global crash? Do NINJA loans really cause a worldwide economic collapse? Or does the cycle of boom and bust happen for reasons radically different than the ones economists conceive. And if something more basic is at work, what does that mean to you and me?

***

Let’s get serious. Is it really possible that biology is the mother of boom and bust? Can the birds and the bees really help you and me understand the cycle of expansion and consolidation, of hunt then devour and digest, of binge, then purge, of stretch, then clench? Is boom and bust really driven by the pendulum of repurposing?

Boom and bust is not unique to capitalist economies, to industrialized societies, or even to creatures who meet, greet, trade, and gamble with money. The cycle of boom and bust is shot through all of life, from the most primitive level to the most complex. Population boom and bust appear in protozoans, mollusks,⁸ amphibians, reptiles, insects, fish,⁹ and mammals. Red grouse in England go through a four-to-eight year cycle of boom and crash. Parasites called Trichostrongylus tenuis that feed on the red grouse go through crashes and booms as their meal-supply increases in numbers, then declines.¹⁰ Snowshoe rabbits in Canada go through a ten-year cycle of population expansion and contraction. So do the lynx that feed on the snowshoe rabbit. Other animals that endure booms and crashes include Darwin’s finches in the Galapagos Islands, reindeer on islands in the Bering Sea, lemmings in the arctic, and hives of honeybees. The snowshoe rabbit and its predator, the lynx, go through a ten-year boom and bust cycle. The vole, a mouse-like rodent, of Finland tunnels through a three-year cycle. The lemming of the Arctic goes through a four-year cycle of boom and crash. So does the animal that feeds on it, the short-tail weasel. And the side-blotched lizard of Santa Cruz, California, goes through a two-year cycle of expansion and contraction, of good times and bad, of boom and bust.

Boom, bust, and the pendulum of repurposing show up in an even stranger biological workplace — in you and me. They made you and me who we are today. And right now boom, bust, and the pendulum of repurposing are making us who we’ll be tomorrow. Let’s go back to your very early days in your mother’s womb, sixteen days after a sperm and egg first joined up to embark on the huge collaborative project called you. As a sixteen-day-old embryo, you were smaller than a period on this page…0.44 millimeters, less than a fiftieth of an inch.¹¹ Despite your miniscule size, you were a tiny handbag of cells with an interior lining. And you were already being shaped by the pendulum of repurposing and the cycle of exploration and consolidation, by the cyclical strategies of the evolutionary search engine.

Some of your cells itched to achieve more than the mere shape of a purse. They ached to become your nervous system, your skull, and your face.¹² That group of cells with high ambitions was a thin groove on the top of the bag that was you, a groove where the opening of a closed handbag is usually found. That groove is called the neural crest. How did the ballsy cells of that neural crest strive to achieve their goals? They divided and gave birth to exploratory armies, then they sent those soaring squadrons of cells out to explore on their own. Like the Caulobacter bacteria with tails, these search parties migrated away from the home of their birth to spots in the growing embryo of you, spots that were brand new. If they traveled to a destination where they were needed and found an appropriate hookup, they stayed and became nerves. If they found no welcome, they were pared away. Ruthlessly. They were forced to literally kill themselves off. They were forced to use a molecular self-destruct mechanism called “apoptosis,” one of the most intensely studied biological mechanisms of the late twentieth century. Apoptosis is otherwise known as “pre-programmed cell death.” It’s a molecular kit and instruction manual for cellular suicide. And nearly every cell is born with it, including the cells with which I wrote these words and the cells with which you’re reading them.

Back to the embryo. New hordes of exploratory neural-cell wannabes continued to set off on journeys through the developing you for months afterward, taking root in the new territory they’d explored if they’d received enthusiastic signals from the cells of their destination. And destroying themselves if they’d ended up in a spot that didn’t need them. That’s the cycle of exploration and consolidation. That’s the cycle of speculation and structure-making.

And that is the cycle of boom and crash behind the recession we are going through today — the Great Recession of 2008-2010.

© 2009 Prometheus Books

[1] Sources on bacteria include: Yves Brun, Lawrence J. Shimkets, Prokaryotic Development (Washington, DC: ASM Press, 2000). Dennis Bray, “Bacterial Chemotaxis: Using Computer Models to Unravel Mechanism,” Speaker Abstracts, Society of General Physiologists, Symposium 2006, http://www.sgpweb.org/Abstracts2006.pdf (accessed March 2, 2009). R M Harshey and T Matsuyama, “Dimorphic transition in Escherichia coli and Salmonella typhimurium: surface-induced differentiation into hyperflagellate swarmer cells.” Proceedings of the National Academy of Sciences of the United States of America, August 30, 1994, pp. 8631-8635. B. Terrana and A. Newton, “Requirement of a cell division step for stalk formation in Caulobacter crescentus,” Journal of Bacteriology, October 1976, pp. 456–462. C.J. Ong, M.L. Wong, J. Smit, “Attachment of the adhesive holdfast organelle to the cellular stalk of Caulobacter crescentus.” Journal of Bacteriology, March 1990, pp. 1448-56. J. Smit, N. Agabian, “Cell surface patterning and morphogenesis: biogenesis of a periodic surface array during Caulobacter development.” Journal of Cell Biology, October 1982: pp. 41-49. J.M. Sommer, A. Newton, “Turning off flagellum rotation requires the pleiotropic gene pleD: pleA, pleC, and pleD define two morphogenic pathways in Caulobacter crescentus,” Journal of Bacteriology, January 1989, pp. 392-401.

[2] Mitsugu Matsushita, “Dynamic Aspects of the Structured Cell Population in a Swarming Colony of Proteus mirabilis,” Journal of Bacteriology. January, 2000, : pp. 385–393.

[3] Jeanne S. Poindexter, Kanan P. Pujara, and James T. Staley, “In Situ Reproductive Rate of Freshwater Caulobacter,” Applied and Environmental Microbiology, September 2000, pp. 4105-4111. See the photos of the stalked and flagellar forms of Caulobacter crescentus at: “Caulobacter, Microbe Wiki, Kenyon College, http://microbewiki.kenyon.edu/index.php/Caulobacter (accessed Thursday, December 25, 2008).

[4] M. Kanbe, S. Shibata, Y. Umino, U. Jenal, S.I. Aizawa, “Protease susceptibility of the Caulobacter crescentus flagellar hook-basal body: a possible mechanism of flagellar ejection during cell differentiation,” Microbiology, February 2005, pp. 433-8.

[5] Benoit B. Mandelbrot, Richard L. Hudson, The (mis)behavior of Markets: A Fractal View of Risk, Ruin, and Reward (New York: Basic Books, 2004), pp. 207-208.

[6] Anne Goldgar. Tulipmania: Money, Honor, and Knowledge in the Dutch Golden Age (Chicago, Illinois: University of Chicago Press, 2007), p. 5.

[7] Gabriel Abraham Almond, Scott C. Flanagan, Robert J. Mundt, Crisis, Choice, and Change: Historical Studies of Political Development (Boston, Massachusetts: Little, Brown, 1973), p. 152.

[8] Maite Narvarte, Raúl González, and Pablo Filippo, “Artisanal mollusk fisheries in San Matías Gulf (Patagonia, Argentina): An appraisal of the factors contributing to unsustainability,” Fisheries Research, October 2007, pp. 68-76.

[9] David R. Montgomery, King of Fish: The Thousand-Year Run of Salmon (Boulder, Colorado: Westview Press, 2004), p. 43.

[10] Peter J. Hudson, Andy P. Dobson, Dave Newborn, “Prevention of Population Cycles by Parasite Removal,” Science Magazine, December 18, 1998: pp. 2256–2258.

[11] Marc Kirschner, and John Gerhart, “Evolvability,” Proceedings of the National Academy of Sciences. Vol. 95, Issue 15, pp. 8420-8427. Marie-Thérèse Heemels, “Apoptosis,” Nature, October 12, 2000. Pascal Meier, Andrew Finch and Gerard Evan, “Apoptosis in development,” Nature, October 12, 2000, pp. 796-801.

[12] N.a. The Visible Embryo, http://www.visembryo.com/baby/16.html (accessed December 2, 2008). (Compiled from The National Institute of Child and Human Development’s Carnegie Collection of Human Development.)