Thursday, May 25, 2023

"What performance-enhancing stimulants mean for economic growth"

From The Economist, May 25:

Could America’s Adderall shortage have harmed its productivity? 

Towards the end of last year America began running short of medicines used to treat attention-deficit hyperactivity disorder (adhd), including Adderall (an amphetamine) and Ritalin (a central-nervous-system stimulant). Nine in ten pharmacies reported shortages of the medication, which tens of millions of Americans use to help improve focus and concentration. Around the same time, something intriguing happened: American productivity, a measure of efficiency at work, dropped. In the first quarter of 2023, output per hour fell by 3%.

Coincidence? Probably. Lots of other things could have explained the productivity dip. Equally, though, many of America’s most productive people rely on Adderall to get the job done. It often seems like half of Silicon Valley, the most innovative place on Earth, is on the stuff. And surprising things can cause gdp to rise and fall, including holidays, strikes and the weather. What’s more, the economic history is clear: without things that give people a buzz, the world would still be in the economic dark ages.

Not all drug consumption helps people work better, of course. Don Draper from “Mad Men”, a tv series about advertising executives in the 1960s, came across many of his finest ideas three Scotches deep. But contrary to popular belief Ernest Hemingway, one of America’s greatest authors, never advised “write drunk, edit sober”, preferring to write liquor-free. In a book published in 1983 David Ogilvy, perhaps the most famous real-life mad man, warned of the dangers of drunks in the office. Use of cocaine, common on Wall Street and in Hollywood, can give people a short-term boost. It also causes grave long-term problems.

Indeed, economists normally think of mood-altering substances as a drag on prosperity. One estimate in 2007 put the cost of drug abuse in America at $193bn, or around 1.3% of gdp. More recently economists have looked at “deaths of despair”, which many link to abuse of opioids. In 2021 more than 80,000 Americans died from opioid overdoses.

But stimulants can play a positive role, too. Consider two of them: sugar and coffee. The first allowed people to work harder; the second allowed them to work smarter.

Until the start of the 18th century calories were a significant constraint on Western economic growth. In 1700 total food supply per person in Britain was equivalent to around 2,000 calories a day—enough for the average man to survive, but not to do a great deal more. Workers were therefore inefficient. Many of the poor, who survived on even more meagre diets, barely had the energy to move, let alone do anything useful....



New York Fed On "Anxiety, Overconfidence, and Excessive Risk Taking" (pathological gambling and self-manipulation with booze and blow) 

See also:
Berlusconi Blames Stock Market Volatility On Cocaine (and a look at neurotransmitters)
"Your genes affect your betting behavior"
New research suggests link between genetics, Wall Street success"
Engineer -- Addicted to Day Trading -- Stole Nearly $750,000 Making False Securities Class-action Claims
"What Caffeine Actually Does to Your Brain"
Ethanol: "Why Coffee, Cigarettes and Booze Can Be Good For You"
Can't Get Enough o' That Lithium. "Peak Lithium: Will Supply Fears Drive Alternative Batteries?"

Although Lilly introduced Prozac to the U.S. in 1988, they didn't really begin marketing it until 1991. Sales increased five-fold by 1994, the year the big bull market of the nineties kicked in.
The joke on trading desks was that this was the Prozac market, sort of the "What me worry?" approach to equities (which may explain the Nasdaq at 5048 in March, 2000).*
This excursion down SSRI lane was triggered by the thought "If we run out of lithium, what will the bi-polars do?".

 *Cramer had similar thoughts, relayed in this NYT article from 2002:

...''My own view is that one reason the investor class, including me, missed the downside was serotonin,'' James J. Cramer, a former hedge fund manager and author of ''Confessions of a Street Addict'' (Simon & Schuster, 2002), said, referring to a substance in the brain that antidepression drugs augment. ''Prozac and all those other drugs banish the 'this is the end of the world' thoughts,'' Mr. Cramer explained. ''Which means you are not as anxious as you should be about an obvious down side.''...
Your Brain and Financial Bubbles
The Internet, Deflation and Depression
...Further, the newspapers likened the changes to those seen in cocaine abusers but went on to describe something quite different from my understanding of what blow does to the reward pathways, overexciting the dopamine cascade until the various D receptors no longer react to dopamine and eventually leading to anhedonia. The big A is often concurrent with and like anxiety, may even kindle for depression.
Don't worry, be happy.

See also "Pleasure Dissociative Orgasmic Disorder"  

Here's an ad for Dexamyl, a Smith, Kline & French offering comprised of the stimulant dextro-amphetamine and the barbiturate amobarbital.
Note how alert yet relaxed the gentleman appears:

Also slightly whack.