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Sunday, March 21, 2021

Permaculture

From Wikipedia, the free encyclopedia
 

Permaculture is an approach to land management and philosophy that adopts arrangements observed in flourishing natural ecosystems. It includes a set of design principles derived using whole systems thinking. It uses these principles in fields such as regenerative agriculture, rewilding, and community resilience. Permaculture was originally a portmanteau of "permanent agriculture", but was later adjusted to "permanent culture", to incorporate necessary social aspects as inspired by Masanobu Fukuoka's natural farming. The term was coined by Bill Mollison and David Holmgren in 1978, who formulated the concept in opposition to Western industrialized methods and in congruence with Indigenous or traditional knowledge.

Permaculture has many branches including ecological design, ecological engineering, regenerative design, environmental design, and construction. It also includes integrated water resources management that develops sustainable architecture, and regenerative and self-maintained habitat and agricultural systems modeled from natural ecosystems. Permaculture has been implemented and gained widespread visibility throughout the world as an agricultural and architectural design system and as a guiding life principle or philosophy. Much of its success has been attributed to the role of Indigenous knowledge and traditions, which the practice itself is rooted in. In turn, the rise of permaculture has revalidated Indigenous knowledge in circles where it was previously devalued.

History

In 1929, Joseph Russell Smith added an antecedent term as the subtitle for Tree Crops: A Permanent Agriculture, which sums up his experience experimenting with fruits and nuts as human food and animal food crops. Smith saw the world as an inter-related whole and suggested mixed systems of trees with other crops underneath. This book inspired individuals such as Toyohiko Kagawa who pioneered forest farming in Japan in the 1930s.

In his 1964 book Water for Every Farm, Australian P. A. Yeomans advanced a definition of permanent agriculture as one that can be sustained indefinitely. Yeomans introduced both an observation-based approach to land use in Australia in the 1940s and the Keyline Design as a way of managing the supply and distribution of water in the 1950s. Other early influences include Stewart Brand's works, Ruth Stout and Esther Deans, who pioneered no-dig gardening, and Masanobu Fukuoka who, in the late 1930s in Japan, began advocating no-till orchards and gardens and natural farming.

Bill Mollison, who has been described as the "father of permaculture," cites Indigenous belief systems as an inspiration of the practice.

In the late 1960s, Bill Mollison, senior lecturer in Environmental Psychology at University of Tasmania, and David Holmgren, graduate student at the then Tasmanian College of Advanced Education started developing ideas about stable agricultural systems on the southern Australian island of Tasmania. Their recognition of the unsustainable nature of Western industrialized methods and their appreciation of Indigenous worldviews were critical to their formulation of permaculture. In their view, industrialized methods were highly dependent on non-renewable resources, and were additionally poisoning land and water, reducing biodiversity, and removing billions of tons of topsoil from previously fertile landscapes. They responded with permaculture. This term was first made public with their publication of their 1978 book Permaculture One.

Permaculture is a philosophy of working with, rather than against nature; of protracted and thoughtful observation rather than protracted and thoughtless labor; and of looking at plants and animals in all their functions, rather than treating any area as a single product system.

— Bill Mollison

Students of Mollison's Permaculture Design Course (PDC) included Lawton and Hemenway. Simon J. Fjell met Mollison and became a teacher of the first Permaculture Design Course in 1976. By the early 1980s, the concept had broadened from agricultural systems towards sustainable human habitats. After Permaculture One, Mollison further refined and developed the ideas while designing hundreds of permaculture sites and writing more detailed books, such as Permaculture: A Designers Manual. Mollison lectured in over 80 countries and taught his two-week PDC to hundreds of students. Mollison encouraged graduates to become teachers and set up their own institutes and demonstration sites. Critics suggest that this success weakened permaculture's social aspirations of moving away from industrial social forms. They argue that the self-help model (akin to franchising) has had the effect of creating market-focused social relationships that the originators initially opposed.

The permaculture movement spread throughout Asia and Central America. In Hong Kong the Asian Institute of Sustainable Architecture (AISA) was established. The Mesoamerican Permaculture Institute (IMAP) flourished in Guatemala. The Permaculture Institute of El Salvador is another example.

Foundational ethics

The ethics on which permaculture builds are:

  • Earth care: Provision for all life systems to continue and multiply.
  • People care: Provision for people to access those resources necessary for their existence.
  • Fair share: Setting limits to population and consumption so that people do not take more than what is needed. By governing our own needs, we can set resources aside to further the above principles. This principle is also described as share the surplus.

Permaculture emphasizes patterns of landscape, function, and species assemblies. It determines where these elements should be placed so they can provide maximum benefit to the local environment. Permaculture maximizes useful connections between components and synergy of the final design. The focus of permaculture, therefore, is not on individual elements, but rather on the relationships among them. Properly done, the whole becomes greater than the sum of its parts. Permaculture seeks to minimize waste, human labor, and energy input and maximize benefits through synergy.

Permaculture design is founded in replicating or imitating natural patterns found in ecosystems because these solutions have emerged through evolution over thousands of years and have proven to be effective. As a result, the implementation of permaculture design will vary widely depending on the region of the Earth it is located in. Design principles derive from the science of systems ecology and the study of pre-industrial examples of sustainable land use. Permaculture draws from disciplines including organic farming, agroforestry, integrated farming, sustainable development, physics, meteorology, sociology, anthropology, biochemistry, engineering, and applied ecology.

Theory

Design principles

The viewpoint of a chicken through the eyes of Permaculture design.

Holmgren articulated twelve permaculture design principles in his Permaculture: Principles and Pathways Beyond Sustainability:

  • Observe and interact: Take time to engage with nature to design solutions that suit a particular situation.
  • Catch and store energy: Develop systems that collect resources at peak abundance for use in times of need.
  • Obtain a yield: Emphasize projects that generate meaningful rewards.
  • Apply self-regulation and accept feedback: Discourage inappropriate activity to ensure that systems function well.
  • Use and value renewable resources and services: Make the best use of nature's abundance: reduce consumption and dependence on non-renewable resources.
  • Produce no waste: Value and employ all available resources: waste nothing.
  • Design from patterns to details: Observe patterns in nature and society and use them to inform designs, later adding details.
  • Integrate rather than segregate: Proper designs allow relationships to develop between design elements, allowing them to work together to support each other.
  • Use small and slow solutions: Small and slow systems are easier to maintain, make better use of local resources and produce more sustainable outcomes.
  • Use and value diversity: Diversity reduces system-level vulnerability to threats and fully exploits its environment.
  • Use edges and value the marginal: The border between things is where the most interesting events take place. These are often the system's most valuable, diverse and productive elements.
  • Creatively use and respond to change: A positive impact on inevitable change comes from careful observation, followed by well-timed intervention.

Layers

Suburban permaculture garden in Sheffield, UK with different layers of vegetation

Layers are a tool used to design sustainable ecosystems that directly benefit humans. A mature ecosystem has many relationships between its constituent parts such as trees, understory, ground cover, soil, fungi, insects, and animals. Because plants grow to different heights, a diverse community of organisms can occupy a relatively small space, each at a different layer. Forests offer seven basic layers, although there can be many more, such as fungi.

  • The canopy: the tallest trees. Large trees dominate, but typically do not saturate the area, i.e., some patches are devoid of trees.
  • Understory layer: trees that flourish under the canopy.
  • Shrub layer: woody perennials of limited height. Includes most berry bushes.
  • Herbaceous layer: Plants that die back to the ground every winter, if cold enough. No woody stems. Many beneficial plants such as culinary and medicinal herbs are in this layer. Annuals, biennials and perennials.
  • Soil surface/groundcover: Overlaps with the herbaceous layer and the groundcover layer; however plants in this layer grow much closer to the ground, densely fill bare patches, and typically can tolerate some foot traffic. Cover crops retain soil and lessen erosion, along with green manures that add nutrients and organic matter, especially nitrogen.
  • Rhizosphere: Root layers within the soil. The major components of this layer are the soil and the organisms that live within it such as plant roots and zomes (including root crops such as potatoes and other edible tubers), fungi, insects, nematodes, worms, etc.
  • Vertical layer: climbers or vines, such as runner beans and lima beans (vine varieties).

Guilds

Mycorrhizal fungi usually function in a mutualistic symbiotic relationship with plants.
 
Ladybugs are seen as beneficial insects in permaculture because of their help with aphid control

A guild is a mutually beneficial group of species that form a part of the larger ecosystem. Within a guild each species provides a unique set of diverse services that work in harmony. Guilds include compatible animals, insects, and plants that form symbiotic relationships which produce healthier plants and ecosystems as well as useful resources for humans. Plants may be grown for food production, drawing nutrients from deep in the soil through tap roots, balancing nitrogen levels in the soil (legumes), for attracting beneficial insects to the garden, and repelling undesirable insects or pests. There are several types of guilds, such as community function guilds, mutual support guilds, and resource partitioning guilds.

  • Community function guilds group species based on a specific function or niche that they fill in the garden. Examples of this type of guild include plants that attract a particular beneficial insect or plants that restore nitrogen to the soil. These types of guilds are aimed at solving specific problems which may arise in a garden, such as infestations of harmful insects and poor nutrition in the soil.
  • Mutual support guilds group species together that are complementary by working together and supporting each other. This guild may include a plant that fixes nitrogen, a plant that hosts insects that are predators to pests, and another plant that attract pollinators. An example of a mutual support guild is mycorrhizal fungi's symbiotic relationship with plants by providing minerals and nitrogen to plant roots and receiving sugars in return has been cited as an example of mutualistic guild. Permaculturalists take advantage of this beneficial relationship when designing their garden layouts.
  • Resource partitioning guilds group species based on their abilities to share essential resources with one another through a process of niche differentiation. A potential example of this type of guild includes placing a fibrous- or shallow-rooted plant next to a tap-rooted plant so that they draw from different levels of soil nutrients.
  • Establishment guilds are commonly used when working to establish target species (the primary vegetables, fruits, herbs, etc. you want established in your garden) with the support of pioneer species (plants that will help the target species succeed). For example, in temperate climates, plants such as comfrey (as a weed barrier and dynamic accumulator), lupine (as a nitrogen fixer), and daffodil (as a gopher deterrent) can together form a guild for a fruit tree. As the tree matures, the support plants will likely eventually be shaded out and can be used as compost.
  • Mature guilds form once your target species are established. For example, if the tree layer of your landscape closes its canopy, sun-loving support plants will be shaded out and die. Shade loving medicinal herbs such as ginseng, black cohosh, and goldenseal can be planted as an understory.

Edge effect

The edge effect in ecology is the effect of juxtaposing contrasting environments in an ecosystem. Permaculturists argue that where differing systems meet can become highly productive and offer useful connections. An example of this is a coast. Where land and sea meet is a rich area that meets a disproportionate percentage of human and animal needs. This idea is reflected in permacultural designs by using spirals in herb gardens, or creating ponds that have wavy undulating shorelines rather than a simple circle or oval (thereby increasing the amount of edge for a given area).

Zones

Permaculture zones 0-5

Zones intelligently organize design elements in a human environment based on the frequency of human use and plant or animal needs. Frequently manipulated or harvested elements of the design are located close to the house in zones 1 and 2. Manipulated elements located further away are used less frequently. Zones are numbered from 0 to 5 based on positioning.

Zone 0
The house, or home center. Here permaculture principles aim to reduce energy and water needs, harnessing natural resources such as sunlight, to create a harmonious, sustainable environment in which to live and work. Zone 0 is an informal designation, which is not specifically defined in Mollison's book.
Zone 1
The zone nearest to the house, the location for those elements in the system that require frequent attention, or that need to be visited often, such as salad crops, herb plants, soft fruit like strawberries or raspberries, greenhouse and cold frames, propagation area, worm compost bin for kitchen waste, etc. Raised beds are often used in Zone 1 in urban areas.
Zone 2
This area is used for siting perennial plants that require less frequent maintenance, such as occasional weed control or pruning, including currant bushes and orchards, pumpkins, sweet potato, etc. Also a good place for beehives, larger scale composting bins, etc.
Zone 3
The area where main-crops are grown, both for domestic use and for trade purposes. After establishment, care and maintenance required are fairly minimal (provided mulches and similar things are used), such as watering or weed control maybe once a week.
Zone 4
A semi-wild area, mainly used for forage and collecting wild plants as well as production of timber for construction or firewood.
Zone 5
A wilderness area. Humans do not intervene in zone 5 apart from observing natural ecosystems and cycles. This zone hosts a natural reserve of bacteria, moulds and insects that can aid the zones above it.

People care

Photos of the Village Building Convergence event (2020)

Permaculture emphasizes a "sharing and caring" approach built on respect and reciprocity in human relationships rather than a competitive approach. The people care ethic needs attention firstly because of the importance of interpersonal dynamics in permaculture and secondly because the principles of permaculture can be used to effectively create vibrant, healthy, and productive communities through reconnecting humans to nature in regenerative ways. Bill Mollison describes how reconnecting with the Earth is necessary for many people because of ancestral separation:

Tribal peoples are very much aware of, and tied to, their soil and landscapes, so that their mental and physical health depend on these ties being maintained. The rest of us have suffered forcible, historic dislocations from home sites, and many no longer know where their home is, although there are new and conscious moves to reinhabit the earth and to identify with a bioregion as "home."

Implementing permaculture principles may create possibilities for self-healing as well as family and community healing. Permaculture teaches practitioners the lessons of interconnectedness and sustainability. Learning these lessons may increase one's mindfulness; a realization that nothing exists or functions in isolation. Permaculture has been described as a peacebuilding tool for communities that are steeped in conflict.

Discussions of Indigenous ethics in regard to permaculture have concluded that the people care ethic of permaculture is "often missing in Eurocolonialist capitalist societies." A permaculture program in Pembroke, Illinois devised an Indigenous permaculture curriculum to address people care, integrating the Mayan concept of in lak'ech ("I am because you are"), the Lakota concept of mitakuye oyasin ("all my relations"), and the Nguni Bantu concept of ubuntu ("I am because we all are") in their classes.

Cultural change

Permaculture Action Day in Denver (2016)

More than an approach to land management, permaculture is also a worldview or philosophy that emphasizes holistic approaches to life and works to create a wider culture based on these values. The ethics of earth care, people care, and fair share are applied to all facets of life, including areas such as education and administration. David Holmgren writes that permaculture is inherently based in the acknowledgement that an environmental crisis threatening humanity and life as we know it is on the horizon and that, as a result, a cultural change is needed to address this crisis: "the process of providing for people’s needs within ecological limits requires a cultural revolution." Permaculture aims to make people and local communities self-reliant from the industrialized political economy that is responsible for much of the ecological damage on Earth. Holmgren writes:

The fact is that our own comfort is based on the rape of planetary wealth, depriving other people (and future generations) of their own local resources. Our own ‘‘hard work’’ and the so-called ‘‘creativity’’ of our economy and ‘‘fairness’’ of our system of government are all secondary factors in creating our privilege. Once we understand the massive structural inequities between rich and poor nations, urban and rural communities and human resources and natural resources, the emphasis on providing for one’s own needs is seen in a different light. As we reduce our dependence on the global economy and replace it with household and local economies, we reduce the demand that drives current inequities. Thus ‘‘look after yourself first’’ is not an invitation to greed but a challenge to grow up through self-reliance and personal responsibility.

Permaculture involves taking action locally while being conscious of larger global issues. As described by Craig Gibsone and Jan Martin Bang, "we may rail at distant miscarriages of justice, but if we can't do very much about them, we may well be better off doing something about our local situation. That old worn-out phrase, 'think globally, act locally' sits very well with permaculture." Research has found that subsistence farmers practicing permaculture methods are more autonomous than those who rely on the global economy for their essential needs and are therefore less apt to view economic collapse as 'the end of the world'. June Brawner writes, "those who practice subsistence—though often associated with rurality, poverty, and backwardness—are more immune to these threats." The self-reliance of subsistence farmers in the face of economic downturn illustrates that what is commonly interpreted as 'wealthy' is socially constructed. While money is often interpreted as wealth in 'modern' society, this can shift suddenly in times of economic collapse.

Individuals who attempt to adhere to permaculture philosophy may confront obstacles because of modern structural barriers, such as landlessness and private property, as well as ideological barriers, such as the prevalence of opposing worldviews that directly conflict with permaculture principles. For example, permaculture research in San Lucas Tolimán, Guatemala suggested that the land deprivation of local Kaqchikel residents coupled with the indoctrination of evangelicalism obstructed the embrace of permaculture philosophy. In Indigenous or traditional communities, what is referred to as permaculture may already be culturally familiar. For example, a researcher found that in the Bulgarian town of Shipka, permaculture principles were widely viewed as "nothing new." This was because "their ancestors had practiced similar agricultural methods long before the term ‘permaculture’ was invented." Protecting Indigenous traditions from marginalization and destruction is important to permaculture.

Common practices

Agroforestry

Agroforestry in Burkina Faso, with maize under trees

Agroforestry uses the interactive benefits from combining trees and shrubs with crops or livestock. It combines agricultural and forestry technologies to create more diverse, productive, profitable, healthy and sustainable land-use systems. Trees or shrubs are intentionally used within agricultural systems, or non-timber forest products are cultured in forest settings.

Forest gardening/food forests involve systems designed to mimic natural forests. Forest gardens, like other permaculture designs, incorporate processes and relationships that the designers understand to be valuable in natural ecosystems. The Charter of the Forest makes extended use of permaculture ideals and techniques such as forest gardening as they are related to the philosophy of anarchism. It also employs permaculture issues as metaphorical commentary on real-life events, such as referencing the 2020 COVID-19 pandemic timeline in the scene "Pale Rust and An Albino Hawk".

Proponents of forest gardens include Graham Bell, Patrick Whitefield, Dave Jacke, Eric Toensmeier and Geoff Lawton. Bell started building his forest garden in 1991 and wrote The Permaculture Garden in 1995, Whitefield wrote the book How to Make a Forest Garden in 2002, Jacke and Toensmeier co-authored the two volume book set Edible Forest Gardening in 2005, and Lawton presented the film Establishing a Food Forest in 2008.

Tree Gardens, such as Kandyan tree gardens, in South and Southeast Asia, are often hundreds of years old. It is not evident whether they came from agroforestry, or permaculture. Many studies of these systems, especially those that predate the term permaculture, consider these systems to be forms of agroforestry.

Suburban and urban permaculture

South Central Farm was one of the largest urban gardens in the United States before its demolition in 2006.

The fundamental element of suburban and urban permaculture is the efficient utilization of space. Maximizing the space for food production and minimizing wasted space is important. Wildfire journal suggests using methods such as the keyhole garden to address this issue of space. Neighbors can also collaborate with each other to increase the scale of transformation. Sites such as recreation centers, neighborhood associations, city program, faith groups, and schools can become part of a larger social and economic movement. Columbia, an ecovillage in Portland, Oregon consisting of 37 apartment condominiums, influenced surrounding neighbors to implement similar green-minded principals or permaculture, including front-yard gardens. Suburban permaculture sites such as one in Eugene, Oregon include rainwater catchment, edible landscaping, removing paved driveways, turning a garage into living space, changing a south side patio into passive solar, aesthetic features, detached structures.

Transforming vacant lots in suburban and urban settings is a common practice of creating community-managed agriculture or farm sites. However, some of these farm sites are perceived by those in power as temporary or informal solutions to the vacant lot rather than as permanent fixtures of the city. This threatens the fundamental principal of permaculture: permanence. For example, Los Angeles' South Central Farm (1994-2006), which was one of the largest urban gardens in the United States, was bulldozed with approval from property owner Ralph Horowitz, despite large-scale protest from the majority Latino community who had developed deep bonds with the site. Over 40 farmers were arrested and evicted. The land sat empty for over a decade until, in 2019, the city council approved the lot for offices and warehouses.

The possibilities and challenges for developing suburban or urban permaculture differ greatly as a result of how the built environment is designed and property is treated in particular areas of the world. For example, a study comparing the built environment in Jaisalmer, India and Los Angeles, United States concluded that the American planned city is ecologically disastrous:

the application of universal rules regarding set-backs from roads and property lines systematically creates unused and purposeless space as an integral part of the built landscape, well beyond the classic image of the vacant lot. [...] Because these spaces are created in accordance with a general pattern, rather than responding to any local need or desire, many if not most are underutilized, unproductive, and generally maintained as ecologically disastrous lawns by unenthusiastic owners. In this broadest understanding of wasted land, the concept is opened to reveal how our system of urban design gives rise to a ubiquitous pattern of land that, while not usually conceived as vacant, is in fact largely without ecological or social value.

Hügelkultur

Sketch of a Hügelkultur bed.

Hügelkultur is the practice of burying wood to increase soil water retention. The porous structure of wood acts as a sponge when decomposing underground. During the rainy season, sufficient buried wood can absorb enough water to sustain crops through the dry season. This technique is a traditional practice that has been developed over centuries in Europe and has been recently adopted by permaculturalists. The Hügelkultur technique can be implemented through building mounds on the ground as well as in raised garden beds. In raised beds, the practice "imitates natural nutrient cycling found in wood decomposition and the high water holding capacities of organic detritus, while also improving bed structure and drainage properties." This is done by placing wood material (e.g. logs and sticks) in the bottom of the bed before piling organic soil and compost on top. A study comparing the water retention capacities of Hügel raised beds to non-Hügel beds determined that Hügel beds are both lower maintenance and more efficient in the long term by requiring less irrigation.

Vermicomposting

Healthy population of red wigglers in a vermicomposting bin.

Vermicomposting is a common practice in permaculture. The practice involves using earthworms, such as red wigglers, to break down green and brown waste. The worms produce worm castings, which can be used to organically fertilize the garden. Worm castings have been noted to increase plant growth and decrease heavy-metals in the soil. Worms are also introduced to garden beds, helping to aerate the soil and improve water retention. Worms may multiply quickly if provided conditions which are ideal. For example, a permaculture farm in Cuba began with 9 tiger worms in 2001 and 15 years later had a population of over 500,000. The worm castings are particularly useful as part of a seed starting mix and regular fertilizer. Worm castings are reportedly more successful than conventional compost for seed starting.

Natural building

Small cob building with a living roof.

Natural building involves using a range of building systems and materials that apply permaculture principals. The focus is on durability and the use of minimally processed, plentiful or renewable resources, as well as those that, while recycled or salvaged, produce healthy living environments and maintain indoor air quality. For example, cement, a common building material, emits carbon dioxide and is harmful to the environment while natural building works with the environment, using materials that are biodegradable, such as cob, adobe, rammed earth (unburnt clay), and straw bale (which insulates as well as modern synthetic materials).

Natural building attempts to lessen environmental impacts of buildings without sacrificing comfort, health, or aesthetics. Natural building employs abundantly available natural materials (e.g., clay, rock, sand, straw, wood, reeds), and draws heavily on traditional architectural strategies found in various climates. Building compactly and minimizing the ecological footprint is common, as are on-site handling of energy acquisition, on-site water capture, alternate sewage treatment, and water reuse. Most materials are sourced regionally, locally, or even on-site. Roofing coverings often include sod or 'living roofs', thatch, and wooden shakes or shingles. Rubble trench foundations are popular, as they do not require concrete. Likewise, dry-stacked or lime mortared stem walls are common. Natural builders also regularly combine wall systems in a single building, making best use of for example each material's thermal or water resistant properties.

Rainwater harvesting

Rainwater collection is a common practice of permaculture.

Rainwater harvesting is the accumulation and storage of rainwater for reuse before it runs off or reaches the aquifer. It has been used to provide drinking water, water for livestock, and water for irrigation, as well as other typical uses. Rainwater collected from the roofs of houses and local institutions can make an important contribution to the availability of drinking water. It can supplement the water table and increase urban greenery. Water collected from the ground, sometimes from areas which are especially prepared for this purpose, is called stormwater harvesting.

Greywater is wastewater generated from domestic activities such as laundry, dishwashing, and bathing, which can be recycled for uses such as landscape irrigation and constructed wetlands. Greywater is largely sterile, but not potable (drinkable). Greywater differs from water from sewage or blackwater that contains human or animal waste. A permaculture approach to blackwater is composting through a process known as humanure; a portmanteau of human and manure. The methane in humanure can be collected and used similar to natural gas as a fuel, such as for heating or cooking, and is commonly referred to as biogas. Biogas can be harvested from human waste and the remainder used as humanure. The simplest forms of humanure include a composting toilet or an outhouse or dry bog surrounded by trees that are heavy feeders that can be coppiced for wood fuel. This process eliminates the use of a plumbed toilet.

Domesticated animals

A backyard chicken coop.
 
Chicken roaming in an herb garden.

Domesticated animals are often incorporated into site design. Animals are a critical component of any sustainable ecosystem. Research indicates that without animals' contribution, ecological integrity is diminished or lost. Activities that contribute to the system include: foraging to cycle nutrients, clearing fallen fruit, weed maintenance, spreading seeds, and pest maintenance. Nutrients are cycled by animals, transformed from their less digestible form (such as grass or twigs) into more nutrient-dense manure.

Multiple animals can contribute, including cows, goats, chickens, geese, turkey, rabbits, and worms. An example is chickens who can be used to scratch over the soil, thus breaking down the topsoil and using fecal matter as manure. Factors such as timing and habits are critical. For example, animals require much more daily attention than plants.

Vegan permaculture

Vegan permaculture (also known as veganic permaculture, veganiculture, or vegaculture) avoids the use of domesticated animals. It is essentially the same as permaculture except for the addition of a fourth core value; "Animal Care." Zalan Glen, a raw vegan, proposes that vegaculture emerge from permaculture in the same way veganism split from vegetarianism in the 1940s. Vegan permaculture recognizes the importance of free-living animals, rather than domesticated animals, to create a balanced ecosystem. Soil fertility is maintained by the use of green manures, cover crops, green wastes, composted vegetable matter in place of manure.

Sheet mulching

Mulch is a protective cover placed over soil. Mulch material includes stones, leaves, cardboard, wood chips and gravel, although in permaculture mulches of organic material are preferred because they perform more functions. These include absorbing rainfall, reducing evaporation, providing nutrients, increasing soil organic matter, creating habitat for soil organisms, suppressing weed growth and seed germination, moderating diurnal temperature swings, protecting against frost, and reducing erosion. Sheet mulching is a gardening technique that attempts to mimic natural forest processes. Sheet mulching mimics the leaf cover that is found on forest floors. When deployed properly and in combination with other permaculture principles, it can generate healthy, productive and low maintenance ecosystems.

Sheet mulch serves as a "nutrient bank," storing nutrients contained in organic matter and slowly making these nutrients available to plants as the organic matter slowly and naturally breaks down. It also improves the soil by attracting and feeding earthworms, slaters and many other soil micro-organisms, as well as adding humus. Earthworms "till" the soil, and their worm castings are among the best fertilizers and soil conditioners. Sheet mulching can be used to reduce or eliminate non-desired plants by starving them of light, and can surpass herbicide or other methods of control.

Grazing

Grazing is blamed for much destruction. However, when grazing is modeled after nature, it can have the opposite effect. Cell grazing is a system of grazing in which herds or flocks are regularly and systematically moved to fresh range with the intent to maximize forage quality and quantity. Sepp Holzer and Joel Salatin have shown how grazing can start ecological succession or prepare ground for planting. Allan Savory's holistic management technique has been likened to "a permaculture approach to rangeland management". One variation is conservation grazing, were the primary purpose of the animals is to benefit the environment and the animals are not necessarily used for meat, milk or fiber. Sheep can replace lawn mowers. Goats and sheep can eat invasive plants.

Keyline design

Keyline design is a technique for maximizing the beneficial use of water resources. It was developed in Australia by farmer and engineer P. A. Yeomans. Keyline refers to a contour line extending in both directions from a keypoint. Plowing above and below the keyline provides a watercourse that directs water away from a purely downhill course to reduce erosion and encourage infiltration. It is used in designing drainage systems.

Fruit tree management

Some proponents of permaculture advocate heavily restricted pruning. Holzer used the method in connection with Hügelkultur berms. He has grew fruiting trees at altitudes (approximately 9,000 feet (2,700 m)) far above their normal altitude, temperature, and snow load ranges. The Hügelkultur berms kept or generated enough heat to allow the roots to survive during alpine winter conditions. The point of having unpruned branches, he notes, was that the longer (more naturally formed) branches bend over under the snow load until they touched the ground, thus forming a natural arch against snow loads that would break a shorter, pruned, branch.

Masanobu Fukuoka, as part of early experiments on his family farm in Japan, experimented with no-pruning methods, noting that he ended up killing many fruit trees by simply letting them go, which made them become convoluted and tangled, and thus unhealthy. He learned that this is the difference between natural-form trees and previously-pruned fruit trees. He concluded that trees should be raised entirely without pruning, allowing them to form healthy and efficient natural branch patterns. This reflects the Tao-philosophy of Wú wéi translated in part as no-action (against nature). He interpreted this as no unnecessary pruning, nature farming or "do-nothing" farming, of fruit trees, distinct from non-intervention or literal no-pruning. He ultimately achieved yields comparable to or exceeding standard/intensive practices of using pruning and chemical fertilisation.

Marine systems

Harvesting of seaweed in Jambiani, Tanzania.

Permaculture derives its origin from agriculture, although the same principles, especially its foundational ethics, can also be applied to mariculture, particularly seaweed farming. An example is marine permaculture wherein artificial upwelling of cold, deep ocean water is induced. When attachment substrate is provided in association with such an upwelling, and kelp sporophytes are present, a kelp forest ecosystem can be established (kelp needs the cool temperatures and abundant dissolved macronutrients present in such an environment). Microalgae proliferate as well. Marine forest habitat is beneficial for many fish species, and the kelp is a renewable resource for food, animal feed, medicines and various other commercial products. It is also a powerful tool for carbon fixation.

The upwelling can be powered by renewable energy on location. Vertical mixing has been reduced due to ocean stratification effects associated with climate change. The Permian Mass Extinction was thought to have been brought on by such ocean warming, stratification, deoxygenation, wikt:anoxia, and subsequent extinction of 96% of all marine species. Reduced vertical mixing and marine heatwaves have decimated seaweed ecosystems in many areas. Marine permaculture mitigates this by restoring some vertical mixing and preserves these important ecosystems. By preserving and regenerating habitat offshore on a platform, marine permaculture employs natural processes to regenerate marine life.

Intellectual property

Trademark and copyright disputes surround the word permaculture. Mollison's books claimed on the copyright page, "The contents of this book and the word PERMACULTURE are copyright." Eventually Mollison acknowledged that he was mistaken and that no copyright protection existed.

In 2000, Mollison's U.S.-based Permaculture Institute sought a service mark (a form of trademark) for the word permaculture when used in educational services such as conducting classes, seminars, or workshops. The service mark would have allowed Mollison and his two institutes to set enforceable guidelines regarding how permaculture could be taught and who could teach it, particularly with relation to the PDC, despite the fact that he had been certifying teachers since 1993. This attempt failed and was abandoned in 2001. Mollison's application for trademarks in Australia for the terms "Permaculture Design Course" and "Permaculture Design" were withdrawn in 2003. In 2009 he sought a trademark for "Permaculture: A Designers' Manual" and "Introduction to Permaculture", the names of two of his books. These applications were withdrawn in 2011. Australia has never authorized a trademark for the word permaculture.

Criticism

Critics Peter Harper and Rob Scott pushed for less reliance on anecdote and extrapolation from ecological first principles, in favor of peer-reviewed research to substantiate productivity claims and to clarify methodology.

Defenders respond out that permaculture is not yet a mainstream scientific tradition and lacks the resources of traditional agriculture. Ferguson and Lovell point out that permaculturalists rarely engage with mainstream research in agroecology, agroforestry, or ecological engineering, and claim that mainstream science has an elitist or pro-corporate bias.

While there are long-term benefits from permaculture, the short-term decline in agricultural output compared to conventional farming may need to be combined with family planning or a two-child policy in most countries, so that no new farmland is needed for any given population.

Aquaculture

In his books Sustainable Freshwater Aquaculture and Farming in Ponds and Dams, Nick Romanowski expresses the view that the presentation of aquaculture in Bill Mollison's books is unrealistic and misleading.

Agroforestry

Greg Williams argues that forests cannot be more productive than farmland because the net productivity of forests declines as they mature due to ecological succession. Permaculture proponents respond that this is true only when comparing data between woodland forest and climax vegetation, but not when comparing farmland vegetation against woodland forest. For example, ecological succession generally results in rising productivity until it reaches the woodland state (67% tree cover), before declining until full maturity.

Regulation of gene expression

From Wikipedia, the free encyclopedia

Regulation of gene expression by a hormone receptor
 
Diagram showing at which stages in the DNA-mRNA-protein pathway expression can be controlled

Regulation of gene expression, or gene regulation, includes a wide range of mechanisms that are used by cells to increase or decrease the production of specific gene products (protein or RNA). Sophisticated programs of gene expression are widely observed in biology, for example to trigger developmental pathways, respond to environmental stimuli, or adapt to new food sources. Virtually any step of gene expression can be modulated, from transcriptional initiation, to RNA processing, and to the post-translational modification of a protein. Often, one gene regulator controls another, and so on, in a gene regulatory network.

Gene regulation is essential for viruses, prokaryotes and eukaryotes as it increases the versatility and adaptability of an organism by allowing the cell to express protein when needed. Although as early as 1951, Barbara McClintock showed interaction between two genetic loci, Activator (Ac) and Dissociator (Ds), in the color formation of maize seeds, the first discovery of a gene regulation system is widely considered to be the identification in 1961 of the lac operon, discovered by François Jacob and Jacques Monod, in which some enzymes involved in lactose metabolism are expressed by E. coli only in the presence of lactose and absence of glucose.

In multicellular organisms, gene regulation drives cellular differentiation and morphogenesis in the embryo, leading to the creation of different cell types that possess different gene expression profiles from the same genome sequence. Although this does not explain how gene regulation originated, evolutionary biologists include it as a partial explanation of how evolution works at a molecular level, and it is central to the science of evolutionary developmental biology ("evo-devo").

Regulated stages of gene expression

Any step of gene expression may be modulated, from the DNA-RNA transcription step to post-translational modification of a protein. The following is a list of stages where gene expression is regulated, the most extensively utilised point is Transcription Initiation:

Modification of DNA

Histone tails and their function in chromatin formation

In eukaryotes, the accessibility of large regions of DNA can depend on its chromatin structure, which can be altered as a result of histone modifications directed by DNA methylation, ncRNA, or DNA-binding protein. Hence these modifications may up or down regulate the expression of a gene. Some of these modifications that regulate gene expression are inheritable and are referred to as epigenetic regulation.

Structural

Transcription of DNA is dictated by its structure. In general, the density of its packing is indicative of the frequency of transcription. Octameric protein complexes called histones together with a segment of DNA wound around the eight histone proteins (together referred to as a nucleosome) are responsible for the amount of supercoiling of DNA, and these complexes can be temporarily modified by processes such as phosphorylation or more permanently modified by processes such as methylation. Such modifications are considered to be responsible for more or less permanent changes in gene expression levels.

Chemical

Methylation of DNA is a common method of gene silencing. DNA is typically methylated by methyltransferase enzymes on cytosine nucleotides in a CpG dinucleotide sequence (also called "CpG islands" when densely clustered). Analysis of the pattern of methylation in a given region of DNA (which can be a promoter) can be achieved through a method called bisulfite mapping. Methylated cytosine residues are unchanged by the treatment, whereas unmethylated ones are changed to uracil. The differences are analyzed by DNA sequencing or by methods developed to quantify SNPs, such as Pyrosequencing (Biotage) or MassArray (Sequenom), measuring the relative amounts of C/T at the CG dinucleotide. Abnormal methylation patterns are thought to be involved in oncogenesis.

Histone acetylation is also an important process in transcription. Histone acetyltransferase enzymes (HATs) such as CREB-binding protein also dissociate the DNA from the histone complex, allowing transcription to proceed. Often, DNA methylation and histone deacetylation work together in gene silencing. The combination of the two seems to be a signal for DNA to be packed more densely, lowering gene expression.

Regulation of transcription

1: RNA Polymerase, 2: Repressor, 3: Promoter, 4: Operator, 5: Lactose, 6: lacZ, 7: lacY, 8: lacA. Top: The gene is essentially turned off. There is no lactose to inhibit the repressor, so the repressor binds to the operator, which obstructs the RNA polymerase from binding to the promoter and making lactase. Bottom: The gene is turned on. Lactose is inhibiting the repressor, allowing the RNA polymerase to bind with the promoter, and express the genes, which synthesize lactase. Eventually, the lactase will digest all of the lactose, until there is none to bind to the repressor. The repressor will then bind to the operator, stopping the manufacture of lactase.

Regulation of transcription thus controls when transcription occurs and how much RNA is created. Transcription of a gene by RNA polymerase can be regulated by several mechanisms. Specificity factors alter the specificity of RNA polymerase for a given promoter or set of promoters, making it more or less likely to bind to them (i.e., sigma factors used in prokaryotic transcription). Repressors bind to the Operator, coding sequences on the DNA strand that are close to or overlapping the promoter region, impeding RNA polymerase's progress along the strand, thus impeding the expression of the gene. The image to the right demonstrates regulation by a repressor in the lac operon. General transcription factors position RNA polymerase at the start of a protein-coding sequence and then release the polymerase to transcribe the mRNA. Activators enhance the interaction between RNA polymerase and a particular promoter, encouraging the expression of the gene. Activators do this by increasing the attraction of RNA polymerase for the promoter, through interactions with subunits of the RNA polymerase or indirectly by changing the structure of the DNA. Enhancers are sites on the DNA helix that are bound by activators in order to loop the DNA bringing a specific promoter to the initiation complex. Enhancers are much more common in eukaryotes than prokaryotes, where only a few examples exist (to date). Silencers are regions of DNA sequences that, when bound by particular transcription factors, can silence expression of the gene.

Regulation of transcription in cancer

In vertebrates, the majority of gene promoters contain a CpG island with numerous CpG sites. When many of a gene's promoter CpG sites are methylated the gene becomes silenced. Colorectal cancers typically have 3 to 6 driver mutations and 33 to 66 hitchhiker or passenger mutations. However, transcriptional silencing may be of more importance than mutation in causing progression to cancer. For example, in colorectal cancers about 600 to 800 genes are transcriptionally silenced by CpG island methylation. Transcriptional repression in cancer can also occur by other epigenetic mechanisms, such as altered expression of microRNAs. In breast cancer, transcriptional repression of BRCA1 may occur more frequently by over-expressed microRNA-182 than by hypermethylation of the BRCA1 promoter.

Regulation of transcription in addiction

One of the cardinal features of addiction is its persistence. The persistent behavioral changes appear to be due to long-lasting changes, resulting from epigenetic alterations affecting gene expression, within particular regions of the brain. Drugs of abuse cause three types of epigenetic alteration in the brain. These are (1) histone acetylations and histone methylations, (2) DNA methylation at CpG sites, and (3) epigenetic downregulation or upregulation of microRNAs.

Chronic nicotine intake in mice alters brain cell epigenetic control of gene expression through acetylation of histones. This increases expression in the brain of the protein FosB, important in addiction. Cigarette addiction was also studied in about 16,000 humans, including never smokers, current smokers, and those who had quit smoking for up to 30 years. In blood cells, more than 18,000 CpG sites (of the roughly 450,000 analyzed CpG sites in the genome) had frequently altered methylation among current smokers. These CpG sites occurred in over 7,000 genes, or roughly a third of known human genes. The majority of the differentially methylated CpG sites returned to the level of never-smokers within five years of smoking cessation. However, 2,568 CpGs among 942 genes remained differentially methylated in former versus never smokers. Such remaining epigenetic changes can be viewed as “molecular scars” that may affect gene expression.

In rodent models, drugs of abuse, including cocaine, methampheamine, alcohol and tobacco smoke products, all cause DNA damage in the brain. During repair of DNA damages some individual repair events can alter the methylation of DNA and/or the acetylations or methylations of histones at the sites of damage, and thus can contribute to leaving an epigenetic scar on chromatin.

Such epigenetic scars likely contribute to the persistent epigenetic changes found in addiction.

Regulation of transcription in learning and memory

DNA methylation is the addition of a methyl group to the DNA that happens at cytosine. The image shows a cytosine single ring base and a methyl group added on to the 5 carbon. In mammals, DNA methylation occurs almost exclusively at a cytosine that is followed by a guanine.

In mammals, methylation of cytosine (see Figure) in DNA is a major regulatory mediator. Methylated cytosines primarily occur in dinucleotide sequences where cytosine is followed by a guanine, a CpG site. The total number of CpG sites in the human genome is approximately 28 million. and generally about 70% of all CpG sites have a methylated cytosine.

The identified areas of the human brain are involved in memory formation.

In a rat, a painful learning experience, contextual fear conditioning, can result in a life-long fearful memory after a single training event. Cytosine methylation is altered in the promoter regions of about 9.17% of all genes in the hippocampus neuron DNA of a rat that has been subjected to a brief fear conditioning experience. The hippocampus is where new memories are initially stored.

Methylation of CpGs in a promoter region of a gene represses transcription while methylation of CpGs in the body of a gene increases expression. TET enzymes play a central role in demethylation of methylated cytosines. Demethylation of CpGs in a gene promoter by TET enzyme activity increases transcription of the gene.

When contextual fear conditioning is applied to a rat, more than 5,000 differentially methylated regions (DMRs) (of 500 nucleotides each) occur in the rat hippocampus neural genome both one hour and 24 hours after the conditioning in the hippocampus. This causes about 500 genes to be up-regulated (often due to demethylation of CpG sites in a promoter region) and about 1,000 genes to be down-regulated (often due to newly formed 5-methylcytosine at CpG sites in a promoter region). The pattern of induced and repressed genes within neurons appears to provide a molecular basis for forming the first transient memory of this training event in the hippocampus of the rat brain.

Post-transcriptional regulation

After the DNA is transcribed and mRNA is formed, there must be some sort of regulation on how much the mRNA is translated into proteins. Cells do this by modulating the capping, splicing, addition of a Poly(A) Tail, the sequence-specific nuclear export rates, and, in several contexts, sequestration of the RNA transcript. These processes occur in eukaryotes but not in prokaryotes. This modulation is a result of a protein or transcript that, in turn, is regulated and may have an affinity for certain sequences.

Three prime untranslated regions and microRNAs

Three prime untranslated regions (3'-UTRs) of messenger RNAs (mRNAs) often contain regulatory sequences that post-transcriptionally influence gene expression. Such 3'-UTRs often contain both binding sites for microRNAs (miRNAs) as well as for regulatory proteins. By binding to specific sites within the 3'-UTR, miRNAs can decrease gene expression of various mRNAs by either inhibiting translation or directly causing degradation of the transcript. The 3'-UTR also may have silencer regions that bind repressor proteins that inhibit the expression of a mRNA.

The 3'-UTR often contains miRNA response elements (MREs). MREs are sequences to which miRNAs bind. These are prevalent motifs within 3'-UTRs. Among all regulatory motifs within the 3'-UTRs (e.g. including silencer regions), MREs make up about half of the motifs.

As of 2014, the miRBase web site, an archive of miRNA sequences and annotations, listed 28,645 entries in 233 biologic species. Of these, 1,881 miRNAs were in annotated human miRNA loci. miRNAs were predicted to have an average of about four hundred target mRNAs (affecting expression of several hundred genes). Freidman et al. estimate that >45,000 miRNA target sites within human mRNA 3'-UTRs are conserved above background levels, and >60% of human protein-coding genes have been under selective pressure to maintain pairing to miRNAs.

Direct experiments show that a single miRNA can reduce the stability of hundreds of unique mRNAs. Other experiments show that a single miRNA may repress the production of hundreds of proteins, but that this repression often is relatively mild (less than 2-fold).

The effects of miRNA dysregulation of gene expression seem to be important in cancer. For instance, in gastrointestinal cancers, a 2015 paper identified nine miRNAs as epigenetically altered and effective in down-regulating DNA repair enzymes.

The effects of miRNA dysregulation of gene expression also seem to be important in neuropsychiatric disorders, such as schizophrenia, bipolar disorder, major depressive disorder, Parkinson's disease, Alzheimer's disease and autism spectrum disorders.

Regulation of translation

The translation of mRNA can also be controlled by a number of mechanisms, mostly at the level of initiation. Recruitment of the small ribosomal subunit can indeed be modulated by mRNA secondary structure, antisense RNA binding, or protein binding. In both prokaryotes and eukaryotes, a large number of RNA binding proteins exist, which often are directed to their target sequence by the secondary structure of the transcript, which may change depending on certain conditions, such as temperature or presence of a ligand (aptamer). Some transcripts act as ribozymes and self-regulate their expression.

Examples of gene regulation

  • Enzyme induction is a process in which a molecule (e.g., a drug) induces (i.e., initiates or enhances) the expression of an enzyme.
  • The induction of heat shock proteins in the fruit fly Drosophila melanogaster.
  • The Lac operon is an interesting example of how gene expression can be regulated.
  • Viruses, despite having only a few genes, possess mechanisms to regulate their gene expression, typically into an early and late phase, using collinear systems regulated by anti-terminators (lambda phage) or splicing modulators (HIV).
  • Gal4 is a transcriptional activator that controls the expression of GAL1, GAL7, and GAL10 (all of which code for the metabolic of galactose in yeast). The GAL4/UAS system has been used in a variety of organisms across various phyla to study gene expression.

Developmental biology

A large number of studied regulatory systems come from developmental biology. Examples include:

  • The colinearity of the Hox gene cluster with their nested antero-posterior patterning
  • Pattern generation of the hand (digits - interdigits): the gradient of sonic hedgehog (secreted inducing factor) from the zone of polarizing activity in the limb, which creates a gradient of active Gli3, which activates Gremlin, which inhibits BMPs also secreted in the limb, results in the formation of an alternating pattern of activity as a result of this reaction-diffusion system.
  • Somitogenesis is the creation of segments (somites) from a uniform tissue (Pre-somitic Mesoderm). They are formed sequentially from anterior to posterior. This is achieved in amniotes possibly by means of two opposing gradients, Retinoic acid in the anterior (wavefront) and Wnt and Fgf in the posterior, coupled to an oscillating pattern (segmentation clock) composed of FGF + Notch and Wnt in antiphase.
  • Sex determination in the soma of a Drosophila requires the sensing of the ratio of autosomal genes to sex chromosome-encoded genes, which results in the production of sexless splicing factor in females, resulting in the female isoform of doublesex.

Circuitry

Up-regulation and down-regulation

Up-regulation is a process that occurs within a cell triggered by a signal (originating internal or external to the cell), which results in increased expression of one or more genes and as a result the protein(s) encoded by those genes. Conversely, down-regulation is a process resulting in decreased gene and corresponding protein expression.

  • Up-regulation occurs, for example, when a cell is deficient in some kind of receptor. In this case, more receptor protein is synthesized and transported to the membrane of the cell and, thus, the sensitivity of the cell is brought back to normal, reestablishing homeostasis.
  • Down-regulation occurs, for example, when a cell is overstimulated by a neurotransmitter, hormone, or drug for a prolonged period of time, and the expression of the receptor protein is decreased in order to protect the cell.

Inducible vs. repressible systems

Gene Regulation can be summarized by the response of the respective system:

  • Inducible systems - An inducible system is off unless there is the presence of some molecule (called an inducer) that allows for gene expression. The molecule is said to "induce expression". The manner by which this happens is dependent on the control mechanisms as well as differences between prokaryotic and eukaryotic cells.
  • Repressible systems - A repressible system is on except in the presence of some molecule (called a corepressor) that suppresses gene expression. The molecule is said to "repress expression". The manner by which this happens is dependent on the control mechanisms as well as differences between prokaryotic and eukaryotic cells.

The GAL4/UAS system is an example of both an inducible and repressible system. Gal4 binds an upstream activation sequence (UAS) to activate the transcription of the GAL1/GAL7/GAL10 cassette. On the other hand, a MIG1 response to the presence of glucose can inhibit GAL4 and therefore stop the expression of the GAL1/GAL7/GAL10 cassette.

Theoretical circuits

  • Repressor/Inducer: an activation of a sensor results in the change of expression of a gene
  • negative feedback: the gene product downregulates its own production directly or indirectly, which can result in
    • keeping transcript levels constant/proportional to a factor
    • inhibition of run-away reactions when coupled with a positive feedback loop
    • creating an oscillator by taking advantage in the time delay of transcription and translation, given that the mRNA and protein half-life is shorter
  • positive feedback: the gene product upregulates its own production directly or indirectly, which can result in
    • signal amplification
    • bistable switches when two genes inhibit each other and both have positive feedback
    • pattern generation

Study methods

In general, most experiments investigating differential expression used whole cell extracts of RNA, called steady-state levels, to determine which genes changed and by how much. These are, however, not informative of where the regulation has occurred and may mask conflicting regulatory processes, but it is still the most commonly analysed (quantitative PCR and DNA microarray).

When studying gene expression, there are several methods to look at the various stages. In eukaryotes these include:

  • The local chromatin environment of the region can be determined by ChIP-chip analysis by pulling down RNA Polymerase II, Histone 3 modifications, Trithorax-group protein, Polycomb-group protein, or any other DNA-binding element to which a good antibody is available.
  • Epistatic interactions can be investigated by synthetic genetic array analysis
  • Due to post-transcriptional regulation, transcription rates and total RNA levels differ significantly. To measure the transcription rates nuclear run-on assays can be done and newer high-throughput methods are being developed, using thiol labelling instead of radioactivity.
  • Only 5% of the RNA polymerised in the nucleus exits, and not only introns, abortive products, and non-sense transcripts are degradated. Therefore, the differences in nuclear and cytoplasmic levels can be see by separating the two fractions by gentle lysis.
  • Alternative splicing can be analysed with a splicing array or with a tiling array.
  • All in vivo RNA is complexed as RNPs. The quantity of transcripts bound to specific protein can be also analysed by RIP-Chip. For example, DCP2 will give an indication of sequestered protein; ribosome-bound gives and indication of transcripts active in transcription (although a more dated method, called polysome fractionation, is still popular in some labs)
  • Protein levels can be analysed by Mass spectrometry, which can be compared only to quantitative PCR data, as microarray data is relative and not absolute.
  • RNA and protein degradation rates are measured by means of transcription inhibitors (actinomycin D or α-amanitin) or translation inhibitors (Cycloheximide), respectively.

Social ownership

From Wikipedia, the free encyclopedia

Social ownership is a form of common ownership for the means of production in socialist economic systems. These systems may encompass state ownership, employee ownership, cooperative ownership, and citizen ownership of equity. Historically, social ownership implied that capital and factor markets would cease to exist under the assumption that market exchanges within the production process would be made redundant if capital goods were owned by a single entity or network of entities representing society, but the articulation of models of market socialism where factor markets are utilized for allocating capital goods between socially owned enterprises broadened the definition to include autonomous entities within a market economy. Social ownership of the means of production is the common defining characteristic of all the various forms of socialism.

The two major forms of social ownership are society-wide public ownership and cooperative ownership. The distinction between these two forms lies in the distribution of the surplus product. With society-wide public ownership, the surplus is distributed to all members of the public through a social dividend whereas with co-operative ownership the economic surplus of an enterprise is controlled by all the worker-members of that specific enterprise.

The goal of social ownership is to eliminate the distinction between the class of private owners who are the recipients of passive property income and workers who are the recipients of labor income (wages, salaries and commissions), so that the surplus product (or economic profits in the case of market socialism) belong either to society as a whole or to the members of a given enterprise. Social ownership would enable productivity gains from labor automation to progressively reduce the average length of the working day instead of creating job insecurity and unemployment. Reduction of necessary work time is central to the Marxist concept of human freedom and overcoming alienation, a concept widely shared by Marxist and non-Marxist socialists alike.

Socialization as a process is the restructuring the economic framework, organizational structure and institutions of an economy on a socialist basis. The comprehensive notion of socialization and the public ownership form of social ownership implies an end to the operation of the laws of capitalism, capital accumulation and the use of money and financial valuation in the production process, along with a restructuring of workplace-level organization.

Objectives

Social ownership is variously advocated to end the Marxian concept of exploitation, to ensure that income distribution reflects individual contributions to the social product, to eliminate unemployment arising from technological change, to ensure a more egalitarian distribution of the economy's surplus, or to create the foundations for a non-market socialist economy.

In Karl Marx's analysis of capitalism, social ownership of the means of production emerges in response to the contradictions between socialized production and private appropriation of surplus value in capitalism. Marx argued that productivity gains arising from the substitution of variable capital (labor inputs) for constant capital (capital inputs) would cause labor displacement to outstrip the demand for labor. This process would lead to stagnant wages and rising unemployment for the working class alongside rising property income for the capitalist class, further leading to an over-accumulation of capital. Marx argued that this dynamic would reach a point where social ownership of the highly automated means of production would be necessitated to resolve this contradiction and resulting social strife. Thus the Marxist case for social ownership and socialism is not based on any moral critique of the distribution of property income (wealth) in capitalism, but rather the Marxist case for socialism is based on a systematic analysis of the development and limits of the dynamic of capital accumulation.

For Marx, social ownership would lay the foundations for the transcendence of the capitalist law of value and the accumulation of capital, thereby creating the foundation for socialist planning. The ultimate goal of social ownership of productive property for Marx was to expand the "realm of freedom" by shortening average work hours so that individuals would have progressively larger portion of their time to pursue their genuine and creative interests. Thus the end goal of social ownership is the transcendence of the Marxist concept of alienation.

The economist David McMullen identifies five major benefits of social ownership, where he defines it as society-wide ownership of productive property: first, workers would be more productive and have greater motivation since they would directly benefit from increased productivity, secondly this ownership stake would enable greater accountability on the part of individuals and organizations, thirdly social ownership would eliminate unemployment, fourth it would enable the better flow of information within the economy, and finally it would eliminate wasteful activities associated with "wheeling and dealing" and wasteful government activities intended to curb such behavior and deal with unemployment.

From a non-Marxist, market socialist perspective, the clearest benefit of social ownership is an equalization of the distribution of property income, eliminating the vast disparities in wealth that arise from private ownership under capitalism. Property income (profit, interest and rent) is distinguished from labor income (wages and salaries) which in a socialist system would continue to be unequal based on one's marginal product of labor – social ownership would only equalize passive property income.

Notable non-Marxist and Marxist socialist theorists alike have argued that the most significant argument for social ownership of the means of production is to enable productivity gains to ease the work burden for all individuals in society, resulting in progressively shorter hours of work with increasing automation and thus a greater amount of free time for individuals to engage in creative pursuits and leisure.

Criticism of private ownership

Social ownership is contrasted with the concept of private ownership and is promoted as a solution to what its proponents see as being inherent issues to private ownership. Market socialists and non-market socialists therefore have slightly different conceptions of social ownership. The former believe that private ownership and private appropriation of property income is the fundamental issue with capitalism, and thus believe that the process of capital accumulation and profit-maximizing enterprise can be retained, with their profits being used to benefit society in the form of a social dividend. By contrast, non-market socialists argue that the major problems with capitalism arise from its contradictory economic laws that make it unsustainable and historically limited. Therefore, social ownership is seen as a component of the establishment of non-market coordination and alternative "socialist laws of motion" that overcome the systemic issues of capital accumulation.

The socialist critique of private ownership is heavily influenced by the Marxian analysis of capitalist property forms as part of its broader critique of alienation and exploitation in capitalism. Although there is considerable disagreement among socialists about the validity of certain aspects of Marxian analysis, the majority of socialists are sympathetic to Marx's views on exploitation and alienation. Socialists critique the private appropriation of property income on the grounds that because such income does not correspond to a return on any productive activity and is generated by the working class, it represents exploitation. The property-owning (capitalist) class lives off passive property income produced by the working population by virtue of their claim to ownership in the form of stock, bonds or private equity. This exploitative arrangement is perpetuated due to the structure of capitalist society. From this perspective, capitalism is regarded as class system akin to historical class systems like slavery and feudalism.

Private ownership has also been criticized on ethical grounds by the economist James Yunker. Yunker argues that because passive property income requires no mental or physical exertion on the part of the recipient and because its appropriation by a small group of private owners is the source of the vast inequalities in contemporary capitalism, this establishes the ethical case for social ownership and socialist transformation.

Socialization as a process

Socialization is conceived as a process that transforms the economic processes and, by extension, the social relations within an economy. As such, it is distinct from the process of "nationalization" which does not necessarily imply a transformation of the organizational structure of organizations or the transformation of the economic framework under which economic organizations operate.

Marxists envision socialization as a restructuring of social relations to overcome alienation, replacing hierarchical social relations within the workplace with an association of members.

Socialization debates

During the 1920s, socialists in Austria and Germany were engaged in a comprehensive dialogue about the nature of socialization and how a program of socialization could be effectively carried out. Austrian scientific thinkers whose ideas were based on Ernst Mach's empiricist notion of energy and technological optimism, including Josef Popper-Lynkeus and Carl Ballod, proposed plans for rational allocation of exhaustible energy and materials through statistical empirical methods. This conception of non-capitalist calculation involved the use of energy and time units, the latter being viewed as the standard cardinal unity of measurement for socialist calculation. These thinkers belonged to a technical school of thought called "scientific utopianism", which is an approach to social engineering that explores possible forms of social organization.

The most notable thinker belonging to this school of thought was the Viennese philosopher and economist Otto Neurath, whose conception of socialism as a natural, non-monetary economic system became widespread within the socialist movement following the end of World War I. Neurath's position was held in contrast to other socialists in this period, including the revisionist perspective stemming from Eduard Bernstein, the orthodox social democratic perspective of Karl Kautsky, the Austro-Marxism models of labor-time calculation from Otto Bauer and the emerging school of neoclassical market socialism. Neurath's position opposed all models of market socialism because it rejected the use of money, but was also held in contrast with the more orthodox Marxist conception of socialism held by Karl Kautsky, where socialism only entails the elimination of money as capital along with super-session of the process of capital accumulation.

Otto Neurath conceptualized a comprehensive view of socialization during the socialization debates. "Total socialization" involved not only a form of ownership but also the establishment of economic planning based on calculation in kind, and was contrasted with "partial socialization". "Partial socialization" involved the use of in-kind calculation and planning within a single organization, which externally operated within the framework of a monetary market economy. Neurath's conception of socialism was the initial point of criticism of Ludwig von Mises in the socialist calculation debate.

In the subsequent socialist calculation debates, a dichotomy between socialists emerged between those who argued that socialization entailed the end of monetary valuation and capital markets, and those who argued that monetary prices could be used within a socialized economy. A further distinction arose between market socialists who argued that social ownership can be achieved within the context of a market economy, where worker-owned or publicly owned enterprises maximized profit and those who argued that socially owned enterprises operate according to other criteria, like marginal cost pricing.

Typology

Social ownership and socialization is categorically distinct from the process of nationalization. In most cases, "socialization" is understood to be a deeper process of transforming the social relations of production within economic organizations as opposed to simply changing titles of ownership. In this sense, "socialization" often involves both a change in ownership and a change in organizational management, including self-management or some form of workplace democracy in place of a strict hierarchical form of control. More fundamentally, social ownership implies that the surplus product (or economic profits) generated by publicly owned enterprise accrues to all of society – state ownership does not necessarily imply this.

Fundamentally, there are two major forms of "social ownership":

  • Society-wide public ownership by an entity or network of entities representing society.
  • Employee-owned cooperative enterprise, with the members of each individual enterprise being co-owners of their organization. These possibilities give rise to a socialization dilemma, faced by advocates of public ownership: if social ownership is entrusted exclusively to state agents, then it is liable to bureaucratization; if it is entrusted exclusively to workers, then it is liable to monopoly power and abuse of market position.

Additionally, there are two major forms of management or "social control" for socially owned organizations, both of which can exist alongside the two major modes of social ownership. The first variant of control is public management, where enterprises are run by management held accountable to an agency representing the public either at the level of national, regional or local government. The second form of social control is worker self-management, where managers are elected by the member-workers of each individual enterprise or enterprises are run according to self-directed work processes.

The exact forms of social ownership vary depending on whether or not they are conceptualized as part of a market economy or as part of a non-market planned economy.

Public ownership

Public ownership can exist both within the framework of a market economy and within the framework of a non-market planned economy.

In market socialist proposals, public ownership takes the form of state-owned enterprises that acquire capital goods in capital markets and operate to maximize profits, which are then distributed among the entire population in the form of a social dividend.

In non-market models of socialism, public ownership takes the form of a single entity or a network of public entities coordinated by economic planning. A contemporary approach to socialism involves linking together production and distribution units by modern computers to achieve rapid feedback in the allocation of capital inputs to achieve efficient economic planning.

The economist Alec Nove defines social ownership as a form of autonomous public ownership, drawing a distinction between state-owned and directed enterprises. Nove advocates for the existence of both forms of enterprise in his model of feasible socialism.

Public ownership was advocated by neoclassical socialist economists during the interwar socialist calculation debate, most notable Oskar Lange, Fred M. Taylor, Abba P. Lerner and Maurice Dobb. Neoclassical market socialist economists in the latter half of the 20th century who advocated public ownership highlighted the distinction between "control" and "ownership". John Roemer and Pranab Bardhan argued that public ownership, meaning a relatively egalitarian distribution of enterprise profits, does not require state control as publicly owned enterprises can be controlled by agents who do not represent the state.

David McMullen's concept of decentralized non-market socialism advocates social ownership of the means of production, believing it to be far more efficient than private ownership. In his proposal, property titles would be replaced by "usership" rights and the exchange of capital goods would no longer be possible. Market exchange in capital goods would be replaced by internal transfers of resources, but an internal and decentralized price system would be fundamental to this systems' operation.

However, by itself public ownership is not socialist as it can exist under a wide variety of different political and economic systems. State ownership by itself does not imply social ownership where income rights belong to society as a whole. As such, state ownership is only one possible expression of public ownership, which itself is one variation of the broader concept of social ownership.

Social ownership of equity

The social ownership of capital and corporate stock has been proposed in the context of a market socialist system, where social ownership is achieved either by having a public body or employee-owned pension funds that own corporate stock.

The American economist John Roemer developed a model of market socialism that features a form of public ownership where individuals receive a non-transferable coupon entitling them to a share of the profits generated by autonomous non-governmental publicly owned enterprises. In this model, "social ownership" refers to citizen ownership of equity in a market economy.

James Yunker argues that public ownership of the means of production can be achieved in the same way private ownership is achieved in modern capitalism, using the shareholder system that effectively separates management from ownership. Yunker posits that social ownership can be achieved by having a public body, designated the Bureau of Public Ownership (BPO), own the shares of publicly listed firms without affecting market-based allocation of capital inputs. Yunker termed this model Pragmatic market socialism and argued that it would be at least as efficient as modern-day capitalism while providing superior social outcomes as public ownership would enable profits to be distributed among the entire population rather than going largely to a class of inheriting rentiers.

An alternative form of social ownership of equity is ownership of corporate stock through wage earner funds and pension funds. The underlying concept was first expounded upon in 1976 by the management theorist Peter Drucker, who argued that pension funds could reconcile employees' need for financial security with capital's need to be mobile and diversified, referring to this development as "pension fund socialism".

In Sweden during the late 1970s, the Meidner program was advanced by the Swedish Social Democratic Party as a way to socialize enterprises through employee wage earners' funds, which would be used to purchase corporate stock. Rudolf Meidner's original plan was to require Swedish companies over a certain size to issue shares equal to 20 percent of profits, which would be owned by wage-earner funds controlled by employees through their trade unions. This plan was rejected and a watered-down proposal was adopted in 1984, which left corporate decision making just as it was and limited the scope of employee ownership to less than 3.5% of listed company shares in 1990.

In his 2020 Presidential campaign, Bernie Sanders proposed that 20% of stocks in corporations with over $100 million in annual revenue be owned by the corporation's workers.

Cooperative ownership

Cooperative ownership is the organization of economic units into enterprises owned by their workforce (workers cooperative) or by customers who use the products of the enterprise (this latter concept is called a consumer cooperative). Cooperatives are often organized around some form of self-management, either in the form of elected managers held accountable to the workforce, or in the form of direct management of work processes by the workers themselves. Cooperatives are often proposed by proponents of market socialism, most notably by the economists Branko Horvat, Jaroslav Vanek and Richard Wolff.

Cooperative ownership comes in various forms, ranging from direct workers' ownership, employee stock ownership plans through pension funds, to the weakest version involving profit sharing. Profit-sharing and varying degrees of self-management or "Holacracy" is practiced in many of the high-technology companies of Silicon Valley.

The earliest model of cooperative socialism is mutualism, proposed by the French anarchist philosopher Pierre-Joseph Proudhon. In this system, the state would be abolished and economic enterprises would be owned and operated as producer cooperatives, with worker-members compensated in labor vouchers.

The model of market socialism promoted in the former Socialist Federal Republic of Yugoslavia was based on what was officially called "social ownership", involving an arrangement where workers of each firm each became members and joint-owners and managed their own affairs in a system of workers' self-management.

Contemporary proponents of cooperative ownership cite higher motivation and performance in existing cooperatives. Critics argue that cooperative ownership by itself does not resolve the structural issues of capitalism like economic crises and the business cycle, and that cooperatives have an incentive to limit employment in order to boost the income of existing members.

Commons and peer-to-peer

In the context of non-market proposals, social ownership can include holding the means of producing wealth in common (common ownership), with the concept of "usership" replacing the concept of ownership. Commons-based peer production involves the distribution of a critical mass of inputs and all outputs through information networks as free goods rather than commodities to be sold for profit by capitalist firms.

The economist Pat Devine defines social ownership as "ownership by those who are affected by – who have an interest in – the use of the assets involved", distinguishing it from other forms of ownership. Devine argues that this variant of social ownership will be more efficient than the other types of ownership because "it enables the tacit knowledge of all those affected to be drawn upon in the process of negotiating what should be done to further the social interest in any particular context".

The phrases "social production" and "social peer-to-peer" production have been used to classify the type of workplace relationships and ownership structures found in the open-source software movement and Commons-based peer production processes, which operate, value and allocate value without private property and market exchange.

Ownership in Soviet-type economies

In Soviet-type economies, the means of production and natural resources were almost entirely owned by the state and collective enterprises. State enterprises were integrated into a national planning system, where factor inputs were allocated to them by the Ministry for Technical Supply (Gossnab).

According to The Great Soviet Encyclopedia, "socialist ownership" is a form of social ownership that forms the basis for the socialist system, involving the collective appropriation of material wealth by working people. Social ownership arises out of the course of capitalist development, creating the objective conditions for further socialist transformation and for the emergence of a planned economy with the aim of raising the living standards for everyone in society.

Misuse of the term

Particularly in the United States, the term socialization has been mistakenly used to refer to any state or government-operated industry or service (the proper term for such being either nationalization or municipalization). It has also been incorrectly used to mean any tax-funded programs, whether privately run or government run.

Public company

From Wikipedia, the free encyclopedia

Replica of an East Indiaman of the Dutch East India Company/United East Indies Company. The Dutch East India Company (also known by the abbreviation "VOC" in Dutch), the world's first formally listed public company, started off as a spice trader. In 1602 the VOC undertook the world's first recorded IPO. "Going public" enabled the company to raise the vast sum of 6.5 million guilders quickly.

A public company, publicly traded company, publicly held company, publicly listed company, or public limited company is a company whose ownership is organized via shares of stock which are intended to be freely traded on a stock exchange or in over-the-counter markets. A public company can be listed on a stock exchange (listed company), which facilitates the trade of shares, or not (unlisted public company). In some jurisdictions, public companies over a certain size must be listed on an exchange.

Public companies are formed within the legal systems of particular states, and therefore have associations and formal designations which are distinct and separate in the polity in which they reside. In the United States, for example, a public company is usually a type of corporation (though a corporation need not be a public company), in the United Kingdom it is usually a public limited company (plc), in France a "société anonyme" (SA), and in Germany an Aktiengesellschaft (AG). While the general idea of a public company may be similar, differences are meaningful, and are at the core of international law disputes with regard to industry and trade.

History

Courtyard of the Amsterdam Stock Exchange (or Beurs van Hendrick de Keyser in Dutch), the world's first formal stock exchange. Modern-day publicly listed multinational corporations (including Forbes Global 2000 companies), in many respects, are all 'descendants' of a business model pioneered by the Dutch East India Company (VOC) in the 17th century.
 
One of the oldest known stock certificates, issued by the VOC chamber of Enkhuizen, dated 9 Sep 1606

In the early modern period, the Dutch developed several financial instruments and helped lay the foundations of the modern financial system. The Dutch East India Company (VOC) became the first company in history to issue bonds and shares of stock to the general public. In other words, the VOC was officially the first publicly traded company, because it was the first company ever to be actually listed on an official stock exchange. While the Italian city-states produced the first transferable government bonds, they did not develop the other ingredients necessary to produce a fully fledged capital market: corporate shareholders. As Edward Stringham (2015) notes, "companies with transferable shares date back to classical Rome, but these were usually not enduring endeavors and no considerable secondary market existed (Neal, 1997, p. 61)."

Securities of a company

Usually, the securities of a publicly traded company are owned by many investors while the shares of a privately held company are owned by relatively few shareholders. A company with many shareholders is not necessarily a publicly traded company. In the United States, in some instances, companies with over 500 shareholders may be required to report under the Securities Exchange Act of 1934; companies that report under the 1934 Act are generally deemed public companies.

Advantages

Public companies possess some advantages over privately held businesses.

  • Publicly traded companies are able to raise funds and capital through the sale (in the primary or secondary market) of shares of stock. This is the reason publicly traded corporations are important; prior to their existence, it was very difficult to obtain large amounts of capital for private enterprises - significant capital could only come from a smaller set of wealthy investors or banks willing to risk typically large investments. The profit on stock is gained in form of dividend or capital gain to the holders.
  • The financial media, analysts, and the public are able to access additional information about the business, since the business is commonly legally bound, and naturally motivated (so as to secure further capital), to publicly disseminate information regarding the financial status and future of the company to its many shareholders and the government.
  • Because many people have a vested interest in the company's success, the company may be more popular or recognizable than a private company.
  • The initial shareholders of the company are able to share risk by selling shares to the public. If one were to hold a 100% share of the company, he or she would have to pay all of the business's debt; however, if an individual were to hold a 50% share, they would only need to pay 50% of the debt. This increases asset liquidity and the company does not need to depend on funding from a bank. For example, in 2013 Facebook founder Mark Zuckerberg owned 29.3% of the company's class A shares, which gave him enough voting power to control the business, while allowing Facebook to raise capital from, and distribute risk to, the remaining shareholders. Facebook was a privately held company prior to its initial public offering in 2012.
  • If some shares are given to managers or other employees, potential conflicts of interest between employees and shareholders (an instance of principal-agent problem) will be remitted. As an example, in many tech companies, entry-level software engineers are given stock in the company upon being hired (thus they become shareholders). Therefore, the engineers have a vested interest in the company succeeding financially, and are incentivized to work harder and more diligently to ensure that success.

Disadvantages

Many stock exchanges require that publicly traded companies have their accounts regularly audited by outside auditors, and then publish the accounts to their shareholders. Besides the cost, this may make useful information available to competitors. Various other annual and quarterly reports are also required by law. In the United States, the Sarbanes–Oxley Act imposes additional requirements. The requirement for audited books is not imposed by the exchange known as OTC Pink. The shares may be maliciously held by outside shareholders and the original founders or owners may lose benefits and control. The principal-agent problem, or the agency problem is a key weakness of public companies. The separation of a company's ownership and control is especially prevalent in such countries as the UK and the US.

Stockholders

In the United States, the Securities and Exchange Commission requires that firms whose stock is traded publicly report their major shareholders each year. The reports identify all institutional shareholders (primarily, firms owning stock in other companies), all company officials who own shares in their firm, and any individual or institution owning more than 5% of the firm's stock.

General trend

For many years, newly created companies were privately held but held initial public offering to become publicly traded company or to be acquired by another company if they became larger and more profitable or had promising prospects. More infrequently, some companies — such as investment banking firm Goldman Sachs and logistics services provider United Parcel Service (UPS) — chose to remain privately held for a long period of time after maturity into a profitable company.

However, from 1997 to 2012, the number of corporations publicly traded on American stock exchanges dropped 45%. According to one observer (Gerald F. Davis), "public corporations have become less concentrated, less integrated, less interconnected at the top, shorter lived, less remunerative for average investors, and less prevalent since the turn of the 21st century". Davis argues that technological changes such as the decline in price and increasing power, quality and flexibility of computer Numerical control machines and newer digitally enabled tools such as 3D printing will lead to smaller and more local organization of production.

Privatization

A group of private investors or another company that is privately held can buy out the shareholders of a public company, taking the company private. This is typically done through a leveraged buyout and occurs when the buyers believe the securities have been undervalued by investors. In some cases, public companies that are in severe financial distress may also approach a private company or companies to take over ownership and management of the company. One way of doing this would be to make a rights issue designed to enable the new investor to acquire a supermajority. With a super-majority, the company could then be relisted, i.e. privatized.

Alternatively, a publicly traded company may be purchased by one or more other publicly traded companies, with the target company becoming either a subsidiary or joint venture of the purchaser(s), or ceasing to exist as a separate entity, its former shareholders receiving compensation in the form of either cash, shares in the purchasing company or a combination of both. When the compensation is primarily shares then the deal is often considered a merger. Subsidiaries and joint ventures can also be created de novo — this often happens in the financial sector. Subsidiaries and joint ventures of publicly traded companies are not generally considered to be privately held companies (even though they themselves are not publicly traded) and are generally subject to the same reporting requirements as publicly traded companies. Finally, shares in subsidiaries and joint ventures can be (re)-offered to the public at any time — firms that are sold in this manner are called spin-outs.

Most industrialized jurisdictions have enacted laws and regulations that detail the steps that prospective owners (public or private) must undertake if they wish to take over a publicly traded corporation. This often entails the would-be buyer(s) making a formal offer for each share of the company to shareholders.

Trading and valuation

The shares of a publicly traded company are often traded on a stock exchange. The value or "size" of a company is called its market capitalization, a term which is often shortened to "market cap". This is calculated as the number of shares outstanding (as opposed to authorized but not necessarily issued) times the price per share. For example, a company with two million shares outstanding and a price per share of US$40 has a market capitalization of US$80 million. However, a company's market capitalization should not be confused with the fair market value of the company as a whole since the price per share are influenced by other factors such as the volume of shares traded. Low trading volume can cause artificially low prices for securities, due to investors being apprehensive of investing in a company they perceive as possibly lacking liquidity.

For example, if all shareholders were to simultaneously try to sell their shares in the open market, this would immediately create downward pressure on the price for which the share is traded unless there were an equal number of buyers willing to purchase the security at the price the sellers demand. So, sellers would have to either reduce their price or choose not to sell. Thus, the number of trades in a given period of time, commonly referred to as the "volume" is important when determining how well a company's market capitalization reflects true fair market value of the company as a whole. The higher the volume, the more the fair market value of the company is likely to be reflected by its market capitalization.

Another example of the impact of volume on the accuracy of market capitalization is when a company has little or no trading activity and the market price is simply the price at which the most recent trade took place, which could be days or weeks ago. This occurs when there are no buyers willing to purchase the securities at the price being offered by the sellers and there are no sellers willing to sell at the price the buyers are willing to pay. While this is rare when the company is traded on a major stock exchange, it is not uncommon when shares are traded over-the-counter (OTC). Since individual buyers and sellers need to incorporate news about the company into their purchasing decisions, a security with an imbalance of buyers or sellers may not feel the full effect of recent news.

Politics of Europe

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