8 - Anatomy, physiology and pathology of the State - kidneys

And here is another piece in our series - our puzzle of how a State would look like if it was a human body.

   We last talked about about lungs as investments, bringing money in the system; and before that, we compared blood to money and the heart to trade.

    A major player in regulating blood homeostasis is the kidney. What would a good equivalent be in a State?

    Let us unravel it.

Anatomy - Kidneys filter blood as Central Banks check on finance and economy

from Johnson MD, Human Biology, Concepts and Current Issues, 7th Edition;
the Urinary System [https://slideplayer.com/slide/6204959/]

Kindeys are remarkable organs. Their functional unit is the nephron, made of the glomerulus, the Bowman's capsule and the renal tubule. The filtration process is carried by the glomerulus, with an arteriole that enters and divides to form a net of capillaries. Those then recompose themselves in another arteriole which exits the glomerulus. The whole surface of the capillaries in the glomerulus is covered by podocytes, specialized cells whose extensions act as tight filters. The blood flows in the glomerulus, is filtered at the capillary level and then leaves. What is filtered - water, salts, glucose, metabolic wastes like urea, which are thus separated from the blood - is collected by the Bowman's capsule which defines the external limit of the glomerulus. From there, the filtered liquid flow through the renal tubule and is further processed - water and substances of interests can be reabsorbed, or not. The eventual output is urine. 

    Within a State, similar functions are performed by the Central Bank in respect to money flow and reserves. By surveillance on the State's financial and credit Institutes policy, the Central Bank should be able to force inappropriate financial operations out of the system. It is the case of risky investments on indebted and failing business - something that can result in speculative bubbles with dangerous consequences. Such by-products of a market economy can't be avoided - as metabolic wastes will always be part of the blood - but to keep the system healthy they must be limited and eventually discharged. The control from the Central one on the other banks acts as the podocytes ensemble, filtering the finance and setting the conditions for the regulation of the flow of money.

Physiology - Kidneys adjust blood volume, like Central Banks modulates money availability and inflation

Kidneys have their own means to correlate the total blood volume with the excretion of urine. Specialized cells (baroreceptors) in the arterioles walls directly check on blood pressure when entering the glomerulus. The cells of the macula densa, part of the juxtaglomerular apparatus, are deputed to sensing the concentration of salt (Na⁺,  sodium) in the to-be-excreted liquid. Reduced blood pressure and low Na⁺ concentration both triggers (or not) the renin-angiotensin-aldosterone release response, a feedback that increases blood pressure in response to hypotension and/or hypovolemia. 

from http://www.uniroma2.it/didattica/FISIOLOGIA_BEU/deposito/Lezione17.reneII..pdf

   The point is to always ensure homeostasis, the dynamic balance of the blood flow. Under physiological conditions, it is one the mechanisms that adjusts the amount of urine on the basis of how much water has been drunk. It also keeps more or less constant not only the blood volume - but also its compositions in terms of salts and cells concentrations. 

    The Central Bank has similar goals and functions in the context of the State. Interest rates and control of inflation are instruments used to keep the purchasing power in line with the economy. A substantial economic growth will physiologically result in an increased inflation, equilibrating the amount of circulating money. An imbalance, as in too much inflation or deflation, even if starting as a protective measure, will impact economy in different ways and eventually will hurt it. 

Pathology - Kidney disease reflects a Central Bank inability to regulate economic stability

Kidney diseases can have different causes, also depending on whether the damage is acute or chronic. Hypertension, as in diabetes mellitus, and infections (nephritis) are associated with chronic kidney disease. In particular, hypertension can eventually cause capillary swelling, increased membrane thickness and podocytes loss in the glomerulus. This makes filtering at the glomerular level less efficient and is stressful for the kidney.

Compare panels top with bottom. Left and center: normal and swollen capillaries. Right: normal and increased basal membrane thickness.
[from Hale LJ and Coward RJM, Insulin Signaling to the Kidney in Health and Disease. Clin Sci (Lond). 2013 Mar;124(6):351-70]

   The disruption of kidney functions leads to further imbalances in blood volume, pressure and solute (like salts and glucose) concentration. Depending on the cases, symptoms can include hypovolemia or hypervolemia; hyponatremia or hypernatremia; hyperglycemia and glycosuria; and azotemia, since urea and other substances (mainly derived from the aminoacids metabolism) are not efficiently excreted anymore within urine. While fluctuations in blood volume and solute concentrations can be physiological, if they are not balanced they become life-threatening.

   Similarly, the actions of Central Bank can be ineffective for multiple reasons. The specifics of economy, finance and politic - and the results of their interactions - are determinant to creating the scenario of a particular crisis. We can compare hypervolemia and hypernatremia to deflation, as in an excess of money in relation to the cost of life - with potentially dangerous impact on public and private debts. Of course, for simmetry, hypovolemia and hyponatremia would be inflation, with reduced purchasing power. In case of crisis, those parameters become much more dangerous for economy than risky financial operations - like hypovolemia and hypervolemia likely cause death faster than just azotemia.

Inflation and price stability in a dynamic equilibrium.
[from https://econfix.wordpress.com/2011/07/02/
price-level-targeting-and-inflation-targeting-part-1-the-theory]

   Normally - under physiological conditions - kidneys and Central Banks are both efficient in performing their functions and crucial in keeping balance. Central Banks are able to exert their powers over the State economy by adjusting the interest rates, the cost of money and the market of the sovereign bonds. Because of this, politic can be motivated to influence and interfere with Central Banks. Also, while the general goals of Central Banks are constant and objective, the specific actions to reach them vary with time and occasions - and are ultimately subject to the judgement of the economists in charge. Evaluation errors and wrong policies are thus possible and at that level can have disastrous consequences - as kidney failure has.

Concluding remarks

Blood circulation and money flow need to carefully balanced, without huge or sudden variations in the parameters defining them. Those parameters are interconnected and the systems regulating them must act ready and precise. 

    Kidneys and Central Banks both have instruments to reach and maintain a dynamic equilibrium, where variations are allowed and the system is flexible but in the end homeostasis must be assured. In human physiology, this means a blood flow with constant volume and solutes concentration; in a State, it translates into an economy constantly growthing. It is something that a Central Bank must be careful in supporting without overtly altering it.