Tuesday, May 07, 2013

Society Does Not Decide

One often hears the phrase "society decides," but among metaphors, this has to be one of the worst -- and most damaging. The reason for this is that "society" is not capable of making a decision. To be able to make a decision, you have to be able to choose among options, and society cannot choose any more than it can decide. To be able to choose and decide, one has to be able to have goals. That means the chooser/decider has to be a teleological entity. This would include any living being, with those having complex neural structures being able to make more complex choices and decisions. Humans, having the most complex neutral networks, are able to make the most complex choices and decisions.

"Society," however, is not a teleological entity. Social processes are ateleological. They do not have goals, make decisions, or choose anything. In this sense it is utter nonsense to say that "society decides" anything.

The reason this is important is that ideas like "market failure" are premised on the idea that the market is failing to provide something that "society decides" is important, but which no individual would be willing to pay for. Thus, the market is not acting optimally (according to equilibrium theory). The argument is that since such sub-optimal products exist which people need, but which nobody would pay for, government needs to step in and provide what "society decides" it, as a whole, needs. This gets us closer to understanding what is really meant when someone says "society decides" something.

What is really meant by "society decides" is "a democratic majority agrees" about a certain outcome. But democratic decision-making is hardly appropriate for a variety of social processes. If by "society," one means a democratic majority, then any number of market products produced for a minority market would be sub-optimal. After all, the raw materials that go into a product produced for a minority market could have gone into another being produced for a majority market. And competition for raw materials drives up prices, meaning products produced for minority markets drive up the price of products for majority markets.

But what is suboptimal at one time may be optimal at another, later, time -- when prices drop. Cell phones are a good example. "Society" did not want cell phones in the 1980s, when they first came out and were extremely expensive, but "society" certainly does now that they are cheap (and are literally tiny pocket computers). But "society" would not have had the cell phones we have now if "optimality" was at all at play at the level of society. The last thing we need to be worried about is optimal outcomes for society -- especially given the fact that real economies are not at equilibrium, but are in far-from-equilibrium states.

Markets do not fail, because 1) market failure is premised on the fact that an unrealistic equilibrium model does not match the far-from-equilibrium economic reality, and 2) society cannot decide anything. Even if we accept "society" meaning "majority," the market is not a democratic process in that way -- it is far, far better insofar as minorities are able to get what they want every bit as much as can the majorities in society. When "society decides," it is minorities of every imaginable kind who suffer. This is true even though society does not and cannot ever decide anything; it is true so long as people continue to believe that society does and can decide, because the same kinds of bad decisions are being made based on the belief that it can. Who is it making those decisions? Since it cannot be society, it has to be some self-appointed spokesman, who inevitably finds that society always decides whatever HE would decide.
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