Proper Divisions, Understanding, and the Spontaneous Orders

In my last post, I discussed how certain kinds of spontaneous orders could be separated. I propose these divisions because I think understanding these relations will help us to understand their relationships to each other in the larger civil society.

I have recently been working on developing the divisions Frederick Turner proposed: the market economy, the gift economy, the divine economy, and the political economy. In each, I propose inclusion of the following spontaneous orders:

The market economy – money, the catallaxy (trade), and technology for living

The gift economy – the sciences (the True), philanthropy (the Good), and the arts (the Beautiful)

The divine economy – morality, religion, and philosophy

The political economy – democracy and common law

Understanding what orders were in the gift economy and what the gift economy was has helped me to understand the nature of the orders in that economy – and what I personally needed to do to succeed in a gift economy spontaneous order. Understanding I was a participant in the gift economy helped me to understand that I would have to give work away in order to successfully transition into the market economy with my skills. Which is in fact what happened when I landed a writing consultant position with the George Bush Center.

However, the relations among the orders seemed to me incomplete, even as helpful as they were. For example, I have been working with Euel Elliott at UTD on a paper on technology, and in doing so, I discovered that there was a strong relation among the technological order, the catallaxy, and the scientific order. I have also been reading Randall Collins’ fantastic book “The Sociology of Philosophies,” in which he discusses the fact that a mathematical revolution preceded the Scientific Revolution, and both involved the development of technologies specific to mathematical and scientific discoveries – all of which led to what Collins terms “rapid discovery science,” in which there is a moving front of discovery with rapid consensus reached, which keeps discoveries happening very quickly. This suggested a relationship among these orders, as well as the fact that there are two distinct kinds of technological orders: one for mathematical/scientific discovery, and one for practical living. Of course, there are overlaps. Lenses for glasses led to lenses for first telescopes, then microscopes. Computers, invented for mathematics, are now used for practical living. Yet, the fact remains that there are distinct developments that should be apparent to pretty much anyone.

I came to realize that if one could loosely group together math, science, technology, and the economic orders into one grouping and loosely group together government, philanthropy, philosophy, religion, and the arts into another, that we 1) have C.P. Snow’s divisions, and 2) we have an explanation why so many who are anti-market are also anti-science, anti-technology, and anti-math, yet pro-art, pro-government, and pro-philosophy (equally, one can see why so many scientists are dismissive of philosophy, religion, and the arts). And then I thought about the fact that Hayek considers economics to be a “knowledge problem” that the catallaxy solves. This resulted in my thinking through these classifications and developing the matrix in my last posting. However, since then, I have developed the classification schema further.

I had divided things into the True, the Practical, the Good, and Wisdom. However, better, more accurate labels would be:

Practical Knowledge – money – catallaxy – technology for living

Pure Knowledge (facts) – math – physical science – technology for math and science

Practical Wisdom (the Good) – social sciences – government – philanthropy

Pure Wisdom (the True) – philosophy – religion – the arts

We still have a continuum of abstraction (on the left) to the concrete (on the right). I will also note that historically, we see the development of the concrete into the mixed into the more abstract. Technology is developed before trade, which is developed before money. The arts (like storytelling) likely evolved before religion, which preceded philosophy. As Collins points out in his discussion of philosophy, high levels of creativity and development are associated with increasing abstraction.

But let us return to the issue of knowledge and wisdom. I want to make it quite clear what I mean when I talk about knowledge. I particularly want to make a distinction between facts and truth. In his essay “On Truth and Lies in a Nonmoral Sense,” Nietzsche discusses the statement that a camel is a mammal, saying that this is a truth of a sort, but one of limited value. These truths of “limited value” are what I would like to call “facts.” Facts are in the realm of knowledge, and are in many ways defined by the language. It is a fact that a camel is a mammal. A mammal is defined as an animal which is warm-blooded, has hair, and feeds milk to its young. Since a camel does/has all of these things, we classify camels as mammals. It fits into this arbitrary conceptual category we have created so we can better study, understand, and talk about them. For all things we could talk about in this manner, I prefer using the word “fact” to discuss them, since these are knowledge-statements. To use another example, let us say I filled my car with gas. One would typically say it is true that I filled my car with gas. I would rather say it is a fact that I filled my car with gas. This use of the word “fact” is supported by its etymology: “fact” comes from the Latin factum, for “done,” the neuter past participle of facere, “to do.” An action of some sort is needed for something to be a fact. That action is our hierarchical categorizing of objects. “All knowledge originates from separation, delimitation, and restriction; there is no absolute knowledge of the whole” (Nietzsche, PT, 109, pg. 39). So “all explaining and knowing is nothing but categorizing” (PT, 141, pg. 47). With facts, we end up with a plurality made up of pluralities. To be reductionist or deconstructionist is to be concerned only with the facts. On the other hand, those against knowledge, who believe we cannot know anything, are those who cannot find fulfillment in knowledge alone. What they seek is wisdom. Knowledge is indeed not enough. But that is hardly reason enough to abandon knowledge any more than the connection of wisdom to religion was sufficient reason, despite the decline of religion in the West, to abandon wisdom. If we abandon knowledge, we will only find ourselves doubly absent – of knowledge and of wisdom. Instead, we need to return to wisdom, to replace what is truly missing.

In the same essay referred to above, Nietzsche says that art “speaks the truth quite generally in the form of lies” (TL, 96). Nietzsche is here talking about truth as facts. Art does not need facts, it gives us everything as illusion. One can have art that is blatantly non-factual, yet still have wisdom-truth in this sense. So works of art and literature act as one of the primary sources of wisdom, as the source of truth in this sense. “The term sophos, which means ‘wise (man)’, originally referred to skill in any part, and particularly in the art of poetry” (Charles Kahn, 9). The artist is the wise man. But this wisdom may or may not even be connected to facts as such. Gabriel Garcia Marquez does not really believe someone can be so beautiful they can literally contradict the law of gravity and shoot up into the air. With magical realism we have “fact-statements” coming into conflict with “truth-statements.” One way of creating meaning is through repetition. Another way is to create an image so amazing one cannot forget it. This latter approach is the soul of magical realism and of such surrealist painters as Dali and Magritte. How can one forget the scene in One Hundred Years of Solitude where Remedios the Beauty she shot into the heavens because was so beautiful? Or when José Arcadio shot himself and

A trickle of blood came out under the door, crossed the living room, went out into the street, continued on in a straight line across the uneven terraces, went down steps and climbed over curbs, passed along the Street of the Turks, turned a corner to the right and another to the left, made a right angle at the Buendía house, went in under the closed door, crossed through the parlor, hugging the walls so as not to stain the rugs, went on to the other living room, made a wide curve to avoid the dining-room table, went along the porch with the begonias, and passed without being seen under Amaranta's chair as she gave an arithmetic lesson to Aureliano José, and went through the pantry and came out in the kitchen, where Úrsula was getting ready to crack thirty-six eggs to make bread.

"Holy Mother of God!" Úrsula shouted. (129-130)

This blood is going places and doing things blood should not be able to do, but that does not matter here. What matters is the truth uncovered by this scene, and that, because it is so strange, we remember it. Meaning is tied to memory (and Memory, in Greek mythology, is the mother of the Muses). We remember things that are repeated (patterned repetition is doubly repetitious, and thus more meaningful to us), and we remember things that are as amazing as these images – the “shock of the new” the Modernists were so enamored with. It is evolutionarily important to be surprised at, shocked by, and thus remember new things, since new, unknown things could potentially be dangerous – and it is good to remember surprising things so we are not continually surprised at the new thing with each subsequent encounter with it. We give meaning to those things we remember. We see this connection too in the Greek word for truth, aletheia. Lethe is the river of forgetting, the river dead souls must drink from before rebirth. Letheia is thus forgetting. A-letheia is not- or un-forgetting. Thus truth, aletheia, is unforgetting, remembering. Art speaks the truth precisely because it, as Kundera says, uncovers aspects of existence we have forgotten. Great art speaks aletheia what we are continually letheia, even after we have experienced the work of art. Art does this through lies precisely because every uncovering of physis/logos is a covering, as “physis kryptesthai philei” (Heraclitus, K. X), “Nature loves to hide.” This is how we understand, if not on a completely logical, rational level of explanation, what Marquez means about a woman being that beautiful, or a murdered man’s blood returning home. We understand these a-rational truths, a-rational because they are true without being factual. Marquez manages to highlight and make beautiful this element, of the potential separation between truth and fact – a separation which is the soul of religious mythology.

Gyorgy Doczi says wisdom is seeing the world as one, unified. This is a legitimate definition of wisdom and of truth. The words truth and betrothed are related, through the Old English treowth, meaning “good faith,” which gives us the words “truth” and “troth.” To betroth is to marry, meaning truth can be seen as a betrothal of facts, the unifying or marrying of facts. “Men who love wisdom must be good inquirers into many things indeed” (Heraclitus, K. IX). Truth as wisdom is unifying.

Wisdom is a generalization tending towards the universal codified into a proverb. The process of cognition begins with noting, observing the particular and then working out what is general from the particular. From the general, a regulating principle, a law, emerges which can take the form of the universal. The universal, the law, and the general are then tested against the ground of particularity in practice. Practice is both the starting point and the testing ground of our conceptualization of the world. What is needed is not so much the recovery of practical philosophy as the recovery of the philosophy of practice. (Wa Thiong’o 26)

Since to practice is both to learn to do something, and to do something (as in to practice medicine), we can see that wisdom needs practice, or doing, for it to be valid. We have already seen that “fact” comes from “to do.” Wa Thiong’o is calling for a unification similar to what I am suggesting. One could see wisdom as understanding the scalar nature of the world, seeing the world as a fractal whole, and knowledge as seeing the world in its constituent parts. As we will see in more detail later, in discussing Nietzsche’s Thus Spoke Zarathustra and The Will to Power, truth(s) would act as the strange attractors pulling the world-system together. By combining knowledge and wisdom, we get a more knowledgeable wisdom, or a wiser knowledge, that sees the world as scalar with emergent properties derived from its constituent parts. Since bringing together knowledge and wisdom creates variety in unity, it would show the world as beautiful. Knowledge alone is not enough; nor is wisdom alone. “Graspings: wholes and not wholes, convergent divergent, consonant dissonant, from all things one, and from one thing all” (Heraclitus, K. CXXIV). The unity of knowledge and wisdom is beauty. The interdisciplinarian is thus the scholar of beauty.

Finally, I want to make a quick note about my division of science into the physical sciences and the social sciences. The physical sciences are divided into what one could term a Great Chain of Being, with physics being the least complex entities one can study, molecules being the next in complexity, living organisms being the next in complexity, and neurobiology being the next in complexity. However, we then get a proliferation of social sciences: psychology, sociology, economics, anthropology, history, political science, etc. These all certainly fit together as being in the next level of complexity – yet there is also a great proliferation at this level (one can say the same of, say, chemistry – one can learn organic and inorganic, quantum chemistry, etc. – but all chemists will learn some of each of these, while an economics student can easily avoid all the other social sciences, suggesting the divisions somehow differ). These divisions have emerged over time, and I do not believe them to be arbitrary. They represent something real in the world.

Thus I do not believe the social sciences – which one could also call, according to the above classification, and returning to an old terminology that was perhaps more accurate, the moral sciences – should be considered to be in the same category as the physical sciences. The methodologies of each should thus be very different. One will note that the moral sciences become classified as being practical, like government and philanthropy, but also part of the wisdom tradition, along with philosophy, religion, and the arts. Thus, it would seem that methods used in the wisdom tradition – those commonly used in philosophy, for example – would be more appropriate than those methods used for factual knowledge. As noted above, there is a world of difference between truth and facts. The facts of historicism can get in the way of understanding the truth about how an economy works, for example.

Note, too, that the practical wisdom of the social sciences are used to help us understand governance, the religious order, the artistic orders, the philosophical orders, the philanthropic order, the scientific order, the mathematical order, the technological orders, and of course the economic orders. Further, the pure wisdom of philosophy, religion, and the arts give each of us our moral education, resulting in the moral evolution of the moral order, which finds its expression in the practical wisdom orders of philanthropy, governance, and the moral sciences. One sees a similar relationship between the pure and practical knowledge orders.

Finally, one should note that there are some more foundational orders that do not fit into this schema. The language order, for example. Also, the moral order seems to negotiate between pure wisdom (truth) and practical wisdom (good). But not all orders have to fit into this structure, as the structure is hardly all-inclusive. Nor should it be understood as being intended as such. Further, not all things are spontaneous orders. Sports, for example, are things we do which are not spontaneous orders. Neither are families spontaneous orders. Nor are businesses – even though they are obviously found in the market economy. One could go on and on. But this should suffice to demonstrate that just because there are many social structures that are spontaneous orders, there are many others that are not. I am here not interested in hierarchical networks, only scale-free, self-organizing networks. The value of this particular organizational structure for these particular orders is that they are in fact related to each other in these ways. Understanding their relations to each other, and how they interact (or fail to interact) helps us understand the even more complex structure of civil society. 

Reconsidering the Relations Among the Spontaneous Orders

I have recently been thinking about the relations among the different spontaneous orders. I have typically been thinking of them according to Fred Turner's divisions into economies: market, political, gift, and divine. The market economy contains the catallaxy (exchange spontaneous order) and the monetary order and technology. The gift economy contains the scientific order, the artistic orders, and the philanthropic order. The political economy would contain government, including the democratic order. The divine economy contains religion and the religious order.

However, I have come to realize that one can also divide the orders into the good/morality, the true, wisdom, and practical living. There are spontaneous orders in each. And these orders can be divided into abstract, concrete, and mixed. Consider:

                      Abstract              Mixed                          Concrete
The True:   Math                     Natural Science      Science & math tech
The Good: Social Sciences  Governance            Philanthropy
Wisdom:    Philosophy           Religion                   The Arts
Practical:   Money                   Catallaxy                 Technology for living

All spontaneous orders overlap to some degree. All influence each other. However it is interesting to note that the True and the Practical are very closely connected (computers developed for the True are now used extensively in the Practical). And the Good and Wisdom are closely related. One could even argue that the Wisdom orders affect the moral order, which then finds its expression in the orders of the Good.

Note, too, that I divided the sciences. The social sciences are in fact moral sciences, and properly belong in the Good, not the True. This is not to say that the social sciences are not concerned with learning what is true-- only that that is not their primary function. This matters for how these science are properly understood and done. It also points to the fact that they are somewhere between Wisdom and the True.

If there is any idea I would love to get a great deal of feedback on, it's this.

Free Rider Problem? Increase Competition.

Given the free rider problem, why do species cooperate? As it turns out, free riders succeed only under monopoly conditions, while cooperators succeed under competitive conditions. When there is competition, the free riders are far less successful, and the number of cooperators increases.

To say this has significant implications for economics is an understatement. There is in economics the "free rider problem." How does one get rid of free riders? Well, the answer seems to be to create the social conditions in which competition is maximized and monopolies are minimized. Our governments are often monopolistic in nature. The result is the creation of more free riders. More decentralization of the government, from a central government to states and, preferably, counties and cities/towns, would result in competitive polities, reducing free riders on government.

The same is true in the economy. Freedom of entry and exit help create the conditions for increased competition. Under competitive conditions, there will be fewer free riders in the economy itself.

We should be on the lookout for where we can learn things. Yeast and bacteria growing together, it turns out, can be quite informative to those who want to understand human economies.

Human Brotherhood, Race, Essentialism, and W. E. B. Du Bois

Work, culture, liberty---all these we need, not singly but together, not successively together, each growing and aiding each, and all striving toward that vaster ideal that swims before the Negro people, the ideal of human brotherhood, gained through the unifying ideal of race; the ideal of fostering and developing the traits and talents of the Negro, not in opposition to or contempt of other races, but rather in large conformity to the greater ideals of the American Republic, in order that some day on American soil two world-races may give each to each those characteristics both so sadly lack. -- W. E. B. Du Bois, The Souls of Black Folk

I have been reading Lisa Zunshine's strange concepts and the stories they make possible, in which she discusses at length the fact that we humans ave a default essentialist reading of human beings and other living things. We view humans as having essences, and this includes not just each individual (I am essentially "Troy Camplin" ten years ago and today as far as everyone is concerned -- and that is why people are surprised when I have changed my mind about something, as much as they are surprise when you have changed your mind about something, as that seems to violate one having an essence) but group membership as well.

Zunshine cites the following story told in Susan A. Gelman's The Essential Child about one of Gelman's colleagues, Francisco Gil-White, who was having a conversation with a group of Kazax men in Mongolia:

Gil-White asked the following: "If I stayed here, and learned Kazax, and Kazax customs, married a Kazax girl, and became a Muslim, would I not be a Kazax?" The respondent's reply was: "Even if you do everything like a Kazax, and everybody says you are a Kazax, you still aren't a real Kazax because your parents are not Kazax. You are different inside."

We thus essentialize our group membership as well -- especially any we are born into. And it runs deep. After reading the above, I proposed to my Hispanic wife that I was going to become Hispanic. The look she gave me was one of extreme confusion. Her first response was to ask me if I was just going to start marking "Hispanic" on forms -- and how was that going to work out? It is not at all surprising that her first thought went to perhaps the most superficial "meaning" of my statement. Essentialism is so deeply ingrained in our thinking that superficial readings of proclamations that one is going to violate that essentialism are the most likely response.

If we then consider Du Bois' statement above, perhaps we can make sense of it, as it seems to be contradictory. How is it that one can gain "the ideal of human brotherhood . . . through the unifying ideal of race"? After all, the ideal of human brotherhood is achievable only insofar as we accept each and every person on earth as equally and fully human. However, group membership -- including racial identity -- tends to create an us-them mindset. And when there is an us-them mindset, there is an Othering which all to easily leads to racism, sexism, ethnocentrism, etc. Thus, it seems that Du Bois is arguing that only if people feel unified by their racial identity will we achieve the ideal of human brotherhood.

One can make sense of this in a number of ways. Given Du Bois' education in sociology, it is perhaps not too much of a stretch to argue that he is perhaps making the argument that one state of collectivist thinking leads to another. Insofar as racial identity is essentially collectivist in nature -- one is, in part, one's race -- and the idea of human brotherhood is collectivist in nature (it doesn't have to be, but it is perhaps not much of a stretch to believe Du Bois considered it such), then racial identity is a stepping stone to human brotherhood. One form of collectivism leads to another.

In Du Bois' conception of racial identity, though, he sees each race as equal, and as being in a position to equally educate each other. In this sense, he would oppose the current conception of multiculturalism that treats all other cultures as equal, while degrading Western culture. Du Bois clearly loves Western culture, and believes it can teach the other races much, just as he believes the other races have much to teach the white race. This co-equal collectivism leads to treating others as being part of a human brotherhood -- as co-teachers of each other.

A  more individualistic (in the Scottish Enlighenment sense) interpretation of Du  Bois would see individuals as being in part informed by their group membership(s) -- cultural, ethic/racial, ideological, etc. -- with the understanding that all groups are equal and have something to teach each other. For Du Bois, this attitude that we are equal and much learn from and teach each other is what unifies us into a human brotherhood. We thus learn to be more human and more humane. Not by rejecting our group memberships, but by simultaneously embracing them and not just tolerating, but appreciating others in different groups, with different ideas, and different world views.

But is Du Bois right to recommend this? Given the fact that we are essentializing creatures, perhaps Du Bois' formula is the best we can accomplish. But note well that Du Bois rejects such notions as cultural imperialism or cultural appropriation. He wants us to appropriate. He wants us to learn from and teach each other. In this sense, perhaps Du Bois would embrace what Frederick Turner termed "natural classicism," in which artists learn from other cultures as much as they learn from their own, to create a new world art.

As every fiction writer is taught, you do not write universal stories by being vague and abstract -- you write universal stories by being detailed and specific. Some nondescript guy doing something somewhere is not universalizing -- but a red-headed Scotsman taking care of his family in the Scottish highlands is. When you see him taking care of his family, interacting with his family, one comes to understand, "Hey, he's a lot like me. My family does similar things." Thus does one come to empathize with the unknown other, to embody that character and thus come to know the subtile differences through the deep similarities. Thus do stories unify us into a human brotherhood -- by showing us that no matter what our differences, we are all brothers. That we are all, esssentially, human.

Some Advice to the GOP

I am going to offer the Republicans some advice. I don't expect them to listen to me, and I don't even expect any to happen across my blog. As with voting, this is just one person feebly expressing his opinion, hoping what is right will prevail.

1. Drop the opposition to gay marriage. There is in fact a conservative argument for gay marriage. Conservatives favor strengthening social bonds. Allowing more people to get married will allow for the creation of more and stronger social bonds. And more than half the population believe gays should be able to marry -- and those numbers are growing.
2. Drop the anti-immigration rhetoric. George W. Bush did it, and he was elected twice. It may be too much to ask the GOP to adopt an open borders, free movement of people stance, but can we at least come up with a way to make it easier for people to come here and work?  I am talking about a work visa that can be attained on this side of the border, so people don't have to deal with the corrupt system at home just to get here to work. Do that, and the socially conservative Hispanic population will start to come your way.
3. Drop the pro-war rhetoric. There is nothing conservative about imposing change on others. There is nothing conservative about offensive wars. Our military should be defensive in nature. We can still use our navy to fight off pirates -- now, how many ships do we need off Somalia to accomplish that? Concerned that the world won't remain at peace without a strong American military presence? Well, if you are actually concerned with maintaining peaceful relations with other countries, history has shown over and over and over that the best way to do that is to . . .
4. Drop the trade war rhetoric. Drop trade barriers of all sorts. Promote nothing but free trade between America and every other country. When a Democratic candidate such as Obama complains about Americans having access to cheap Chinese tires, the answer should not be "I agree with my opponent." It should be, "Seriously? You oppose the American people being able to buy cheap tires so they can have that money to buy other things?"

If you just do these things, the GOP will start winning Presidential elections again. If you keep doing what you're doing, if you keep nominating the same exact guy each and every time, you won't.

Taxes as Theft Given Legitimacy Through Ritual

If some person or group of people takes your property (including money) by force or threat of force, we call such an action theft. If I approached you and told you that unless you gave me your money that I would kidnap you and lock you away in a building I owned, and that if you resisted, I would kill you, I would be guilty of theft if you gave in, kidnapping if you did not, and murder if you resisted. Would it be better if I hired someone to do it for me? Of course not. I would be just as guilty, with conspiracy added to it.

Now suppose I got a large number of people together and engaged in the same action? What would you call that? A gang, if we were poor; a mafia if we were wealthy. Would we be less guilty of theft? Of course not. Having more people involved in your crime doesn't make it less of a crime. Laws against gang activity and organized crime suggest we think it worse when more people are involved.

I could go through this same thing with murder. Whether it's one or many involved in the murder, it's still murder. However, as I have observed here and here, our governments perform rituals that allow them to commit certain kinds of murder when they engage in capital punishment. One could certainly make the argument that our governments perform rituals that allow them to commit certain kinds of theft when they tax. This suggests that taxes are without question theft -- if we agree to the above definitions of theft -- but that through our governments make such theft legitimate for our governments to engage in. Calling theft by some other name, such as "tax," doesn't change the fundamental nature of the transaction.

The real question with taxes, then, is the same question with capital punishment: is the ritual we engage in legitimate? Should it do what we make it do?

The real question isn't whether or not taxes are theft. Taxes are theft. The question is whether or not we believe the rituals we undergo to make it legitimate are, themselves, legitimate.

I think when we do away with capital punishment, we will be a more moral people. Immoral actions are not made moral through ritual. I do not think that is a legitimate role for rituals to perform. I think we become more moral when we reject that role of ritual. I think, too, we will be a more moral people when we reject the legitimacy of the ritual that allows governmental organizations to legitimate theft.

Pessimists, Optimists, and the Hopeful

Tielhard de Chardin begins The Future of Man with an observation that there are two groups of people, those who do not believe the world changes and those who do. He identifies the first group as pessimistic and the latter as optimistic. One could easily identify the former as conservative, the latter as progressive.

The problem with the first group is, as F. A. Hayek observed in Why I Am Not a Conservative, that the conservative mindset rejects change, period. No matter what the society is like, the conservative wants to conserve it. And this is assuming the person believes anything can, in fact, change. There is a kind of deep conservative who does not believe anything can in fact change. People have always been the same (rotten), society has always  been the same (rotten), and there is nothing anyone can do about it. This is clearly the pessimistic world view.

The problem with the progressive, on the other hand, is that embracing change because it's change means that no matter what you have, it should change -- even if what you have is good. There is an eternal optimism that, if we just change, the change will be better. Out of this comes a belief that people have no identities at all (they always change), that societies have no identities at all (they always change), and therefore there are no rules/laws to be discovered. Humans and their societies are infinitely maleable if everything is always changing. We just have to change, and everything will be fine. This is clearly the optimistic world view.

But what if, like Hayek, you reject both? Or, to be more accurate, you accept both? Processes change in relation to what they already are. Yes, everything flows, but everything flows within the river beds in which they have been flowing. The flow has to be redirected in light of the current flows. This is what we learn from the constructal law. This is also known as the tragic world view. Humans have a basic nature, but one that is capable of change and growth. There are social laws, but those laws create degrees of freedom that allow society to change and grow. All change must take place from the position of where you are already and must be done with a recognition that there are other elements of society with which the changed element must necessarily interact. And you cannot predict how that changed element will interact with all the other elements of society, meaning you have to introduce the change slowly and be ready to withdraw it if it turns out to be more detrimental than good. This means there has to be a high degree of freedom in introducing elements -- it should be voluntary. Only in such a way can a society evolve in a healthy manner. Change must take place in light of tradition, and one must be aware that not all change is for the good, and that even good change can have negative consequences for some over time. This is the tragic world view. It is embraced by neither pessimists nor optimists, but those who embody both -- it is the world view of hope.

There are clear social consequences for each. The pessimist will rarely act, as nothing can change anyway. The optimist will always act, certain that all the world needs is change. The hopeful will act with caution, understanding that good intentions are not good enough, that good outcomes are a vital element to moral action, and that even the best outcomes are always going to have negative outcomes. However, the hopeful/tragic world view also recognizes that good can come out of the bad. That unintended consequences can be positive as well as negative. Spontaneous orders, for example, are an unintended consequences of the interactions of large groups of people. Yes, there can certainly be perverse orders -- but positive orders are also a real possibility. But what we cannot do is deny such orders emerge, nor can we rearrage them as we please (how does one organize an unintended consequence, anyway?). And this is why I am neither a pessimist/conservative nor an optimist/progressive, but rather am a hopeful/classical liberal.

Obama's Embarrassing Big Bird Ad

VOICEOVER: “Bernie Madoff. Ken Lay. Dennis Kozlowski. Criminals. Gluttons of greed. And the evil genius who towered over them? One man has the guts to speak his name.”

MITT ROMNEY: “Big Bird.” “Big Bird.” “Big Bird.”

BIG BIRD: “It’s me. Big Bird.”

VOICEOVER: Big. “Yellow. A menace to our economy. Mitt Romney knows it’s not Wall Street you have to worry about, it’s Sesame Street.”

MITT ROMNEY: “I’m going to stop the subsidy to PBS.”

VOICEOVER: “Mitt Romney. Taking on our enemies, no matter where they nest.”

I haven't spent any time at all on this blog discussing the current Presidential election. If I thought it mattered, I might. However, I was utterly amazed by the above ad. And I was not amazed in a good way.

My criticisms of this ad have nothing to do with my opposition to Obama. I equally oppose Romney. I am viewing this ad purely from the perspective of an expert in rhetoric.

I had heard about this ad before I saw it for the first time on Saturday Night Live. In fact, though I knew of the ad's existence, I still thought for a moment it was an SNL spoof of the ad. But it was not. It was in fact the actual ad. I could not believe the incredibly bad judgment by the people who designed the ad, the people who approved the ad, and Obama himself (who does say at the beginning "I approve this message") to release this thing.

I would first like to note that the ad trivializes the scandals highlighted at the beginning of the commercial by equating them with Sesame Street.

Second, there is a false equivalence. Wanting to cut spending on PBS literally has nothing to do with illegal activities by a handful of people who worked on Wall Street. I won't go into the issues surrounding regulations, etc., as that has nothing to do with this analysis. I am viewing the commercial entirely from the perspective of effectiveness. The fact that pretty much any idiot on earth could see that there is a false equivalence undermines the effectiveness of the ad.

Third, there is a bit of a postmodern juxtaposition followed by a bait-and-switch. After listing all of the people involved in scandals on Wall Street, the ad says "And the evil genius who towered over them?" and then cuts first to a window with a vague Big Bird shadow, then to Mitt Romney. The cuts are so fast, and the shadow so clear, the implication is that Romney is in fact the "evil genius who towered over them." For a moment you are shocked by the accusation that Romney was somehow involved -- but then, you get the bait-and-switch, with the ad focusing on Big Bird.

In the end, the ad is a complete disaster. Ranging from the trivialization of crimes to the creation of false equivalents, this has to be the worst political commercial of all time, from the perspective of effectiveness for the candidate.

I am sure someone in the Obama campaign thought they would trivialize Romney with this ad. But all they really did was trivialize themselves. If this is all they have to offer as a reason to vote for Obama after 4 years, he doesn't deserve to be reelected. Maybe he doesn't even want to be.

Better Than Rational

Cosmides and Tooby explain how humans are better than rational.

natural selection's invisible hand created the structure of the human mind, and the interaction of these minds is what generates the invisible hand of economics.

the human mind is not worse than rational (e.g., because of processing constraints)-but may often be better than rational. On evolutionarily recurrent computational tasks, such as object recognition, grammar acquisition, or speech comprehension, the human mind greatly outperforms the best artificial problem-solving systems that decades of research have produced, and it solves large classes of problems that even now no human engineered system can solve at all.

For the problem domains they are designed to operate on,specialized problem-solving methods perform in a manner that is better than rational; that is, they can arrive at successful outcomes that canonical general-purpose rational methods can at best not arrive at as efficiently, and more commonly cannot arrive at all. Such evolutionary considerations suggest that traditional normative and descriptive approaches to rationality need to be reexamined.

It matters a great deal that economists are, more often than not (though they are improving some, thanks to the efforts of people like Daniel Kahneman and Vernon Smith) using a version of "rationality" that is, quite frankly, extremely irrational. Our instincts matter. And the ways in which those instincts get expressed in different ways in different cultures matter. HT: Roger Koppl

Traffic, Economics, and Constructal Law

There are a large number of different kinds of self-organizing processes, from chemical to biological to neurological to social. As we learn from the constructal law, these processes are fundamentally flows. And the flows create patterns. And the patterns affect the flow.

In each of these kinds of self-organizing processes, we see coordination of behavior. From this emerges patterns. In social systems, incentives matter. To understand the behaviors of a system, understand the incentives involved.

Traffic is a self-organizing process. A variety of orders emerge in traffic, ranging from steady flow to utter standstills. Traffic jams are a kind of order which emerges -- though most people would certainly classify it as an unwanted, even a "perverse" order. But how do traffic jams emerge?

Let us leave aside for a moment accidents, which will certainly slow traffic. They are hardly the only source. How many times have you been in heavy traffic and wondered what on earth was causing the slowdown, only to find traffic suddenly open up so that you are driving along as a more reasonable rate of speed -- only there appeared to be no reason for either the slowdown or the speedup?

The main cause of such slowdowns is the fact that when we are driving, benefits are concentrated while costs are dispersed. Worse, costs are dispersed behind us, where it won't affect us.

For example, if we find we are in a turnoff lane and we don't want to turn off, most of us will try to switch lanes, even if it means causing others to hit the brakes. In heavy-enough traffic, one person hitting the brakes will result in others hitting their brakes. This results in a chain-reaction slowdown that may only dissipate after a half mile or more. And this is assuming that nobody changes lanes, keeping the slowdown in one lane. Naturally, there will be those who want to continue going at the rate of speed they are going at and will therefore switch lanes. They gain, but at the expense of another lane slowing down. Thus there can be a chain reaction both down and across lanes. And all because people are responding to what will benefit us without considering the costs to others. And, like I said, those others are behind us, so we are typically left unaware of what we have done. And since we don't know any of those people, we probably don't care all that much, anyway. Further, any cost we may incur on ourselves is going to be much less than the benefit we gain by switching lanes.

Thus, the incentives overall are for us to switch lanes to our benefit. However, if none of us did so, traffic jams would be very rare. One does not see too many traffic jams on carpool lanes precisely because one cannot switch lanes on them -- they are one lane, and they are difficult to get on and off of. As a result, traffic moves much faster.

All of this is merely an analysis of what happens. Knowing this, I am not going to stop switching lanes, because since nobody else is going to stop doing so, I'm not going to make any difference on things other than to slow myself down getting to where I am going. And even if most people did stop switching lanes except when absolutely necessary to enter or exit, there would be a number of free riders taking advantage of everyone else following the rule, thus causing traffic to slow for the rule-followers. And since enforcement of any lane-switching rule would actually slow traffic more (not to mention be rather arbitrary, as it would only be enforced if an officer is around, and then the officer would have to read your mind to understand your intention in switching lanes, which is impossible, making the law impossible to enforce) from stops and from drivers changing their mind if they think they see a police officer, legislation would only make things worse. Other than trying to design roads that take human behavior and constructal law into conscious consideration, there is not much one can do.

And even with such conscious design, there will still be people making mistakes, slow drivers, fast drivers, etc. According to constructal law, differences in flow speed cause structures to emerge. People driving slower than the flow of traffic or faster than the flow of traffic, causing people to switch lanes and hit their brakes. But again, there is nothing that can be done about differences in speed. There simply cannot be a law stating that people have to drive exactly 60 miles per hour, no faster, no slower. People do have to enter and exit, etc. -- aside from the practical problems of enforcement. And if there is a traffic slowdown, are you going to ticket everyone?

Traffic acts as a good way of understanding incentive structures. There is no way of getting around the fact that benefits are concentrated on you while the costs are distributed onto a large number of drivers, most of whom are behind you. Certainly one could just deal with the fact that you made a mistake about what lane you should be in and exit and turn around or re-enter traffic further down. But how many people are realistically going to do that to the benefit of unknown strangers? If you haven't done so, you're one of those people who wouldn't. That's because the cost would be concentrated on you, while the benefits would be distributed to unknown strangers.

Politics works the same way as traffic. Benefits are concentrated, while costs are distributed. If the government gave me $300 million, that would benefit me greatly. But it would only cost $1 per person in the United States. It's not a big deal for you to give up a dollar, but it's a very big deal for me to receive $300 million. And this is the argument we repeatedly hear from politicians arguing for their pet projects, subsidies, etc. "Why, this program only costs ten million dollars." And when you break it down per taxpayer, it's not that much. But ten million here, ten million there, and soon you're talking about real money. This particular driver not switching lanes isn't going to make much of a difference on traffic, though his switching lanes may benefit him. One would have to get everyone to change their behaviors to get a change in traffic behavior. And that would mean a structural change in incentives.

While political sytems act like traffic, economic systems act the opposite of traffic. In a free market economy, costs are concentrated and benefits are dispersed. Any business owner who makes a mistake loses their business, but successful businesses distribute their benefits out to customers with the increase in goods or services, including increases in quality, etc. from competition. A free market would be like a traffic system in which somehow drivers who did things that would slow traffic were removed from traffic and made to start over again, thus making the flow of traffic improve for everyone else. How quickly would people learn what they needed to do to keep traffic flowing well? Yet, because of the incentive structure of free market economies, this is precisely what happens in the economy.

Of course, many prefer the traffic/political model because the concentrated benefits are easy to see, while the distributed costs are difficult to see in these models. On the contrary, in economic processes the distributed benefits are difficult to see, while the concentrated costs are easy to see. It is easy to see the benefits of the government stepping in to rescue General Motors; it is difficult to see the distributed benefits of letting it die off. It takes considerable amount of understanding of economics to understand the latter, so we should not be surprised people don't see it that easily. Like the lane-switching driver, the benefits are immediate and clear; the costs lay far behind among the unknown many. Worse, even if you do understand this, there's not a lot of incentive to do anything other than to continue to switch lanes to your own, concentrated, benefit.

Theory of Mind, Racism, and Collectivism

Without our cognitive "theory of mind" by which we are able to attribute mental states, intentions, etc. to others, our human level of social complexity would be impossible. But what is it we are really doing when we use our "theory of mind" to attribute mind to others? We are in fact theorizing that because I have a mind, others have minds. And therefore their mind will be like my mind. Their goals will be like my goals, their values will be my values, etc. And it is here, in overattributing oneself into others, that many of our cognitive failures emerge.

An important cognitive feature humans have is this tendency to "overattribute." This is important in our early evolution, because it is more important to make a mistake in the direction of too much than of too little, particularly when reading signs. If you see order, it is better to make the mistake of thinking that all order is made by an orderer than to make the mistake of failing to recognize that said order means there is an orderer -- who is likely to be close by. An orderer is potentially dangerous -- another tribe, for example. It's not that big a deal if you make a mistake of thinking even natural order means an orderer, but it is potentially fatal to fail to recognize when other people are around.

The same is true of theory of mind. We probably assume too much mind being present in many things without minds -- but that's less of a problem than failing to realize another person has a mind. However, this tendency to overattribute, when applied to theory of mind as believing others are like us, can create problems.

Perhaps an obvious error we commit is our tendency to homogenize. With theory of mind, not only do we assume others do have minds similar to our own, we assume they should. And by "similar," we often in fact think "the same." A difference between an other and oneself creates cognitive dissonance and mental discomfort. We can resolve this by either changing our ideas about others' minds, or by insisting others change to conform to our own model, or  by dehumanizing the other.

The last case is why there is racism and sexism. Many consider differences in others as evidence of lack of mind. Lack of mind means the other is not human. One cannot truly be racist or sexist toward those one considers to be "human," by which one means, "like myself." Those who look the same, act the same, have highly similar beliefs, values, etc., and share the same culture are all "like myself," and are therefore properly human. Those who don't are suspect.

In the second case, there is acceptance that others have minds, but their minds are "wrong" because their actions, beliefs, values, etc. are different. From this we get the drive for conformity. People "should" think how we think, meaning we should try to get them to think as we think. In its healthy form, this is known as "education." In its unhealthy form, it is collectivism, socialism, re-education camps, censorship, etc. It is an insistence that my values are the only good and true values, and that my value rankings are the only good and true value rankings. This is what socialists, and especially Marxists, insist to be true. It is no coincidence that all communist countries engaged in re-education camps and censorship, and tried to get rid of those who would not conform. Again, in its healthy form, this is simply social living; in its unhealthy form, it is collectivism.

But there is a third possibility -- one which we are still learning to embrace. That third possibility is understanding that differences in the way others think is not an indication that they do not have a mind. It is simply an indication that different social conditions, cultures, etc. create different ways of thinking. However, there are also healthy and unhealthy versions of this. The purely pluralistic, postmodern version, which insists that there is nothing but difference, is the unhealthy version. In this, nobody can understand each other, with the result that the only way there can be peace is to have a single, dominant ideology. It is the individuality of constructivist rationality Hayek rightly criticized. However, there is a healthy version, which understands that humans are united in their cognition, but also demonstrate differences. We probably all do share the same values; we just rank them differently. We are social individuals, with different ways of doing things that can, nevertheless, be coordinated with the right institutions. And this can happen because, though we are all different, and though we differ in our values, we also share values and our basic cognitive features.

This suggests that it is our theory of mind that causes two different kinds of collectivist beliefs. But we hardly want to do away with our theory of mind! Of course, that's not even an option. What is an option is realizing that our tendency toward homogenization is a cognitive error. The answer is not to go to the extreme of unconnected heterogeneity, but rather to combine the two, to understand humans both have a basic nature and commonly-evolved mind, and that there can nevertheless arise differences in our thoughts and actions and, consequently, in our cultures and societies.

Math, Complexity, Economy

In his 2010 paper "Some Epistemological Implications of Economic Complexity," Roger Koppl cites Fritz Machlup's (1978)

examples of statements exhibiting economic logic Statement(1): "If, because of an abundant crop, the output of wheat is much increased, the price of wheat will fall." Statement(2): "If, because of increased wage-rates and decreased interest rates, capital becomes relatively cheaper than labor, new labor-saving devices will be invented." Statement(3): "If, because of heavy withdrawals of foreign deposits, the banks are in danger of insolvency, the Central Bank Authorities will extend the necessary credit." (Machlup, 1978, p. 64)

Koppl notes that

The first statement is more reliable than the second and the second is more reliable than the third.

This is because, citing Machlup again,

causal relations such as stated in (2) and (3) are derived from types of human conduct of a lesser generality or anonymity. To make a statement about the actions of bank authorities (such as (3)) calls for reasoning in a stratum of behavior conceptions of much less anonymous types of actors. We have to know or imagine the acting persons much more intimately (Machlup, 1978, p. 68)

Koppl relates this to his "Big Players" thesis. And I think he is right to do so. And he argues that this makes "literary methods" necessary in economics. And I think he is right to do so. But there is also something implied here that is not stated explicitly.

The situation in statement(1) is that of a "pure market." Such a "pure market" is calculable. One could easily use mathematical methods. But too many who use mathematical methods think that they can use these methods to plan or at the very least regulate the economy. But note that the emergence of a Big Player who can in fact use such math to adjust the economy to try to make it perform in this or that fashion creates a situation in which mathematical methods fail.

In other words, modeling pure markets with math gives us the hubris to believe we can use math to control the market, but in creating a position in which someone can control the market, the math is then necessarily going to fail to model the new condition of Market + Big Player. And what about statement(2)? Well, with statement(1), we have a "pure market," or, more accurately, a catallaxy statement. Statement(2) is a statement of Catalaxy + Technological Order. The addition of a second spontaneous order makes the process too complex for math.

And the Catallaxy never stands alone. It is always interacting with the Technology order, the Monetary order, etc. And if the order is mostly dominated by a Big Player (as is the case with the Monetary order), the interactions are even less calculable. Another way of putting this is to turn the statements above into the questions "If . . . will . . . ?" Then we can answer them as such:

(1) Yes

(2) Probably, but the nature of the change will be unknown until developed.

(3) It depends on the Authorities' knowledge, understanding, background, ideology, etc. We cannot know what they will do, even if we know what they did in the past under what we assume to be similar circumstances.

Note that even here the answers increase in complexity. And I greatly truncated (3). We thus have what seems to be a paradoxical situation. So long as we leave the economy alone, we can compute or calculate it; but if we try to use those computations/calculations to intervene in the economy, we can no longer compute or calculate it, meaning the early computations/calculations are no longer valid. Alas, such paradoxes are of the very nature of the world.

Evolutionary Psychology to Spontaneous Orders

There are two papers by Douglas Kenrick, et al that lay out what I would consider to be foundational work in bridging evolutionary psychology and spontaneous order theory. They investigate several ways cultural differences can emerge, but this is broadly applicable to the emergence of spontaneous orders, and would be a good way to investigate how different versions of the same kinds of orders could emerge. There is no reason one could not run these models with all our instincts. We have, according to E. O. Wilson (actually, George P. Murdock, whom Wilson is quoting), identified at least sixty-seven cultural universals so far:

age-grading, athletic sports, bodily adornment, calendar, cleanliness training, community organization, cooking, cooperative labor, cosmology, courtship, dancing, decorative art, divination, division of labor, dream interpretation, education, eschatology, ethics, ethno-botany, etiquette, faith healing, family feasting, fire-making, folklore, food taboos, funeral rites, games, gestures, gift-giving, government, greetings, hair styles, hospitality, housing, hygiene, incest taboos, inheritance rules, joking, kin groups, kinship nomenclature, language, law, luck superstitions, magic, marriage, mealtimes, medicine, obstetrics, penal sanctions, personal names, population policy, postnatal care, pregnancy usages, property rights, propitiation of supernatural beings, puberty customs, religious ritual, residence rules, sexual restrictions, soul concepts, status differentiation, surgery, tool-making, trade, visiting, weather control, and weaving. (Wilson, OHN, 160)

Each of these, in various forms, can be found in every culture, throughout history. My guess is there are many more than just these. In Natural Classicism, Frederick Turner adds combat, gifts, mime, friendship, lying, love, storytelling, murder taboos, and poetic meter to the list of sixty-seven. And in The Culture of Hope, and in Beauty, he gives a list of what he calls neurocharms (208-210), many of which could also be considered cultural universals, since they are found in every human culture. Many of these, such as narrative, selecting, classification, musical meter, tempo, rhythm, tone, melody, harmony, and pattern recognition can be found in other animals, including chimpanzees, gibbons, and birds. Others, such as giving meaning to certain color combinations, divination, hypothesis, metaphysical synthesis, collecting, metaphor, syntactical organization, gymnastics, the martial arts, mapping, the capacity for geometry and ideography, poetic meter, cuisine, and massage (which would be a development of mammalian and primate grooming rituals, which humans also engage in, as any couple can tell you), are uniquely human.

One could run these models with each instinct and/or with combinations of instincts. Given enough computing power, it should not be entirely impossible to run combinations that would give rise to groups with features similar to actual cultures that have actually existed or exist. At the very least, it would be interesting to run some simulations to see what kinds of markets and other recognized spontaneous orders might emerge. This might also suggest other orders are spontaneous orders -- or could be.

Austrian Theory and Historical and Empirical Analysis

This month's Cato Unbound is a bit "inside baseball" among Austrians and post-Austrians on Austrian economics and empirical analysis. Steve Horwitz starts things off with an argument that Austrian economists are in fact more empirical, because they consider more factors to be important for what contributes to the features of the economy than do other schools. At least among the Hayekian scholars I mostly associate with, there is little question this is true. Hayek said you can't be a good economist without being an interdisciplinary scholar, and I (and Horwitz) concur.

George Selgin gives a very clear rebuttal -- so clear that it seems clear where the problems are in his analysis. To some degree, there is little one can argue with in regards to what he says about economics analysis and about how many (let's say, half) Austrian economists do economics. However, I think he is missing the real critique of historical and empirical analysis.

Let us consider the minimum wage. If you look at the historical/empirical evidence, you will see that most of the time in the United States after the federal government raised the minimum wage, unemployment went down. Conclusion based on history and empiricism alone: raising the minimum wage causes unemployment to decrease. However, economic theory says increasing the minimum wage causes unemployment to go up. This clearly contradicts the empirics.

Or does it?

The problem is that we are dealing with a complex system. In a complex system, there is not a simple cause-and-effect relation. Whether or not there is a minimum wage, and whether or not one raises it if there is one, will affect unemployment -- but it is hardly the only factor affecting unemployment. If there are other factors acting in the economy to decrease unemployment more than the increase in minimum wage would increase it, you will of course see unemployment go down.

By understanding that the minimum wage increases unemployment, you can understand that without the minimum wage, unemployment would have gone down even more than it would have. Could a regression analysis help us understand how much a particular increase in the minimum wage would increase unemployment? Well, that would require that you include all the factors contributing to employment. But how can you do that? Here are a few of the things that will contribute to employment levels:

•  the property rights regime
• the institutional composition of the economy
• trade regulations
• economic regulations and enforcement
• immigration regluations and enforcement
• features of the black market for banned or regulated goods
• rate of innovation and entrepreneurship
• demographics
• general racial/ethnic attitudes of society at large
• child labor laws -- whether or not they exist, and their features if they do exist
• tax policy and changes
• monetary policy and changes

There are no doubt more. Please note that some of these are measurable, but some are not. You cannot actually quantify a quality (like racial attitudes), so this cannot actually be factored into a regression analysis. (The fact that there are people who think you can accurately measure such things as "happiness" such that you can mathematize it rather than create simple, inaccurate rankings does not disprove this point, but rather is a condemnation of those social scientists who are engaging in the logical fallacy of quantifying a quality.)

But even if there were nothing but measurable factors, you would have to make sure you are including all the factors involved -- and the ways in which they interact -- to do the analysis. What we are faced with is an incomputable problem. You might be able to discover general trends, but I doubt you would ever be able to say that if we raise the minimum wage from $6.00 to 7.15 per hour you would necessarily get an X% increase in unemployment.

What you can know is that an increase in the minimum wage will price out low-skilled workers. It can do so in a variety of ways. It may be cheaper to automate; it may be cheaper to hire one skilled worker rather than three unskilled workers; it may be cheaper to relocate to a place with a lower minimum wage; etc. The minimum wage may also drive some businesses out of business. Which of these will occur? In what ratios? What will the resulting effects be?

One resulting effect may be that, over time, as the minimum wage continues to go up, low-skill jobs are run out of a region, meaning nothing but high-skill, high-wage jobs are available such that a subsequent increase in the minimum wage will have absolutely no effect on unemployment. When, if ever, will this stage be reached? What conditions would have to exist for it to be reached at all?

So where does this leave us? It leaves us with Mises' praxeology. We have to understand the underlying principles of human action to understand what is happening in the economy. If we look at the historical and empirical data, we are seeing the surface results of an underlying set of complex actors engaging in complex interactions, reacting to complex factors.

Actually, it leaves us with both praxeology and contemporary computer modeling. But even the models have to have complex actors acting as humans would act. Which brings us right back to . . . praxeology. The models, too, only show us what will result over time -- the emergent patterns, or surface results. The computers can only run the underlying complex interactions, not make them transparent to the humans trying to understand the results.

And even with computer models, you have to make sure you have all the relevant parameters. One can never tell what was the relevant parameter in a historical situation that made this downturn better or worse than the last one. Most of the time, we think we know that this or that factor was relevant, but too often we are looking at surface issues and missing the underlying issues. We stop the cause-and-effect chain too soon, and have no real idea what caused the current conditions to be as they are or were.

A good example the Great Recession. What caused it? If you were to rely only on what mainstream economists and the news media have been saying, it is the fault of the mortgage companies who created the bundles with the toxic mortgages in them. But that is in fact pretty far down the road from the primary causes -- some of which are the factors explained by ABCT. Most people fail to see that it was government policy, government regulations, and cronyism that caused the Great Recession -- because few follow the causal chain far enough. Austrians do.

And few understand the complexities involved. How many economists consider entrepreneurship and innovation and technology to be "external shocks" to the economy? But such an attitude is the height of absurdity. Economic growth is caused by the above mentioned external shocks. Which means understanding the causes of economic growth is outside mainstream economics. Which is absurd. Interdisciplinary economists -- which include almost all the Austrian economists I know -- understand that there are a lot of complex factors at work. And the understand that economic analysis is at best incomplete unless you include all of these factors, that most of the things that "shock" the economy are not really external to it, but are necessarily part of the economy. This means economic analysis is necessarily extremely complex. And the more complex a phenomenon is, the less it is able to be reduced to mathematical analysis. Especially, as Hayek observed, if it is more complex than the entities studying it.

Finally, Julian Baggini and Lawrence Krauss debate some of these same issues in a somewhat different context. Are all questions that are "answerable" necessarily "empirical"? I think this is the real debate.

My People Page at the EDGE Center

My EDGE Center People Page is now up. I need to get them a better picture. Unless someone with some mad photoshop skills can clean it up and email it to me.

Senior Fellow, The EDGE Center

Over the past several months, I have been working with several people at UT-Dallas to help set up a social science research center there, the EDGE Center. EDGE stands for "Entrepreneurship, Diversity, and Global Empowerment," and is associated with the Office of Diversity at UTD. It was set up by Elena Labastida, though the directorship has been taken over by Euel Elliott since she left for a tenure-track Assistant Professor of Economics and Business position at the Anáhuac University. I will be a Senior Fellow and Editor of the EDGE's interdisciplinary social science journal, "Developments in Spontaneous Orders: A Journal of Diversity, Globalization, and Entrepreneurship." I am very excited about this opportunity. In addition to my editing duties, I will be doing research projects on spontaneous order theory and publishing papers as a Senior Fellow of the EDGE Center. We are presently working on getting the peer-reviewed journal together. It will be officially launched, online, January 2013. Papers on our research areas are welcome. Feel free to email me any and all submissions. We will also be showcasing research being done at the EDGE Center in a special "working papers" section of the journal. We are also hoping to make the journal highly interactive, and to include things like video of interviews and other aspects of research. If anyone wants to help us out at the EDGE Center, we welcome any and all donations. You will be supporting the work being done there, as well as the journal.

Political Conflict and Cultural Creativity

I've only read one thing by John Gray, his book "Straw Dogs." I find his overall world view dark and repugnant. I only later found out he had once been a Hayekian, but had for some reason taken a turn toward the dark side. In this piece he has at BBC, that darkness shows -- but he's not entirely wrong. He's right that conflict, competition, and freedom are important for culture. This is merely a repetition of Nietzsche's insights. There is little wrong with this statement, to be sure:

Culture may not need democracy or peace, but it can't develop without some measure of freedom - and that requires a diversity of centres of influence, working openly and at times in opposition to one another. Rightly, we've learnt to mistrust any directing cultural role for the state. When artists and writers rely solely on government, the result is at best nepotism and mediocrity.

In this, he fails to note what was really working in Medieval and Renaissance Italy -- the division of Italy into conflicting, competing polities. Nietzsche notes that ancient Greece, Medieval Italy, and 19th century Germany were all cultural powerhouses, and they were all simultaneously united by culture, language, etc. and divided politically. There was a delicate balance between unity and division that resulted in cultural creativity. I see the same story as well in Randall Collins' The Sociology of Philosophies. To get creativity in philosophy, there has to be freedom to allow conflict and competition. However, Gray is wrong about one thing -- but wrong in a subtle way -- and that is the role of politics in cultural creativity. Collins shows that when politics is involved in philosophy, creativity slows or even ends. But -- and here's the difference -- when there is government support without politics involved, or if there is conflicting political forces each supporting the arts, one can get cultural creativity. It is probably impossible for there to be truly apolitical government support for anything, which means if there is going to be government support combined with cultural creativity, there will have to be conflicting polities. The good -- and bad -- news, then is that we can expect a period of incredible cultural creativity very soon. Around 2020, if Turchin is correct. There was certainly considerable cultural creativity in the U.S. the last time there was a spike in violence in this country, c. 1970. In reality, it was more in the lead-in to 1970, just as the lead-in to the Civil War, the American Renaissance, was highly creative culturally. I see the conflicts arising. We should see the cultural creativity in the U.S. emerging soon if Turchin is correct.

Revolution Bubbles in History

The journal Nature has a fascinating piece on cliodynamics -- computer analyses of patterns in history. What I find fascinating is that they end up with exactly the same analysis as I had on the revolution in Egypt. Each each case, we were looking at bubbles and the causes of bubbles. There is a bubble that resulted in the violence/unrest bubble. The bubble of my analysis seems to lead to the bubble of Turchin's analysis. One gets boom-bust cycles in complex processes when there is positive feedback. Cheap money is a kind of positive feedback. There was an education bubble in the 1960's that led to the violence of the 1970's. I have been saying there is an education bubble now -- and Turchin predicts revolutionary violence in the U.S. of the same kind around 2020. Given that there is also a health care bubble, whose problems have been and will be exacerbated by Obamacare, though created by decades of third party payers, and given the fact that we are still trying to recover economically from the housing bubble, I suspect that 2020 will look far, far worse than did 1970.
_____________
Update: more on cliodynamics. HT: Peter Turchin

Judging Orders from Different Orders

I want to discuss further the science-technology-market symbiosis I discussed in my previous post. This symbiosis has created an unprecidented level of material wealth and well-being fo rthose participating in civil societieis in which those orders are healthiest, most developed, and most interactive.

But that is all this triple order can do. It cannot make us more moral except insofar as it can (and will) encourage whatever behaviors -- hard work, innovation, creativity, efficiency -- that result in success within those orders. These are virtues within this triple order, virtues which may be shared by other orders, or may be viewed as vices in other orders. To a bureaucrat, there is no greater evil on earth than efficiency. Aesthetic qualities -- a central concern of the artistic order -- that cannot be made profitable are unimportant, or even harmful, in the market order.

Complaints that the market order can only improve our material conditions and not our souls are both correct in their assessment and utterly beside the point. The result of the science-technology-market order symbiosis is not to make us more moral, but to increase knoweldge and improve our material conditions. Morality is the realm of the moral order -- or, to be more expansive, the artistic-moral-philosophical symbiotic order. Yet, even here, boundaries blur -- the artistic-moral-philosophical triple order comments upon the science-technology-market triple order, which in turn has recently been directed, through the scientific order, to understanding the biological underpinnings of the moral and artistic orders.

At the same time, nobody would think it at all sensible to think the moral order should demonstrate "efficiency," as that has nothing to do with morality per se. And what would an "efficient" painting or poem be? Using values from one order to judge another can lead to nonsense. Also, would we expect the artistic order to make us better off materially? Hardly. That's not what it does. So we should not complain that the market order does not do things it is not even capable of doing. There are values which are higher in one order over the other. And there are people who feel comfortable in one order -- or set of orders -- over another. Why should we insist that everyone must prefer the order we prefer? It is the height of arrogance to insist that our values are the values all others should hold -- and that everyone should rank them as we rank them. "Judge not lest ye be judged" applies to those who show a preference for participating in one order over another.

Symbiotic Spontaneous Orders

Randall Collins' discussion of modern natural science in The Sociology of Philosophies is very interesting, and I think both accurate and enlightening.

He argues that modern science is "a distinctive form of social organization which I shall call rapid-discovery science," which emerged as a new network alongside that of philosophy.

Rapid-discovery science is actually two networks, "one of scientific and mathematical researchers, and in symbiosis with it a second network comprising genealogies of machines and techniques which generated an ongoing stream of new phenomena for scientific research" (382). Indeed, the laws of thermodynamics were discovered because of the invention of the steam engine, not the other way around.

What Collins is identifying is the emergence of "a kind of cyborg network" in this symbiosis. There had always been technology and, as such, a technological spontaneous order. And there had always been natural science and, thus, a scientific order. But the two interacting together really drove scientific discovery. More, this technological innovation also resulted in the rapid expansion of the catallaxy -- economic growth boomed. In a real sense, the market economy is also a kind of cyborg network. Each co-creates the other, and drives further growth.

We can thus see that science, technology, and the market economy are intimately tied together -- but perhaps not as many think. They are coevolutionary, co-creating spontaneous orders.

Why is it that these are able to become symbiotic with such explosive growth? Could others? Artists would love to think their orders could become symbiotic with the catallaxy and create a better order, but I suspect not. The artistic orders are more tied in with the moral order -- they are symbiotic. And all of these are thus "a new problem in philosophical space" which spurs "reconceptualization on a higher level of reflexivity" (382).

But now we are facing an interesting connundrum. What connects science, technology, and the market? What connects the arts, the moral order, and philosophy (I would place it in a similar triple-stranded symbiotic order with art and morals)? Is this not a somewhat modified version of C.P. Snow's separation of the sciences and the humanities, and never the twain shall meet? If we were not witnessing a further synthesis of science with the artistic and the moral orders insofar as science is now being used to understand the underlying structures of these orders, we are seeing bridges built. It will be interesting to see where this new symbiosis takes us.

The Structural Architecture of Idea Networks

A summary of Randall Collin's structural architecture of philosophical social networks (the philosophical order):

First: Intellectual creativity is concentrated in chains of personal contacts, passing emotional energy and cultural capital from generation to generation. (379)

Second: Creativity moves by oppositions. [...] Chains of oppositions creat the inner content of philosophies; new ideas unfold by negating the major points of rival positions on a shared topic of argumetn and a common level of abstraction. [...] Not zeitgeist, but structured rivalries constitute the successive moments of intellectual history. (379)

Third: The emotional energy of creativity is concentrated at the center of networks, in circles of persons encountering one another face to face. (379)

Fourth: The law of small numbers sets upper and lower limits to these oppositions [3-6 schools; more and you get skeptics or synthesizers]. (380)

Fifth: The law of small numbers structures dynamics over time, connecting the outer conditions of social conflict with the inner shifts in the networks which produce ideas. (380)

Sixth: Because intellectual life is structured by oppositions, leading innovators are often conservatives. [...] Conservative opposition under new conditions of heightened abstraction and reflexivity results in innovations under a veneer of pseudoconservatism. (381).

This seems to be the structure of social networks in the gift and divine economies. I would argue that philosophy qua philosophy properly belongs in the divine economy -- a statement that is certainly far more controversial now than it would have been a few hundred years ago (in the West -- it would be uncontroversial in most of the world even now).

Further, since the gift economy is also structured around ideas, we would expect it to be similarly structured. There are different theories (schools of thought) in physics, for example -- loop quantum gravity, string theory, M-theory. There are different schools in economics -- neoclassical, Austrian, post-Keynesian, etc. There are different literary movements -- postmodernism, new formalism, magical realism, etc. A close analysis would find that at any given time, there are typically 3-6 such movments in play and in opposition.

If we take literature, we can see that new formalism arose in opposition to postmodernism. New formalism is typically understood to be a "conservative" movement because of the emphasis on rhyme and meter. However, it is a conservatism in light of postmodernism and all of the movements that took place in the 20th century. Thus, it is in fact something new.

Given the fact that we now have online social networks, one has to wonder what effect it will have on these sorts of creative networks. Can it replace face-to-face? Or will that necessarily be part of it? Perhaps it can help strengthen what in the past would have been small movements made up of distantly scattered people by letting them connect and stay in contact until they can have face-to-face contacts. I have little doubt that both have been in play in my life. Those I have met face-to-face have helped me get to know people online, who I was then able to meet face-to-face. And I am able to connect with people across the world, whereas in the past movements were localized -- most of Moderism took place in Paris, and probably all the networks led back there.

The internet is thus going to alter these networks Collin talks about somewhat, but perhaps not all that radically. If we can get past childish ad hominem attacks on everyone who disagrees with us online, we may be able to realize it more than we currently do.

Call for Papers

January 1, 2013 will see the release of the inaugural issue of "Developments in Spontaneous Orders: A Journal of Diversity, Globalization, and Entrepreneurship," a peer-reviewed journal of the EDGE Center, a social science research center at UT-Dallas.


We are seeking papers for our inaugural issue on our journal's theme(s):

• Spontaneous Orders
• Entrepreneurship
• Diversity
• Globalization
• Science and Technology

We encourage all scholars interested in exploring how the above themes can help us better understand our social world to consider submitting original academic papers. Acceptable papers can range from case studies to theoretical explorations.

 

Since this is an online journal, we are accepting papers year-round. Papers will be published two at a time throughout the year, with each issue consisting of a year's worth of papers. To have a paper considered for publication on the release date, please submit by Oct. 1, 2012

 

Manuscripts should be sent as Microsoft Word attachments via email to zatavu1@aol.com. Manuscripts submitted to this journal should not have been published elsewhere and should not simultaneously be submitted to another journal.

 

Please be sure that the first page of your manuscript contains the title of the article, the names and affiliations of all authors, any notes or acknowledgments, as well as, the complete mailing addresses of all authors. The second page should contain no author information as well as an abstract of no more than 150 words and 5 to 7 keywords.

 

Manuscripts should be Times New Roman 12 font. We are an interdisciplinary journal, and the writing must be intelligible to the professional reader who is not a specialist in any particular field. Manuscripts that do not conform to these requirements and the following manuscript format may be returned to the author prior to review for correction.

Papers should be between 8,000 and 11,000 words in length. The entire manuscript should be double spaced.

 

I encouarge everyone to spread the word and to freely repost this call for papers.

Troy Camplin, Ph.D.

 

Senior Fellow, EDGE Center

 

Editor, Developments in Spontaneous Orders: A Journal of Diversity, Globalization, and Entrepreneurship

 

zatavu1@aol.com