Friday, December 28, 2012

Knowledge vs. Understanding

Max Weber, Mises, and Hayek all believed that the social sciences were sciences of understanding (verstehen), not sciences of knowledge. This fits my recategorization of the social sciences into the wisdom tradition (wisdom is understanding, not knowledge).

In this light, consider this from Frederick Turner's brilliant new book Epic:

Scientific method, excellent in many respects, is in some ways inferior to the storytelling system, as its reductive, deductive, and analytical procedure virtually dictates that a single cause with a single effect can be identified as the answer. (152)

Does this not sum up all the problems with mainstream economics? Anyone who proposes a single cause with a single effect as the answer to anything in economics ought to be laughed right out of the room. Any yet, how many economists do just that?

Rather, the social sciences should be closer to storytelling and philosophy, with their emergentist, inductive, and synthetic procedures, as these are what create verstehen. The scientific method does not. All it creates is knowledge. And knowledge is not understanding. Indeed, the knowledge we do have in the social sciences create such a wide variety of "understandings" that it's pretty clear that very little is being understood at all.

Thursday, December 20, 2012

The Theater of Tensions

My latest academic publication, The Theater of Tensions, can now be found at Studies in Emergent Order. It's a study of how theaters, as organizations, negotiate the various values of the spontaneous orders theaters necessarily overlap.

Wednesday, December 19, 2012

Applying Economic Insights to other Social Processes

Allan Waldstad applies economic reasoning to understanding the process of science. The great thing about Austrian economics is that it treats the economy as a social science, meaning what it says about the economy is equally applicable to other social processes -- like science, or even literary production. Quite frankly, I think it can help one to see how silly certain ideas in economics are if we apply them to other processes. Consider wealth redistribution. The same processes that result in the patterns of wealth distribution also result in the emergence of identical patterns of reputation in science and in the arts. Is it fair that Don DeLillo has a better literary reputation than I do? Shouldn't we redistribute some of his reputation my way, since I am reputationally impoverished compared to him? Or would that just destroy reputation? Now, if what I said about reputation sounds downright stupid, you now know how you sound to me if you advocate wealth redistribution.

Friday, December 14, 2012

Pure Wisdom and Practical Wisdom Mediated by the Moral Order

What connects the pure wisdom orders (philosophy, religion, and the arts) to the practical wisdom orders (the social sciences, governance, and philanthropy) is the moral order. In many ways, the orders of pure wisdom (like the orders of pure knowledge -- mathematics, the physical sciences, and their technologies) are specialist orders. One has to achieve a certain level of expertise to participate in them at the highest levels. There remains freedom of entry and exit -- a necessary requirement for any social order to be a spontaneous order -- but one does have to learn some pretty complex rules of the game to participate at such a level that one becomes well known throughout posterity.

However, in truth, we each have our own philosophies, our own religious beliefs, and our own artistic views. In the arts, we have all doodled, written a few lines of bad poetry. But more, we have participated by viewing art (architecture is all around us, as are any number of examples of the visual arts outside of museums and galleries), by watching fictional shows on T.V. and at the movies, and by watching plays and reading poetry, short stories and novels (at least in high school). We all have our own philosophical and religious beliefs, which we at the very least share with our friends and family. We thus are all participating in each of these spontaneous orders. And who was Nietzsche (or any of the great, well-known philosophers) influenced by that nobody ever heard of, but who he knew growing up, and whose ideas influenced him -- perhaps even without his conscious knowledge? What great storyteller in Shakespeare's youth, whose name will never be known by anyone else, sparked his imagination? And who have each of these influenced, whose names we'll never know, who influenced yet others?

This is the structure of spontaneous orders. Our ethics are molded in the philosophical, religious, and artistic orders; our morals are developed in the moral order, and find their expression in the social science, governance, and philanthropic orders. The moral order connects the three orders of pure wisdom to the three orders of practical wisdom. Thus, it perhaps would help us to understand the moral order.

What happens when our passions run amok? Sexual desire becomes rape. Acquisition becomes theft. Enmity becomes murder. What happens when we castrate those passions completely with the sword of morality? We become unsexed, without love We become satisfied in our poverty (or romanticize it in others!). We are desensitized to every offense, to every injustice, and go along to get along. We thus need moderation (how Aristotlean! how Nietzschean . . .) -- perhaps a tangent to moralization, in spiritualization:

"The spiritualization of sensuality is called love" (Nietzsche, Twilight of the Idols, 53). The spiritualization of acquisition is called mutual trade. "A further triumph is our spiritualization of enmity. It consists in profoundly grasping the value of having enemies" (TI, 53).

Nietzsche argues that the moralist in fact simply wants everyone to be just like him (TI, 56). Let us admit he is right. Even those who recognize they sometimes fall short morally have an ideal,which is theirs and their alone, to which they expect everyone to rise. And thus, when I discuss morals, I too cannot escape this fact. For example, to discuss an expanding realm of morals is to assume the very morality of such an expansion. There are others who consider such an expansion to be an acceptance of immoral behavior, and thus evidence of our becoming less moral.

One is thus tempted to try to trace out a neutral position -- but each attempt to do so seems to slip away. If I discuss empathy creation, there is implied a claim that creating empathy is good. And it is I who thinks it's good -- and, perhaps, you do too -- and thinking this, I want others to believe as I believe. We wish others to see as we see, to think as we think, to feel as we feel. We do this because we have a theory of mind -- yet our access to our mind is our only source of what a mind is like. Thus, I posit your mind is like my mind. And when your mind is not like my mind, the differences are wrong -- you are wrong. And even if we develop greater empathy, we only ever move from "I do not understand you; therefore, you are wrong" to "I understand you, but you are wrong." At best we change the borders of our tribal lands, including some, excluding others -- but tribal we remain.

Poets, playwrights, fiction writers write their minds. Religious writers write their minds. Philosophers write their minds. We read them, agree and disagree, understand and fail to understand, and learn to empathize more and more the more of them we read. This is the way a liberal education is a moral education. We learn to humanize more people, to see their points of view, to understand their thoughts. We'll find allies and people we would like to be; we'll find villains and yet understand their villainy.

But we must understand that understanding is not to be mistaken for agreement or approval. To understand is not to defend -- though one must admit that understanding allows the injustice of mercy to slip in. True justice must be balanced on the scale with mercy -- it can't be behind a veil.

And thus does the sun of empathy rise, spreading more and more light, so we can see more people are actually like us -- more like us than we ever imagined, because in our exposure to more minds through literature, religion, and philosophy, we are now more like them. Thus does the moral order evolve. And those morals find their expression in our philanthropy, in how we choose to govern (or have ourselves and others governed), and in our desire to come to a higher understanding of our social orders through the social sciences. Wisdom becomes practice through the moral order, and practice in turn informs the ways we will one day be wise.

Thursday, December 13, 2012

Education Bubble

An increasing number of us are realizing that there is a higher education bubble. What this means is something I intend to investigate in the near future. One thing the author of the linked piece mentions is textbook prices. Of course that's part of the bubble!

Poetry Moralizes by Weirding

If the arts are concrete forms of pure wisdom, they moralize. How do they moralize? By making you weird. Specifically, you learn to empathize. You learn to empathize not just with characters in literature, but with objects and places, plants and animals. Thus one enters into a wide variety of others, seeing the world in new perspectives. This is disrupting to the way we view things, opening up the imagination, bringing forth new moral possibilities.

The lessons learned from the processes of the spontaneous orders of pure wisdom find their realization in the world in the spontaneous orders of practical wisdom. This is how "Poets are the unacknowledged legislators of the world" (Percy Shelley, "A Defense of Poetry").

Wednesday, December 12, 2012

Discovery vs. Processing.

The realms of pure knowledge and pure wisdom are realms of discovery -- the discovery of what is always already there. The realms of practical knowledge and practical wisdom are realms of processing -- processing the discovered knowledge and wisdom. There are of course good and bad ways to process knowledge and wisdom -- just as there are good and bad modes of discovery.

How can we learn which is which? Won't we need to know what is a good mode of discovery to discover a good mode of discovery? Or at least, stumble upon a good mode. But then, how would we know it is good? Or bad? The same problems arise with modes of processing. Are we facing infinite regress in either case? Or do we just take a leap of faith, at least for a while? Is this what happens with accepted paradigms and paradigm shifts?

 In any case, surely we can understand that discovery and processing are different sorts of things. We know the purpose of discovery: new knowledge, new wisdom. But what is the purpose of processing? What is the outcome? More process? I think so. Which is why it's a mistake to consider the economy as being able to ever have a goal. It is a process.

Tuesday, December 11, 2012

Catallactic Trade vs. Reciprocity

Vernon Smith observes that social exchange is a trait humans share with chimpanzees. Does this mean that I was wrong when I claimed technology preceded trade?

If we understand that social exchange for chimpanzees is in fact reciprocity that much more resembles human philanthropy and familial interchange, then no. Human trade is not among family members, but among nonfamily, including strangers. This is an expansion of troupe/tribal social exchange, but it's not trade in the same sense as catallactic trade.

Even from this perspective, it seems that concrete philanthropy/reciprocity precedes catallactic trade. And technology in the form of tools can certainly be found among chimpanzees -- and not just among chimpanzees. As with any of our distinctively human actions, the foundations of catallactic trade can be found in chimpanzees, even if the actual action in the sense in which humans engage in the action cannot.

I would argue that without some degree of specialization, no real catallactic trade will take place. And that kind of specialization is human. Vernon Smith certainly shows us the foundations for catallactic trade in chimpanzees, much like in my dissertation I demonstrated that chimpanzees have all the foundational attributes for the emergence of language -- but in the end, chimpanzees simply do not have language any more than they have catallactic trade.

HT on the Smith piece: Sarah Skwire

The Postmodern Anti-Market Mentality

Anti-market thinking takes a variety of forms. For many economists, the most obvious one is economic planning -- an idea which grabbed the imagination of economists in the first half of the 20th century in particular. Yet this is hardly the only kind of anti-market thinking, let alone the most common one in more recent years.

A large number of anti-market thinkers are the postmodernists, starting with Heidegger (who I know is not a postmodernist, but the pomos are impossible without him). Heidegger was anti-science and anti-market, but also anti-central planning (which makes sense given his opposition to science). He saw national socialism/fascism as the corrective to both the free market and central planning. Postmodernist thinkers are anti-market, but also not necessarily for central planning. Their "socialism" isn't central planning socialism -- a fact which suggests that they don't even know what it is they really support. They are just anti-science, anti-market, anti-epistemology, anti-foundationalists. I personally see the logic of being both anti-science and anti-market, even as there is an anti-market, pro-science group as well. Some of the latter are planners; some of them, though, are just afraid that pro-market people will defund science.

For many outside of economics today, socialism isn't necessarily associated with central planning. That is associated with communism. If you asked most non-economists what socialism was, most would perhaps say that it's the government owning the businesses. This is of course possible without explicit central planning. All one would need is the kind of planning one would find in any monopoly business. It would not occur to them that one would have to actually have central planning if the government did in fact own and run all the businesses, since it would make little sense for two government-run businesses to bid for something made by another government-run business. 

In the end, most people today who are anti-market simply think the government ought to regulate the economy very strictly and fund the arts and sciences and make sure people have enough money to live and are able to get whatever health care they need. They have no clear understanding of economics or economic principles, they have no clue that there was even a socialist calculation debate or what that could possibly mean, and they have no really solid ideology to even speak of. Most just have a vague primatological sense that someone ought to be in charge, that money corrupts, and that the government is the arbiter of morals. In the end, most anti-market people don't want central planning so much as they want fascism. They just want the non-ideological, kinder, gentler postmodernist version of it. When one fights the anti-market mentality today, that's what one really has to fight.

Monday, December 10, 2012

Finance and Art -- An Interdisciplinary Inquiry

Interdisciplinary work, at its best, highlights commonalities among disciplines one may not have noticed were there and sheds light on each of the disciplines used. Rachel Cohen's piece in The Believer, "Gold, Golden, Gilded, Glittering," comparing art with finance is one such.

Cohen suggests that artistic depictions of time, from permanence/eternity to increasing contingency from time's passage, parallel developments in finance, from more "permanent" and grounded to more transient and ungrounded (perhaps one could go a step further, and bring in a Hiedeggerian critique of "groundedness" as such). She notes that finance has developed to a point where there is pure finance -- or finance for the sake of finance. As I have noted in my article The Spontaneous Orders of the Arts, spontaneous orders develop a "pure center" so to speak. In the literary order, there is literature about literature. In painting, there are paintings about painting. In the economy there are businesses about business. In finance, there is finance about finance. Each are "ungrounded" and seemingly separated off from the rest of civil society. They do not interact with the other orders. This means both great potential for civil society -- but also great potential for abuse and very negative side-effects. The financial machinations involved in what led to the housing bubble bursting to create the current recession certainly qualifies as a negative side-effect.

But what can we glean from the fact that I recently classified the arts as being concrete pure wisdom and finance/money as being abstract practical knowledge? This would seem to suggest the two are literally opposites.

Given Cohen's insights regarding the relationships between finance and art, though, we can see considerable parallels. Is this inherent in the fact that "opposites attract"? Or that humans feel a need to be in balance -- if they are involved in one element of life a great deal, they will seek out the opposite to (at least occasionally) keep in balance? Or is this simply a reflection of the deep, fundamental similarities among all the spontaneous orders -- including their development over time?

Sunday, December 09, 2012

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. 

Friday, December 07, 2012

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.

Wednesday, November 14, 2012

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.

Monday, November 12, 2012

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.

Wednesday, November 07, 2012

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.

Saturday, October 27, 2012

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.

Friday, October 26, 2012

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.

Sunday, October 14, 2012

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.

Sunday, October 07, 2012

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

Monday, October 01, 2012

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.

Sunday, September 30, 2012

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.

Wednesday, September 26, 2012

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.