Colorado Confluence

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This Week With Christiane Amanpour hosted an excellent debate this morning, with conservative pundit George Will and Congressman Paul Ryan on one side, and Congressman Barney Frank and Clinton Administration Labor Secretary Robert Reich on the other, over the fundamental, perennial issue of the optimum size and scope of government. First, please note that I did not frame it in the conventional way, with “small government” (SG) on one side, and “big government” (BG) on the other, because that is the frame created by SG advocates to mislabel their opposition. The real debate, as I see it, isn’t between SG advocates and BG advocates, but rather between SG advocates and advocates of “No Presumption Pragmatism” (NPP).

The legitimate concern is that NPP may tend toward limitless growth in government, but it is not therefore the case that those who are advocates of “no presumption pragmatism” are advocates of big government. Rather, it might be that there is an un-met challenge facing NPP that, if met, is a preferable path to either dogmatic SG advocacy or a careless, unrestrained-government growth version of NPP.

But there is an inherent tension between wanting government to perform an endlessly growing list of functions, and wanting government to be a minimalistic agent in our national affairs. ABC News’ John Donvan summed up that aspect of the debate nicely:

In the following introductory comments and opening salvos in this incarnation of The Debate, the participants lay out the parameters nicely, challenge some assumptions, redefine some positions, and offer some compelling insights and arguments:

Paul Ryan does an impressive job advocating his position, arguing that adhering to strict principals that generate optimal outcomes is superior to overreliance on government to take care of all challenges and address all issues, the latter error leading to a sprawling and cumbersome burden on human creativity and enterprise rather than an effective reduction in social problems and increase in human welfare. Barney Frank and Robert Reich respond that the government is too big in some ways and too small in others, and that reducing one’s position on the issue to an anti-government presumption fails to address the real challenges of managing a popular government.

Frank points out that many SG advocates are perfectly happy to rely on government to impose their will on others, advocating restrictions on women’s reproductive rights and a lack of definition of civil rights for gays and lesbians, while opposing the use of government in the productive manner of addressing “public goods” and “public bads,” not defined by arbitrary moral convictions, but rather by the real effects of our inevitable interdependence on our individual well-being. Reich reiterates that the question isn’t the size of government, but rather what factions of the population government is assisting or failing to assist.

Paul Ryan’s argument that smaller government is inherently more efficient and more effective than big government simply ignores the inevitable fact that any government function costs money, that, in a complex modern economy, there are a plethora of inescapable and quite expensive government functions that must be performed (e.g., regulating information-intensive markets such as financial and energy markets, which are easily gamed at potentially catastrophic public expense, but costly to monitor effectively); that the majority of the government programs targeted by SG advocates (with the notable exceptions of Social Security and Medicaid) actually involve piddling expenditures in relation to these large inescapable costs that government must be able to meet; that advocacy not to meet those inescapable costs is advocacy for a wildly self-destructive public policy; and that many of those piddling expenditures are in programs which research strongly demonstrates reduces far larger future costs that occur in their absence (such as those we currently incur in our enormous criminal justice system, far larger and more expensive, per capita, than those in other developed countries, incarcerating a far larger proportion of our population).

Since, in reality, there are expensive functions that a modern government must perform, and since, in reality, some social welfare programs have been strongly demonstrated to be cost effective over time, all things considered, what we as a polity really need to do in this debate is to transcend both the “big government is bad” platitude and the “every problem has a direct government solution” habit, and move into thinking more systemically, more intersectorally, and engage, in ever larger numbers with ever more commitment and knowledge, in the real challenge of using government as a disciplined and effective agent of our will, a portal into the organic processes of which we are a part, through which the essential functions of consciousness, of collective decision-making, of necessary oversight, of intentionality and value-driven intervention, can be implemented.

The debate in response to the audience question at the end over bailouts v. limiting the size of banks so that none are “too big too fail” is, as Robert Reich pointed out, an example of an information-intensive issue on which the relative positions of “conservatives” and “liberals” is not quite clear. The conservatives in this debate favored limiting the size of banks, while Frank on the liberal side argued that we require a different paradigm that allows for the existence of big banks in order to be internationally competitive. Though this Great American Debate historically began, in many ways, over a very similar question (should we have a national bank or not?), in its modern incarnation, it’s less ideological than technical, both sides admitting to the need to rely on economic analysis rather than blind ideology, neither side having the definitive solution to what is in reality a very complex problem.

The next segment deals with economic inequality and collective responsibility:

Elizabeth Warren’s introduction to this segment of the debate is, I believe, a very eloquent expression of the fundamental truth undermining the extreme SG/Libertarian argument: We are interdependent members of a single society, our political economy not being, never having been, and simply not capable of being, a mere market place for exchanges among atomized individuals, but rather an arena of coexistence in which some aspects of our shared lives are coordinated through market exchanges, but some aspects are necessarily coordinated in other ways as well.

These “extra-market” aspects of our shared existence aren’t just cultural, aren’t just a matter of family relationships and community relationships and voluntary organization memberships, but are also political and economic, involving our collective decision-making apparatus, our laws, and the ways in which a modern capitalist economy is populated with corporate actors whose own internal structure is hierarchical rather than “free market” based, and which wield enormous political power as a result.

The distribution of wealth and opportunity in America is clearly not a function of some mythical perfected meritocracy, but, as in all times and places throughout human history, is primarily a function of historical injustices reproduced through the chances of birth and the inherited opportunities and burdens that come with them. Our current legal system, evolved through periodic cleansings of the codification of those injustices, has certainly diluted the effects of those historical injustices, but their remaining legacy is clear to see, and is, in fact, a statistically undeniable current reality. Whatever policies we implement or decline to implement today, doing so with blithe disregard for the realities that currently exist is indefensible on both pragmatic and moral bases.

Paul Ryan’s response to Christiane’s opening question about economic inequality bordered on disingenuous: He blamed “current economic policies” for that growing disparity, despite the fact that the disparity has grown with the greatest acceleration, as it has in previous historical epochs, with the growth of deregulation and the success of SG political advocacy. This trend can clearly be seen in the three eras of most obscene concentration of wealth in America: The era of “The Robber Barons,” the “Roaring Twenties” of the Hoover Administration, and the current Reagan and post-Reagan era.

Ryan also, as he did throughout this debate (and as is an endemic deficiency in his ideological camp’s position), acted as if there is no other nation in the world with which we can compare our policies, to determine which kinds of policies really do increase social mobility and decrease economic inequality, and which ones really do exacerbate the lack of social mobility and the increase in economic inequality. The inconvenient fact is that a comparison to the social democracies of Western Europe and Canada demonstrates what the historical record I mentioned above also demonstrates: Social mobility is increased through social democratic government interventions in the economy, economic inequality is decreased, and prosperity is not undermined.

Paul Ryan argues that any attempt to decrease social inequality inevitably serves only to impoverish the wealthy rather than enrich the poor. This is an assumption and a fallacy. Historically, in fact, our political economic institutions have evolved in large measure to decrease social injustice (including economic inequality) without undermining the productive engine from which we all benefit. We’ve been successful enough at the latter goal that we consider merely slow growth to be economic failure, and periods of economic stagnation to be a crisis, and have, on average, maintained a fairly constant and sustained continuing growth in overall economic prosperity. While we’ve met that side of the challenge rather soundly, we not only have failed to address the increasingly inequitable distribution of the wealth thus created, but have actually devolved into a debate over whether we should care about that failure or not.

Ryan and Will represent the more “urbane” branch of their ideological movement, counterfactually insisting that their position decreases inequality and increases social justice, rather than that inequality and social injustice don’t matter. Unfortunately for Ryan and Will, the history of our own nation, and a comparison to other nations, demonstrate that the truth is the precise opposite of what they are claiming it to be.

Robert Reich added the observation that both the marginal tax rate on the wealthiest, and economic growth, were astronomically high under Dwight D. Eisenhower, debunking the assertion that they are antagonistic to one another.

George Will argues that Big Government always favors the wealthiest and most powerful, because it is most responsive to those who can pay expensive lobbyists and make large campaign contributions. Well, yes, government is skewed in favor of those with greatest political economic power, which is why the anti-government, deregulation movement has been so successful: It favors those with the greatest political economic power. To argue against using government to favor the interests of the less powerful on the basis that any government action is somehow inevitably going to favor the more powerful is a bizarre tautology, especially given the historical fact that disenfranchised groups have with some regularity successfully organized to gain power and legal protections throughout our history (e.g., women, African Americans, workers, environmental activists, etc.)

George Will then brought up the interesting observation that (therefore) the welfare state in America is primarily a transfer of wealth from the poorer young to the wealthier elderly (in the form of social security and Medicare). But this is a surprisingly sloppy representation, since neither the young nor the elderly are monolithic in their economic condition. I do agree, however, that social security and Medicare should be means tested; as a nation, we simply can’t afford to subsidize the wealthiest with public programs designed as safety nets.

But it is completely disingenuous to argue that the primary reason for that intergenerational disparity in wealth is due to Social Security and Medicare. The fundamental reason is insufficient government regulation of a market successfully exploited by a small minority of citizens over the course of their lives, such that they accumulate astronomical wealth by old age, creating the disparity that Will cites.

Ryan, however, made a potentially good point that Big Federal Government concentrated in Washington creates a convenient geographic and institutional nexus of power for corporate America to influence the political class. However, ironically, the policies that are most implicated in anti-BG advocacy are those policies that are most antagonistic to corporate interests, such as improved public health and safety standards, improved environmental standards, and expanded social services and programs for the neediest. The success of corporate lobbyists isn’t primarily the increase of government action to their benefit (though there is, of course, some of that), but rather the decrease of government action to their benefit (i.e., deregulation).

I do believe, however, that we need to move toward a paradigm of government facilitated public empowerment to carry out some of the functions currently embedded in governmental bureaucracies. Government can serve best to channel resources and pass legislation that will fund and guide local efforts. We need to think and act more systemically, in a more decentralized way, rendered coherent and conscious through our central agency of collective action (i.e., government), but utilizing all of the social institutional material on the ground in pursuit of social problem solutions and social institutional improvements.

The audience question that opens the next segment is very timely for me, since just yesterday I received my first “photo surveillance” ticket in the mail:

Paul Ryan’s repetition of the notion that economic equality automatically grows with economic growth is well answered by Barney Frank, who pointed out that economic growth is a necessary but not sufficient condition of wide-spread economic well-being

In fact, aggregate economic growth and economic equity (distributive justice, which is one aspect of social justice) are neither diametrically opposed nor perfectly compatible. There is a tension between them, in which some policies could indeed increase aggregate growth at the expense of distributive justice, some policies could increase distributive justice at the expense of economic growth, and some policies increase both economic growth and distributive justice at the same time. Obviously, the last category has the most to recommend it, but there are also times to accept trade-offs between aggregate growth and equitable opportunity to partake of the wealth produced by it.

As a thought experiment, consider the extremes: Few would support an arrangement by which one person accumulates ten times our current GDP every year, but everyone else is left in abject poverty. And, similarly, few would accept an arrangement in which there is absolute equality of abject poverty. There is clearly some balance to be struck between these two values.

Of course, Paul Ryan is right on target in the gist of his last remarks at the end of this segment: We need to end crony capitalism, eliminate subsidies to the rich, and address our economic challenges systemically. Those observations, however, do not belong to the larger ideological package that he is advocating, and, in the final analysis, are not compatible with it.

And on to the closing arguments:

Diminutive Robert Reich’s joke during his closing argument, reminding the audience that he has worked in government most of his life and then standing up and asking, “Do I look like Big Government to you?” struck me for a moment as funny but irrelevant, until I reflected on it a bit: Government is a human institution, comprised of human beings, acting in human ways. It is how we use it (and how we fail to use it), and what we do with it that defines its value. It is a vehicle of human will, not an external imposition, and it is, and should be, exactly as “big” as we are.

But, despite all of my arguments above, the take-home lesson from this debate, for everyone, should be that there is a legitimate debate to be had. From there, we can begin to acknowledge that no platitude suffices, and that the question is not one that can or should be answered with a slogan or reductionist philosophy. The responsibility of popular sovereignty, of self-governance, is that we govern ourselves wisely, succumbing to the manias and oversimplifications neither of the left nor the right. The more of us who take that step, who seek to transcend blind ideologies and embrace the challenge of being reasonable people of goodwill working together in a complex and subtle world, the better off we all will be.

Buy my e-book A Conspiracy of Wizards

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A post on (former Denver mayoral candidate and current Denver Hispanic Chamber of Commerce President) James Mejia’s Facebook page about a drunk driver totaling his parked car reminded me of my similar experience about nine and a half years ago, and the lesson I learned from it about the moral and ethical deficiency that comes from the commodification of responsibility.

This essay forms a counterbalance to my essay on Political Market Instruments, which was more favorable toward another form of commodification of responsibility: the commodification of collective or shared responsibilities that serves the purpose of addressing the collective action problems involved. The potential benefits of some degree of commodification of shared responsibilities is that it converts the burden of meeting them into a monetarily lucrative one, and allocates that burden according to who can best bear it, transforming the value of meeting it into a tradable commodity. The commodification of personal responsibility, conversely, serves to insulate the individual from the moral or ethical dimensions of their obligation, reducing it to a market transaction in which an undue burden can fall on an innocent victim of another’s error.

When my wife and I moved to Colorado, we stayed with friends in Lakewood while looking for an apartment, our car parked on a quiet residential street. In the wee hours of the morning we all heard a commotion, and discovered a drunk driver had totaled my old but reliable Plymouth. State Farm, the young drunk driver’s father’s insurance company, tried to low-ball me (not considering the value of work done in Mexico for which I had no receipts, for instance, and offering me a settlement of about $1000, which was insufficient to buy a running car to replace the one I had), it being inherent to their business plan to try to pay the least possible, despite the fact that, morally and ethically, when a drunk driver totals your parked car, they really have a pretty unambiguous responsibility to make sure they make it completely right.

To the father’s enormous credit, when I wrote him a nice note about my predicament, he kicked in an extra $1000! So, in this particular instance, the outcome was a model of an individual taking personal responsibility despite the commodification of that responsibility insulating him from it. But it’s clear that that is exceptional, that the norm is to let the insurance company handle it, and that voluntarily assuming the moral responsibility which the insurance company insures people against is a rare occurrence. (In fact, the father mentioned in his reply to me that virtually everyone he knew counseled him to let the insurance company handle it.)

The system could certainly be tweaked to diminish this defect, without either eliminating the indispensible service of insurance or making its cost exorbitant. One way to diminish it, for instance, would be, in circumstances of absolute responsibility by one party for a harm suffered by another, a requirement that insurance companies accept the highest independent estimate of the value of the property destroyed (with perhaps some government certification of the those qualified to make such assessments, to prevent collusion between victims and those doing the assessments), since the injured party, morally and ethically, should get “the benefit of the doubt.” In general, when one person has an unambiguous moral responsibility to make another whole after inflicting some injury on them, their insurance company covering such liability must be held to the same moral standard that society would hold the individual. That is not currently the case.

Of course, we do have a recourse in place to ensure this result: Legal action. Unfortunately, legal action comes at a a cost to all involved, in time, stress, risk, and just general imposition. It is expensive, a form of transaction costs which get in the way of arriving at optimal solutions by making the process of arriving at them more costly than the benefits of arriving at them. There is also, in this case, grossly unequal institutional power between the insurance company and the individual challenging it, with the resources the insurance company has at its disposal to defend against legal action far outstripping the resources the individual has at his or her disposal (not to mention that accessing legal counsel may impose a cost on that individual that that individual should not have to bear.) Therefore, whenever possible, we, as a society, should prefer, whenever possible, to implement more seamless, costless mechanisms to arrive at optimal outcomes.

The commodification of responsibility, whether of the collective responsibility commodified by Political Market Instruments, or of the personal responsibility commodified by liability insurance, is not necessarily a bad thing. We only need to be careful that we are not erasing, or insulating the individual or collective from, any portion of that responsibility in the process.

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Social institutional innovation, like technological innovation, has an evolutionary quality to it: New instruments fumblingly addressing new challenges or opportunities sometimes grow up into highly elaborate systems that take on a life of their own. Market economies in general are an archetypical example of this phenomenon: From places where people came together to exchange their wares, markets have evolved into highly complex and robust networks of global transactions, implicated in a velocity of wealth production and transmission that would have boggled the minds of ancient merchants. Therefore, as we stand on the threshold of inventing new kinds of market instruments which trade in artifacts of administrative regulation, even those of us anchored to the dusty tomes of law and economics might benefit from stretching our imaginations a bit, and contemplating what may lie beyond the horizon.

For the purposes of this fanciful conversation, let’s refer to all present and future market instruments that trade in artifacts of political regulation or aspiration as Political Market Instruments (PMIs). The question posed in this essay, therefore, is: If the challenges involved in current tradable regulatory instruments are increasingly surmounted, and the range of PMIs is extended into other realms, such that the trading of such instruments becomes commonplace, what might such markets evolve into?

In order to explore this question, we need to consider what kinds of goods or services PMIs would commodify. Current and recent uses, including global warming abatement, renewable energy credits, and pollution reduction, are examples of a broader category of challenges called “collective action problems,” which have been discussed extensively, in various forms, in the economic, social scientific, and even mathematical literature (see . Global warming, for instance, invokes the need to create viable international accords through which a preferable global energy and GHG emissions regime can be developed, implemented, and enforced. The challenge emanates from the fact that nations individually bear the costs of contributing to such a regime, but collectively reap the benefits. Simplifying the matter somewhat for this initial discussion, all have an incentive to arrive at an optimal agreement and see it enforced, though all also have an incentive for not complying with the agreement to the extent that they can get away with non-compliance.

Here’s a simple thought experiment which illustrates the nature of collective action problems well enough for the average high school social studies student to understand. Imagine that I make the following offer to a group of thirty people, of which you are a member: For each of you that chooses to pay me $10, I will give each and every person in the group (including you) $1, regardless of whether those other members of the group chose to pay the $10 or not. To avoid discussing any complexities at this point, let’s say that the decision is made in secret, no member of the group ever knows what any other individual member chose to do, and all members agree that their only goal in this exercise is to maximize their own individual wealth. If each individual acts in his or her own rational self-interest, since accepting the offer costs him or her $9, no one would choose to do so. However, if everyone does accept it, each person is made $20 richer. No matter how many people accept or reject the offer, those who chose not to take it will always be better off than those who chose to take it. In other words, rationally doing what best maximizes one’s own individual wealth (in this scenario) leads to an outcome in which everyone does worse than they would have done had they been able to enforce a cooperative agreement.

Real world collective action problems are generally much more complex, in which, just as in market exchanges, there are a variety of comparative advantages (differing concessions or contributions which each is best positioned to make, such as Brazilians being better positioned to offer deforestation reduction, and Americans better positioned to offer industrial CO2 emissions reductions). And they occur on multiple overlapping and nested levels and regarding multiple issues, with myriad collective action problems coexisting intranationally, internationally (among nations as the actors), and transnationally (across national boundaries by non-state actors).

Social institutions arise primarily in response to such collective action problems (and, relatedly, in response to time horizon problems resulting from the devaluation of future consequences leading to insufficient foresight in decision-making processes), and utilize four distinct modalities in order to align individual to collective (and immediate to long-term) interests: Hierarchies, markets, norms, and ideologies. Hierarchies are systems of legitimate authority relying on formally codified and enforced rules. Markets are decentralized systems of multilateral exchange, usually facilitated by some form of currency. Norms are informal rules mutually enforced through decentralized social approval and disapproval. And ideologies are internalized beliefs and values enforced through self-policing and auto-sanctioned by cognitive dissonance (in the form of self-inflicted feelings of guilt or shame). Individual social institutions generally are comprised of some or all of these modalities, usually in combination, developing interdependently both within and across individual social institutions.

PMIs are essentially a hybrid institutional mechanism, comprised primarily of the hierarchical element necessary to regulatory regimes, and the market element which facilitates an efficient allocation of resources and burdens. Governments or international commissions imbue PMIs with their value by creating scarcity (in the case of compliance allowances) or subsidized demand (in the case of off-sets or RECs). The benefit of creating an accounting and exchange mechanism for political concessions and accommodations is the same as creating one for the exchange of goods and services: Like money, it frees actors involved in an exchange from what Edgeworth called “a double coincidence of wants,” that is, the necessity of two actors each having something the other wants more than they want what they themselves have. And, like money, it permits multilateral, geographically and temporally decentralized exchanges among a potentially unlimited number of actors, facilitating the achievement of collectively beneficial arrangements with greatly reduced transaction costs. PMIs are a mechanism for duplicating this innovation in the context of political rather than economic exchange.

Differences among nations, among their individual conditions and priorities, provide opportunities to make political exchanges which help both to facilitate such agreements, and to distribute responsibilities and benefits in accord with each nation’s particular circumstances. The expanded PMI model I am contemplating explores both the potential and the limitations of exchanging political concessions among multiple parties to arrive at mutually beneficial outcomes.

The simplest illustration of the PMI model involves three parties negotiating over three issues. Country A wants a concession from Country C, but has nothing to offer Country C in return. Country B wants a concession from Country A, but has nothing to offer Country A in return. And Country C wants a concession from Country B, but has nothing to offer Country B in return. No bilateral agreement can be arrived at among any combination of these three nations. But if it is worth it to A to make the concession to B in return for the concession from C, to B to make the concession to C in return for the concession from A, and to C to make the concession to A in return for the concession from B, then the three of them can negotiate a tri-lateral exchange that satisfies all of their needs. (In this case, the transaction costs are manageable, and PMIs are not required.)

Similarly, it may be possible at times for numerous nations to arrive at an agreement through such “circular exchange,” under circumstances in which no subset of that group could have arrived at any mutually beneficial agreement. At its most complex (and traditionally most difficult to accomplish, as discussed below), a PMI model aspires to facilitate a tangled web of multilateral exchanges of concessions of varying magnitude implicating numerous unrelated issues, such that the removal of any party to the negotiation or any concession being made would unravel the entire agreement. This frees the parties from the necessity of having bilaterally reciprocal interests, and permits the kind of decentralized, multilateral pattern of exchange typified by markets.

The basic premise of the PMI model is that the more parties and issues that can be conflated in a single negotiation, the more optimal the agreements that can be arrived at through a multilateral exchange of concessions on those issues among those parties. The logical conclusion would be that, therefore, conflating all issues and all parties into a single negotiation leads to the most optimal agreement possible. The limiting factor has been that the larger the number of negotiating parties and issues on the table, the higher the transaction costs of coming to a multilateral, multi-issue agreement. The PMI model, therefore, is currently useful to the extent that it can reduce transaction costs enough that the benefits accrued from the arrangement arrived at exceed the transaction costs spent to arrive at it, and to the extent that there is no other non-PMI-facilitated deal that any subset of the parties could have arrived at which would have given them a better benefit-to-transaction-cost ratio.

This is still an onerous obstacle. However, just as various innovations developed historically to reduce the transaction costs involved in economic exchange (money being the most critical one), the PMI model is not immune to future innovations which might reduce the transaction costs involved, and thus increase the range of its applicability. Such innovation begins with a precise analysis of the anatomy of the transaction costs imposed by political (or contractual) negotiations. The least intractable transaction costs involved in multilateral negotiations are coordination costs: Getting the parties to the table, so to speak. Coordination costs are most salient early in such negotiations, and have been greatly reduced, in international relations, by the proliferation of international institutions and treaties.

Bargaining costs, which involve determining the exact nature of the agreement and the precise division of costs and benefits, are somewhat more significant. Bargaining costs are incurred during the actual negotiation process, when the parties involved try to exchange their way to a multilateral agreement that is satisfactory to each and every one of them. At this stage, the negotiations most closely resemble a traditional bartering market, with all parties both sellers and buyers bartering around a single stall.

Finally, and sometimes most intractably, multi-party agreements are beset by defection (or enforcement) costs. Defection costs are those costs incurred by monitoring and enforcing the agreements arrived at during the negotiations. Improving the salience of the multi-party negotiations, and extending its range of applicability, necessarily involves finding ways to reduce all of the aforementioned transaction costs implicated by it.

The potential benefits of pursuing a PMI approach are myriad. As more activities or concessions are brought into a single market, coordination and bargaining costs are almost eliminated, and even enforcement costs are greatly reduced by creating a much larger shared investment in the integrity of the system. To the extent that successful multilateral political exchange agreements are implemented through it, it increases international interdependence, produces oversight commissions with enough authority to ensure the value of the PMIs, and thus provides an incremental back door into some limited though significant degree of global federalism. To the extent that political market solutions can be implemented, they have strong reverberating effects throughout our integrated social institutional and technological subsystems, creating new markets and new entrepreneurial opportunities, and increasing the ideological and normative association of the development and distribution of sustainable energy technologies with political and economic opportunity in general.

In fact, the development of commissions with the authority to ensure the value of PMIs is both a major benefit and a major challenge. Contractual arrangements within jurisdictions are made possible by a legal structure under which they can be enforced. International agreements are made difficult by the paucity of such enforcement mechanisms on the global level. But international commerce, more than perhaps any other historical force, has integrated sovereign nations into a single interdependent global system. Commodifying political exchange requires more oversight than commercial exchange, but also provides more incentives to create it than traditional international negotiations do, by creating more, and more distributed, opportunities to profit from international political exchange.

Despite the potential for PMIs to improve international and transnational cooperation, they would face all of the challenges already encountered by existing regulatory instruments, and to a far greater extent. The determination of the relative value of seemingly unrelated political concessions would be difficult, but fully established markets are particularly good at accomplishing that (their respective market values would determine their exchange rates). Ensuring the integrity of the instruments (preventing leakage, ensuring additionality, etc.) would grow in magnitude of difficulty as the markets become more multifaceted and extensive (though that could also reduce the problem in the long run by bringing more measurements of more changes in more places into the system). The transaction costs involved in every incremental step in establishing such a market will be enormous.

One benefit of such a comprehensive system is that the universal scope and coverage essentially eliminates the problem of leakage, since there is nowhere for any abated public bad to leak to. Just as the concern about leakage has pushed focus on off-set markets from individual projects to sectoral and nation- or province-wide abatements, it would be one force pushing the expansion of PMI markets in general.

Another obstacle for PMIs, already contemplated in regards to existing instruments, is the perverse incentives they can create. If, for instance, we incorporate deforestation avoidance into international carbon markets, then their value is a creature of past deforestation. When a market values the cessation or reduction of the rate of a destructive activity, it implicitly retroactively values having initially increased the rate of that activity in order to necessitate its reduction. In the context of enduring markets for the abatement of past destructive activity, such perverse incentives pose a serious challenge that must be decisively addressed. Many things we might want to incorporate into future and more comprehensive PMI markets -such as improvement in human rights, military de-escalation, and reduced trade barriers, to name a few- would all have current positive value as the result of the negative value of past or continuing actions and policies. Designing mechanisms to prevent the incentive to create problems in order to trade in their correction would be a fundamental challenge for establishing authentic value-generating PMI markets.

It’s worth noting that in our current international political bartering system, this problem already exists. In the lead-up to international treaty negotiations, countries frequently amp up certain misbehaviors in order to have more to trade with. The increased robustness of PMI markets would only increase the robustness of the problem. And, presumably, at the time of establishment of any new abatement PMI, the baseline set for reduction targets would precede any amping up that may have occurred in anticipation of the creation of such markets.

Stretching our imaginations to the utmost, PMIs could trade in a vast array of political goods. As stated above, there are many public bads that we all have a shared interest in abating: human rights violations, military build-ups, trade barriers, and domestic criminal activities with international consequences (e.g., drug cartels), to name a few. And there are many public goods or broadly shared aspirations that there is either already a shared interest in encouraging, or a potential for some degree of international consensus: improved worker conditions and salaries; more political, economic, and cultural freedom; more open borders; and stronger guarantees of protection for foreign nationals abroad, to name a few. In each case, measures would have to be created (such as a “human rights abuse index”); a target would have to be set for abatement markets (either by reference to a baseline, or by some other aspirational standard) and a system for ensuring the integrity of instruments measuring incremental gains in public goods would have to be established; and monitoring, reporting, and verification systems would have to be in place. As such markets proliferate, the ability to identify and implement new areas amenable to new PMIs would continue to emerge.

Though the notion of trading in human rights abuse abatement, or organized criminal activity abatement, may seem odd, and could certainly raise some moral hackles, it is essentially the same idea as trading in GHG emissions abatement: creating markets for the diminution of some undesirable activity. Given the fact that the obstacles are daunting enough for GHG emissions abatement markets, and that the problems facing them grow exponentially as the scope and coverage is expanded to more issues and parties, the path from the present to this possible future would be a long and tortuous one, with many seemingly insurmountable challenges and as-yet-unforeseen technical innovations defining the way. Whether such a future will ever come to pass is far from certain, but that some future which currently appears equally improbable will come to pass seems almost inevitable (assuming continued human survival).

Such speculation may seem to be an unwarranted flight of fancy from our current vantage point, just as to the ancient Greeks, not unfamiliar with the wonders of the agora, contemplation of the exotic financial instruments being traded today would have appeared equally untethered from reality. The preceding discussion is not intended as a blueprint of how to implement an imminently practicable policy instrument, but rather as an added perspective regarding how to contextualize current innovations in terms of potential long-term historical significance. The question isn’t whether current institutions will evolve to surmount obstacles seemingly insurmountable today, but rather which institutions and in what ways. The lathe of trial and error which will produce those innovations is more productive when we experiment with an eye to future as well as present possibilities. I believe that in a comparison between taxes-and-subsidies and tradable instruments as means for internalizing externalities (specifically carbon taxes and carbon cap-and-trade regulation), while both should be used, each in circumstances most appropriate for it, a less obvious (and perhaps still very slight) added weight needs to be accorded to tradable instruments, due to their dramatic long-term potential for facilitating mutually beneficial cooperation, particularly in the Hobbesian paradise of international relations.

1See, e.g., John Von Neumann and Oskar Morgenstern, Theory of Games and Economic Behavior (Princeton University Press 1944); John Nash, The Bargaining Problem, 18 Econometrica 155 (1950); Garrett Hardin, The Tragedy of the Commons, 162 Science 1243 (1968); and Mancur Olson, The Logic of Collective Action (Harvard University Press 1965)

2See, e.g., Kenneth Boulding, The Economics of the Coming Spaceship Earth, in Environmental Quality in a Growing Economy (Henry Jarrett ed., 1966).

3See, e.g., Garrett Hardin, The Tragedy of the Commons, 162 Science 1243 (1968); and Mancur Olson, The Logic of Collective Action (Harvard University Press 1965)

4I utilized this illustration as a high school social studies teacher, using classroom currency points.

5The actual results in my classroom experiment varied considerably, though there were always some students who accepted the deal and some who rejected it.

6See, e.g., Robert Axelrod, An Evolutionary Approach to Norms, 80 American Political Science Review 1095 (1986); and Elinor Ostrom, Governing the Commons: The Evolution of Institutions for Collective Action (Cambridge University Press 1990).

7Steve Harvey, Institutionalizing the Production of Supranational Public Goods: The Shifting Locus of Interest Group Lobbying in Europe (August 1994) (unpublished paper presented at the annual meetings of the American Sociological Association in Los Angeles, CA).

8F.Y. Edgeworth, Mathematical Physics, (Kegan Paul 1881).

9This is precisely what the famous Coase Theorem postulates. See Ronald H. Coase, The Problem of Social Costs, 3 J.L. & Econ. 1 (1960).

10See Douglas D. Heckathorn and Stephen M. Maser, Bargaining and the Source of Transaction Costs: The Case of Government Regulation, 3 J.L. Econ. & Org. 69 (1987).

11See id.

12See id.

13Admittedly, such discussions quickly run into the issue of cultural relativism v. universal human (and non-human) rights, and the related issue of “imperialism” or hegemony v. cultural and political self-determination, but this issue is implicit in all discussions of international law and international standards of conduct.

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(The following is a slightly extended version of my response to an op-ed by Vince Carroll,  Putting Fat Cats In Their Place, in today’s (10/30/11) Denver Post: http://www.denverpost.com/opinion/ci_19211159?source=bb.)

Vince Carroll is absolutely correct that we must consider not only the distribution of wealth, but also the absolute growth of wealth, when discussing issues of our economic well-being as a nation and a people. Certainly, if everyone is getting wealthier, then why should we worry if that is accomplished by means of a system in which the wealthiest get astronomically wealthier while the further down you go along the spectrum of income and wealth, the less robust the growth of wealth becomes (less robust even as a proportion of existing income and wealth, meaning a lower percentage of a lower base number)?

There are several reasons why:

1) The growth in household incomes that Carroll cites is due to an increase in two-worker families, and a decrease in stay-at-home moms. In reality, there has been a decrease in real individual average income in that same time period, an anomaly in the modern era of ever-expanding wealth which corresponds precisely with the rise of income-concentrating deregulation.

2) We have an economic system demonstrably less efficient than some others in existence (e.g., Germany, the Netherlands, etc.) at striking an optimal balance between absolute growth and distribution of the fruits of that growth, resulting in far greater levels of impoverishment, infant mortality, homelessness, violent crime, incarceration, mental health problems, and numerous related problems, than have been achieved by other nations that have struck a more sensible balance.

3) Extreme income inequality reduces economic vitality by constricting the breadth and depth of economic activity. The more concentrated wealth is, the less disposable income, in the hands of fewer people, is available to contribute to the consumer engine of our economic vitality.

4) Carroll disregards the role of deregulation (from the 1980s onward) in generating this economically debilitating concentration of wealth, how that deregulation has been implicated in every major economic crisis since its inception, how it has now undermined the consumer engine of our economy in dramatic and enduring ways, and how, as a result, our economy is in a period of stagnation following contraction, with a no-longer-growing pie still obscenely concentrated in far too few hands.

5) Carroll disregards the various costs not measured by traditional economic indicators, referred to in the economic literature as “externalities” (those costs and benefits of economic transactions that affect those who were not parties to the transaction, in either positive or negative ways), which, while helping to author the huge concentration of wealth in America over the past 30 years, also have helped to do so on the back of the population at large by reducing public health, safety, and welfare, and placing increasing burdens of accumulating and devastating negative externalities on future generations across the globe.

6) Extreme income inequality has many other socially destructive consequences, even aside from the ones listed above. It undermines national solidarity and cultivates inter-class resentments, creates subjective feelings of relative poverty, and undermines democracy by concentrating both the means of affecting public opinion (and thus determining the outcomes of elections) and the power to determine the economic well-being of the vast majority of the people of the nation into the hands of a small, corporation-beholden-and-embedded economic elite.

One must look not only at this “snapshot of reality,” but also at the trends revealed over time, and the consequences of such trends. Even if all of the present reasons for considering how equitably distributed wealth is did not exist, a trajectory of accelerating concentration of wealth is clearly untenable in the long run.

Today, 1% of the nation’s wealthiest command 40% of the nation’s wealth, while the bottom 80% command less than 15% of the nation’s wealth. In 2007 (see http://sociology.ucsc.edu/whorulesamerica/power/wealth.html for an overview of 2007 income distribution figures), the top 1% commanded slightly less than 35% of the nation’s wealth (already considered an indicator of astronomical inequity). The current growth trend in capital concentration has been underway since 1980, coinciding precisely with the Reagan-coined “government is the enemy” paradigm of the right; in 1979, the top 1% commanded just over 20% of the nation’s wealth, having fluctuated since WWII between 20% and, in a rare outlier in 1965, 34%.

The last time the concentration in wealth in the hands of the wealthiest 1% of the population exceeded 40% was in 1929, on the eve of The Great Depression, when policies similar to those advocated by the Libertarian Right today had been successfully championed under the Hoover Administration.

If the challenge is to “get it right,” all things considered, then our grotesque and accelerating concentration of wealth in America, accompanied by the highest-among-developed-nations rates of poverty, hunger, homelessness, violence, incarceration, and other social ills, is indeed an indicator of having failed to do so.

Yes, we do not want to seek “equality” in a vacuum, engaging in the folly of imposing an equality of impoverishment. But we as a nation are not teetering on the edge of that particular folly; rather, we are over the edge of the opposite folly, which we insanely avoid addressing by pretending that it doesn’t exist.

Buy my e-book A Conspiracy of Wizards

Buy my e-book A Conspiracy of Wizards

As I’ve frequently written, the fundamental ideological dichotomy in American politics today is not the right/left dichotomy (or “statist”/libertarian, or pro-corporate/anti-corporate), but rather the rational-people-of-goodwill/irrational-people-of-ill-will dichotomy. Perhaps that latter dichotomy is always the real dichotomy in politics, in all times and places; or, if not the real dichotomy, then at least the real poles of perpendicular axes, with various specific ideological orientations falling within the space thus defined. How reasonable are the various positions being advanced? How much in service to humanity?

As is usually the case, people at opposite ideological extremes are oddly similar, obsessed with oversimplistic panaceas in a complex world, angry that others fail to recognize the one absolute truth of which they are so prematurely and impenetrably certain. Just as fundamentalist Christians and fundamentalist Muslims share a tendency toward theocratic moral tyranny, the extreme right and extreme left of political ideology share a failure to recognize that we are embedded in a complex dynamical social system, that the reality with which we are coping and the ways to do so effectively are organic rather than mechanical in nature, and that dogmatic assertions about what single change or doctrine need be advanced, without adequate consideration of that complex organic whole, are counterproductive.

What we need instead of these sweeping reductionist ideologies is a commitment to systemic understanding and systemic action. Not surprisingly, extreme ideologies tend to be anti-intellectual, either explicitly refuting the value of applying our minds to the challenges we face as a people (as is frequently evident among some factions on the far right today), or implicitly eschewing the value of skepticism and scientific methodology as applied to social and political issues by clinging to blind ideological certainties instead (as is too often evident on the far left as well as the far right).

We see this commitment to systemic understanding and action emerging from time to time in what to many are counter-intuitive positions being advocated by responsible representatives of otherwise highly opposed ideological orientations. I recall, for instance, the ubiquitous public relations push of a couple of decades ago for continued investment in space technology, putting various pairs of ideological opposites on screen together lauding the benefits of doing so. For many, the notion that we should invest significant amounts of our limited resources in aerospace research struck many as counter-intuitive: We have so many problems to address here on Earth, why should we be squandering precious resources on something so frivolous as the development of exotic technologies for use beyond the Earth’s atmosphere?

Of course, the case for investing in such technologies is that, by doing so, we create a constant flow of valuable off-shoots with very significant applications here on Earth. Simply by trying to understand and work with some highly complex aspect of our surrounding reality we benefit ourselves, even if the focal aspect of our surrounding reality seems remote or irrelevant.

A similar, also to some counterintuitive, example of a policy position that all reasonable people support is the need for Americans to invest in our infrastructure. There are those, lost in the error of linear thinking in a non-linear world, who insist that we cannot invest in infrastructure because we have a huge and growing national debt, and that therefore no investment is justifiable. This is simply an economically illiterate position, not understanding how economic growth occurs, both as a historical fact and as a basic systemic reality (see, e.g., Real Fiscal Conservativism, The Economic Debate We’re Not Having and The Real Deficit).

To underscore the degree to which investing in infrastructure is a no-brainer, the presidents of both the U.S. Chamber of Commerce AND the AFL-CIO have teamed up to encourage Congress to pass the president’s call for investment in infrastructure (http://www.uschamber.com/press/releases/2011/march/us-chamber-afl-cio-urge-infrastructure-bank, http://blog.aflcio.org/2011/01/26/union-movement-business-back-obamas-call-for-infrastructure-rebuild-and-other-sotu-reactions/).

The right has long claimed that government is inefficient because it doesn’t create wealth, and doesn’t act in ways similar to how private enterprise, the engine of wealth production, acts. The first point is a red herring, because the only sector of our economy that “produces wealth” directly is labor; all other sectors perform auxiliary functions (e.g., management, capital investment, etc.). Government, in a modern capitalist economy, imperfectly performs vital functions for the production of wealth, including reducing transaction costs and internalizing externalities (see, e.g., Collective Action (and Time Horizon) Problems and Small Government Idolatry).

The second point, that government doesn’t act like private enterprise and so fails to perform as well, has some validity in some contexts, but is mere misdirection when, at those  times when government is indeed employing sound economic principles in ways very similar to private enterprise, the same critics obstruct rather than applaud such efforts. Investing in infrastructure, and even doing so through deficit spending, has long been a hallmark of successful private enterprise in a modern capitalist economy. Businesses large and small depend on credit as the lubricant of economic growth, and it makes perfect sense for governments to do the same.

Just to put our debt into perspective: We currently owe an amount equal to our annual GDP, and are paying interest on new debt that is about equal to the rate of inflation (that is, when adjusted for inflation, we’re paying zero percent interest on new debt). An average homeowner, conversely, borrows about four times their annual income in order to purchase their home, and pays a far higher interest rate on that debt. Without this form of credit commonly in use, very few people would be able to afford to purchase their own homes. Credit, even proportionately far larger than our national debt, and at a far higher interest rate, is clearly not by definition a bad thing.

The problem is not our current debt, or even any immediate additional debt we undertake, but rather our ability to make economically sound policy decisions as a nation, including implementing a plan to control the long-term rise in debt (without which our national debt will eventually become the problem that some, erroneously, consider it now to be). One aspect of such economically sound policy making is the ability to use deficit spending to grow the economy in order to produce both greater individual prosperity and greater future public revenues in order to reduce our national debt and increase our national prosperity in the long run.

It’s time to leave the blind ideological noise on the margins of our public discourse, where it belongs, and bring well-informed analyses in service to human well-being front and center. When the leaders of organized labor and big business are both advocating the same policy, and when that policy has been proven by both world history and private enterprise to be a sound one, all reasonable people should have the good sense to rally around it.

Buy my e-book A Conspiracy of Wizards

Buy my e-book A Conspiracy of Wizards

One of the most critical political issues confronting the U.S. Congress right now is something that has never been a political issue before, is universally recognized by every economically literate member of our society to be something that should never be made into a political issue, and yet has become one due the willingness of one ideologically fanatical faction that is gaining increasing political control in this country to blackmail the non-fanatical majority with complete self-destruction unless the latter gives in to the former’s demands. That is the current state of our country.

The issue to which I’m referring is whether to raise the debt ceiling. In fact, the United States is alone among developed nations to have such a provision, the existence of a debt ceiling and the necessity to vote to raise it, because it would be inconceivable not to, and as a result default on the nation’s financial obligations and destroy the nation’s credit ranking. One frequent poster on Colorado Pols offered some historical insight into this “archaic and useless” bit of legislative baggage: http://coloradopols.com/diary/15729/the-debt-ceiling-is-archaic-and-useless.

It is worthwhile to read and listen to some summaries of what the actual effects of failing to raise the debt ceiling would be. Here is Tresury Secretary Timothy Geithner’s response to Senator Michael Bennet’s query on that subject: http://www.denverpost.com/politics/ci_18066294. And here is a particularly cogent round table discussion, in which all experts from all ideological camps agree with Giethner’s assessment: http://abcnews.go.com/ThisWeek/video/roundtable-economic-outlook-13607093. Notice, despire the universal agreement among all economic experts, from all ideological camps, concerning how devasting this would be to the U.S., that Congressman Doug Lamborn (R-Colorado Springs, CO), quoted in the first article linked to above, said, defending the fact that he has never voted to raise the debt ceiling and never will, “These proclamations and threats mean nothing to me.”

It is a tragic irony that the worst of our catastrophes, the greater part of humanity’s suffering, is inflicted on humanity by humanity itself. The genocides are what underscore this point most emphatically, but the political blackmail that the far-right is now engaged in, while a subtler example, is perhaps a more salient one, for it underscores how ordinary our self-inflicted suffering really is, how easy to avoid, and how easy not to. We have just seen in America the sudden effervensence of a political movement that is based on reducing everything to a few populist platitudes, and the introduction to Congress of some phenomenally unprepared and incompetent representatives who have promised to remain completely faithful to this increasingly institutionalized ignorance.

Now, despite absolute certainty that it would destroy us fiscally and economically, propelling us and the rest of the world into an economic crisis possibly as deep and sustained as The Great Depression itself, these agents of self-destructive stupidity are blackmailing everyone who has an ounce of sense or responsibility that unless they cave in to the economically and socially illiterate demands of this new movement, their newly elected agents will destroy the nation’s economy completely.

Okay, folks. You’ve had your fun. Enough’s enough. Give us our moderately rational, somewhat pragmatic, not entirely insane nation back again. Okay?

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The following is an entire (up to the moment of this posting) Facebook comment thread on a Libertarian’s Facebook page. I often infiltrate these echo-chambers, just to emphasize the distinction in how we arrive at and defend our respective conclusions. Many examples are striking, but this one, toward the end (you can skip the first third without missing much), is so perfectly illustrative of the absolute commitment to a blind ideology, a refusal to even admit to the value of being reasonable people of goodwill, or to the possibility that those who disagree could possibly have anything of merit in their perspective, that I wanted to post it here. It serves not only to emphasize the dogmatic belligerence of the modern far-right, but also as a warning to their counterparts on the far-left: All reasonable people of goodwill have to commit to reason and universal goodwill, not by assuming that our own blind ideological certainties are unassailable, but rather by acknowledging that we live in a complex and subtle world, and that we are all challenged to better develop, both individually and collectively, the disciplines and procedures that favor reason and humanity over irrationality and bigotry.

Catherine Keene but when free markets “fail” we need less freedom in the marketplace. The only thing consistent about Keynesians is their ability to defy logic.

Jawaid Bazyar Government now takes 50% of GDP. We still have poverty, drugs, homelessness, and unemployment. Guess we’ll just need 60%! or 70%! What, exactly, will be enough, Krugman et al?

Kori Fisher what was that definition of insanity again??? doing the same thing over and over expecting a different result….yeah, that’s the one.

Steve Harvey Evidence: gdp experienced historically unprecedented growth in 1934-1937 in the wake of New Deal policies (raising tax rate for hightest bracket, deficit spending); Sweden is first country to emerge from Great Depression using Keynesian eco…nomic principles (http://www.huppi.com/kangaroo/Timeline.htm); both the on-set of the Great Depression, and the return of a downward spiral in late 1937, were due to fiscal policies virtually identical to those recommended by conservatives today; massive deficit spending in WWII decisively pulled America and the world out of the Great Depression; the economic outcome of Obama’s stilmulus spending in the wake of the 2008 fiscal sector meltdown exceeded all professional economic predictions of our immediate economic prospects in 2008 (including for the most stubborn lagging indicator, unemployment, which turned from increasing at an accelerating rate to increasing at a decelerating rate a month after the first stimulus package was implemented). Yeah, those crazy Nobel Prize winning economists and their wild ignorance (compared to economic sages such as yourselves) about economics….

Jahfre FireEater The Keynesian view that an economy is a machine that can be tweaked to one’s advantage without negative consequences is refuted in spades by Ludwig von Mises in his magnum opus, Human Action. As Mises says, this idea “is as old as it is bad…”

Jawaid Bazyar Harvey, you’re insane. Of course it’s easy to cherry-pick numbers you like. How about you take a look at the US unemployment rates before, during, and after our Keynesian orgy during the Great Depression.

Amy Chesser Brock Have you seen Keynes vs. Hayek round 2? http://www.youtube.com/watch?v=GTQnarzmTOc

Steve Harvey ‎@Jawaid: Yes, look at them. I linked to the Great Depression time line in my previous message. Economic contraction follows the policies you recommend, while economic expansion follows the policies I recommend. The sustained explosion of economic growth following WWII was due to the biggest public spending project in American history (WWII armaments). Also, not a single nation on the face of the Earth partook of that post WWII economic expansion without first having a massively expensive administrative infrastructure in place, such as the one we put in place during the New Deal. There is, in fact, an optimum: Too much deficit spending for too prolongued a period causes economic collapse, just as too little for too prolongued a period causes economic contraction. Private businesses run on very much the same model (credit is the life-blood of corporations). We fail for not reducing the deficit in times of economic boon, not for increasing it in times of economic contraction.

David K Williams Jr ‎@Steve Harvey – regarding those Nobel Prize winning economists, I’ll call your Krugman & raise you a Hayek.

Jahfre FireEater LOL

Jahfre FireEater Any scheme that allows the elite to do as they please with easy financing will win an economist or a President a Nobel Prize.

Jahfre FireEater Funding for an ivy league academic economics guild, sure no problem…just keep promising those who write the checks that there will ALWAYS be another check in their checkbook.

Steve Harvey @David: Right. My point is that you’re neither. As someone who has done work in the field of economics, I recognize the legitimate debates, and don’t dismiss Hayek or Friedman the way you folks so blithely dismiss Krugman. It’s pretty clear from the empirical evidence that government spending does indeed stimulate the economy in the short run (I know of no economist who disputes that), but the question -and it remains a question, no matter how brilliant y’all assume yourselves to be- is at what point that short-term stimulus effect is outweighed by long-term drag effects. Most economists recognize that it is a largely context dependent analysis, depending on the current state of the economy, and what, precisely, the government invests in. For instance, if the government invests in public goods that have lots of complementary private goods associated with them (e.g, invests in highways, making cars a more attractive comodity to buy), with lots of forward and backward linkages (e.g., stimulates related industries upstream and downstream from that which the government has invested in), then there is likely to be a very high multiplier effect. Economics, among all of the things that we discuss in public discourse, is the least amenable to oversimplistic platitudes, which is what your ideology pretty much relies on.

Donald E. L. Johnson Dems spend to buy votes, build political careers, not fix the economy. Belief is not the issue, imho.

David K Williams Jr Steve – we can all count on death, taxes & your misplaced condescending elitism. Hayek In fact rejects government spending as a means to stimulate the economy and explains why WWII did not end the depression.

Steve Harvey David, I love the way arguments you disagree with are “elitism” (the more informed, the more elitist), but your dismissive certainty in the face of legitimate disagreement is just good ol’ fashioned common sense populism. If there’s any “elitism” to be found, it is to be found in the position that claims that there is no legitimate debate to be had, that the one truth is known, that the speaker’s position is its perfect and final expression, and all others are just wrong and misguided. I’m all for well-informed and well-reasoned debates on the complex and subtle issues that face us as a society. That’s not what you and your friends ever offer, or accept. (There are those on the right who do, but they are becoming increasingly marginalized by those who don’t).

David K Williams Jr There are plenty of arguments with which I disagree that aren’t elitist. Your arguments, however, always revolve around how smart & educated you are & us mere mortals or so silly for not agreeing.

Steve Harvey My arguments are arguments, mobilizing specifically cited information in reasoned form to defend a position arrived at in the same way. That seems to be the problem.

Donald E. L. Johnson Steve, hve you read The Forgotten Man. It shoots down all of your points.

Steve Harvey No, it doesn’t. Here’s my point: I know that I know almost nothing, and I know that the same is true of all of you. I have more than my share of formal degrees and life experience, and a good mind through which to sift it all, and, as a result, I recognize that it is a very complex and subtle world in which we live, and that our certainties about anything but the most trivial and superficial of phenomena is tentative and fallible. The more you know, the more you know that you don’t. On the left and the right, there are those who simply don’t get that, who have a favorite sacred source or secular sage who, despite being contested and him- or her- or itself fallible, is infallible in their eyes. And when people speak from that place, know absolutely and irrefutably that their own contested truth is incontestable, that is blind dogma, and pure folly. What offends David and others more than my perceived arrogance is that I argue my positions, and do so well enough that it challenges those fortified sacred false certainties, not because of any special talent of mine, but because any argument that is a genuine argument does so.

Valarie Murphy ‎@Steve, Krugman has to be dismissed; he’s always wrong.

Steve Harvey Thank you, Valarie, for illustrating my point.

Donald E. L. Johnson Steve, You’re not the only one who has had life experiences, lived through several booms and busts and read numerous books on our and the world’s political and economic history. And you’re not the only one who knows what he doesn’t know and can’t predict. We’ve all been around the track one way or another, and we have our points of view the same as you do. Ours is as valid as yours. Some of us try to be objective in assessing what’s going on, and some of us are constantly trying to learn more so that we have a better feel for what’s happening and likely to happen. Having read numerous well-researched articles and books on economics and written thousands of stories and articles about numerous companies, employers, laws, regulations and economic developments, it is my personal opinion that government spending on the kind of pork that is in Obama’s stimulous bill and in ObamaCare does nothing to stimulate the economy and in the long run kills private sector jobs.

Donald E. L. Johnson Val, Krugman’s not always wrong, but he never can be trusted to be honest. He’s Pinch’s favorite socialist, and he works hard to defend his former colleague, Ben Bernankee, and his favorite politician, Obama. Like too many academic economists, Krugman has convinced his readers that he has no intellectual integrity and that he’s just another partisan hack with a column.

Steve Harvey Yes, Donald, it’s your personal opinion, but you don’t REALLY acknowledge the possibility that you’re wrong. You don’t REALLY acknowledge that professional economists are divided on the subject (with, if anything, the weight of professional opinion against you). You read what reinforces your bias, not what challenges it, and assume that “your opinion” is the end of the story. I don’t often go there with you, but, the fact is, I consider the question of the relationship of deficit spending to economic growth to be extremely complex, and clearly not something that anyone knows the answer to. I sure don’t. There is plenty of empirical evidence which supports the conclusion that it is a short term stimulus, though you all simply define that out of existence, because it doesn’t confirm your bias. The main issue seems to be its indefinite growth, eventually swallowing up the economy. There is also the issue of balancing legitimate considerations, weighing the goal of maximizing GDP growth with the goal of maximizing true equality of opportunity and other issues of human welfare and social justice. These issues are defined out of existence by those who have a false certainty that defines all of their positions with absolute conviction. There is no real openness to a debate, no real contemplation that there might be anything imperfectly understood, no real ability to learn and grow. It’s not your conclusions that are the real problem, but rather the inflexibility with which you cling to them.

Steve Harvey This exchange inspired a little essay, called “Sacred Truths”: http://coloradoconfluence.com/?p=2075

Steve Harvey Donald, you said ” Dems spend to buy votes, build political careers, not fix the economy.” In a survey of professional economists by The Economist magazine in 2008, 80% favored Democratic over Republican economic policies. The notion that Dems are more corrupt than Republicans is another convenient ideological bulwark, but it has no grounding in realiy. The games and strategies of electoral politics are found across the spectrum, in large part because that which works (for getting elected to office) ends up being that which is best represented. Your assumption that every belief and value those who disagree with you hold must be some nefarious attempt to do evil may serve your false certainties, but it doesn’t serve our civil discourse or our ability to govern ourselves wisely. You also said “Belief is not the issue, imho.” In other words, no criticism of your beliefs can ever be relevant, since their validity is incontravertable; the issue is, as you stated, that those who disagree with you are always wrong, by definition. All people who think this way, from across the political spectrum, do us all a disservice, by reducing our public discourse to a struggle between reason and blind ideology, rather than between competing well-reasoned positions.

Pyro Rob Steve, I think Ronald Reagan was thinking of you when he said this famous like:

“Well, the trouble with our liberal friends is not that they’re ignorant; it’s just that they know so much that isn’t so.”

Steve Harvey A strange response to the assertion that we all need to recognize the limits of our knowledge more, the need to recognize that when complex issues are legitimately contested to pretend to know that one pole in that contest is the indisputable truth is folly, and the need to keep exploring.

Pyro Rob You are mistaken, the issues are not that complex. In fact, the solutions are not that complex either.

Steve Harvey You see the difference in how we think? I recognize a complex and subtle world, with the human dimension mirroring the natural (indeed, a part of and emanation of the natural), ideas spreading and changing and merging into new ones, forming our technological and social institutional landscape, our laws and economy, our cultures and ideologies and arts and sciences. I come at it with a sense of wonder, a sense of awe, even a sense of reverence, recognizing the miracle of our existence, and the responsibility of having minds with which to engage with the reality of which we are a part, to meet our challenges and grasp our opportunities. How well we understand this dynamo of which we are a part affects how well we engage with it, how well we realize the heights of our humanity. You respond to someone who recognizes this complexity, and our constant challenge to understand it to the best of our limited abilities, never fully grasping it, by simultaneously declaring that there are no subtleties or complexities to be grasped at all, that its all very simple and fits into a few reductionist platitudes, a true hier to the Inquisitioners of old; and, at the same time, launch a quote criticizing those who do not think in that way, who recognize the complexity of the world and do not reduce it to a few simple platitudes, for thinking that they know what isn’t so? You turn reality on its head, in the most obvious of ways, and then pat yourselves on the back for the brilliance of having said something completely meaningless.

Steve Harvey Let’s capture this conversation in its bare form: Steve: None of us knows as much as we either think or pretend we do. Pyro: You’re problem is that you know things that aren’t true. Steve: Strange answer. We live in a complex world with legitimately contested issues. Pyro: You’re wrong. We live in a simple world with simple answers. Steve: So, saying that none of us knows as much as we think we do is the error of knowing things that aren’t so, while claiming that everything reduces to a few simple and indisputable platitudes is the avoidance of that error? Uh-huh. I see….

Buddy Shipley The Cartoon Bears investigate the income multiplier of con-artist, Maynard Keynes, his argument for deficit spending, to see why it doesn’t work. They discover bad assumptions, and that Keynes was contradictory on whether his multiplier would or wouldn’t cure unemployment. They find a couple of interesting clues, and get ready to tackle the math in these videos. http://www.youtube.com/watch?v=pA67E8jMq84 http://www.youtube.com/watch?v=4Vnus-Kw5Is

Buddy Shipley Whether one favors the economic theories of Keynes or Hayak, any attempt to implement policy based on either MUST be constrained by the powers and authority granted to the federal government by the Constitution. Therefore most Keynesian ideas can never be permitted because they can only be implemented through tyranny.

Keynes was a conman and The Tree of Liberty is very thirsty…

Buddy Shipley ‎”For economists the real world is often a special case.” –Edgar R. Fiedler

“Ask five economists and you’ll get five different explanations? six if one went to Harvard.” –Edgar R. Fiedler

…”Give me a one-handed economist! All my economics say, ‘On the one hand? on the other.'” –Harry S. Truman

“In economics the majority is always wrong.” –John Kenneth Galbraith

“In economics, hope and faith coexist with great scientific pretension and also a deep desire for respectability.” –John Kenneth Galbraith

“An economist is someone who knows more about money than the people who have it.” –Anonymous

“An economist’s guess is liable to be as good as anybody else’s.” –Will Rogers

“Economy is too late when you are at the bottom of your purse.” –Seneca

“The economy depends about as much on economists as the weather does on weather forecasters.” –Jean-Paul Kauffmann

“The notion that big business and big labor and big government can sit down around a table somewhere and work out the direction of the American economy is at complete variance with the reality of where the American economy is headed. I mean, it’s like dinosaurs gathering to talk about the evolution of a new generation of mammals.” –Bruce Babbit

“If all the economists in the world were laid end to end, it wouldn’t be a bad thing.” –Peter Lynch

“If all the economists were laid end to end, they would not reach a conclusion.” –George Bernard Shaw

“When you rob Peter to pay Paul, you can always count on the support of Paul.” –George Bernard Shaw

“There are three kinds of lies: lies, damned lies, and statistics.” –Mark Twain

Steve Harvey The problem, Buddy, is not the debate, but the unwillingness to have it. I am arguing that it is a complex and subtle world, and that our best understandings are tentative and incomplete, while those arguing against me both insist that it is a simple world amenable to simple answers, that they know what those simple answers are and that all who disagree with them are wrong and dismissible as such, and, in an amazing demonstration of how conveniently constructed their reality is, that the problem with those who disagree with them is that they think they know things that aren’t true! If we have camps in our public discourse in which their absolute certainties are not open to new information or applied reason, then we have no public discourse, but rather a secularized religious war and nothing more. Thanks to folks like you, and your counterparts on the left with the same attitude (against whom I argue just as vociferously), that is exactly the condition of this country right now. As for your dismissal of the opposing side in the current economic debate, while you are right about the fallibility of expert views, you are irrational to assume that your lay views benefit from some superior insight. The problem isn’t that experts don’t know and you do, but rather that none of us does. We are operating in a complex world with imperfect knowledge and understanding. Admitting that is a necessary first step to having any kind of meaningful public discourse. For example, you dismiss the notion that public investment can have any economic stimulus effect, despite fairly overwhelming historical evidence to the contrary (to which I cited above), relying on a string of quotes and one well-worn analysis that criticizes the Keynesian multiplier. But that analysis is the definitive truth, and, even if it were, there are non-Keyneisian arguments for why government stimulus spending works under certain circumstances, such as the one I mentioned above concerning the complementarity to private goods of the public investments, and the robustness of forward and backward linkages. It may be the case that the historical evidence is an artifact of spurious relationships, that all analyses that support the notion that government spending can have a stimulus effect under certain conditions are wrong, that the 80% of economists who think so understand economics less well than you do, and that your platitude-driven conclusion is the one correct one. I’ll admit to that possibility. Let’s put all of the arguments on the table, in a mass public agreement that none of us yet knows all of the answers, and agree to have a civil public debate based on reason applied to evidence, in which all of us are committed to the historically proven processes (e.g., scientific methodology) by which to arrive at our agreed upon truths. Let’s step back from our false certainties, across the ideological spectrum, and agree to be reasonable people of goodwill working together in a complex and subtle world. How can anyone object to such a proposal?

Pyro Rob Steve, the simple problem is that the govt thinks it’s responsible for things it is not. The simple answer is to restrict the govt from doing those things. The really simple answer is to abide by the constitution as it is written.

Steve Harvey Pyro, that’s the simple problem according to one ideology, and one faction of our population, and not the other. Nor is it the unambiguous truth about what our Constitution says and means (a document whose interpretation is subject to judicial review rather than popular referendum). The challenge in a democracy (or republic, if you like), in a popular sovereignty, is to recognize competing views and interpretations, to recognize competing political and economic ideologies, and not to assume that only yours is legitimate, while all others are wrong. I disagree with your political and economic assumptions, but I am very willing to participate with you in a process which subjects all views to reason and evidence, to robust debate, to a process by which reasonable people of goodwill can better arrived at the best reasoned and most useful policies. To get to that place, ideologues have to stop insisting that there is only one truth: Their own.

Buddy Shipley No Steve. The problem is blindly assuming the “debate” is even legitimate. Keynes was a conman and the gullible refuse to accept they’ve been had, and no one wants to admit they’ve been scammed on such a scale as this.

Buddy Shipley It’s NOT a F#$%ing “ideology”!!! WTF is the matter with you? It’s the Constitution, stupid! SO many Marxist assholes, so little time.

Steve Harvey You can keep repeating variations of “We are absolutely right and those who disagree with us are absolutely wrong, case closed,” but you are only continuing to prove the depth of your blind ideology. There are legitimate economic debates, some not involving Keynesian economics at all (as I’ve noted twice already, not all analyses which arrive at the conclusion that public spending has an economic stimulus effect do so via a Keynesian analysis). You dismiss the opposing view, and insist on your own infallibility. I say we are all fallible, and the only way to frame that universal fallibility in a manner which best serves reason is to commit to the processes most conducive to the triumpth of reason.

Steve HarveyI’ve studied and taught the Constitution in multiple contexts, in economics, history, and law, and all Constitutional scholars that I know recognize that the document you think is so simple and straightforward isn’t at all. Many of its terms aren’t defined, and have no inherent unambiguous definition (e.g., “due process,” “general welfare,” etc.). The necessary and proper clause, the spending clause, and the commerce clause give Congress potentially expansive powers, depending on interpretation. Insisting that your interpretation is correct, often in contradiction of virtually all constitutional scholars, is indeed ideology, and not the Consitution itself. The underlying purpose of the Constitution was to strengthen, not weaken, the federal government, as its history (replacing the toothless Articles of Confederation) and its in-depth defense by Madison, Hamilton, and Jay in The Federalist Papers clearly demonstrate. It may be, in the end, that you are less omniscient that you believe, and that there is indeed room for debate in this great nation of ours.

Buddy Shipley Steve refuses to comprehend. It is not a matter of “right and wrong”! It’s the Constitution, a binding contract between and among all citizens of these United States. Neither Steve nor our Elected Officials have the RIGHT to ignore it and do as they please!! That is tyranny.

What Steve calls “platitudes” I call standing up for the liberty of individuals, upholding and defending the Constitution, which is the sworn duty of EVERY elected official! That they fail to do this makes them criminals, but the judiciary aids and abets them in their tyranny.

And fools like Steve like it that way.

Buddy Shipley Steve, you are part of the pathology that’s killing us. If ANY of the bullshit you think is “Constitutional” was legitimate, why didn’t the framers and founders implement any of it from the outset?

You just make shit up and pervert the language of the Constitution to suit your agenda du jour. YOU are one of the errors in our education system responsible for filling student’s heads with propaganda.

Steve Harvey Buddy, as I said, I’m familiar with, and committed to the Constitution. The problem is that you refer to a caricature of the Constitution rather than to the Constitution itself, and the terms of the binding contract are other than what you insist they are. Again, this is open to debate (though I am convinced, through being well-informed rather than through an arbitrary certainty, that your position is mistaken), and I do not dismiss you as wrong-by-definition the way you dismiss all those who disagree with you. I recognize that I live in a world of differing views, differing interpretations, and that our job is to put into place the most robust and rational systems for arbitrating among those disagreements. Your belief is that as long as you keep shouting more loudly, invoking more epithets and ad hominems directed toward those who disagree with you, labelling away every fact and analysis and all who articulate them that you find inconvenient, you have somehow managed to command an impenetrable fortress. It is only impenetrable in terms of how well it insulates you from contradictory evidence and argumentation; it is non-existent in terms of how well it actually defends your position in public discourse.

“The genius of the many is a captive giant, whose freedom is the ends and the means of all other things.” This is a line from my novel (A Conspiracy of Wizards; see An epic mythology), uttered by the wizard Evenstar to his disciple Algono, both expressing one of the underlying dynamics of nature about which the novel is ultimately about, and foreshadowing a metaphorical representation of it: A fiery giantess trapped in a mountain (a volcano myth; see The Hollow Mountain), representing the pent-up power of Mother Nature herself.

Nature (more specifically, the terrestrial biosphere) is a product of the genius of the many, of time and numbers, of a “selfish gene” (to use biologist Richard Dawkins’ term) replicating, mutating, and competing (or struggling) for reproductive success, in a process of non-linear diversification and proliferation (i.e., there are ebbs and flows to both). This diffusion of thriving, of experimentation, of massive quantities of failed variations interspersed with occasional successes, winnowing down the spectrum of forms to those which can articulate themselves into the transcient biological and geological landscape of their time and place, is the progenitor of human existence. And, as might be expected, the progeny (humanity and human history) resembles but is not identical to its parent (the biosphere and “natural history”).

I have already described this resemblance in a series of essays (Adaptation & Social Systemic Fluidity, The Evolutionary Ecology of Social Institutions, The Fractal Geometry of Social Change, The Evolutionary Ecology of Human Technology, The Politics of Consciousness , Information and Energy: Past, Present, and Future, The Evolutionary Ecology of Audio-Visual Entertainment (& the nested & overlapping subsystems of Gaia), The Nature-Mind-Machine Matrix). This is not another reiteration of that theme. Here, I am focusing on a single aspect, an underlying dynamic: The relationship between the Many and the One (see E Pluribus Unum and Collective Action (and Time Horizon) Problems for related discussions). More specifically, this post is about the aggregation of the many into a more or less robust unity, focusing especially on the robustness of information processing.

Arguably, the robustness of information processing is precisely what defines the genius of the many, as exemplified in the progressions of biological evolution and human history (parallel phenomena on different time scales, with a different breadth and depth of forms). Genes are packets of information, and evolution is how they are naturally processed (accidental mutations fit themselves, successfully or unsuccessfully, into their environments, modifying the environment in which both previous and subsequent accidental mutations must fit themselves, in an evolving matrix of informationally defined forms). And the same is true for human technologies and social institutional forms, including the various ways in which organized divisions of specialized labor are accomplished: It is all information-based (see Information and Energy: Past, Present, and Future, for a discussion of these interrelated generators of human historical progress).

The informational foundation of our existence is not just what we normally identify, such as the product of universities and research institutions, or the communication of information through our various media, but also the full range of human activities: all of the norms, values, techniques, rituals, arts, recreations, jokes, gestures, expressions…, in short, all that constitutes human life.

In human affairs, there are two fundamental facets to the genius of the many: One that is the product of averaging, and one that is the product of aggregating. The first aspect is best illustrated by the fact that if you have a thousand people guess the number of jelly beans in a jar, the average of their guesses will be far closer than any individual guess, and, in fact, will be remarkably close to the actual number. The second aspect is best illustrated by the robustness of a division of labor in a market economy, in which the organic articulation of separate expertises and activities produces greater aggregate wealth. This essay is primarily about the second facet, but it is important to remain aware of the first as well, that the “averaging” of our diverse opinions and assessments also contributes to our collective genius, and that, in many circumstances, seeking more moderate positions is recommended by such awareness. But it is through the aggregation rather than the averaging of our individual consciousnesses in which the most robust expressions of the genius of the many can be found.

Embedded in our technologies and social institutions is something analogous to the human genome, but encoded in cognitions rather than in genes, and more fluid (or faster flowing, and acceleratingly so as a result of its own feedback loop) due to the speed and intentionality of cognitive communication, mutation, adaptation, and competition for (cognitive) reproductive success. Our intentionality is a part of this process: To the extent that we, individually and collectively, prefer some outcomes over others, our will, and how we exercise it, affects this evolutionary process for better or worse. The two predominant variables affecting the quality of the effect our will has on this process are the degrees of reason and goodwill employed in our efforts: A deficit in either leads to less desirable aggregate outcomes, while an abundance of both leads to more desirable aggregate outcomes, in proportion to the extent of the deficit or abundance (see The Politics of Reason & Goodwill, simplified, for a discussion of how we can and should organize in service to these two values). 

In a sense, embedding reason and goodwill into our social institutional landscape, and cultivating them as the predominant (metaphorical) flora and fauna of that landscape, is the recursive function of the genius of the many in service to human welfare (by which I mean not just the relative absence of devastating hardships, but also the increasing presence of conditions which give full expression to the human spirit and the joyful celebration of life). As the quote from my novel says, freeing the genius of the many is both the means and the ends of this goal, because it both produces and defines human welfare. Thus, we value individual liberty both as an end in itself (enabling each of us to more fully pursue and celebrate our own lives), and as a means to the end of aggregating into a more creative and productive society.

A slight digression is required here, to distinguish liberating the genius of the many, on the one hand, from liberating individuals from oppression on the other. The two are related, but not identical. The former depends both on the liberation of individual creativity and initiative, and the aggregation of that individual creativity and initiative into a collectively productive force. The latter is a more unbalanced concept, focusing only on the individual and not on the articulation of individual efforts into a collective and mutually enriching enterprise. The latter is the blind ideological expression of a historical recalibration, in which the tendency of societies to be overcentralized and oppressive was confronted and eroded, and the ideology favoring individual liberty rose in prominence in those societies which most successfully confronted this previous historical imbalance.

Unfortunately, in contemporary America, the pendulum has swung too far, creating an ideological obliviousness to our interdependence and mutual responsibilities to one another. We need now a new conceptual framework, which recognizes both the value of individual liberty, and the value of organizing into a collective enterprise for mutual benefit and in service to humane values and ideals. The genius of the many is not liberated by disintegration into mutually indifferent individuals, but rather by recognizing the complex and subtle relationship between the individual and society (see, e.g., Liberty & Interdependence, Liberty & Society, Liberty Idolatry, and The Inherent Contradiction of Extreme Individualism). Indeed, true liberty is something subtler and richer than mere freedom from government; it is a function of our mutually liberating collective enterprise, which endows us with the conceptual and material means to live fuller, more expressive, and more gratifying lives, with a wider spectrum of possibilities available to us.

It is true that the genius of the many does not always serve this end, that its product can be temporarily diverted toward its own containment. It is sometimes tapped in service to goals that do not seem to serve human welfare at all, such as building great monuments to ancient rulers (e.g., the pyramids), or enriching the few on the backs of the many. In the former instance, such ostentatious displays are both the oppressive aggrandizement of the rulers who commission them, and are a symbolic consolidation of our collective genius, an expression of the degree to which a society has managed to organize itself sufficiently to mobilize enormous resources in service to the mere advertisement of that ability. It is analogous to the Irish Elk, which, according to a still debated theory, went extinct due to having evolved ostentatious antlers in males, as a way of advertising to females their ability to squander their surplus nutritional intake (and thus their prowess in being able to obtain and consume that surplus) on a mere symbol of such prowess (the antlers having reduced their competitiveness vis-a-vis other species, eventually leading to their extinction).

But this diversion of the product of the genius of the many, in human societies, is generally in service to the few, or in service to blind militancy. It gradually leads to the collapse of the society that indulges in it under its own weight (much as the Irish Elk did under the weight of their antlers), rather than the invigoration of that society by virtue of the continuing liberation and mobilization of the genius of the many. A good modern example is the Soviet Union, which mobilized enormous resources in service to a militant totalitarianism, but in an unsustainable way.

In other words, diverting the product of the genius of the many away from human welfare, and away from liberating individual initiative and creativity, expresses and consolidates a current degree of liberation of that genius, but often curtails further liberation of it, and even contracts the existing degree of liberation. One theory of the rise of modern democracy in England illustrates this most clearly: According to the theory, the constant internecine wars of Medieval Europe create a constant pressure on monarchs to mobilize sufficient resources to fund those wars. The pressure was greater than it was in other parts of the comparably developed world, because European states had resisted (since the fall of the Western Roman Empire) consolidation into a strongly centralized large empire, leaving kings to vie with other kings close enough to pose an immediate and constant threat to the throne itself. The English solution to this problem was the gradual granting of increasing rights, first to nobles, and then expanding outward, in order to liberate the individual initiative and effort sufficient to produce enough taxable resources to fund these wars. In other words, to compete through utilization of rather than display the genius of the many requires liberating more of it rather than merely channeling it into the production of monumental works.

While historically, (implicit and explicit) competition with other (internal and external) polities was the generating force of the progressive liberation of the genius of the many, we have within our power the ability to replace that motivating force with one more directly committed to the maximization of human welfare. We can compete, in other words, not against each other, but against suffering and in service to our collective well-being.

So the question is: How do we organize ourselves to best liberate and mobilize this genius of the many in service to human welfare, broadly understood? Again, the two essential ingredients to such organization are reason and goodwill. We must increasingly focus our efforts on serving humanity rather than merely serving either ourselves individually (or locally) or serving some blind ideology which evolved in haphazard response to the end goal we can now explicitly define and pursue. And we must do so by subjecting all policy choices to the crucible of systematic and procedurally disciplined “reason.”

Government is our agency for such collective decision-making. We have two basic challenges facing us vis-a-vis government: 1) Ensuring that it serves our collective welfare rather than the welfare of smaller, privileged sub-groups; and 2) ensuring that we enable it to do so most effectively. These are somewhat in tension with one another, because democracy, which evolved in service to the former demand, can limit or obstruct the mobilization of specialized knowledge and expertise through a division of labor that best serves the latter demand. The challenge for us, and the vehicle for most effectively liberating and channeling the genius of the many, is how to most efficiently and effectively articulate these two mechanisms into a single coherent system.

Our national ideology has enshrined both of these values (democracy and division of labor through a market economy), but has conceptually divorced them from one another, obstructing their articulation. In the popular American view, the economy may benefit from specialization and a division of labor, but government benefits from direct popular control of decision-making. We may want to hire our surgeons on the basis of their training and expertise, but we don’t want to entrust such responsibilities to our governmental representatives. The problem is that governance is, like surgery, an information-intensive task, requiring the mobilization of precise knowledge and analysis in service to well-designed public policies. And the challenge we face in governing ourselves accordingly is not dissimilar to the challenge face in other principal-agent relationships: We have an agent to whom we must delegate some specialized functions, but in such a way that we ensure that that agent is acting in our interests rather than its own (at our expense).

The most efficient way to accomplish this is to align the interests of the agent with those of the principal, so that when the agent pursues its own interests most robustly, it incidentally is also serving its principal’s interests most faithfully. This is what social institutions generally attempt to accomplish, through market mechanisms, hierarchically imposed rewards and punishments, diffuse social approval and disapproval, and internalized values invoking one’s own “conscience.”

On the other side of the relationship, the complacency or disengagement of the principal permits the agent to run amok. In order to improve our articulation of the interests of the principal with the expertise of the agent, we need a principal, a polity, that is as engaged as possible, actually tracking the outlines of the information that the agent will be mobilizing, just as the parent of a child about to undergo surgery might want to be as well informed and involved as possible, even while recognizing that they have to entrust their child’s life to the surgeon’s expertise.

In America today, we suffer the combination of a polity that blindly entrusts its own self-governance to a government it feels disassociated from, while simultaneously distrusting that same government and wanting to impose on it its own uninformed will. What we need instead is a polity that has access to and an interest in the details of what it means to govern ourselves intelligently, and works with our agents to utilize their expertise in service to our informed and engaged collective will.

To most effectively liberate the genius of the many, we need to organize ourselves from top to bottom, filling in the chasm between “people” and “government,” forming layers of engagement, and channels of information flows, so that our various potential contributions to intelligent self-governance flow “inward” to our agents, while the outlines of the relevant expertise to which we must frequently defer flow “outward” to the polity. (Again, my outline for how to go about doing that can be found at The Politics of Reason & Goodwill, simplified). By doing so, we can most effectively and organically institutionalize the incorporation of both reason and goodwill (or collective will) into our political decision-making processes, more fully liberating the genius of the many, and, by doing so, more fully liberating the human spirit.

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In a modification of my last post,  The Evolutionary Ecology of Social Institutions, in which I described how memes and paradigms form and spread and combine into social institutions, I added on a few paragraphs describing the fractal geometry of that social institutional landscape, which form the first few paragraphs (following this one) of this post.

The social institutional landscape has a nested and overlapping dynamical fractal structure, with some small subset of memes shared almost universally by global humanity, and the rest by smaller swathes of humanity of every magnitude down to the individual level. Transnational linguistic groups, national or regional cultures, international professional communities, aficionados of theater or a local sports team, local peer groups and families, these and almost unlimited other such groupings can share meme-sets ranging from specialized professional knowledge through games and entertainments to particular opinions or judgments. Rumors, observations, shared jokes, novel insights, technical innovations all swirl and sweep through humanity like gusting breezes through endless grasslands.

Some are highly contagious, articulating well with human psychological predispositions or existing internal cognitive landscapes, or proliferating due to their economic or military utility, spreading far and wide. Some become obsolete, dated by the flow of events or by the duration of attention spans, and contract again into oblivion after “lives” ranging from the very local and fleeting to the very widespread and long enduring.

Individual internal cognitive landscapes are comprised of a unique intersection of these differentially distributed memes, most, though shared in essence, slightly modified in the individual mind by the already existing cognitive landscape of metaphorical frames and narratives into which they fit themselves. And all of this is in constant flux at all levels, new memes emerging, spreading out in branching and expanding tentacles, which themselves are branching and expanding recursively, shrinking back, billions doing so simultaneously, converging into new coherent sets of memes which take on lives of their own.

If we imagine each meme as a color, and each variation as a shade of that color, then we would have innumerable distinct colors and shades flowing in diverse expanding and contracting fractal patterns through the mind of humanity, the hues shifting as the memes evolve, interacting in almost unlimited unique and creative ways as they converge in particular minds and groups of minds, each individual human being defined, in conjunction with its unique set of genes (and subsequent physical affects of variable environmental factors), by its unique set of memes organized into simultaneously shared and individuated metaphorical frames and narratives. This is the graphic of our social institutional landscape: mind-bogglingly complex, flowing and dynamic, throbbing with a life of its own, shot through with the transient borders and categories imposed by our imaginations, borders and categories which themselves are artifacts of the mind in constant flux on varying time scales. (See The Mandelbrot Set: Images of Complexity for a static but in-depth version of the imagery described above.)

But distinct memes themselves are changing as they flow, being modified in individual minds or synthesized with other memes to produce new ones, displacing or disproving others, in a constant dance of creation and destruction interspersed with the flowing patterns of modification, dispersion, expansion, and contraction. Memes are catalysts, interacting with human predispositions, existing cognitive architectures, and the natural environment to produce new forms, new technologies, new social institutions, and to render old ones obsolete or out of favor.

As discussed in The Evolutionary Ecology of Human Technology, some of those memes are intentionally cobbled into purposive systems, or “technologies,” programming or channeling some set of natural or behavioral phenomena in service to desired ends. Those that program natural phenomena are the ones conventionally thought of as “technologies,” enabling us to do things we were once unable to do, and to produce wealth and comfort and opportunity (as well both intentional and unintentional damage to human beings, their physical infrastructure, and the natural environment) far in excess of what we once were able to produce. These technologies and technological domains (e.g., electrical, digital, etc., as well as, as explained below, market, contractual, etc.) interact with the more haphazardly accumulating and evolving meme-clusters of the social institutional landscape. Technologies can be thought of as the engineered architectures carved out of the social institutional “natural environment,” the latter comprised of the wilderness of foundational linguistic and cultural forms as well as the economic, political, and ideological accretions diffusely growing in conjunction with our various purposive systems.

(The distinction between “engineered architectures” and the rest of the social institutional landscape can be a bit hazy, since the rest of the landscape is a function of human purposive action as well. The difference is that the architectures are consciously invented components, such as the airplane or the US Constitution, while the rest is everything that organically grows around and in conjunction with them, such as social norms, cultural motifs, and folk beliefs. In a sense, it might be correct to say that the entire social institutional landscape is composed of microcosmic “architectures,” if examined closely enough, since it is the accretion of individual purposive actions. Indeed, technologies are to the social institutional landscape what the social institutional landscape is to Nature itself, an increased focusing and intentionality -in a sense, a distillation- of diffusely accreting “purposiveness.” This is one more aspect of the fractal recursiveness of The Nature-Mind-Machine Matrix.)

While technologies programming physical phenomena are what we most commonly think of when we think of “technologies,” there are undeniable social institutional technologies as well, such as currency instruments (facilitating multilateral, global, on-going exchange, and the enormous economy based on it), enforceable contracts (allowing people to bind one another to mutually beneficial collective action that would have been difficult or impossible in the absence of such instruments), scientific methodology (allowing a more robust and reliable growth in knowledge of the underlying dynamics of the natural world than had been previously possible, and, in fact, underwriting an explosion in the proliferation and sophistication of new technologies), and legal procedure (allowing a more reliable and vigilant system of determining truth in disputes between individuals or between individuals and the state). The United States Constitution, in fact, is the codification of an intentionally invented social institutional purposive system.

New social institutional technologies are constantly being explored, experimented with, implemented, and either proliferate or languish according to their relative reproductive success. In fact, governments are factories of such technologies, passing laws and regulations, creating administrative agencies, establishing new systems and markets, signing treaties with verification and enforcement provisions, forging new social institutions to deal with emergent or suddenly more salient issues and challenges (such as the creation of the United Nations in the wake of World War II, or of tradable carbon market instruments in the context of the Kyoto Protocol. See, e.g., Political Market Instruments).

But just as new technologies in the conventional sense can be created in people’s garages or in small start-ups formed by highly educated young people, so too can new social institutional technologies emerge in contexts more humble than those of the halls of government or international treaty conferences. Many diffuse technological innovations, of both the conventional and social institutional varieties, have occurred in conjunction with information technologies, which have come to form such a vital framework within our social institutional landscape. The Netroots movement is an excellent example of diffuse social institutional innovation in conjunction with emerging physical technologies, contributing substantially to the success of Obama’s 2008 presidential victory.

A particularly good example of a set of robust social institutional innovations contrived by a very small cadre of political entrepreneurs is described in the book The Blueprint: How Democrats Won Colorado, by (pre-eminent Colorado political broadcast journalist) Adam Schrager and (former Republican Colorado state house representative) Rob Witwer. The book describes a confluence of new state laws (both campaign finance and term-limit limitations), a very small group of highly motivated and capable extremely wealthy individuals (“the gang of four”), and the targeted channeling of huge amounts of money by them into non-campaign organizations such as political 527s, 501(c)(3) charitable organizations, and 501(c)(4) social welfare organizations, each with its own advantages and limitations, to affect state legislature races, transforming the Colorado political landscape in the process.

The Tea Party movement, as well, clearly has both some grass roots political entrepreneurial characteristics to it, as well as more centrally orchestrated aspects, both involving some social institutional purposive systems, channeling the deep well of  jingoistic “Political Fundamentalism” in the United States, and the reactionary anger to the combination of the Obama victory in 2008 and the perception of Big Government (“socialist”) actions and policies, tapping into inchoate bigotries and xenophobia, all in service, ultimately, to corporate interests (“small government” meaning non-regulation of corporate behavior, which in turn means foisting costs of production in the forms of externalities onto the public).

The question facing those who want to affect the dynamical fractal geometry of our ever-changing social institutional landscape in purposive and guided ways is how best to do so, where and how to flap the butterfly’s wings in such a way so as to cascade through the system in reverberating, self-amplifying winds of social change. As I put it near the end of The Evolutionary Ecology of Human Technology:

Negotiating this evolving ecosystem of social institutions, technologies, and their interactions with both individuals and the natural environment involves more than hammering together a set of purposive systems. It is a vibrant whole, a metabolism, more organic than mechanistic. Understanding how it flows, how changes ripple through it, how its complexity and interconnectedness form the roiling currents we are riding, is the ultimate art and science of consciously articulating our lives with their context in ways that allow us to fulfil potentials we have only barely begun to imagine. To some extent, these potentials will be realized by technologies, including social institutional technologies. But human consciousness is more than the sum of its parts, and the more our technologies and ideologies flow and undulate with the rhythms of the evolving natural, social institutional, and technological systems within which they are embedded, and with which they articulate, the more fully we will realize the full breadth and depth of our humanity.

I invite and implore all readers to continue to contemplate this question, to consider how best to dance with these complex systems in ways which yield greater human welfare and liberation, greater realization of our humanity and our consciousness. In the meantime, please consider my own evolving “A Proposal: The Politics of Reason and Goodwill” (or the short version: The Politics of Reason & Goodwill, simplified) as one possible starting point. This social institutional world of ours is both a product and source of our genius, in an articulation of coherence and individuation, of interdependence and liberty, of collective and individual consciousness. It is the collective mind upon which we draw, and which draws upon us. It is a narrative we write and act out together in a sprawling improvisation, more subtle and complex than any that has ever been bound into volumes or performed on a stage. Let’s write it well.

Click here to buy my e-book A Conspiracy of Wizards for just $2.99!!!

Click here to buy my e-book A Conspiracy of Wizards for just $2.99!!!

Social institutions, technologies, and ideologies and conceptual frameworks are comprised of memes (cognitions) linked together into coherent bundles according to organizing principles called “paradigms.” For instance, a government or economy is comprised of the memes which define the roles of all actors in the system, the rules and processes involved, and the underlying principles which inform and guide it (the paradigm). This is true of informal as well as formal institutions, across levels of organization, including everything from religions and industries to popular beliefs and customs of all kinds.

Memes and paradigms are in constant flux, evolving by several interrelated mechanisms. At core, as in biological evolution, is the variable reproductive success of the underlying memes. Memes, like genes, are packets of information which reproduce (are communicated), mutate (change in the various minds of those to whom they are communicated), differentially thrive (sometimes in direct competition, and sometimes due merely to contextual circumstances), and thus evolve (those mutations that are more reproductively successful proliferate while those that are less so fade away). Memes and sets of memes can also be combined in novel ways through intentional human effort to innovate, producing new memes and sets of memes from the consciously mediated synthesis of existing ones.

The relative reproductive success of memes is driven by a combination of reflexive and reflective individual human responses. Motivating these responses are psychological and emotional predispositions, general utility, and localized utility, blended into both rote and strategic interactions. The localized utility of certain memes and sets of memes can coalesce into social institutional power (often originated by, and implicitly underwritten by, access to physical force), allowing the imposition of paradigms that yield differentiated costs and benefits to those organized under them.

The evolution of technological memes and sets of memes, for instance, is driven at one level by general utility (see The Evolutionary Ecology of Human Technology), from which individuals involved in their creation, production and utilization draw localized utility, and, when combined with facilitating organizational memes, can give differentiated power to those groups of people with differentiated access to them or ability to utilize them for maximum benefit. The evolution of popular beliefs, on the other hand, is driven more by identifiable and inherent psychological and emotional predispositions, in a process of adaptation to and articulation with memes and paradigms evolving under the lathe of utility (which in turn adapt to and articulate with memes and paradigms evolving under the lathe of psychological and emotional predispositions).

Social institutions (including social institutional purposive systems that program human behavioral phenomena, or social institutional “technologies,” but excluding other technologies that program natural phenomena) coalesce around organizational adaptations to technologies of all kinds, as well as in both haphazard (decentralized, organic, and cumulative) and intentional (centralized, purposive, and punctuated) response to collective action and (to a lesser extent) time horizon problems (see Collective Action (and Time Horizon) Problems; in brief, collective action problems are situations in which individual rational self-interested behavior leads to worse outcomes for everyone involved than could be achieved through mutual commitment to cooperative action, and time horizon problems occur when the discounting of future costs and benefits leads to a sub-optimal short-sightedness in rational self-interested individual and collective behavior).

Separating out social institutions from non-social-institutional technologies (i.e., what we normally think of when we think of “technologies”), we can discern four social institutional modalities: Hierarchies, markets, norms, and ideologies. Hierarchies are authority structures comprised of formal rules centrally enforced by means of explicit rewards and punishments. Markets are mutually beneficial systems of exchange, in which one’s share of the benefits of collective action is determined by the market value of their contribution to it. Norms are unwritten rules diffusely and informally enforced through the social approval and disapproval of others. And ideologies are internalized beliefs and values enforced through self-policing and auto-sanctioned by cognitive dissonance (in the form of self-inflicted feelings of guilt or shame).

Actual social institutions and social institutional paradigms are comprised of blends and hybrids of these modalities, articulated with technologies, responding to a combination of the organizational demands and opportunities presented by technologies, related and independent collective action and time horizon problems, and the demands and opportunities posed by the diffuse organic psychological and emotional reflexive reactions to all of these other changes.

The various social sciences, with differing focal points but considerable overlap, examine the dynamics of the various aspects and various overlapping and cross-cutting organizing principles (“paradigms”) of this social institutional landscape. Though differing disciplines and schools within disciplines often utilize superficially conflicting or incompatible theoretical lenses, much of the perceived mutual exclusivity of perspectives evaporates when these perspectives are combined under the umbrella of a comprehensive social systems paradigm such as the one I am describing here (much as string theory in physics reconciles quantum mechanics and relativity).

Paradigms shift when a new guiding principle is used, or an old guiding principle is used in a new way, in the social institutional as well as social theoretical context. Changing physical power sources, for instance (such as the advent of the steam engine or electrification), creates rippling new challenges and opportunities, a need to adapt architecturally, organizationally, and economically to the new principle. The change from monarchy to popular sovereignty that occurred during the 17th-19th centuries in several Western European and Western European derived nations reversed the principal-agent relationship between government and populace (transforming the government from principal to agent, and the populace from agent to principal), accompanied by continuing cascades of social institutional and ideological accommodations and adaptations. (Interestingly, the political ideology in the United States today that is rooted in 18th century American Revolutionary ideology is based largely on the anachronistic rejection of government as principal and populace as agent that motivated the American Revolution).

Revolutions (whether political, technological, economic, or cultural) are essentially just such paradigm shifts, in science catalyzed by an accumulation of anomalies within an existing paradigm; in technology by limits imposed by existing technologies combined with “opportunity niches” provided by the current technological and economic landscape (see The Evolutionary Ecology of Human Technology); in politics by the limits imposed by the current regime on certain empowered or ready-to-be-self-empowered interest groups and the opportunities they perceive (e.g., American Independence, African American Civil Rights, various post-colonial national independence movements); and in culture by the diffuse organic adaptations and adjustments that ripple through the institutional landscape as a result of these other changes, involving a combination of aesthetics (fine arts, music, cuisine, etc.), entertainments and public celebrations, and psychologically and emotionally motivated cognitive adaptations and reactions.

There are two types of processes that memes can undergo during their residence in a human mind: 1) They can be implicitly accepted intact and modified only unconsciously and unintentionally (if at all), or 2) they can be worked on, in conjunction with and through utilization of other memes, critiqued, evaluated, intentionally modified, synthesized, and/or woven into a larger cognitive framework. Technological memes as discussed by Brian Arthur in The Nature of Technology, for instance, undergo the second process.

Sometimes and to some extent these clash with sets of memes associated primarily with the first process, memes that are reproduced as elements of authoritative traditions, taken as “gospel.” Sometimes and to some extent the two types of meme processes articulate with one another in mutually reinforcing and synergistic ways. And these two interactions can occur simultaneously between the same two sets of memes. It can be argued, for instance, that though the memes of the Medieval Catholic Church and the early products of modern science were often and most obviously in conflict with one another, they were also in some ways mutually reinforcing, the monotheism at the heart of Catholicism providing a coherent “creation” for science to explore.

The conflicts themselves can generate or invigorate particular social institutional innovations. The rise in popularity of home schooling in the United States, for instance, emerges to a large extent from the aversion of some religious fundamentalists to the secularized secondary socialization provided by public schools. 

The social institutional landscape has a nested and overlapping dynamical fractal structure, with some small subset of memes shared almost universally by global humanity, and the rest by smaller swathes of humanity of every magnitude down to the individual level. Transnational linguistic groups, national or regional cultures, international professional communities, afficianados of theater or a local sports team, local peer groups and families, these and almost unlimited other such groupings can share meme-sets ranging from specialized shared knowledge to particular opinions or judgments, rumors or observations or shared jokes rustling through them like a breeze through tall grass.

Some are highly contagious, articulating well with human psychological predispositions or existing internal cognitive landscapes, spreading far and wide. Some become obsolete, dated by the flow of events or by the duration of attention spans, and contract again into oblivion after “lives” ranging from the very local and fleeting to the very widespread and long enduring.

Individual internal cognitive landscapes are comprised of a unique intersection of these differentially distributed memes, most, though shared in essence, slightly modified in the individual mind by the already existing cognitive landscape of metaphorical frames and narratives into which they fit themselves. And all of this is in constant flux at all levels, new memes emerging, spreading out in branching and expanding tentacles, which themselves are branching and expanding recursively, shrinking back, billions doing so simultaneously, converging into new coherent sets of memes which take on lives of their own.

If we imagine each meme as a color, and each variation as a shade of that color, then we would have billions of distinct colors and trillions of distinct shades flowing in diverse expanding and contracting fractal patterns through the mind of humanity, interacting in almost unlimited unique and creative ways as they converge in particular minds and groups of minds, each individual human being defined, in conjunction with their unique set of genes, by their unique set of memes organized into simultaneously shared and individuated metaphorical frames and narratives. This is the graphic of our social institutional landscape: mind-bogglingly complex, flowing and dynamic, throbbing with a life of its own, shot through with the transient borders and categories imposed by our imaginations, borders and categories which themselves are artifacts of the mind in constant flux on varying time scales. (See The Fractal Geometry of Social Change for a continuation of this theme).

Precise analyses of various kinds -political, economic, and cultural- can be organized under this paradigmatic umbrella, articulating with one another in new and more robust ways. In future posts, I will frequently explore specific historical developments, current events, and political, economic, and social issues in the light of the framework outlined above (as I have in fact done in many previous posts). Much is gained by creating an accommodating and encompassing analytical language through which to explore and examine the complex and subtle dynamics of the world in which we live.

Click here to buy my e-book A Conspiracy of Wizards for just $2.99!!!