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Anarchists and libertarians fail to acknowledge the nature of collective action problems, and the ways in which various modalities (including hierarchical organization, of which government is one example) are used to address it. The trick is to most effectively blend these different modalities, not to reduce reality to a caricature that allows us to pretend that that challenge doesn’t really exist.

(There’s a famous example used in economic literature, of a barge-pullers guild in 19th century China, that hired overseers to whip slackers in order to eliminate the free-rider problem. In other words, the barge-pullers themselves chose to impose on themselves an overseer in their own collective interest. It’s a strange and complex world in which we live; we need first and foremost to face up to that fact before rendering judgment in broad brushstrokes that fails to acknowledge fundamental aspects of reality.)

The “problem” with government isn’t its existence or the fact that people rely on it for certain purposes, but what in economic, legal and managerial theory is called “the agency problem.” In a popular sovereignty, government is constituted as an agent of the people, its principal. This is in many ways a reversal of most ancient notions of sovereignty, which saw the people as “subjects” of the sovereign. The problem, or challenge, is the degree to which reality can be made to correspond to theory.

In one view, this reversal of theoretical roles occurred organically, because in the crucible of European internecine warfare the crown’s (particularly the English crown’s) need for revenue to finance such wars drove an ongoing liberalization of the political economy to generate such revenue, In other words, international competition drove sovereigns to empower ever-more ever-broadening swathes of their citizenry, since those that did so fared better in the wars among relatively small and easily swallowed states.

In the Glorious Revolution in England in 1688, this reversal was institutionally recognized, laying the groundwork for the American revolution’s clearer codification of that institutional shift in its break from Great Britain. The challenge then became aligning the agent’s action’s to the principal’s interests, a challenge compounded by the size and diffuseness of the principal in comparison to the agent. This is the ongoing challenge we face.

A centralized agent ostensibly working on behalf of a diffuse principal can always exploit the transaction costs facing the principal in its translation of some hypothetical “popular will” into a mandate to the agent in order to serve the agent’s interests at the expense of the principal’s. This is the challenge we must continually face. But to then leap from the reality of that challenge to the conclusion that the existence of the agent is a sign of our own self-enslavement neglects the real need we have for such an agent, the real function it performs, and the costs of choosing to “liberate” ourselves from any centralized agency through which to address the collective action problems that face us.

The bottom line is that we live in a complex and subtle world, and that our neat reductions of it, our caricatures of reality, do not serve us well. While it’s true that, historically, governments of large political states were established through military conquest and exploitation, it is also true that the benefits of civilization are a derivative of that brutality, and that there are indeed benefits (as well as costs) of civilization, of a large-scale division of labor which freed up some to do things other than produce food. Our challenge now is not to feed our emotionally gratifying sense of superiority to “the Sheeple” for “knowing” that government is our oppressor, but rather to face, intelligently and effectively, the real challenges and real enterprise of aligning the actions of our agent with the interests of its principal, of making government ever more something that serves the interests of the people in general and ever less something that serves the interests of the few who capture it for their own benefit.

And that is a complex challenge, a complex enterprise, best framed in precise, analytical ways. It is our task to work to maximize the robustness, fairness and sustainability of our political economy, by applying disciplined reason and imagination to methodically gathered and verified information in service to our shared humanity. Unfortunately, caricatures of reality like those popular among ideologues of all stripes do nothing to help us accomplish that, and do much to interfere with our ability to do so effectively.

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Part I: The Economy.

1) Every modern, prosperous, developed nation on Earth, without one single exception, has a large administrative infrastructure and has had a large administrative infrastructure in place since prior to participating in the historically unprecedented post-WWII expansion in the production of prosperity. Every single nation on Earth that lacks a large administrative infrastructure is an impoverished nation. No nation without a large administrative infrastructure has ever achieved post-WWII levels of prosperity and economic development. The claim, then, that such a large administrative infrastructure, which the far-right refers to as “socialism,” is incompatible with prosperity, is the precise opposite of what the empirical evidence suggests: It appears to be not only compatible with prosperity, but absolutely indispensable to prosperity.

2) Economic theory and empirical observation make clear why this is so: Due to the consequences of “transaction costs” (the costs of market transactions, such as gathering information or organizing interested parties to act as single market actors in public goods scenarios), government involvement in the modern market economy is a vital component of a robust and well functioning economy, and its absence ensures that centrally located market actors (who benefit from “information asymmetries”) will game markets to their own benefit and to the public’s often catastrophic detriment. The government helps to reduce transaction costs by investing in infrastructure and human capital development that involve a combination of high immediate costs and very long-term though extremely high benefits that is not conducive to reliance on private investment.

3) In the immediate wake of the implementation of New Deal policies, we had four years of historically unprecedented GDP growth, that only declined again immediately after budget hawks similar to the American far-right today pushed through a more conservative fiscal policy.

4) What finally ended the Great Depression and set the country and world on the most dramatic expansion of prosperity in the history of the world was the most massive public spending project in world history : WWII, in which the United States ramped up its industrial engine by producing enormous quantities of sophisticated heavy military equipment that was conveniently destroyed as fast it could be manufactured, demonstrating that even unproductive production can stimulate an economy, suggesting how much more economically beneficial investment in infrastructure can be.

5) Our period of greatest economic growth (the 1950s and 1960s) was also the period of our highest marginal tax rates, when we did, in fact, make massive investments in infrastructure (such as our interstate highways system) and scientific and technological research and development (such as the space program and the government sponsored advances in computer technology, both of which generated a plethora of economically enormously beneficial developments).

6) In the immediate wake of the stimulus spending by the Bush and Obama administrations, declining GDP turned to growing GDP and an accelerating rise in job losses turned into a decelerating rise in Job losses, literally turning the corner from the deepening collapse authored by eight years of Republican economic policies to gradual recovery within months of the resumption of a Democratic administration and sane economic policies.

7) Virtually no economists, liberal or conservative, recommend fiscal austerity during an economic contraction, and yet Tea Party lunatics, drenched in the false belief that a long-term deficit and debt problem is an immediate crisis, insist on policies that virtually every economic model shows actually INCREASES our debt while crippling our economy.

8) The overwhelming majority of professional economists do not agree with the Tea Party economic paradigm, and The Economist magazine called it “economically illiterate and disgracefully cynical.” 80% of American economists in a 2008 survey favored Democratic Party over Republican Party economic policies (and that was BEFORE the rise of the Tea Party!).

9) The Tea Party Congressional faction famously blackmailed the country with fiscally and economically nationally self-destructive default on our financial obligations (by threatening to refuse to raise the debt ceiling, which has never before been contentious and in most developed countries is automatic), in order to secure continuing tax cuts for the wealthiest Americans which even conservative economists called “indefensible.” Even though this catalyzed a damaging downgrading of our national credit rating, they seem poised, in 2013, to repeat the same self-destructive and irresponsible behavior.

10) The two greatest economic collapses of the last 100 years in America were both immediately preceded by the two highest peaks in the concentration of wealth in America in the last 100 years (in 1929 and 2008, respectively), both of which followed a decade or more of the kinds of “small government” policies favored by the right today. Following the 1929 collapse, we learned from our mistakes and used government to create a more sustainable economy. Following the 2008 collapse, the far-right has continued to try to inflict continuing economic harm on the nation, insisting on continuing the same policies which caused the economic collapse in the first place.

11) Yet despite these many compelling facts, those on the far-right not only continue to believe what is contradicted by reality, but are 100 percent certain that their ideological dogma is the indisputable truth, and are smugly dismissive of those who disagree with them.

Part II: The Constitution and the Foundational Values of the Nation.

1) The Constitution was drafted and ratified to strengthen, not weaken, the federal government, after ten years of living under the toothless Articles of Confederation. “The Federalist Papers,” a series of op-ed arguments for ratification of the Constitution written by Madison, Hamilton, and Jay, largely made the case that an adequately empowered and centralized federal government was essential to the viability of the new republic. (“Federalism” was originally used to designate the political doctrine favoring a strong federal government, but has been converted by the modern right-wing to refer to the political doctrine favoring a weak federal government.)

2) Despite the frequent refrain that government taxing-and-spending is an act of federal tyranny and “unconstitutional,” the fact is that Article I, Section 8, Clause 1 of the United States Constitution grants Congress the unqualified power to tax and spend in the general welfare, the Constitutional provisions limiting that power being the ones that define our electoral process, by which we the people get to decide, through that process, whether our representatives’ interpretation of “the general welfare” is one we the people agree with. So, if “socialists” vote in a “socialist” president who taxes and spends to provide universal healthcare, or to address issues of poverty or disability or other acts of humanity as a people, that is not unconstitutional, it is not an infringement on anyone’s liberty, it is not an abuse of federal power, but is, rather, Congress doing exactly what it was empowered to do.

3) While claiming to be the great defenders of the Constitution, right-wingers are in fact the great antagonists against the Constitution, because they reject the process by which we have resolved disputes over constitutional interpretation for over two centuries (Judicial Review) and fight to reduce the Constitution to a meaningless Rorschach Test which each ideological faction claims to support whatever that ideological faction favors, thus destroying the Constitution as a functioning document.

4) While pretending to be the great bulwark against tyranny, they in fact pose the greatest threat of tyranny and against our rule of law, by insisting that they are prepared to overthrow the government if they disagree with it, and by insisting that their “liberty” requires that we siphon political economic power away from our constitutionally and democratically constrained government organized to serve the public interest and into large private corporations that are not constitutionally and democratically constrained and are organized to serve the interests of the few who own the most shares rather than of the public in general (a transferal of power to corporate interests which is essentially the definition of “fascism”).

5) The claim to be the true representatives of the will and spirit of the Founding Fathers is almost the diametrical opposite of the truth, for several reasons. For one thing, the “Founding Fathers” did not have one simplistic ideological “will” that could be so easily represented. Ben Franklin, for instance, believed that all private wealth beyond that necessary to maintain oneself and one’s family in modest fashion should revert to the public “by whose laws it was created,” by means of very high luxury and inheritance taxes. Thomas Paine believed in redistribution of wealth, through the agency of government, from the more wealthy to the less wealthy. Alexander Hamilton believed in a very strongly centralized federal government. The two things that bound our Founding Fathers together and that, in the final analysis, they universally agreed on is that people can and should govern themselves through the use of their own reason and in service to their shared humanity, and that compromise was an essential tool in doing so, two things that the modern far right most vigorously rejects. In other words, the far right, by idolizing caricatures of the Founding Fathers, does the opposite of emulating them as rational and humane people striving to create an ever-more rational and humane society.

6) While power has indeed shifted from the states to the federal government over the course of our history, at the same time (and in part by that very mechanism), real protections against the potential tyranny of government have grown far stronger than they were even at the time of the founding of the nation, when states’ rights were paramount. As stated above, the first major step in that direction was the Constitution itself, replacing the toothless Articles of Confederation with a federal framework with a strong federal government.

Supreme Court Chief Justice John Marshall, at the beginning of the 19th century, made another step in that direction, instituting the doctrine of “judicial review,” which gives the Court the last word in legal and constitutional interpretation, thus ensuring that our short and ambiguous founding document has, for functional purposes, a single unambiguous interpretation that we accept as a matter of law.

The next major step was the Civil War, which increased federal power to protect the rights of individuals (in this case, slaves) from the oppression of more local (state) governments and private property owners. The New Deal nationalized our sense of economic purpose and shared fate, and our participation in WWII took that spirit abroad and ramped up our economy even further. The Eisenhower administration taxed and spent with impunity, and put in place an enormously beneficial infrastructure which led to decades of historically unprecedented growth. The Civil Rights movement, Court holdings, and Civil Rights and Voting Rights Acts all continued the use of the federal government to protect individual rights against state and private violation. Kennedy used the federal government to land a man on the moon, increasing our technological prowess in ways that have also been highly beneficial. And, finally, the federal government was instrumental in the development of information technologies which have created enormous prosperity.

In the meantime, the Civil Rights amendments to the Constitution and the Court’s interpretation of the Bill of Rights have led to an extraordinary extension of our liberties and of the vigor of their protection. The Bill of Rights came to be applied as a bulwark against state and local as well as federal intrusions of individual rights and liberties. The provisions came to be read with increasing rigor, requiring ever greater due process protections (which the faux-liberty-loving right have generally opposed with equal vigor), discovering a penumbra “right to privacy” that isn’t actually explicitly stated in the Constitution, and, in general, providing ever increasing protections for individuals against governmental exercises of power.

But rather than rejoice in this advance of liberty and prosperity, the right imagines that any intrusion on private property interests and their hoarding of private wealth is the real affront to individual liberty and human rights, just as their slave-owing ideological forebears did.

Part III. Morality, Humanity and Self-Congratulatory Historical Revisionism.

1) Right-wingers dismiss the plight of the poor, most of whom work long hours in low-paying jobs, as a function of their own defects and laziness, and insist that it is morally unacceptable for us as a society to assume any shared responsibility to address social issues such as poverty, hunger, homelessness, the special needs of the disabled, and unnecessary and unjust human suffering in general.

2) They do so despite the fact that every other developed nation on Earth has done a far better job than us of reducing poverty, reducing economic inequality, and reducing the myriad social problems associated with poverty and economic inequality.

3) They revise history so as to define every historical movement that is now broadly condemned to have been “left-wing movements,” such as their conversion of Nazism –a political ideology and regime which hated communists, labor unions, intellectuals, journalists, the poor, and “foreigners” living within the country, favored policies which concentrated wealth and power into constitutionally and democratically unconstrained corporate hands, and relied on an ultra-nationalism stoked up with lots of jingoism and “patriotic” rhetoric and imagery– into a left-wing movement, and their main argument why this is so is because “National Socialism” has the word “Socialism” in its name (much as the German Democratic Republic, or East Germany, a Soviet client state, must have been a Democratic Republic, since it’s right there in the name, right?).

4) They revel in the (accurate) facts that the Republican Party freed the slaves while the Democratic Party was closely associated with the KKK, always implying that that alignment continues today. They neglect to mention (or recognize) that, in the wake of The Civil Rights Act of 1964, which LBJ (a Democrat) was as closely associated with as Obama is with The Affordable Care Act (“Obamacare”), southern whites (and northern white racists) abandoned the Democratic Party en masse and migrated to the Republican Party, which is why implicit and explicit racism now resides almost exclusively in the Republican Party, with the map of Tea Party strongholds closely corresponding to the map of the Confederacy, and with so many Tea Party policy positions containing so much implicit racism (e.g., voter suppression laws, opposition to any form of affirmative action, hyperbolic disdain for the first African American president, contempt for Latin American migrants, etc.).

Part IV: Guns, Violence, and a Reactive rather than Proactive Society.

1) The United States has the second highest homicide rate among 36 OECD nations (beaten only by Mexico, which “benefits” from a constant flood of our firearms crossing the border to fuel their problem), from 2 to 25 times the homicide rate of 33 of the 35 other OECD other nations.

2) In both domestic comparisons of homicide rates across all jurisdictions and cross-national comparisons of homicide rates in developed countries, there is a positive correlation between per capita legal gun ownership and homicide rates.

3) The overwhelming majority of firearms used in the commission of crimes in The United States are put into circulation by initially being legally purchased in those states with the laxest regulations, and entering the black market from there, through which they are distributed to all locales in the country due to the complete absence of any obstructions to the transportation of good across state and municipal borders.

4) As a statistical fact, a legally, privately owned firearm is many times more likely to be involved in EACH of the following than to be successfully used in self-defense: suicide, accidental shooting death, mistaken shooting death (not an accidental discharge or hunting accident, but an intentional shooting at an innocent person mistaken for an intruder or a threat), crime of passion and use as part of a cycle of domestic violence.

5) As a statistical fact, a firearm in the home has a greater likelihood of being the instrument of death of a member of the household or of an innocent visitor than to be used in self-defense, and the owner of a firearm is more likely to be the victim of gun violence than a non-owner of a firearm.

6) We, as a nation, have the highest absolute number and highest percentage of our population incarcerated of ANY nation on Earth, making us in a very literal sense the least free nation on Earth.

7) This high incarceration rate is in part a function of a right-wing retributive orientation, which believes that the world is neatly divided between the “good guys” and the “bad guys,” and that if the good guys are just better armed against the bad guys, and lock the bad guys up or execute the bad guys, we’ll be a more peaceful and law-abiding society as a result.

8) The right, in other words, believes that the more we threaten one another –with decentralized deadly violence, with incarceration, with capital punishment– the more we will reduce violence against innocent victims, despite the empirical evidence that the opposite is true.

9) When an unarmed black teen walking home from the store (Trayvon Martin) was shot to death by an armed vigilante out looking for people to “defend” himself against (George Zimmerman), the right tried to dismiss this as irrelevant to the question of whether being an armed society of fearful and angry people out looking for people to “defend” themselves against is really such a good idea. They insisted that if it was legally self-defense in the moment of the use of deadly force (as it may or may not have been), then there can be no basis for criticizing the policies and ideology that encouraged the creation of the need to use deadly force, neglecting to recognize the fact that the entire encounter was a function of Zimmerman choosing to go out with a gun and look for people to “defend” himself against, and neglecting to notice the implications of his choosing to “defend” himself against an unarmed black teen walking home from the store. Following this incident, numerous right-wing posts on Facebook showed “scary” black criminals as some kind of a justification for whites going out with guns, pursuing unarmed black teens, and shooting them to death.

10) Those societies that have a more proactive and less reactive orientation –that recognize that we affect the propensity and ability to commit violent acts by the cultural milieu that we create together, that recognize that taking better care of one another and providing more social justice and less destitution, and making access to instruments of deadly violence less rather than more easy , by reducing the flood of instruments of deadly violence and the idolization of instruments of deadly violence which in part define our society— have far lower rates of deadly violence than we do, far lower rates of incarceration, far lower rates of poverty and other social ills, healthier and (according to self-report survey studies) happier populations.

11) Unfortunately, the far-right in America insists that to recognize our interdependence, to be an aspirational and hopeful rather than fearful and angry society, to be proactive and caring rather than reactive and retributive, would be an affront to their “liberty,” and thus opposes such progress in an obviously preferable direction, a direction which is more humane and productive and life-affirming.

Part V: Their Ideology’s Historical Predecessors.

1) The abuse of the concept of “liberty” to mean the liberty to benefit disproportionately from an unjust system which results in a grossly unjust distribution of wealth and opportunity, the identification of the federal government as a threat to that “liberty” and a tyrant because of it, is an ideology that has existed as long as our country has existed.

2) This conflation of the concepts of “liberty” and “property,” and the related reduction of “liberty” to a socially irresponsible license to exploit and oppress others for one’s own benefit, was originally the ideology of Southern Slave owners, who insisted that their liberty to own slave was being threatened by the tyrannical federal government, an ideology explicated in John C. Calhoun’s “Union and Liberty,” in which he argued that the “minority” (southern slave owners) had to be protected from the majority who were trying to infringe on their “liberty” to own slaves.

3) It continued to be used by Southern Segregationists, who argued that any attempt to end Jim Crow and ensure the civil rights of discriminated against groups would be an infringement on their freedom.

4) In fact, when LBJ was instrumental in the passage of the Civil Rights Act of 1964, the result was the movement of racists from the Democratic Party to the Republican Party, where they now reside.

5) Rand Paul said that he would not have been able to support the Civil Rights Act of 1964. The abolition of slavery (even to the point of having to use years of military force) and the passage of laws protecting African Americans and others from discrimination in the public sphere were both federal governmental exercises of power.

6) The Right currently favors Jim Crow-like voter suppression laws based on a discredited pretext, dismisses as irrelevant the shooting death of an unarmed black teen walking home from the store by an armed vigilante out looking for people to defend himself against, opposes laws which address a historical legacy of an inequality of opportunity in America which disproportionately effects those categories of people who have been most historically discriminated against, speak in words and tones highly reminiscent of our nationally embarrassing McCarthyist witch trial era, and, in general, demonstrate that they are simply the current incarnation of an old historical perennial.

7) When confronted by those who disagree with them, people they constantly vilify and refuse to engage in any constructive national discourse with, they react with great hostility, their primary argument generally being that the act of presenting the factual and logical and moral errors in their ideology to them is an insult that cannot be tolerated.

Part VI: Their Short-Sighted, Socially Disintegrative and Globally Destructive Ideology.

1) Those on the far-right dismiss as a bastion of liberal bias precisely those professions that methodically gather, verify, analyze and contemplate information, thus insulating their dogma from any intrusion of fact and reason. (It’s no wonder, then, that only 6% of American scientists self-identify as Republican, and only 9% as conservative, compared to 55% as Democrat and 52% as liberal. 14% identify themselves as “very liberal,” over 50% more than those who identify themselves as merely “conservative.)

2) By doing so, they are able to dismiss scientific insights into the potentially catastrophic impact we are having on global natural systems through our unchecked accelerating exploitation of Nature in service to our immediate appetites and avarice, an exploitation which is converting us from fellow symbiotes in a sustainable biosphere into deadly parasites killing the host on which we are feeding.

3) Consistent with the general tone and tenor of their entire ideological package, this rejection of methodological thought and short-sighted commitment to immediate self-gratification, at the expense of others, at the expense of our planet, at the expense of our future, is an expression of a primal unmindfulness rather than the more mindful engagement with the world that we are capable of. It is a vestige of primitive inclinations rather than a progress into a more fully conscious existence on this planet. It is the rejection of the shared human endeavor that had begun to define us, a shared reaching for what we are capable of creating together, a shared commitment to reason and humanity.

Conclusion.

This is, of course, a very partial list of the logical, factual, and moral fallacies that define the modern Far-Right. It is a single folly comprised of innumerable dimensions, including the failure to invest in children and families and communities, to value the health and welfare of our population, to have compassion and respect for those who migrate towards opportunity and do our hardest and least pleasant jobs for us for the lowest wages. It includes the disdain for gays and lesbians and transgender people, for Muslims and atheists and all those who differ in any way which triggers any number of deep and hateful bigotries. It includes the movement for an American Theocracy similar to those in the Middle East, in which Fundamentalist Christians strive to turn the state into a vehicle for their tyrannical religious fanaticism.

All of these multiple dimensions of far-right-wing folly and barbarism are part of a single, coherent package, an ideology of fear and hatred, of a variety of in-group/out-group biases and bigotries, an ideology which insists that we must not govern ourselves in ways which promote human welfare but only in ways which react brutally to the failure to do so, an ideology which eschews more effective and less costly preventions in favor of less effective and more costly reactions to problems left to fester and grow. It is an ideology which refuses to allow us, as a society, to invest in our future, to recognize our interdependence and our responsibilities to one another as human beings, and to work together intelligently and humanely in service to our collective welfare.

They’re on the wrong side of fact, the wrong side of reason, the wrong side of morality, and the wrong side of history. And they’re smug about it. We, as a nation and a world, do need a moderately conservative voice to be a vital participant in our national dialogue, but we all need to subordinate such ideological leanings to a shared commitment to being rational and humane people, wise enough to know that we don’t know much, working together to do the best we can in a complex and subtle world. While all of us fall short of that commitment to some degree and at some times, when factions form that demonstrate a consistent determination to be the diametrical opposite of rational and humane participants in a shared national endeavor, those factions become the problem we must solve rather than participants in our effort to solve it.

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Buy my e-book A Conspiracy of Wizards

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.

Buy my e-book A Conspiracy of Wizards

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Given my frequent reference to collective action problems (and time horizon problems), along with the endemic levels-of-analysis error committed by right-wing ideologues who insist that individual volition (as opposed to social contracts) should be relied on to produce all public goods, I thought it would be a good idea to have one post to refer to which explains them and their relevance simply and clearly.

Collective action problems are those situations in which a group of people have some public good which they can produce together, or which they must maintain together. Each individual contribution to its production or maintenance costs only the individual making it, but benefits every member of the relevant public.  It is often the case that by a strictly self-interested individual calculation, the costs to the individual of contributing to the public good outweigh the benefits to that individual, though the benefits to the group (and thus to all individuals in it) outweigh the costs to the group (and thus to all individuals in it). (Put another way, the total benefits of each contribution outweigh the total costs, but since the individual bears the entire cost and receives only a fraction of the benefit, the costs to the contributor of contributing outweigh the benefits to the contributor).

The classic mathematical formulation of the problem is “the prisoners dilemma” (http://en.wikipedia.org/wiki/Prisoner’s_dilemma). In short, the scenario involves two partners in crime arrested and held in separate interrogation rooms. Each is offered a deal if he turns in the other. Since neither knows what the other will do, they each have to ask themselves what is the best choice for each possibility. If A doesn’t turn B in, then it is in B’s best interest to turn A in, and if A does turn B in, it is still in B’s best interest to turn A in. According to rational self-interest, B’s most logical choice is to turn A in. A faces exactly the same logic. They both turn each other in. But, if they had been able to coordinate their choice, and commit one another to it, they would have both been better off not turning one another in.

There are other classic formulations as well, such as Garrett Hardin’s “Tragedy of the Commons” (http://en.wikipedia.org/wiki/Tragedy_of_the_commons), and “the free rider problem” (http://en.wikipedia.org/wiki/Free_rider_problem).

When I was a high school social studies teacher, I taught my students about collective action problems using the following exercise: Using “classroom currency points” (ccps), I made the following offer to my thirty-or-so students: For each that chooses to pay me 10 ccps, I will give each and every person in the group 1 ccp, regardless of whether they chose to pay the 10 ccps 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 (the latter being, in practice, what students did). If each individual acts in his or her own rational self-interest, since there is a net cost of 9 ccps to accepting the offer (pay ten and get one back in return, along with everyone else), no one would choose to do so. However, if everyone does accept it, each person is made 20 ccps richer (pay 10, and get one back for each of the 30 students who paid). 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.

Even adding in some of the complexities I left out, communication without any mutually enforceable commitment mechanism doesn’t solve the problem, since each can assure the others that he or she will cooperate but then not actually do so, benefiting from others’ cooperation while not contributing him-or-herself as a result. Some enforcement mechanisms are informal, such as the loss of respect and reciprocal goodwill if non-cooperation is found out; and some are internalized, in the form of values and beliefs in which one feels shame at neglecting to do “the right thing,” and pride at doing the right thing. These are all aspects of the human and social institutional landscape, and all relevant factors in a complete analysis.

Returning to the basic model, it is not hypocritical, for instance, for someone to both support a higher carbon tax and yet not unilaterally pay to the government the amount they think it should be (though calling it “hypocritical” can act as an informal enforcement mechanism in some situations). The carbon tax is based on the calculation that we are all better off in the long run by paying it (and by having our carbon emissions affected by having to pay it), but the choice not to do so unilaterally is based on the calculation that the costs are borne by that individual only, in exchange for a very slight marginal decrease in carbon emissions. Even simply “driving less” faces the same logic: it inconveniences the individual, but does not fundamentally address the problem that is a function of widespread rather than isolated individual behaviors.

The lack of recognition of the difference between advocating for a social policy which incentivizes people to act in a certain way, and choosing to unilaterally act in that way, is an example of a “levels of analysis error,” analyzing social issues as if they can best be understood on the individual level of analysis. This error permeates Libertarian/Tea Party ideology, which doesn’t recognize the existence of public goods, and therefore of collective action problems.

Time horizon problems are similar to, and interactive with, collective action problems. A time horizon problem involves the fact that we quite reasonably value that which will be enjoyed or suffered closer to the present than that which will be enjoyed or suffered farther in the future. One psychological reason is that we cannot be certain that we will survive into that future, so delaying gratification risks never enjoying it, in proportion to how far into the future it is postponed, while delaying something unpleasant means possibly never having to suffer it, in proportion to how far into the future it is postponed. More generally, the present is visceral and certain, while the future is abstract and uncertain. This is why children have to learn to delay gratification, and most adults never get as good at it as would behoove them to be (though some overshoot the mark).

Collective action problems and time horizon problems combine in many instances to create a mutually reinforcing obstacle to widespread cooperation for mutual benefit. The classic example is global warming. Global warming is a global phenomenon, with every emission of Greenhouse Gases (GHGs) affecting the whole world equally (in regards to global warming), but the costs borne by each individual, corporation, and nation that engages in GHG emissions reduction. Compounding this massive, multilevel collective action problem is the time horizon problem: The costs of abatement are in the present, while the benefits lie in the future. Uncertainty plays into these obstacles: Convenient distrust of the overwhelming scholarship demonstrating the reality of the problem is easily mobilized in service to not confronting this combined collective action/time horizon problem.

In the real world, collective action and time horizon problems are nested and overlapping, across levels and among various swathes of shared interests, group identities, or social institutional entities. And the ways in which human minds work, embracing frames and narratives rather than, for the most part, the most rational arguments utilizing the most reliable data, combined with our capacities for empathy and selflessness, complicate the systemic dynamics involved further, creating, along with the multilevel and multisector nature of collective action and time horizon problem, both more complexity in the challenges being confronted, and more opportunity for resolution.

Both biological and cultural evolution are driven, to a large extent, by the combination of collective action and time horizon problems (more the former than the latter). As Economist Robert Frank argues in his book Passions Within Reason, emotions evolved in a certain branch of the animal kingdom in order to facilitate cooperation: The costs of angering others, and benefits of earning their heartfelt gratitude incentivize acting cooperatively. However, genetic and memetic selection occur at the individual level, so incentives to cheat also exist. (Cognitive Scientist George Lakoff, in his book The Political Mind, describes how the mind is “hard-wired,” so to speak, with a capacity for empathy, illustrating the neurological correlary to Frank’s thesis).

Social institutions arise and evolve primarily to augment and improve upon this haphazard function of emotions, with contracts and laws and taking the place of trust, and enforcement by the state taking the place of private retaliation. Four distinct modalities combine in various ways in particular social institution to better 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.

A great deal of theory and research, within a great many different disciplines and paradigms, has explicitly and implicitly been devoted to these dynamics. The complexity involved is, of course, far more extensive than I have indicated in this brief overview. But understanding the basics described in this post should be a requisite part of every human education, for it informs the nature of the challenges we face, and of the solutions available, in essential ways.

(See also The Mathematics of Conflict and Cooperation, for more elaboration of this model.)

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

No sooner do I write and post an essay on the literally evolutionary nature of modern information technologies (http://coloradoconfluence.com/?p=577), then I come across an article in The Economist zeroing in on one aspect of exactly what I’m talking about (http://www.economist.com/node/17091709?story_id=17091709).

In my novel (http://coloradoconfluence.com/?p=126), a wizard ruminates that “the genius of the many is a captive giant, whose freedom is the ends and the means of all other things.” Wikinomics is about another large step in the liberation of that captive giant, by reducing the transaction costs involved in massive decentralized network communications. Ronald Coase famously said that in the absence of transaction costs, we would bargain our way to maximum utility. Some have interpreted Coase’s Theorem to be more about the formidable obstacle posed by transaction costs than the efficacy of bargaining our way to paradise. But, in either case, the internet has dramatically reduced the size of that obstacle.

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