Right Reason

The Democracy of the Market

 

 

The capitalistic market economy is a democracy in which every penny constitutes a vote. The wealth of the successful businessman is a result of a consumer plebiscite. Wealth, once acquired, can be preserved only by those who keep on earning it anew by satisfying the wishes of consumers.

-Ludwig von Mises, The Causes of the Economic Crisis

Smith and Kierkegaard on the Sickness Unto Death

 

In all the liberal and ingenious arts, in painting, in poetry, in music, in eloquence, in philosophy, the great artist feels always the great imperfection of his own best works, and is more sensible than any man how much they fall short of that ideal perfection of which he has formed such conception, which he imitates as well as he can, but which he despairs over ever equalling. It is the inferior artist only, who is ever perfectly satisfied with his own performances. 

-Adam Smith, The Theory of Moral Sentiments 

 

A human being is spirit? But what is spirit? Spirit is the self. But what is the self? The self is a relation that relates itself to itself or is the relation’s relating itself to itself in the relation; the self is not the relation but is the relation’s relating itself to itself. A human being is a synthesis of the infinite and the finite, of the temporal and the eternal, of freedom and necessity, in short, a synthesis. A synthesis is a relation between the two. Considered in this way, a human being is still not a self.

-Søren Kierkegaard, The Sickness Unto Death

 

 

When compared to the immortal standard of virtue, all human behavior will be found lacking. Whether it is because of a lack of knowledge or a lack of self-command, human beings will never be able to perfectly correspond with the injunctions of that standard, and so any impartial spectator will always find something to be desired in humanity. The emphasis that Smith puts upon the impossibility of the standard that a truly virtuous man grasps at is reminiscent of Søren Kierkegaard’s later writings on despair, which he called the sickness unto death. The sickness was found in a person in the midst of despair willing to be rid of himself, which was an act that would lead to death, the elimination of the self, if it could. Thus despair is the sickness unto death. 

 

An example Kierkegaard used was the example of Caesar Borgia whose motto was “Either Caesar or nothing.” Borgia never would become Caesar, so did he despair about who he was since he wished to be someone else? If so, this despair was a desire for Borgia to lose who he was. Kierkegaard, being a Christian religious writer at heart, believed that everyone was, by nature, immortal, and that therefore no one could actually lose themselves. By virtue of immortality, no one could rid themselves of themselves. The sickness unto death, was thus impotent. According to Kierkegaard the realization of this impotence was a reason the Christian understood human nature whereas someone who does not accept the immortality of the soul would not. 

 

Returning to Smith, when someone judges themselves according to the immortal standard out there, it is natural that such a judgment brings along with it the opportunity for the sickness unto death. Not only is there ignorance about what is good and beautiful in the world, but there is also outright rejection of what is good and beautiful. In addition, human beings have often failed to reach the immortal standards of virtue because of weak wills, and the inability to actually follow through with what their prudence informed them to do. When a human being sees just how much he has failed to live up to virtue, there are bound to be times when he wishes to no longer be himself. This desire need not express itself in outright suicidal thoughts, but it can also express itself in people withdrawing from the world, and becoming all but dead to the world. The one who struggles from the sickness unto death is no longer human being striving to reach up to the immemorial standard of virtue, but now someone who has given into the sickness unto death by abandoning that pursuit.

Of Pygmalion

 

It is love that asks, that seeks, that knocks, that finds, and that is faithful to what it finds. 

-St. Augustine

 

From “Love’s Turing Test”:

By this point, the film has turned into a particularly clever Pygmalion story, one that is more attuned to what a modern man might actually want in a fantasycompanion, as opposed to a mere sexual fantasy. And Samantha is very much a Galatea: her personality starts with coding set up by her programmers, but it develops very much in response to the way Theodore interacts with her. Interaction by interaction, she is created by him.

There are A.I. questions to ask about how plausible Samantha is as a construct – how close to passing the Turing test can you get with little more than lots of processor power and fairly simple algorithms for machine learning. It’s still an open question, though bets are being placed as we speak. But the movie doesn’t really focus on those questions, but on questions of how well we humans pass the Turing test these days. Or ever have. Or, to the extent we do, how we have managed to pass for human for so long.

Samantha is designed to adapt her personality in response to interaction with her user. But we all do that. Anybody who’s been married or in a relationship for a long time can recognize the ways in which we learn how to behave, even how to feel, from how our partners respond to us – for good and for ill. Theodore himself talks about how he is who he is because of his history with his ex-wife, whom he knew from his youth – she created him as surely as he created Samantha. We’ve all got fairly simple algorithms for machine learning. We’re all Pygmalions, and we’re all Galateas. And Theodore’s world seems to have made its melancholy peace with this understanding of themselves. One of the striking things about the film is the degree to which everybody pretty much accepts Theodore’s relationship with Samantha – with one very important exception.

The best stories are those which reflect our attention back to the human condition. Ovid’s retelling of the story between Pygmalion and Galatea in The Metamorphoses is one of those stories. Ovid writes about the relationship between the scultper Pygmalion and the infatuation he comes to feel for his work in progress, Galatea. Venus, though, intervenes on Pygmalion’s behalf, and bringing the sculpture to life, unites the two in marriage. 

The story of Pygmalion and Galatea helps reflect our attention back to what he desire in our own lives. Especially in a world of computer programs and tailor-made interactions, it is easier to become a Pygmalion, and to become enamored with simply one’s own fantasy rather than having to address the actual world, which largely doesn’t care for own own individuality. Despite that, part of being an adult, as compared to an adolescent, is the asceptance of that cold fact, and still managing to live in the world despite it.

Furthermore, it is in learning to allow that world - the one beyond our interior fantasies - to influence us that we can grow as human beings. By retreating to a world created to serve our own peculiarities, we are retreating to a world defined by our own virtue and vice, and we may therefore become blind to our own failings. 

Liberty, and Prudence in Policy: The Case of Marijuana

 

 

In a post responding to the severe criticism David Brooks has received on his own unfortunate column arguing against the legalization of marijuana, T.N., a blogger at The Economist’s “Democracy in America” blog, comes to his defense in “Marijuana Legalisation: Sort of In Defense of David Brooks.” There he argues that while Brooks’ point certainly could have been better argued, that Brooks certainly had a point which is often neglected in the tide of increasing support for legalization.  

The most noteworthy part about the blog post, though, does not have to do with the topic of cannabis, or David Brooks. It is that T.N.’s post is paradigmatic of a certain mentality about policy. That mentality is the belief that policy is about a matter of utilitarian calculus. A good piece of legislation is therefore one that encourages the general welfare while a bad piece of legislation, vice versa, is one that diminishes the general welfare. T.N. advocates for such an understanding when in writing:

The point is that however the cost/benefit formula is constructed, there are factors on both sides of the equation. Lives have been ruined by marijuana as well as by its prohibition. It may be facile to lament the legalisation of the drug while ignoring the damage wrought by prohibition, but it is equally silly to assume that there will be no losers from the unprecedented experiments in Colorado and Washington.

 

According to this view, a politician’s craft is a matter of prudence - defined by Aristotle as being “about human concerns, about things open to deliberation” (Nicomachean Ethics 1141b). When legalizing marijuana, then, politicians have to weigh the benefits of its legalization compared to those of its prohibition, and if those benefits outweigh the costs, then the legislation should be passed.

Completely lacking from T.N.’s  account of legislation, though, is any voice for the presumption of liberty. The idea that the prudential decision ought to, by principle, be left to the person who shall serve to reap the decision’s fruit is not be to found there. Nowhere in T.N.’s appraisal of legalization does the columnist seem to consider the idea that people ought to be free to destroy themselves. Instead, politicians stand above their citizens, to ensure their happiness. When the columnist addresses the choices of individuals, it is only with respect to either minimizing or maximizing their utility: “Moreover, lots of people smoke marijuana because they like it; the drug therefore has a ‘utility function’ that ought to be factored in to any cost/benefit analysis.”  

That is a dim view of human free will. A cost/benefit analysis from on high simply looking at people as utility maximizers fails to capture the full tapestry of human motivations across society, and it fails to consider the multiplicity of motivations for why people would make their own prudential choices. The presumption of liberty, though, acknowledges that, and in acknowledging it, respects human beings as free to their own prudence lest a grave concern overwhelm that presumption.

 

The presumption of liberty alone, not the politician’s prudence, should be the reason for the legalization of cannabis. It is not that marijuana does no more harm than alcohol, or that marijuana might even have positive effects across societies, but that people should be given the respect that they deserve, and that no one should claim to make the prudential decision to partake in drugs for them. There is simply no scope for a superior in politics to interfere with that decision, and so there is no reason why politicians need to deliberate about it. It simply should not be their decision to make.  

Humanity is, at heart, a species with a deep impulse towards self-destruction, and if someone desires it, he will be able to achieve it through one means or another. Talk about the political prudence of legalizing marijuana does nothing to address that.  Prudence is a matter of proper deliberation, but there is no strong reason for why the choice of whether to smoke marijuana should not be made by politicians, especially when it comes to the well being of individuals.  

 

The fact shall always remain that if people are to be free to choose virtue, they must be free to choose vice. Whether it is the case of the problem of evil or the legalization of drugs, people are free agents whom need to be respected as free agents. Ensuring the integrity of  what Adam Smith called “the obvious and simple system of natural liberty” which liberals should be the primary concern of politicians, matters of prudential legislation only following after that. As far as the legalization of marijuana, it would be one small way forward towards ensuring the existence of that system of liberty. It isn’t for no reason that The Economist named Uruguay its country of 2013 for enacting such an “obviously sensible” change.

Uncertainty and the Gun

 

 

"You were wrong for years, right for a moment, losing small, winning big, so vastly more successful than the other way around (actually the other way would be bust)."

-Nassim Nicholas Taleb, Antifragile

 

 

 “Do not play with guns!” “Do not point a gun at something you’re not willing to destroy!” These are common maxims of handling firearms. Simply, easy to comprehend, yet capable of savings thousands of lives across the world each year if they were fully heeded.

The injunction is also one that serves as a proper paragon for acting within an uncertain world. It depends neither on exact knowledge of either the changes of there being a round in the chamber nor knowledge of the payoffs involved. Instead, it relies on the recognition that, even though most events would may very well have inconsequential results, a single devastating outcome is possible. Therefore, uncertain about whether the gun is loaded, we ought to avoid playing with it to avoid this catastrophic event.

Most orthodox decision theorists would go about the problem simply by using the statistical device of expected value. With this perspective, one should play with the gun if and only if the expected benefits exceed the expected costs, with the expectation function being the payoff, whether that is the cost or benefit, multiplied by its chance of happening. This statement can be simply stated as:

i) E[B]-E[C]= b.p_b-b.p_c>0

To get the command not to play with the gun, one can easily assign a cost of negative infinity to the costs of dying to provide, under any situation – no matter how sure we are that the gun is unloaded, to never play with a gun.

From a practical perspective, this is clearly not a sound maneuver since there are worse things than dying, especially dying from a gun-shot wound. One can lose everything, have everyone one loves executed and then be hung, drawn and quartered. That is surely worse than being killed by the gun. Even killing a loved one instead of dying oneself from the action may very well be a worse outcome.

However, since we have assigned the payoff to dying from the gun as negative infinity, we are unable to make any outcome worse within the model; ergo, dying as a result from playing with the gun is not infinitely negative. It is some other number.

I’m confident most orthodox decision theorists would here make that cost low enough so as to overwhelm the expected payoff of playing with the gun, and so yield the reasonable answer prima facie not to play with the gun. This may be something fully in line with how most philosophers do decision theory, but there is an ad-hoc aspect to that solution that does not settle well with me.

After all, a theory that can explain everything explains nothing. If we go about fine tuning the parameters of (i) in any way necessary to get the desired outcome, then we aren’t actually saying that much. In addition, these concerns are heightened by the use of equations like (i) to not only explain normative behavior, but positive behavior in the world. (I) can just easily say that a person’s actions reflect that they estimated the expected benefits of her actions to be more than the expected costs of her actions as they can say that a person ought to act only if she expects the expected benefits to overwhelm the expected costs. So which one is it?

In addition, most decision theorists are cheating here. They're cheating because they're basing their method for how they go about fine tuning the parameters of (I) to get what they believe ex ante to be the proper course of action. That's neither a helpful nor an insightful theory; to the contrary, it is simply at best a post-hoc rationalization, and intellectual masturbation at worst. The decision theorist already knows, without needing the framework of (i), not to play with the gun, but what leads to that decision. I would wager it is because he understands that playing with the gun involves small rewards, the fun of playing with the gun, at the risk of horrific injury.

This judgment is much more in line with the rule-based heuristic above of avoiding situations with low payoffs and high rewards. Rather than being concerned about the expected benefit of playing with the gun, the decision theorist, without even realizing it, prima facie looks at the distribution of the payoffs involved and realizes that there in a very undesirable outcome within the distribution that ought to guide his concern. Then, rather than basing his statement for why not to play with the gun based on that distribution of payoffs, he then goes, and uses a calculated average in order to justify it. The decision theorist is thus cheating

Within a world of uncertainty, such as when we simply do not know if the gun is loaded and any guess as to the probability is simply making a figure up, we should act so as to put ourselves in the position to gain from the uncertainty. It’s not because we know that the expected payoff to playing with the gun is negative that we ought to play with the gun. Instead, it is that, even though we do not know the odds of the gun being loaded, we recognize a situation in which there are there are drastically undesirable outcomes that may be smothered away by the expecations functions of (i).

Knowing that all it takes for one of those violent outcomes to be realized is a single te with that intuition in mind we avoid the gun. No calculations of costs and benefits necessary, just recognition of the distribution of the payoffs, which we can infer from a rather elementary familiarity with firearms and human anatomy. Even if the expected payoff of playing with the gun were sufficiently high that expected-value theory would recommend playing with it (imagine a billionaire offering millions for someone to play), we know that the expected value hides a catastrophe (and its all fun and millions until someone gets shot in the head). Being right even a hundred times when playing with a gun and then being wrong on the next is much, much worse than not playing at all.

 

Recognizing the involved distribution of payoffs allows us to act so as to avoid those catastrophes. We don’t understand the world, it is simply opaque to us, and to prosper in this environment, we should act so as to benefit from that uncertainty. To state that we should never play with guns because even a positive expected value from the act hides a catastrophe is to act so as to take advantage of the uncertainty to aid our survival. It doesn’t matter that we think we know the odds of the gun being unloaded because we may be wrong, and so rather than that “may be wrong” perhaps emerging from the dark cloud of uncertainty, like one of Pacific Rim's kaiju, to destroy us, we use that uncertainty to guide us along a better course of action.  

Voting: Individually Costly Yet Often Beneficial to the Group

 

The queue, one of the many costs of voting.

 

Voting is certainly a costly norm for the individual voter. There is much to do n life and as has been shown elsewhere, voting is more than likely to have a very small payoff. The man who merely cares about the expected pay-offs of his behavior is unlikely to be a man who votes since each vote has so little effect on the general election (). From a purely Benthamite position, it could even be said that voting is irrational with some justice to the topic because of how low the payoffs are compared to the costs of voting. However, ending the investigation here, as all too many who discuss the topic do, would be to end before considering what may be one of the most powerful reasons to vote: allegiance to a group norm.

Voting may certainly be an individually costly norm, but it is also a norm that greatly benefits the success of a group, say Republican or Democratic. The groups that are constituted by individuals who follow the norm of voting come hell or high water will have a much greater chance at winning elections and this will result in those groups that have voting members becoming dominant. If every single Republican were to vote with mechanistic certainty, then Governor Romney would have a much greater chance of winning the election just as President Obama would have a much greater chance of winning. This can be true at the same time as it is true that the expected cost of voting exceeds the expected payoff. Yes it may very well be individually costly to vote, but if one wants to be a member of a winning group in politics, then one needs to adopt the behaviors that help define such a group and one of those behaviors is voting. Of course, people may need a reminder or two that plays on their moral sentiments to vote, and the successful groups will be those that are able to motivate their constituents to go vote despite the costs.

 

So the question to vote or not becomes less about the individual costs and more about the question of whether one is apart of a group that can benefit from a high election turn-out. So, even though your vote may not matter much, the votes of one's group may very well matter and the success of the group may depend on individuals adopting costly behaviors.  

The Principal-Agent Problem: The Case of Ezekiel

 

Qui facit per alium, facit per se.*

 

The problems of economics are everywhere. They come whenever there is human choice, even in man's relationship to the divine. From the book of the prophet Ezekiel:

Thus the word of the Lord came to me: Son of man, I have appointed you a watchman for the house of Israel. When you hear a word from my mouth, you shall warn them for me.

If I say to the wicked man, You shall surely die; and you do not warn him or speak out to dissuade him from his wicked conduct so that he may live: that wicked man shall die for his sin, but I will hold you responsible for his death. If on the other hand, you have warned the wicked man, yet he has not turned away from his evil nor from his wicked conduct, then he shall die for his sin, but you shall save your life.

If a virtuous man turns away from virtue and does wrong when I place a stumbling block before him, he shall die. He shall die for his sin, and his virtuous deeds shall not be remembered; but I will hold you responsible for his death if you did not warn him. When, one the other hand, you have warned a virtuous man not to sin, and he has in fact not sinned, he shall surely live because of the warning, and you shall save your own life.

(Ezekiel 3:17-21)

 

First, what is the principal-agent problem? The problem is about the difficult of providing the proper incentives for having one party, be it a single person or even an entire firm, termed the “agent” work for the benefit of third parties, called the “principal.” (If you're wondering how the terms “Agent” and “Principal” became common, they're imported from British common law.) It is fundamentally about the need to align the incentives of the agent to guide him along actions that result in the principal's greatest benefit.

Since the agent and the principal often have diverging interests, the incentives involved may actually lead the agent to maximize his own well-being at the expense of the well-being of the principal. This problem poses the need to construct incentives that are able to converge the two's interests and ensure the same actions maximize both of their benefits. 

 

The problem applies just as much to motivating a prophet of God to go out to a rebellious house and to serve as watchman for future events just as it does ensuring stockbrokers take the best options to maximize the value of his client's portfolios. Even a prophet is not except from the weakness of humanity; Ezekiel may very well prefer just to forget his vision of God and to return to a mundane life of farming. After all, being a prophet is no easy vocation.

God then has to solve this principal-agent problem when recruiting Ezekiel. He does so by entwining Ezekiel's fate with those of the principal, of those of the house of Israel that Ezekiel is supposed to act as watchman for. If a man dies in sin without being warned, then Ezekiel shares that man's fate. However, if he had been warned beforehand by Ezekiel , then Ezekiel will have saved his own life. By making the stakes not simply about turning the house of Israel away from wicked conduct, but also about Ezekiel preserving his own life, God is able to provide a solution to this instance of the principal-agent problem.

There is nothing like the threat of death to get a man out of bed and to prophesy to the people

 

 

* "He who acts through another, acts through himself (i.e. in his best interest)." The Latin expression of the Law of Agency, one of the most important principal in common law that for the regulaton of principal-agent problems in commerce.