The All-Seeing Eye

Musings from the central tower…

Economics Foundation

One of my goals in this blog is to examine the interplay between certain postmodern theories and certain economic theories that, due to certain political and demographic realities, might never be considered together. In Constituting Feminist Subjects, Kathi Weeks points out that there is a “paradigm debate” between modernists and postmodernists that makes it difficult to constructively combine elements of, for instance, Foucault and Marx. However, someone whose area of interest is feminist politics would be highly likely to, in their course of study, come across somewhat favorable accounts of both of these thinkers. Perhaps socialist feminism and postmodern feminism would be presented as opposing movements, but they oppose each other only in their approach to meeting ostensibly similar goals. Thus the logic of Weeks’ attempt to bring some degree of reconciliation to the two.

This same student of feminist thought would be very unlikely to encounter certain other
theories, thinkers, or schools of thought, or if they were encountered, they’d be likely to be presented negatively, misrepresented, or dismissed as irrelevant for one reason or another. This is not an attack on the feminist movement – merely an observation that, in any movement or school of thought, there are areas of particular interest that are studied in great depth, and there are areas of no particular interest that are not studied at all. I could easily level the same critique against economics. In fact, I arguably already have, when I said that Libertarian thought needed to be reevaluated in the face of certain postmodern theories. I’ve spoken a bit about some of the formulations of power that will inform this project of deconstruction and reconstruction, so now, I’d like to talk a little bit about the economic side of things. My project here is to begin to lay the foundations for my postmodern theory of economics.

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March 2, 2008 Posted by | Economics | , , , , , , , , , , , , , , , , , , , , , , , , | 1 Comment

Free Will, Determinism, and Motivation

It is possible to look at the universe like a giant computer. If you know the software a computer is running and all of its inputs you can predict the result. Similarly, one might think that if you knew all the rules of the universe – that is, if you understood physics perfectly and accurately – and if you knew the position and velocity of each particle in the universe, you would be able to predict the results – that is, how everything would turn out. Such a view is called determinism. When Newton first proposed that all matter obeyed certain laws, he was accused of atheism, because the obvious implication of his theories was determinism, which is a theory that leaves no place for God and no place for free will.

The question of free will vs. predestination or determinism is, of course, older than Newtonian physics, but physics is the way in which I first conceived of the question. One might ask, if God is all powerful, how can anyone act in a way God does not want? One might ask, if God knows all, then isn’t destiny written – isn’t there no way to change things? I have never been particularly into theology, but physics always fascinated and frightened me.

Some time ago I read Isaac Asimov‘s Foundation trilogy, which despite its name consisted of approximately thirteen thousand books. This series is based upon the idea that there was a mathematician named Hari Seldon who was able to predict the course of history using mathematical models and a deep understanding of historical trends. I did not find this idea credible. People, after all, are far too complicated to reduce to a mathematical model. Aren’t they?

Can we predict what people will do in a given situation? If we can, what does that say about free will? If we can’t, how can we enact social change?

In Freakonomics, authors Levitt and Dubner describe a scenario in which parents were charged a small fee (I think it was $3) for being late to pick their children up from daycare. The result of this fee was that lateness increased dramatically. According to Levitt and Dubner, the fee was too low, and parents felt as though paying $3 justified their lateness. In other words, when no provision is made for lateness, the parents have to pick their kids up on time or risk their kids being scared and alone. When the daycare center charges for lateness, watching the kids for a few more minutes becomes just another service that the parent can buy, and buy they do. The point of this story is that incentives don’t necessarily work the way we think they will. There are complicated issues at stake even in something as simple as daycare. As we saw in the Traveler’s Dilemma, it’s not a simple task to predict how people will make their decisions, and sometimes rational behavior isn’t what theorists think is rational.

However, what both of these scenarios show is that despite the difficulty, despite the complications, it is possible to develop models and predictions for how people will behave. It is possible to find, with experimentation, the fee amount at which parents will begin picking their children up on time to avoid the fee. It is possible to find, with experimentation, the punishment amount at which people will begin picking the low number rather than the high number in the Traveler’s Dilemma. In other words, people’s behavior may be more complicated than we think, but it is not unreasonable. People act based on motivations, and although these motivations are often not obvious, they are there and they can be found.

Of course there will always be exceptions. There’s always room for free will. There will always be people on the far ends of the bell curve, people who defy expectations and act inexplicably. But in order to effect positive change in the world, we have to believe that we can predict behaviors for most people. We have to believe that there’s a number of dollars that will decrease the amount of late pickups from daycare. After all, isn’t this how we determine prison sentences? Isn’t there a number of years of incarceration that we believe will make the commission of murder unattractive to most potential criminals? Isn’t there a number of dollars that we believe will deter people from speeding and thus decrease the number of traffic accident fatalities?

I’ve never really believed in free will. I’ve always thought that everything is already determined by particle vectors, that everything I do is explainable by something that happened to me in childhood or by a set of circumstances that outlined my choice to such an extent that I didn’t really have a choice. And that’s why, for me, I think it is important for us to search for these motivations, search for these incentives, to build and discredit and rebuild these mathematical models to predict behavior. Because I want to set things up so that people have no choice but to make the right choices. I want a society full of people who pick 100 on the Traveler’s dilemma and pick their children up on time from daycare, and if we’re going to have that we have to pick the right game.

And that, in turn, is why it’s worth looking at something like the Traveler’s Dilemma and finding out that people will cooperate with each other as long as the risk for doing so isn’t too high. It’s why it’s worth looking at the daycare paradox to find out how much guilt is worth. It’s why it’s worth asking why people follow their king or their president against their best interests. We need to find out what motivates people. And in exploring incentives and economics, game theory and modeling, philosophy and psychoanalysis, that’s exactly what I hope to do. I hope to find a solution, a way to set up society so that we’re all playing a game that everyone can win.

In closing, right now I feel that most people are not playing a game that everyone can win. There’s a game called the Prisoner’s Dilemma. In this game, two prisoners are in the custody of law enforcement, but the police don’t have enough evidence to convict them of a serious crime. Each of them is told that they are both suspects and given the following options. If one prisoner gives up the other, that prisoner will go free and the other will go to jail for a long time. If neither of them confesses they will both serve a short sentence for whatever smaller crimes the police can put on them. If they both confess they’ll both serve a short sentence. The implications of the game are that it is better for each player, no matter what the other player does, to confess their crime. Unlike the Traveler’s Dilemma, the Prisoner’s Dilemma tends to lead to uncooperative behavior – in other words, it is much better for each player to screw the other player over, unlike in the TD in which screwing the other player leads to a greater loss.

The Prisoner’s Dilemma game describes many situations in modern life – situations in which people have a great incentive to hurt other people. If there is some way to change the rules of the game so that, like in the Traveler’s Dilemma, or many other games, people have an incentive to help other people, then everyone could benefit immensely. Changing the rules of the game is what I’m aiming for, but it’s going to take a lot of searching to find the right game and a lot of convincing to get people to play it.

February 10, 2008 Posted by | About, Economics, Game Theory | , , , , , , , , | 2 Comments