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  • An Uncomfortable Intimacy

    Posted by Joseph Fouche on August 4th, 2010 (All posts by )

    Following up on Lex’s point

    For most of the course of human events, mankind lived in tribes. Behavior was regulated by intimate and persistent relationships, many with blood relations. The prolonged development required by human children assumed prolonged immersion in a cultural torrent fed by close physical proximity to fathers, mothers, brothers, sisters, aunts, uncles, cousins, grandparents, and the occasional stray outsider. Through this immersion, acceptable behavior was impressed on a child’s mind through a mix of deliberate and accidental lessons cumulatively applied over decades. When personal survival depended entirely on face to face relationships with others, the incentive to conform to what the tribe found acceptable was strong.

    As Peter Turchin discussed in War and Peace and War, every human group, including tribes, is made up of three kinds of people:

    • knave: puts individual interests before group interests
    • saint: puts group interests before individual interests
    • moralist: conditionally puts individual interests before group interests

    If moralists can punish knaves for not pursuing group interests, they will willingly put group interests ahead of their individual interests. If moralists can’t punish knaves, they opt out of pursuing group interests and only pursue their individual interests.

    Since any human group is roughly ¼ knave, ¼ saint, and ½ moralist, this potentially pits ¾ of the group against the knaves. Within a tribe, knaves face an additional problem: the size of a tribe is usually smaller than Dunbar’s number. Dunbar’s number is the “number of individuals with whom a stable inter-personal relationship can be maintained” within the limits of the human mind. If group size is less than Dunbar’s number (around 150 people), moralists can know who’s a knave and who isn’t, allowing them to monitor and punish known knaves.

    Consistent face to face intimacy with saints or moralists makes knavery difficult.

    David Ronfeldt’s institution (equivalent to one of Joseph Tainter‘s complex societies), counteracts moralist surveillance of knavery. The institution is a sort of super-tribe of tribes stacked on tribes. It feeds off the same instincts that bind individuals to tribes but is one step removed from the intimacy and persistence of a true tribal bond. While an institution can create a semblance of intimate and persistent relationships with individuals (often through identification with a real or mythic figure thought to be emblematic of the institution), there is a large gap between institution and individual.

    The number of individuals within an institution is potentially larger than Dunbar’s number. Within an institution, everyone can’t know everyone else persistently and intimately. This gives knaves the room for maneuver that they lack in the more intimate confines of the tribe. Knaves exploit the freedom bestowed by people who aren’t aware of their knavery to counter the numerical advantage saints and moralists enjoy over them.

    They can create alliances with other knaves to form rent-seeking groups. They can dupe saints into supporting efforts to create institutional complexity to replace simpler tribalism. Saints think they can use such complexity to raise everyone to a higher level of institutional purity. Knaves know they can use such complexity to camouflage pursuit of their own interests instead of the institution’s. Knaves, playing the saint, can even rally moralists to support opportunities to generate complexity secretly intended to pursue knavery. Since the survival of knaves in an institution doesn’t necessarily rely on the good will of moralists who know them intimately, they can actually get away with generating complexity to advance personal interests at the expense institutional interests.

    Moralists within an institution attempt to detect and punish knavery. But, if knaves can generate enough complexity, moralists get frustrated and eventually withdraw their support from the institution. They revert to tribal loyalties (what John Robb calls “primary loyalties”). The moralist strategy of “lite up, tune in, and drop out” is a major contributor to the collapse of institutions that Tainter explored in The Collapse of Complex Societies. Moralists in institutions like the Western Roman Empire became frustrated with the increasingly Byzantine (literally) complexity of the late Empire and opted out. The Empire collapsed and Isaac Asimov had his plot for the Foundation series.

    Taleb has started pushing the need to re-personalize institutions to make them more resistant to negative black swans. A principle Taleb has recently pushed aggressively is that the “captain goes down with the ship; all captains and all ships”. Application of this principle would reverse the current logic of limited liability and leave people who introduce complexity into institutions fully exposed to the consequences of their actions, for good or for ill. This principle doubly applies when knavery created such complexity as camouflage for their free riding.

    Taleb, singing from the songbook of his homeboy John Robb but with greater focus on city-states than fighting grizzly bears, points out that:

    In an antique city state, or a modern municipality, shame is the penalty for the violation of ethics; in larger organisms like the mega Nation-State, with a smaller role for face to face encounters, shame ceases to play its duties of disciplinarian. We need to re-establish it. (This is one of the causes of the fragility of the nation state).

    Taleb, repelled by an imposed encounter with regulator turned regulatory arbitrageur Alan Blinder, lists some downsides of knavery-prone complexity:

    [T]he more complicated the regulation, the more prone to arbitrages by insiders. So 2,300 pages of regulation will be a gold mine for former regulators. The incentive of a regulator is to have complex regulation.

    T. Greer has pointed out that laws passed by past Congresses were quite terse compared to the multi-volume laws that Congress puts out now and the even larger reams of paper consumed by the regulations that implement those laws. Perhaps increased complexity in American society since 1964 has something to do with it but knavery unleashed also plays a powerful role. Roman plebes pushed hard to get the Twelve Tables published so everyone could know the law that Roman patricians had monopolized as way to control the plebes. The Twelve Tables arrived at by the Decemviri (just like the 9/11 commission, only trying to take over the country) even had a nursery rhyme quality so that the mostly illiterate plebes could memorize them. Do you think the plebes would be satisfied when the road they started on ended in the (again literally) Byzantine complexity of the Code of Justinian?

    [T]he difference between letter and spirit of regulation is harder to detect in a complex system. The point is technical, but complex environments with nonlinearities are easier to game than linear ones with a small number of variables. The same applies to the gap between legal and ethical.

    The human mind, especially that of the moralist, is linear. Wrong A is committed and Punishment B should follow. Knaves, in attempting to confound the linearity of the moralist, introduces complexity that crosses over into non-linearity. “Wrong A, if not Wrong B, may be followed by Punishment C unless Wrong D happens, in which case…” and so on. Moralists follow informal principles that culture inculcates into them from birth. Knaves prefer formal rules that leave gaps where free riding can flourish. This free riding may violate informal principles of the latent tribal codes moralists follow but doesn’t violate the formal rules that knaves created. Knaves seek to be in charge of codifying and enforcing rules. They want as many rules as possible. That way knaves can crowd out simpler tribal principles and expand complex institutional rules, broadening opportunities for free riding.

    [R]egulation, like drugs, has side effects, and like drugs, it can harm the patient — something in my work I call the iatrogenics (harm done by the healer). People do not mention that regulation helped promote the Value-at-Risk method of risk measurement in replacement to age-tested heuristics — these methods blew up banks.

    Complexity has side effects that even knavery can’t anticipate. Those side effects can be toxic. They can even sweep knaves away in their wake, even though knaves do their best to entrench themselves in protective complexity. Saints, beacons of well-intentioned virtue, can create complexity in their zeal for earthly perfection that would make even knaves shudder. This complexity of the anointed can generate even more toxic side effects than the complexity of the damned.

    [W]e need a more severe monitoring of the activities of public officials and a solution to the following conflict. In African countries, government officials get explicit bribes. In the United States they have the implicit, never mentioned, promise to go work for a bank at a later date with a sinecure offering, say $5 million a year, if they are seen favorably by the industry. And the “regulations” of such activities are easily skirted.

    I’ve long wondered if the ability to take retired politicians, senior commanders, and civil servants and give them well-paid jobs in consulting, think tanks, and corporate boards was a better path to domestic peace than expecting noble poverty and opening yourself to conspiracies by disgruntled former functionaries. America has always traded the ubiquitous micro-corruption that characterizes knavery in most human societies for a more obscure macro-corruption that has characterized knaves in finance and other elite fields. Perhaps loosing a limb every once in a while through macro-corruption is better than death by a thousand cuts through micro-corruption. However, if macro-corruption is leading to loss of the body along with a limb, the time may have come to cut down the scope of macro-corruption in America.

    The Greeks had respect for the banausoi, those who had to make a living in the professions, but many argued against trusting them in running the affairs of the city on grounds that “a funeral goods merchant would not be trusted to wish for the good health of his fellow citizens.” The point has been debated through the ages, from Xenophon to Seneca (who took the opposing point), but it is even starker today in the age of lobbyists and a shift in middle class values that tolerates the “everyone needs to make a living” even when the means to “make a living” are harmful to society.

    The passing of simple informal tribal principles and their replacement by an every growing body of complex formal institutional rules increases the complexity of an institution. Increased complexity, Tainter argued, consumes increased energy. Some of this is caused by the intrinsic nature of institutional complexity. But a lot of it is caused by competing swarms of knaves simultaneously free riding off of the institutions, contributing to diminishing returns for the entire institution. Rules destroy persistent intimacy and shroud knavery. Rules increase energy consumption. They push institutions to the point that the moralists who bear their weight drop their load, opt out of complexity, and into simplicity, threatening whatever benefits complexity offers in the process.

    The solution to unnecessary complexity is moralists’ monitoring and punishing knavery. The question is whether the circumstances that bring moralists and knaves face to face again is a conscious adjustment or a cataclysmic collapse.

     

    23 Responses to “An Uncomfortable Intimacy”

    1. david foster Says:

      “knaves and saints”…the phrase “Baptists and bootleggers” has been used to describe the coalitions forming to oppose liberalization of alcohol laws in various states; also, more generally, the coalitions supporting government regulation of many forms.

    2. Michael Kennedy Says:

      I can recall an interesting experience as chief of surgery in a small hospital in the late 70s. A well known scoundrel applied to our staff. The first thought is, “Oh Oh. Why is he doing this ?” He had an office in the north part of the county and had made no move as far as we knew, to shift his operations, which were a mix of bogus medical theories and unethical practice of surgery, our way. For one thing, our community was more sophisticated than his usual hunting ground.

      He was, of course, accompanied by his lawyer who had an impressive reputation for ruining the lives of any physicians who got in the way of his client.

      We had him fill out the usual application, which included stock questions such as “Have your privileges ever been restricted or revoked in any hospital ?”

      After carefully reading the completed application, we carefully perused the records available through the state, which requires disclosure of such actions. Lo, and behold, he had answered this question “No” and we found evidence that his privileges had been revoked somewhere. Had he answered honestly, we would have been helpless to bar him for, like the Ground Zero Mosque, he had the law on his side.

      The fact that he had lied (A minor matter to him but not to us), then triggered another stock sentence in the application. “Any false statement will be grounds for rejection of the application. The applicant must then wait a minimum of three years before applying again when rejected for cause.” Of course, my letter to him pointing out that, regrettably, his inaccurate statement would require rejection no matter how much we had anticipated his presence on our staff, could not have been more respectful. We never heard from him again although I was later an expert witness for the Medical Board against him and was warned that any skeleton in my own closet would be quickly used against me.

      Sometimes the knaves trip themselves up in complexity and those who would defend themselves must become as expert in that complexity as they are.

    3. J. D. Lindskog Says:

      Again:

      J. D. Lindskog Says:
      August 5th, 2010 at 11:02 am
      In terms of ‘value added’ for the evolutionary health of species Homo Sapiens, one wonders what the propensity for Self Delusion contributes to our survival.
      -Perhaps a testing algorithm for social organizational structures?
      -A winnowing process eliminating outliers on the personality spectrum?

      The inability to assess the limits of behavior nearly always ends in tears and often in blood.

    4. sol vason Says:

      Free market capitalism has no need for government or a ruling class. The “ruling class” is nothing more than people who are very talented politicians. Some have jobs, some do not. They like big government because that means more jobs for rulers.

      There are 2 basic economic systems. First, there is what many people label “free market capitalism”. Free market capitalism assumes that each individual makes economic decisions that are in his self interest. The people who get rich in material things are those who maximize their own self-interest. Religious and social organizations call this type of behavior selfish and greedy.

      The more common economic system, a system which is not taught in Econ 101, is traditional socialism. Traditional socialism requires that each and every individual act out of charity – each person must give all that he can and, in return, he is freely given all that he needs. Traditional socialism has been the principle economic system used in the last 2000 years. Of course there is disagreement about whether the exchanged “gifts” are of equal value. The Russians have a maxim “They pretend to pay us, we pretend to work”. Ordinary people usual are miserable under traditional socialism.

      Traditional socialists believe that if selfish, greedy people (those who decide what to do based on their own self interest) are eliminated, then the state will whither away and everyone will live in perfect harmony. Ideally, free markets must be eliminated because they encourage and reward selfishness and greed.

      In a traditional socialist society the only thing a member of the lower class may “own” is his job. Therefore jobs are passed from father to son. Because some jobs are preferable to others, jobs become a measure of social status. Traditional socialist societies have a large number of classes, and membership in each class is determined by job title. In a society where all workers are equal, those with higher class are more equal than their co-workers and more vulnerable to those above them.

      There is very little difference between being a worker in a traditional socialist state and being a medieval serf. A serf gives everything he produces to his Lord. In return the Lord gives the serf just enough to survive. Some serfs have better jobs than others. The lord increases his wealth by selling products produced by the serfs on his manor and by threatening to invade his neighbors.

      The traditional socialist system works best within a small tribe or village or within a family. The members of a tribe exchange favors or gifts. A member of a small tribe never attempts to make a profit from another member of his family, his tribe or his village. What we perceive as graft and corruption in the Middle East, Africa and Asia is nothing more that tribe members helping each other (which their morality requires).

      Traditional socialism requires a society divided into classes, a society in which only the members of the ruling class are allowed to maximize their self-interest because their interests are identical with the interests of the State. These are the founding principles of traditional socialism: “L’etat, c’est moi”, “Princeps legibus solutus est”, “Quod principi placuit leges habet vigorem”, “The powers that be are ordained of God”. A socialist state must have a ruler. A free market state does not even need a government, except to protect itself from socialist states.

      Sometimes traditional socialist states permit highly regulated “free” markets. The lower classes are forbidden access to these markets because the markets are created to acquire foreign currency by selling locally manufactured products at prices that are below prevailing prices in free market states. Because these item are made with “freely given” labor, they cost nothing to produce. However there is no reason to let local workers “buy” them, because the local workers don’t need these goods. The traditional socialist agreement “from each according to his ability, the each according to his needs” only provides everything the workers NEED to survive, NOT everything they WANT to have.

      Whenever an individual gets rich it is because that person has maximized his self-interest. Regardless of whether he did this in a free market economy or a socialist economy or a “mixed” economy he will be perceived as greedy and selfish. If lots of people get rich, it might be called a “decade of greed”. Those who make the accusation are always socialists, no matter how rich they are. Class is important in a socialist economy because class justifies the possession of riches and silences critics. Class has no importance in a free market economy because Class has no value in making money. The wealthiest people are those who satisfy the self-interests of the greatest number of people at the lowest price, not those with the purest blood or the best intentions.

      Socialist countries start wars, capitalist countries avoid them. There are always easier, less risky and more profitable ways for free-market capitalists to make money than going to war. If everyone in an economy is paid by the government, then there is no one left to pay the taxes needed to pay the salaries of the government workers. If a States cannot raise money internally to pay government salaries, then it must find external sources of funds. Traditionally a state raises money externally by conquering, looting and pillaging another country. Or, like North Korea, threatening to do so. Today wealthy capitalist countries provide foreign aid to well-armed socialist countries in order to avoid war. Poorly armed socialist countries (like Haiti) get very little foreign aid. However, Haiti’s ruling class is wealthy and they prefer to rule a poorly armed country.

      Traditional socialism has pie making laws and regulations that require the serfs to produce a pie that ought to be exactly the same year after year. Under traditional socialism, laws and custom have fixed the size of the pie and the size of each piece. If one person gets a larger piece, then someone else must suffer because his piece is made smaller. Traditional socialists believe that one man can get richer only if someone else gets poorer. Therefore all profits, as Obama says, are evil.

      Free market capitalists in America have proved over the last 400 years that they can make a pie that is bigger and better than was ever made before, and that they can make pies using less labor because they have developed a new recipe and everyone who helps make the new pie gets a bigger slice than ever before. Furthermore, they have proved over and over again that those who are no longer needed to make the new recipe pie can easily find new jobs making another kind of pie and that those jobs pay more than the jobs they lost. The notion of labor saving machinery is anathema to socialists who are dedicated to saving jobs at all costs.

      Expanding pies, labor saving machinery, and new types of jobs are normal in the American free market . For 2000 years outside the US, traditional socialism has always been the cause of poverty, desperation and starvation – the very things it is designed to prevent. The members of the ruling class refuse to understand pie making because a ruler doesn’t get his hands dirty doing the job of the serfs and workers. Because rulers are clueless about how to make pies, they pass laws requiring that pie making should be done as it has always been done, thus guaranteeing that poverty and desperation continue as they have for over 2000 years.

      Americans have proven that when everyone maximizes his own self-interest within the rules of a free market system, everyone prospers and enjoys luxuries not even kings ever had. Governments are not needed and wither away. Social classes disappear. Only socialists stay poor because they never work to support themselves but rely on gifts. Unfortunately, socialists are always great politicians. They recreate a traditional socialist government and it grows like cancer.

    5. PenGun Says:

      Hmmm, so if moralists cannot punish knaves they become them. Leaving only the saints to pursue common goals.

      So because you cannot “punish” you have to surrender your beliefs and join those you cannot punish.

      I think your problem is punishment. That really is the problem the right has not addressed honestly. You need to feel superior and right. You think those you oppose are inferior and wrong.

      Do you see where this is going? Probably not.

    6. Michael Kennedy Says:

      It is interesting sometimes (though not always) to try to analyze how some individuals can miss a point so completely yet be oblivious of it.

    7. sol vason Says:

      The question seems to be how 300 million Americans or 1.3 million Chinese or the many billions through out the world should be employed, fed, clothed, housed, kept healthy and entertained. The underlying assumption is that a central government out to be making these decisions.

      I believe that an examination of history shows all that previous attempts that rely on central planning by the government have failed because the problems are too complex for one ruler, or even several government agencies staffed by well-meaning expert rulers, to solve. Paradoxically the optimal solution is to have no government and let each person decide for himself what job to do, what to eat, cloth himself, guard his health, and find entertainment free of all government control and regulation — be a “knave” and ignore “what’s best for the tribe” when he decides what to do.

      “Saints” and “moralists” make decisions that make the “saints” and “moralists” feel good but bring misery to the people they affect.

    8. Jonathan Says:

      -The set of “Saints” includes a large subset of fools.

      -You can take institutional simplification too far. Sometimes you want to unbundle group relationships so that you can take more risk. I don’t think we should do away with corporations, for example. Risk and credit, leverage, are important features of high-growth economies. The trick is to align them accurately with their costs and benefits. This may be done by creating the right incentives. Problems occur when risk is socialized but private agents can earn outlier rewards. Now that everyone understands the problem, it may be fixed by a combination of equity-market feedback and the rewriting of contracts (though continued government intervention in the markets, maintaining systems of perverse incentives, will make the fixing difficult).

    9. sol vason Says:

      “knave: puts individual interests before group interests”
      •saint: puts group interests before individual interests
      •moralist: conditionally puts individual interests before group interests”

      The term knave seems unfair. It would be more accurate to change it to “innovators”. The term “saint” should be changed to “rent seeker”, The term “moralist” should be changed to “opportunist”.

      The terminology also assumes that group interests can be identified, can be agreed on by the group to which these interests are imputed, and that protecting these interests will be beneficial in the long run to the group. All moot.

      Group interests are always championed by rent seekers because rent seekers profit by preventing innovation and maintaining the status quo. Rent seekers are skilled politicians which answers Lex’s question why the “ruling class” is so confident.

      “Opportunists” flip flop between supporting rent seekers and innovators depending on which side looks like it will win.

      Innovators are too busy innovating and rocking the boat. They usually die young because they are poor politicians.

    10. Joseph Fouche Says:

      My summary of Turchin’s summary seems to have caused confusion. Perhaps Turchin’s original distinction would clear it up:

      During the 1990s, several economists, most notably Ernst Fehr at the University of Zurich and his colleagues, decided to test the assumptions of rational choice theory experimentally…what these experiments…reveal is that society consists of several types of people. Some of them–perhaps a quarter in experiments with American college students–are self-interested, rational agents – ‘the knaves’. These will never contribute to the common good, and will choose free-riding unless forced to [contribute] by fines imposed upon them. The opposite type, also about a quarter, are the unconditional cooperators, or ‘the saints’. The saints continue to contribute to the common pool and lose money, even when it is obvious to everybody that cooperation has failed (although most of them reduce the amount of their contribution). The largest group (40 to 60 percent in most experiments) are the conditional cooperators, or ‘the moralists’. The preference of the moralists is to contribute to the pot, so that everyone would be better off. However, in the absence of the mechanism to punish noncontributors, free-riding proliferates, the moralists become disgusted by this opportunistic behavior, and withdraw their cooperation. On the other hand, when the punishment option is available, they use it to fine the knaves [even though imposing a fine comes at a cost to them…and] the group [eventually] achieves the cooperative equilibrium at which, paradoxically, the moralists do almost as well as the knaves, because they now rarely (if ever) need to spend money on fining the free-riders.

      In the experiment, the knaves were the rent-seeking free-riders.

    11. Andy Freeman Says:

      > A principle Taleb has recently pushed aggressively is that the “captain goes down with the ship; all captains and all ships”.

      Interestingly enough, few have pointed out that regulators don’t have “skin in the game”.

      On a related point, regulation is the greatest source of systemic risk.

    12. JamesB_Bkk Says:

      Great article. Thanks.

      Sol Vason: It is hard to tell in your first comment if this is a characterization of others or your own thought: “The people who get rich in material things are those who maximize their own self-interest.” I think it can be observed that rich people engaging in commerce are so because they maximize value for others or are perceived sometimes wrongly to do so. Engaging in commerce excludes kings and kingmakers, despots and other political gangsters and their families and some heirs. Frauds give the impression of maximizing value for others to get their cons to willingly hand over value.

    13. Steve Skubinna Says:

      I thought the three types of people were dicks, pussies, and assholes.

    14. toadold Says:

      I’ve noticed that in medium to large organizations that tribes will form and these tribes will act in the interests of the tribe rather than the organization.

      Also despite rules/guidelines to the contrary family/friend tribes will form up.

      A knowledge of feudal politics is helpful in many academic institutions even more so than commercial ones.

    15. M. Report Says:

      Exponential Society ?

      Maximum number/function:

      1 Individual

      10 Team members

      100 Company employees

      1000 Community citizens

      10% of each devoted to interface.

      How many provide an adequate gene pool ?

    16. Mitch H. Says:

      The very assumption of “knaves, saints and moralists” seems predicated upon an atomized single-state view of personality which resembles no actual personage or collection of personages I’m familiar with.

      For instance, I’m reading a popular history of the 12th century Angevins and their peers right now. Henry “Curtmantle” was the patriarch of about as obnoxious a brood of self-interested, malevolent, vicious, and treacherous nobles as you can find upon this earth. He himself was promiscuous, selfish, blasphemous, violent, ill-tempered and savagely warlike. You’d think, carrying your heuristic in mind, that this is a family of “knaves”, obviously! But not so much. Henry II repeatedly acted against his rational best interests, fought vigorously against the interests of the corrupt clergy with one hand while endowing many monastic establishments with the other, subjected himself to horrible tortures in penance for the murder of Thomas à Becket, and in general acted at times remarkably like an altruistic “saint”.

      Two of his opponents, Becket & King Louis VII, were posthumously, and in the case of the King of France, contemporaneously known to be saintly. And yet Becket’s great cause in life – after his “road to Damascus” moment in being elected Archbishop of Canterbury – was the protection of a truly vile Church privilege, the “benefit of clergy”, which was as classic an example of a rent-seeking complexity as you can find. He pursued it even after all the actual knaves who might enjoy said rent-seeking had given up the fight, and was literally martyred in the end, in defense of an abomination. Louis VII, despite his famed altruism and piety, was as great an inflicter of destructive warfare, rape, and pillage as any of his peers, and infamously assaulted an inoffensive & allied Muslim statlet at the climax of the Second Crusade, wasting the efforts of tens of thousands of slaughtered crusaders to no good effect, all because the crusader lord of Antioch had offended his moral sense by trying to get King Louis to do what he had come to do – fight the actual Turkish threats to the crusader states, who just happened to be that hated prince’s personal enemies, and thus were spared the crusader onslaught through a “sainted” king’s pique.

      I suppose what I’m trying to get at here, is that these simple creatures of the 12th century, who should be, if anyone could be, pure and unmixed examples of self-interested “knaves” and group-oriented, ideological “saints”, are instea found persons of parts, self-interested in moments, altruistic or even saintly in others. The only real difference between the two classes seems to be *when* they indulged in their altruisms and knaveries, whether it be in the coolness of reasoned calculation or the fevered heat of the moment, and even then, it’s sort of a crapshoot.

      No man is a villain in his own mind, and even the most aridly inhuman of sociopaths justify their own ways to themselves according to some scheme of principle or ideology. The malevolent rational actor is a myth, an abstraction, or a creature of propaganda.

    17. gpc31 Says:

      Bravo. A brilliant explication of two large and fuzzy problems that I have puzzled over, namely the loss of civic virtue and social self-restraint. You supply the structural undergirdings of the former and the calculus for the latter.

      Again, brilliant!

    18. sol vason Says:

      JamesB_Bkk
      I agree with your summary. I think “maximizing personal utility” and “maximizing self-interest” are the same thing. I use “self interest” because not everybody took Econ 101 and Greg Mankiw teaches it best.

    19. TeeJaw Says:

      I’m wondering if there is a distinction to be made between different kinds of complexity. First is the complexity discussed here which is largely designed by knaves for their benefit to enable them to game the system as free riders. Another type of complexity is not the result of design but arises out of the spontaneous order envisioned by Hayek where most of the rules are derived from customs and practices of free individuals making decisions and choices on a daily basis in pursuit of their own interests.

      The moralists and saints create that sort of complexity when they are free to control their own destiny. The knaves seek legislative rules in order to control the moralists and saints, so the knaves can impose their brand of forced complexity. The knaves either know or intuit what they are doing and thereby gain an advantage over the saints and moralists who are too easily duped by knaves selling snake oil.

      When the moralists have a clear picture of just who is a knave they may wisely seek to punish them and limit their knavery. But the desire to advance the interests of the group over self-interest can also make them credulous, and vulnerable to the trickery of knaves. Thus the distorted perception of ordinary people who support Obamacare [a minority thank goodness] thinking it will advance both their own and society’s interests. The knaves are celebrating victory.

      Knave-made complexity is malevolent and durable. Spontaneous order is benevolent and fragile.

    20. David Foster Says:

      Toldold says..”I’ve noticed that in medium to large organizations that tribes will form and these tribes will act in the interests of the tribe rather than the organization”

      Yes. And an importance facet of the art of executive management is designing organization structures to make this tribal phenomenon work in the interests of the overall organization. For example: in business, where feasible, it is often better to organize your tribes around products rather than around functions (engineering, sales, marketing, etc)…while you may lose something in the form of redundant effort, you will gain in terms of time-to-market and probably also in terms of employee emotional commitmenent. There will still be intertribal conflict, but it is likely to be less destructive than in the tribal model.

    21. onparkstreet Says:

      Teaching hospitals are tribal. Well, many seem to be in my experience and to the detriment of overall patient care.

      I think a lot of this has to do with the traditional structure of academic and medical specialty departments. Stakeholders within each department are more interested in accruing assets toward their own academic pursuits (which, to be fair, they think most important for patients), or toward their own medical speciality rather than designing a system that contributes to the larger purpose – taking care of the patient.

      – Madhu

    22. Joseph Fouche Says:

      TeeJaw’s point is important.

      I’ve discussed his point in the past:

      http://committeeofpublicsafety.wordpress.com/2010/07/18/worth-reading-the-collapse-of-complex-societies/

      http://committeeofpublicsafety.wordpress.com/2010/02/27/death-by-tactics/

      http://committeeofpublicsafety.wordpress.com/2010/07/02/worth-reading-special-operations-and-strategy-from-world-war-ii-to-the-war-on-terrorism-chicagoboyz-edition/

    23. cjm Says:

      seems like the interesting question is whether or not knaves can be harnessed towards productive ends. maybe through trickery.