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EvPsych vs. Economics

Eliezer has a great post on Overcoming Bias about the clash between Hansonian-style economics and EvPsych, when analyzing human motives and behavior:

Evolutionary psychologists are absolutely and uniformly cynical about the real reason why humans are universally wired with a chunk of complex purposeful functional circuitry X (e.g. an emotion) - we have X because it increased inclusive genetic fitness in the ancestral environment, full stop.
...
But it wouldn't be conventionally ev-psych cynicism to suppose that you don't really love your mate, and that you were actually just attracted to their body all along, but that instead you told yourself a self-deceiving story about virtuously loving them for their mind, in order to falsely signal commitment.

Robin, on the other hand, often seems to think that this general type of cynicism is the default explanation and that anything else bears a burden of proof - why suppose an explanation that invokes a genuine virtue, when a selfish desire will do?

Of course my experience with having deep discussions with economists mostly consists of talking to Robin, but I suspect that this is at least partially reflective of a difference between the ev-psych and economic notions of parsimony.

Ev-psychers are trying to be parsimonious with how complex of an adaptation they postulate, and how cleverly complicated they are supposing natural selection to have been.

Economists... well, it's not my field, but maybe they're trying be parsimonious by having just a few simple motives that play out in complex ways via consequentialist calculations?

Read the whole thing, it's great. I love both these ways of looking at the world, but have realized for years that they are in conflict. This is the best example / analysis of that conflict that I have seen. The a priori assumptions about rationality in economics just don't square with modern scientific data about the design and effectiveness of our mental hardware, whereas EvPsych (to the degree that it is a falsifiable science, which is admittedly limited) does.

Our brains clearly do not work via incredibly sophisticated, rational analyses of large numbers of possible actions and their consequences. Instead, they are patched together from many specific modules and some general but limited reasoning ability.

My viewpoint is that this, like happiness research, is something that economists and their fans (like, say, libertarians) argue vociferously against because they don't like the implications. Because it threatens their identity by threatening their worldview. And not because they are rationally analyzing/dismissing it.

Not that they don't have some valid criticisms, but the burden of evidence they place on these fields they don't like is far higher than on fields they do like. Which is nothing unusual, it's typical human nature - of the EvPsych kind, not the rational economic kind. Practice beats theory, as usual.


Futurism and Libertarianism (a blatant appeal for support)

There has long been a connection between libertarianism and futurism. Many people first encountered libertarian ideas in the work of Science Fiction authors like Robert Heinlein and L. Neil Smith. A general openness to rational analysis of the world, and pursuing ideas to their logical, if unpalatable ends, tends to lead people to both.

More pragmatically, new technology is perhaps the single most effective way to change a society. Birth control technology, for example, has had an enormous effect on sexual mores. For true privacy, we count on encryption, not legal protection. The internet has enabled small groups to collaborate as never before (plus made it far harder to censor pornography - or anything else). Ocean platforms are the best way to reform government.

So I think its important for libertarian causes that people be out there thinking about future uses of technology and defending its potential to positively change the world from those who are scared of it. Which is part of why I'm running for the board of Humanity+ (former the World Transhumanist Association), the foremost organization devoted to the use of technology to improve the human condition. If you're a member, please vote for me! If you aren't, consider joining - you must do so today (Sunday) to be eligible to vote.


Get with the SLs, or miss the revolution!

Brian Doherty wants to be all inclusive, and says:

This is not to say such taxonomic divisions and side-taking in libertarianism are useless or to be condemned--just that I think whatever such divisions you can create, it is quite likely that libertarians on either side are doing good things to help bring about a more libertarian world, even if that merely means convincing one more person that we should live in such a world.

Here's the thing, though: we libertarians have been yelling forever that what matters is not just intentions but consequences. My problem with liberals is not that they want to feed the hungry and educate the poor, it's that their methods infringe on my rights, and fail - a miserable combination. I'm not going to condemn the efforts of PLs - but I do think they (which means most libertarians) are deeply misguided, and as a result they are wasting their time and money. That's a bad consequence, and it's sad. There are few enough of us libertarians, if we're going to make a difference in the world, we need to act effectively.

Brian also says that: "Undoubtedly, as in any market, there will be plenty of efforts exerted that prove ex post to have been misguided, but it's hard to know that before hand". But I don't agree that, right now, all the paths to Libertopia look equally likely. It's not like a financial market where you have strong forces acting to equalize returns. Activism doesn't have the frequent feedback necessary for an efficient system, nor the incentives. (In my experience, many activists work for the thrill of feeling they are contributing to a cause as much as or more than the thrill of success - not a reward system which will lead to efficient activism.)

And frankly, I don't think it's even close. Working on a handful of long-shot SL proposals, knowing that only one need succeed, is far superior to the entire field of PL, which will never succeed.

In some sense, this is just an argument about methods. But that's an important argument. In the end, almost everything in life comes down to choosing methods. The view that methods don't matter and we shouldn't argue is a view that gives up on one of life's great questions: How to act most effectively to change the world.

Also , there is a specific element of Brian's strategy that I think seasteading disproves: "even if that merely means convincing one more person that we should live in such a world." In traditional libertarian activism, focused on some vague hope of a future change in the political winds causing change within a democracy, convincing people matters. But that's one of the reasons seasteading is great: we don't need to win an election. We don't need a sweeping movement. All we need to do is create one small free town. Then we can switch from arguing, preaching, and proselytizing to demonstrating the virtues of a free society by example. And that is an enormously superior method of evangelism.

Gazing into my crystal ball, I expect this argument between the people who are voting with their feet (or advocating it) and those who think we can tame the beast to heat up over the coming years. You're going to get one wing of the offensive from we seasteaders, and another from the FSPers. (I have my disagreements with the approach, but they are well towards the SL side, and I applaud their focus on concentration of power and actions over words.) The vanguard from the expatriates has been fighting for awhile now.

This has gotten long so I will refrain from exploring the subtle connections between SL/PL and actually doing and living libertarianism vs. just talking about it. But there is a connection, and it's going to strengthen. You can be a PL, and dream about freedom as a slave in the shadow of the beast, or you can be an SL, and work towards escaping from and eventually slaying the beast.

I've picked my side, and we're going win. Winning is fun, and winners get all the babes[1], so you should join us.

[1] I use this as a gender-neutral term, I assure you. Please imagine a babe of your preferred sex, ethnicity, and political persuasion.

P.S. As a random aside, am I the only one who sees huge cognitive dissonance in libertarians living in DC, like the Cato crowd? Is it any wonder they get captured by the establishment and see PL as a normal, wholesome, feasible strategy? In case no one else has yet stated the obvious: the libertarian revolution is not going to come from Washington DC - just like the American Revolution did not happen in the halls of Parliament. Power and geography are intimately tied, which is why freedom is found on the frontiers.


Steppin' in to defend the SLs

I've been busy at my day job actually trying to bring about Libertopia (wow, it's fun to say that!), rather than just talking about it (oh, snap!), hence my only blog contribution to the debate thus far has been a response to Bryan Caplan's Policy All the Way Down over at the TSI blog (and some comments on Caplan's post).

But since I am a vehement structuralist, I feel compelled to enter the fray wit' some agreein' (yawn), and disagreein' (fun!). Let me briefly (for me) try to hit a few major points of my position and response. Those interested in a messy but long work-in-progress about my politics can find it here. A discussion of seasteading compared to other libertarian activism methods is here.

First, I've been a big fan of Jacob's SL/PL posts. Not saying I fully agree with everything he said, because I never fully agree with everything anyone says, including myself, but I largely agree with it. Good stuff! I've been bookmarking them all on my list of things to talk about when I start a structuralist blog, which may well happen soon.

CJ's portrayal of SL as a "disdain for sullying the purity of their ideal theory" is wildly off the mark, at least as far as my SL goes. I am a very pragmatic, consequentalist guy, and I am an SL for purely pragmatic, empirical reasons. If I thought there was the slightest change of any substantial reform from PL, I wouldn't be an SL. The danger of having to try new structures and societies, the geopolitical difficulties of starting new countries, the fact that our best option requires us to tame a new frontier, the ocean - SL is hard!

But frankly, over the years I have come to believe quite strongly that we have no chance at significant reform in current democracies. I have never heard a particularly plausible scenario. Ron Paul never had a chance. Libertarianism is not popular, and it will never be popular. The US will not let the FSP secede with NH (although the FSP is certainly my favorite US-centric project). Democratic reform is hopeless.

It's hopeless for the same reasons Bryan touches on: "The level of federalism is low and stable for a reason - when there was more federalism, political actors have incentives to reduce it; now that's low, political actors have little incentive to change it. Alas, it's policy all the way down." In other words, things are the way they are for a reason. Because it's an equilibrium. And we have decades of failed libertarian activism, and a hundred years of watching democracies grow bigger and bigger governments, to provide massive empirical evidence that this shitty equilibrium is stable.

Sure, PLs may win occasional small victories. There are occasionally net-positive PL projects and reforms. But as a project to bring about an even slightly libertarian society, it is utterly hopeless. As DR's esteemed founder Jonathan Wilde demonstrated long ago, even if libertarianism was popular, it would still lose out in elections.

As Bryan Caplan points out, structural libertarianism within an existing structure is policy libertarianism. But as he then adds, seasteading is different: "Whatever else you think about seasteading, it does bypass the problem of changing either structure or policy in existing societies."

If, as CJ says, "however much we might want to live in Libertopia, it's arrival isn't coming any time soon.", PL might be the best we could hope for. But we have another option! I work on it every day. It's a long-shot, but more like 1 in 10 than the 1 in a billion chance of a Ron Paul Revolution. It has serious challenges - but they are challenges of money and engineering, challenges which humans are good at. PL fights human nature, systemic incentives, and the corruption of politicians. That's a sucker's battle!

So repent of your PL ways, and come join our seasteading community. We're working to bring about a world with countries that have 0% tax rates, instead of fighting tooth and nail over whether taxes are 39% or 40%. It's more realistic, more exciting, and more fun!


Competition matters

...and just because something is private sector doesn't mean it has competition. Megan McArdle's history of the big three:

In the early 1950s, for various reasons Detroit developed a cozy three-way oligopoly. The UAW developed a cozy monopoly on supplying labor service to that oligopoly. In some ways, the UAW helped sustain that oligopoly. If you're a big company whose quality suffers, you have problems. But if you have a union making sure that labor quality cannot vary across the industry, you don't need to worry that your competitors will make a better car. Detroit competed on styling and power, not reliability or price.

During those years of oligopoly, the Big Three's first loyalty (after their loyalty to management) was loyalty to the union. The worst thing that could happen to a Big Three manager was a strike. Making a car that is reliable is only partly a matter of engineering; it's mostly a matter of extremely tight control over the assembly process. That tight control is necessarily less pleasing to the workers than looser rules. The unions could severely hurt a company with a strike. Whereas the customers? The customers could only go to another company where the same union was negotiating the same loose work rules.


The Free Market Clapper

When times are good, the government is the problem! Just clap when times are bad, and the government will be the solution!

The Free Market Clapper


Libertarianism and Positive Psychology

I draw the connection:

Positive psychology (the study of happiness, wellness, and improving normal life) tells us that optimists (who are happier) tend to see themselves as empowered, and their accomplishments as resulting from their efforts and abilities. Pessimists see themselves as victims of fate, with no control over the bad things that happen to them.
...
In this context, libertarianism can be seen as a political philosophy based on optimism, focusing on the power of the individual to affect their life, rather than protection from fate. The nanny state, while it can be seen as more caring and compassionate in its desire to help those who suffer, is also deeply pessimistic in its focus on fate instead of power. It teaches people that what happens to them is not their fault.

Sometimes this is true - but I worry that it is poisonous to happiness and self-worth, and antithetical to a culture of striving and achievement.


Polygamy for libertarians: monogamy = marriage marxism?

Somehow I find this angle hilarious:

MARK HENKEL: And also, that, ah, we are now in an "era of the dumbed down males" with "marriage-phobic baby daddies" that is a consequence of the enforced "one man, one woman" that is "marriage Marxism." That more or less has uh - instead of having an incentive for men to grow up and be real men, and take real responsibility and real nurturing of families in caring, compassionate Christ-like way - as Christians are to be of course - that, uh, "one man, one woman" is a marriage socialism that has prevented that. Instead of a laissez faire free market principle of creating an incentive for excellence, that, uh, men would grow up and be capable.

It's another viewpoint on the old argument that monogamy benefits lower-class men at the expense of lower-class women[*]. Which is obviously true from libertarian principles (given that men have a higher variance in income, and that polygamy tends to be multiple wives rather than multiple husbands).

That is, if you remove the option for men to have multiple wives, that harms those women who would rather be the Nth wife of a high-status guy than the first wife of a low-status guy. It benefits the low-status guys, who now have less competition, and can get better (or any) wives. So it's a redistribution.

Now, it's been argued before (in The Moral Animal, I think), that this is a beneficial redistribution for society. Since most violence and crime comes from low-status single men, redistributing wives towards that group may lower violence overall. As a libertarian I still challenge the morality of disallowing women from marrying better husbands, but I at least am willing to admit that it has benefits.

But then Mark Henkel (a Christian pro-polygamy advocate), makes the great economic point that this is a static analysis. What about the incentives created by monogamy? Well, it lowers the competitive pressure on men to be good husbands! Knowing that there are as many men as women, and that many women want to get married, a man can take less care of himself and do less personal growth, and still get a wife, just by waiting until "all the good ones are taken". In a world where the good ones can be taken by multiple women, men who laze their way through their twenties in the super-extended-adolescence popular nowadays may find themselves with nothing.

What a great argument! Monogamy as marriage marxism, polygamy as competition. Doesn't mean you have to seek multiple partners for yourself - but I buy the case that it's a more libertarian institution.

[*] I've phrased this as multiple wives, b/c that is historically much more common, but the arguments work similarly in the case of multiple husbands, which increases the competitive pressure on lower-status women.


Prediction Markets for parole?

Michael Keenan writes:

When you have a future prediction problem, the best solution available is (in most cases, when some normal conditions like liquidity hold) prediction markets. I propose replacing parole boards with prediction markets on the likelihood of recidivism for each convict.

This is a great example of the problem with having criminal law instead of just civil law. With civil law, the whole thing obviously becomes an insurance problem. If you commit a crime, your future defense agency rates go up - and how much they go up depends on your chance of recidivism.

If you committed a crime and were uninsured and are now in debt, whether you are in prison (not working), in prison working, or out working depends on the relative income you can earn in those situations, and the recidivism rate that whoever takes responsibility for you (your defense agency) expects.


Patri's Politics

My blogging here has been fairly light, as I'm busy with The Seasteading Institute, but I'll try to make up for it w/ two pointers to dense material.

First, if you are sympathetic to my political views (democracy sucks, libertarianism would be great but conventional methods for achieving it are futile and it appears to be unstable, so let's find some workable, stable ways of getting it, goddamnit), and you don't read Unqualified Reservations, you are missing out. I somehow just started reading it a couple weeks ago, and it is awesome. Not that I agree with all of it, of course, but there are so few of us in the "libertarianism is great but impossible so let's realistically figure make it happen" camp, to find someone intelligent and erudite blogging about it is wonderful. See, for example, Why I am not a libertarian.

Second, as my political views are fairly unique and not described by any simple phrase (ancap frontierism? pragmatic polycentrism?), I finally sat down and tried to put them all in one place. The result is still a bit of a mess, and doesn't include all the key points, but it's a start. If you are one of my companions in the vague diffuse area of consequentalist pragmatic libertarianism, I hope it will be of interest. If you are of some other flavor of libertarianism, perhaps it will help move you in our direction :).

If you have a good name for this brand of politics, or know of blogs or posts or books that fit into it other than those listed, please suggest them in the comments. I think I posted it here before, but if you haven't seen Arnold Kling's Competitive Government vs. Democratic Government (PDF), it is an excellent piece along these lines.


Concentrating Diffuse Consumer Interests

Amazon Fights 'Wrap Rage' With Easy-Open Packaging

The Web retailer's Frustration-Free Packaging initiative aims to reduce the plastic clamshells, coated wire ties, and fasteners that drive consumers crazy.

(story - or just go to amazon.com to see the announcement)

Good for them. Excess packaging seems like a double waste - more work for consumers, more cost for producers. I'm guessing it lowers factory costs, maybe? Or it could be something where it is a tiny effect distributed across many people, and so only when a big force like Amazon gets involved does a change happen.

I was talking about this w/ Michael Keenan in the context of Google. Google gets so many of the internet's ad dollars that it is willing to do things that make the net a better place, which have no direct benefit, just because it captures so much of the indirect benefit of people doing more shopping online. This isn't just a PR statement, I can testify that it is a genuine internal motive. During my time there, I saw this specific reason used as a justification for some pretty large projects.

We tend to think of it being bad for one company to capture a lot of a market, but as these examples show, it has some advantages, in that the company has incentive to act as a concentrated proxy for the diffuse interests of consumers. Essentially, these large companies are reducing coordination costs, and enabling groups to get benefits that they would never be able to coordinate on, because their interest is too diffuse.

Nor is the importance of this restricted to search engines or retail. In government models like proprietary community (Spencer MacCallum's, or a seastead), we have entities with local monopolies, but (due to competition between jurisidction) incentive to maximize the value of their local area. And one of the ways to do this is to act as a concentrated force for diffuse interests. Like Google & Amazon, and unlike the farcical claim of democracy to accomplish the same thing, proprietary communities directly and independently[*] profit from benefiting the diffuse interests which they serve.

(This example is relevant to anarcho-capitalism as well).

[*] That is, independent of anything else they do. If Google captures half the ad dollars on the internet, and spends $1M to decrease phishing which increases ad spending by $10M, they make $5M - $1M = $4M regardless of what else they do. Whereas in a democracy, the feedback is occasional and for huge bundles (ie a candidate), so actions are not evaluated independently.


EconTalking about seasteading

The latest EconTalk podcast features me talking about seasteading. It was a fun interview. One of the things I find wonderful about seasteading, and frustrating about libertarian skepticism towards it, is that I see it as a reform that fits much better with libertarian theories than most libertarian reforms. It's all about spontaneous order and about systems and incentives being more important than people. Russell Roberts asked some great questions that helped bring those aspects out, and was open to the answers.

Doctrinaire libertarians (not Russell) amaze me with their blind spots: they point to all the empirical evidence about the power of the free market...and then ignore all the empirical evidence about the instability of economic freedom (especially when combined with political freedom). Yes, free markets are great - the world has made that clear. It has also made it clear that democracy and free markets are incompatible - the world's democracies have far too much economic regulation and taxation to qualify as a free market.

Stability matters - what is the point of a theoretically better system if we can't reach it in practice, and if it would just decay into the same old same old even if we did reach it? Rhetoric and proselytizing are not the answer - we've had amazing people out there conveying libertarian ideas in beautiful ways for decades, and whaddaya know, the population still ain't libertarian. And even if they were, the political process would still distort things in the way that democracy distorts things (which is substantial).

A credible vision of a better future must include a reason why things suck now, and why it will change so that things can be better. Seasteading has such a reason. No other libertarian reform I've seen does - the Libertarian Party, the Ron Paul Revolution, the Free State Project, Agorism, whatever. Thus, they are pipe dreams.

Settling the oceans is hard. But not as hard as changing human nature. Or wishing away the incentives of democracy.


Why did the markets like the bailout

As you can see from the graph in Scott's post, the markets plunged when the bailout failed to pass the House.

Why? I can understand the financials plunging, since the bailout would have been a transfer from taxpayers to them. But why the market as a whole? Does that mean the bailout would have been good for the economy?


I don't understand credit

Or how it affects the real economy. (This is part of my general ignorance of / disbelief in macro).

In micro, a common technique is to look past the money to the stuff. For example, if someone prints a bunch of new dollars (inflation), then we don't have any more wealth. More dollars chase the same resources, and prices go up, but we aren't any better off. In fact, the people closed to the new dollars (the spenders, the first receivers & re-spenders) benefit at others expense. Similarly, government spending always comes from somewhere, so to act as though it "stimulates" the economy when in reality it just moves spending from one place or time to another is bogus. It's not about money, it's about the allocation of resources.

But then I read in the paper:

Without a mechanism to shed the bad loans on their books, financial institutions may continue to hoard their dollars and starve the economy of capital. Americans would be deprived of financing to buy houses, send children to college and start businesses. That would slow economic activity further, souring more loans, and making banks tighter still. In short, a downward spiral.

Fear of this outcome has become self-fulfilling, prompting a stampede toward safer investments. Investors continued to pile into Treasury bills on Thursday despite rates of interest near zero, making less capital available for businesses and consumers.

Superficially, this makes sense, just like it makes superficial sense that government spending creates jobs. But then I think "look past the money to the stuff."

Before tight credit and after tight credit, the resources in the economy are the same. The people, the skills, the capital, the natural resources - all the same. So how can tight credit slow down the economy? The factory that my business doesn't build means that the factory building resources are available to someone else more cheaply.

In fact, shouldn't the effect be the opposite? If tight credit means higher interest rates, then it encourages saving and investment over consumption. In fact, tight credit cures itself - it raises interest rates, which encourages saving, which provides more credit.

I am especially suspicious of the phrase "hoard their dollars and starve the economy of capital". Dollars are not capital, they are pieces of paper. You could burn them all, and the economy would still have all the capital it had before. Hoarding should just cause temporary deflation, as a lower supply of dollars chases the same amount of stuff.

But maybe I'm missing something about the nature of credit? Please enlighten me.