Evonomics – Stop Using Adam Smith and F.A. Hayek to Support Your Political Ideology

Stop Using Adam Smith and F.A. Hayek to Support Your Political Ideology

The irony of faith in blind markets – by David Brin

Hi David,

Almost everything you say is true in a sense, and I align with much of it, and yet to me it still missed the point.

I am not in any way in favour of centralised control. I strongly favour decentralisation, and individual freedom. And I see evolution in a different light.

[ what follows is largely taken from previous post]

Darwin clearly demonstrated the role of competition in evolution, and that has quickly entered the popular consciousness – the whole “nature red in tooth and claw” thing. And it is only part of the picture, an odd caricature in a sense.

Evolution has always been about the roles of both competition and cooperation.

The more complex the entity, the more important the many roles of cooperation in its being, and competition in its getting there.

And raw cooperation is always vulnerable to exploitation by cheating strategies, so at every new level, cooperation requires attendant strategies to prevent invasion by cheats, and at every level there will continue to be a sort of “evolutionary arms race” within levels of cooperative systems between potential cheats finding new cheating strategies that evade detection, and the cooperative system finding new strategies that bring the cheat back to cooperation. From a systems perspective, there can be no end to that process, at every level, eternal vigilance is required by those within the cooperative, both to detect new cheating strategies, and to develop effective counter-strategies that make it in the self interest of the cheat to come back within the cooperative.

And within all of this complexity, there exists a vast array of common over simplifying assumptions at every level, that lead many to sub-optimal outcomes in terms of both understanding and incentive to action.

Within the highest levels of commitment to life and liberty, there is an extremely difficult exercise of creating boundaries that both respect life, and empower liberty. It is extremely difficult to empower liberty without posing significant risk to life. Nothing is simple.

One of the most profound problems that exist right now, is the dominance of market values in our society.

To a good first order approximation, money rules.

It seems that most of the intellectual justification for this comes from a mistaking of correlation with causation.

Throughout history, free markets have been associated with freedom and prosperity.

Many people have taken that association to mean that money (the market measure of value) must be at the root of this freedom and prosperity.

It now seems clear that such a causal association was a mistake.

It seems that the greatest prosperity coming from markets was from the distributed trust networks between traders, that allowed individuals to make reliable judgements.

It seems that high level cheating strategies within economic thought have exploited that mistake of correlation with causation, and have managed to put monetary systems at the top of our governance systems.

This appears to be a logical error.

What is needed is distributed trust networks within a cooperative context. It seems to be decentralisation of control (trust in a reliable context) that most reliably delivers liberty.

Freedom is the result of distributed trust networks within a cooperative context, not the freedom of capital.

Capital has many tendencies to be exploitive to the cooperative, as even Adam Smith noted.

Markets and capital were great tools in times of genuine scarcity, but they cannot work well in contexts of universal abundance.

The social utility of markets degrades rapidly as our ability to automate production increases.

Exchange based thinking tends to be intensely short term and self centred and tends to ignore the needs of the many levels of our cooperative existence.

And automation is not yet at the point it can entirely automate all goods and services, and it is rapidly approaching the point that production of all essential goods and services could be fully automated (water, food, housing, healthcare, transport, communication, education, sanitation, energy, recycling). Such automation should be able to be fully distributed.

So yeah – its complex, far more complex than most people have even the slightest inkling of.

One of the major issues with human brains is that we form habits, and under stress our brains revert to earliest habits.

In logic, we must all start from simple binaries.

Thus, under stress, we all have a strong tendency to revert to the simplest binary “truth” our brain associates most strongly with that particular context. That worked well when stress came from big cats or bears or invading hordes, but doesn’t work so well in times of abstract economic and social crises.

The evidence in logic is now clear, that provided that there is actually enough for everyone, then cooperation is always more powerful for everyone than competition.

And we are now at the stage in our development as a species that we need to go to a level of universal cooperation, and put significant effort into developing systems that can support everyone (no exceptions) in a high standard of living, with high standards of security. The only logical alternative is not really safe for anyone.

We all get far more by cooperating, than any can get by cheating, however unlikely that may look to most right now.

Exponential technological development does actually have the ability to deliver that, but not in a competitive market context. Markets must (in logic and in practice) value universal abundance of anything at zero. This is why automation must break markets, and that need not be a bad thing for individuals, if, and only if, we structure the systems to distribute that automation universally and use it to empower everyone.

Transition is going to be “interesting”.

[followed by]

Again David, I agree with all you wrote, and it still misses something essential.

Competition is only part of the package.
Cooperation is every bit as important, and the more complex the systems the more essential is cooperation.

The focus on competition, without even a mention of cooperation, is “out of whack” – unreal.

What you are calling “regulation of arenas” is far more accurately characterised as cooperation.

Just look at the levels of cooperation present in complex systems like human beings. RNAs to proteins, RNAs and proteins to give lipids, DNA, cells and organelles, cellular specialisation to give organs, nervous systems, etc. The move into the social arena. So many cooperative levels within culture. We humans are born helpless, without the cooperation of parents and culture more widely we are dead. So many levels of cooperation within culture.
I spend much more than 80% of my time in cooperative activities that have no financial gain, and they are all directed in a sense towards what I see as my own long term best interests, on a 50-100 year time-scale.

We don’t all compete with each other.
Sure there is some competition.
Sure we all enjoy competition to a degree.
Sure there is a competitive aspect to markets.
And my particular company has established a reasonably stable niche, in which we supply a service at a cost that is hard for a competitor to match, given that it would take a couple of million investment to improve on our product, and it would take decades to recover that investment if you could convince our clients that your new product was better, and you could provide a better service (and that is doubtful). So most successful entities find stability in niche specialisation that largely avoids competition – one sees that at every level.

So yes – competition is a powerful thing, no argument, and cooperation is at least as powerful, and in higher order systems, much more powerful, provided it has sufficient attendant strategies to effectively mitigate the risks from cheating strategies. And clearly our modern financial systems do not have such attendant strategies, as they do in fact seem to be dominated by cheating strategies at several levels.

And you have not actually addressed the issue of how individuals are supposed to generate value in an age of exponential expansion of automation. No doubt you and I could hold out much longer than most, but what about the drivers, the cleaners, the waiters, the plumbers?
My son spent 2 years going to hundreds of job interviews before finally securing his first job, beating off 200 other applicants. He is now in reasonably high paid employment and enjoying what he does. The really scary thing is, that he is really bright, really motivated, and highly skilled, and he still had that reality.

The market system cannot deal with full automation.
Universal abundance drives markets to zero value.
That is a fact.
Oxygen in the air is the prime example.
Arguably the single most important thing for any human, yet of zero market value due to universal abundance.
Markets cannot deal with universal abundance.
Markets require scarcity.
Unemployment and poverty are necessary components of a market system.
Automation offers us the ability to ensure every individual has all they need to do whatever they responsibly choose.

The best three programmers I know have all stopped doing work that puts people out of work, but others are doing it, if more slowly and expensively.

There is another way out of this mess.

I love your work.
I hugely respect your intellect.

The issue is beyond competition in a sense.
With automation reaching the point that we can now develop systems that do not require anyone to do anything to maintain them, then the whole game changes.
Labour is no longer of value in an exponentially growing set of classes of goods and services.

That really is a game changer.

We have a choice here.
And that choice is really important.

Do we choose to value life and liberty, universally?
I say yes!
I say that requires the development and deployment (universally) of fully automated production systems, that deliver all the essentials of life and freedom to everyone. And that comes with a requirement to use those tools responsibly, with due regard for the life and liberty of everyone else. And that is going to take some education, at many levels.

I say that now that such a thing is realistically possible in a realistic time-frame, there is both a moral imperative and a personal self interest imperative to do it.

Sure we can use competition as part of the process, and at the highest level, it is a cooperative exercise.

What say thee?


[followed by]

Yes David.

To the degree that we have approximated flat open and fair competition, that has certainly been a part of how we have gotten to this point.

What I am saying is that automation has the ability to change everything, in such a way that the past is no longer a good predictor of the future.

The role of competition is reducing.
At each new level of cooperation, competition becomes less useful.
So much more can be achieved by cooperation – orders of magnitude more – for everyone – all levels.

We have the technical capacity to completely remove the need to compete for survival.
Guaranteeing survival allows for something that has never previously existed.
It is the game changer.

Market competition cannot get us there, for the simple logical fact that markets require scarcity to deliver value, and cannot assign a positive value to any universal abundance. They can (and have) taken us a long way – and the next step must be outside of the competitive market framework.

You have played eloquently with enough paradigms in your time – spend a few hours on this one, and tell me if I’m wrong!


About Ted Howard NZ

Seems like I might be a cancer survivor. Thinking about the systemic incentives within the world we find ourselves in, and how we might adjust them to provide an environment that supports everyone (no exceptions) - see www.tedhowardnz.com/money
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