Archives for category: Bounded rationality

In a free-enterprise, private-property system, a corporate executive is an employee of the owners of the business. He has direct responsibility to his employers. That responsibility is to conduct the business in accordance with their desires, which generally will be to make as much money as possible while conforming to their basic rules of the society, both those embodied in law and those embodied in ethical custom.” Milton Friedman, 1970

Between 1776 and 1970 the world had leaped forward. Technologically, economically and socially. Not only that we’ve managed to learn so much about the world and to produce immense wealth but we’ve somehow managed to ‘spread around’ the results. The proportion of people who had improved their fortunes had grown constantly during the entire period.

The majority of Americans share in economic growth through the wages they receive for their labor, rather than through investment income. Unfortunately, many of these workers have fared poorly in recent decades. Since the early 1970s, the hourly inflation-adjusted wages received by the typical worker have barely risen, growing only 0.2% per year. In other words, though the economy has been growing, the primary way most people benefit from that growth has almost completely stalled.” Jay Shambaugh, Ryan Nunn, HBR

Isaac Newton hadn’t invented gravitation. He only ‘noticed’ it. Put it in words.
Adam Smith hadn’t invented the free market. He had noticed how it used to work and opened our eyes about it.
For what ever reasons, enough of us had chosen to close those eyes back. And have reached the conclusion that ‘greed is good’.

Milton Friedman was both horribly wrong and exactly right.

He was right in the sense that he had gouged correctly what the ‘general public’ wanted/was ready to accept. “in accordance with their desires, which generally will be to make as much money as possible

He was horribly wrong in the sense that he had perpetuated Marx’s error. Karl’s, not Groucho’s.

Money isn’t everything. Life beats it to the post.
Profit is, indeed, essential. Only it is nothing but an indicator. About how efficient a corporation is.
Meanwhile the role of a corporation is to accomplish – as Friedman himself had dully noted, the will of the shareholders.

The problem arises from the fact that ‘near mindedness’ blinds.
If/when both shareholders and management have nothing but ‘money’ in their scopes the market actually looses its freedom.

Economic agents no longer converge towards the market to solve each-others problems – like Smith had noticed, but to ‘make money’.

Not the same thing. Not by a long shot.

A new pandemic is gripping us.
By our egos!
One which is a hell of a lot more dangerous than Covid….

In fact, narrow mindedness is a disease which occurs naturally. It probably affects some 10 percent of the population in ‘normal’ times.
When things are no longer normal – and people become nervous because uncertainty does all kind of ‘funny’ things to our minds, narrow mindedness becomes an opportunity.
A golden opportunity for those who ‘professionally’ fish in troubled waters.

“The Petersons weren’t wearing pro-police T-shirts,” notes Churchill. “They weren’t carrying a banner, holding a sign or waving a black-and-blue flag. They appear to just be listening. But merely listening to an opinion that some Skidmore students find objectionable is apparently enough to get a professor in hot water.”
Professor Greg Patton at the University of Southern California (USC) was telling students in a communications lecture last month about filler, or pause words, such as ‘err’, ‘umm’ or ‘you know’ in English.
Footage of his lecture, which has now gone viral, shows Prof Patton saying: “In China, the common pause word is ‘that, that, that’. So in China, it might be na-ge, na-ge, na-ge.”
Enunciated, na-ge sounds like the N-word, which led several of the professor’s students to complain to the university. Responding to the complaint, the dean of the university, Geoffrey Garrett, told students that Prof Patton would no longer be teaching the course.
“It is simply unacceptable for the faculty to use words in class that can marginalize, hurt and harm the psychological safety of our students,” he said.

As a mediator, I was trained to differentiate between needs and wishes.
Between something which will actually make your life easier and something you just fancy.
And to understand the fact that everything we do has consequences.

A father has asked me the other day:
‘What had I done wrong? My only son hardly ever speaks to me…’

‘When did the rift became apparent? How early?’

‘Things went fine until he had become an young adult. OK, we had some ‘misunderstandings’ when he was a teenager but he seemed to had overgrown them… Until sometimes in his early 20-ies when he really rebelled. And told me everything he couldn’t tell me – his words, about how he felt while growing up.”

‘And what exactly were his grievances?’

‘He was cross at the manner in which I was telling him things. At the manner in which I was trying to stimulate him. He’s very bright, you know, only didn’t do much in his life. Not by a long shot! And I kept telling him that. I still do, as a matter of fact.’

‘You see, no matter whether you go to the church or to a brothel, the soles of your shoes will get thinner. This doesn’t depend on where you go. It only depends on the road you chose and the manner in which you shuffle your feet.
Same with words. What you’re trying to say is, indeed, very important. But even more important is the manner in which you try to get the message across. Whenever your ‘target’ becomes angry at you … the message will be truncated in the process… Even more importantly, the ‘target’ will retain a ‘bad’ memory of the whole incident. And if more and more ‘bad’ memories keep piling one on top of the other…
But not everything is lost! The very fact that he took the trouble to talk out the matter with you means he was not ready for a ‘divorce’. Not then, anyway…’

Society exists in two forms.
One in which the individual members have a certain amount of respect towards their peers.
And another one, where John Doe doesn’t give a damn about anybody else. Or even hates everybody else.

The first kind evolves. People talk – and listen, about their problems. Then find solutions.
The second experiences revolutions.

When too many individuals have never had anything ‘substantial’ on their name, and feel they have no chance of improving their lot – because ‘everything’ has already been appropriated by a small minority, that society has a marked tendency towards communism.

Sometimes, too many individuals see their fortunes go down the drain, for no matter what reason. From there, only God knows how, those fortunes go straight into somebody else’s pockets. Any society which experiences something similar has a marked tendency towards fascism.

The problem with both communism and fascism being that they have always failed. Crumbled from within before being pushed into the precipice by those who has seen the situation as an opportunity. As an opportunity too good to be wasted.
Then, if neither had ever survived for long, why are so many people who continue to profess either? So many intellectuals who try to convince their audience that …

Well…, first of all, because ‘intellectuals’ are nothing but regular people. With a twist! Not only that intellectuals have the same ‘passions’ as the commoners – ‘greed’ being the most intense, but they also have a very good opinion about themselves. Hence too many of the intellectuals consider that they are the ones who should be in charge. That they are the ones who know what everybody else need to do if they want to live comfortably.

In a nutshell, too many intellectuals fall into the trap of considering themselves infallible. And ‘deserving’!
Hence those would do everything needed to get what is rightfully theirs.

If a society is ripe for communism, one/a bunch of the ‘intellectuals’ I described above will, for sure, drape themselves in a communist flag.
If another society is ripe for fascism, in a similar manner, one or, probably, more ‘intellectuals’ will drape themselves in a fascist flag.

It’s up to us, who’ve experienced at least one of them, to blow the whistle.
And it’s up to the rest to listen…

Let me start by attempting to answer this question in a logical manner.

Theoretically, individuals have the right to defend their lives. And properties. In some jurisdictions, the defender might even shoot the trespasser.
On the other hand, it is a lot harder to identify an example where property might end up purposefully damaged in a lawful manner while life is being defended. ‘Purposefully’ as in property being targeted in an attempt to fulfill the goal of defending life.
When groups of people are involved, things are even more complicated.
Is a community entitled – using the police force, a “well regulated militia” or even ‘spontaneously’, to inflict bodily harm to a group of people who randomly destroys property? What becomes different when the destruction occurs during a protest ‘gone wrong’?
The way I see it, things are more complicated at the social level because of the number of people involved. At the individual level, things are simple. The guy who trespasses is the one who gets hurt. The defender is the only person who might inflict injury and the one who will answer for the act. When there are more people involved…. Some protest peacefully, others do the damage… and who knows who gets clobbered – or shot, by the police?!? Same thing looking from the ‘other’ side. The owner of a property might have decided to protect it in a different manner than the police … or even not at all…
To wrap it up, there’s no single answer for this question. On the individual level, the actors/agents must decide on the spot. Considering the specifics of each incident. While being ready to accept the consequences. On the social level, neither murder nor property damage are acceptable and must be dealt with in a very thoughtful, but firm, manner.

As usual, logic can take us only this far. Far from the essence…

What are we doing here?
How can we even attempt to compare life with property?
Do they belong to the same category?
Can we sell a human being? Do houses have souls?
What’s happening to us?

One of the best examples of professional grade propaganda which had recently crept up on my FB wall

As always, the ‘gaslighters’ use ‘the obvious’ to get inside our heads.
Once there, they actually twist our minds.

In fact, the professional propagandists act like viruses do.
They use the internal mechanisms of the target to alter its ‘software’. To ‘convince’ the target to act in a manner favorable to the ‘virus’ rather than in its own interest.

And the fact that both sides – or trolls embedded there?!?, use the same ‘tools’ only makes it harder for the targets – for us, really, to defend ourselves. To maintain our sanity.

Let’s go back to the example at hand.
Yes, it’s ridiculous to blame this child for Pearl Harbor. This is the evident part of the meme.
Only it’s very legit to blame those who deny that Japan attacking Pearl Harbor was ‘murder’. Legit enough to become a must.
Just like it’s a must to blame those who deny the Holocaust.

Same thing with slavery. And with other crimes of the past.
Blaming people alive today for what their ancestors had done in the past is ridiculous. Just as ridiculous as denying that past crimes had consequences. Some of which continue to pull us down today.

Present day colored people in America – and Roma people in Europe, continue to suffer the consequences of having been enslaved for many generation.
Denying that only burdens entire societies.
It burdens the colored people themselves and, on a way larger scale, it burdens the rest of us. The colored people having less opportunities than the rest of us is a waste for the society at large. The disproportionate number of crimes and felonies perpetrated by the colored people are a cost shouldered by all of us.
Meanwhile, the blame is not entirely ‘theirs’. Had they been ‘defective’ in any way would have prevented any of them from ‘prospering’. Hence we’re dealing with a rather ‘cultural’ thing. Which cultural thing has appeared at the intersection between us and them. We had enslaved them. We had kept them at arm’s length until not so long ago. So many of us continue to look down on them.
We consider it’s their individual responsibility to pull themselves up!
And how are they supposed to do that? Statistically speaking, and in the present conditions, not only the most talented and the very lucky among them….

How are we going to proceed? Continue with the blame game – and play into the hands of those who want us weak, or attempt to do something about it? To find a real solution?

‘For things to work as intended, there must be a rule’.

Errr…

‘For things to work, there must be at least some consistency involved’.

This is a far better starting point!

An example would be fine?

Then imagine an Earth where the gravitational field was haphazard. In space and time. Where two lumps of dirt, a k a mountains, sometimes pulled at each other while some other times pushed. With no rules involved whatsoever.
Or where sometimes wood needed oxygen to burn while some other times – or in some other places, the presence of nitrogen was enough for wood to burst into flames.
Need some more? Then how about a place where dogs breed with cows. And also with butterflies. Only not always. And not in a constant manner.

Have you stopped laughing?
Well, this was how our ancestors imagined the Earth.
Sometimes after a mutation had provided them with the most powerful brain ever, our forefathers had learned to speak. To ‘trade’ information. Soon after they has started to develop something Humberto Maturana called ‘the ability of an observer to observe themselves while making observations’. ‘Self awareness’ for short. Or ‘conscience’ in everyday parlance.

Imagine a self-aware observer watching the sun go down. A rather smart one. One with a vivid enough imagination to ask ‘what if the sun will not come up tomorrow morning’…
Stonehenge has suddenly acquired a new meaning, right?

That was why God had so much traction. Simply because it gave sense to everything. It lend meaning to everything under the sun. And beyond!

In time, under God’s protection, we invented science. And, slowly but surely, we’ve started apportioning meaning ourselves.
Meaning we’ve started to take for granted.
Meaning which no longer depended on any third party!

Only we’ve gradually forgotten what science is really about.

Why we had developed it in the first place.

We had forgotten that science is wrong by definition.
That, by following this path, we’ll be forever able to find new meaning but that we’ll never be able to find ‘the’ meaning.

And now, that we’ve ‘killed’ God – as no longer necessary, we rely solely on the meaning we’ve already affixed to the things we already know.
To the things we consider to know… conveniently forgetting what science taught us….

Faced with unforeseen crises – unforeseen, not unforeseeable, we are left powerless.
Having taken so much for granted – our knowledge about the world and our ability to overcome everything the nature throws at us, above all, we find ourselves bereaved of our erstwhile powers.

Are we going to rediscover intellectual humility? And the ability to take advice? From the most unlikely teacher?

Or else?

One way to interpret Maslow’s pyramid of needs is to consider that an individual might become a full fledged human only after having climbed to the ‘fifth floor’.

The key word here being “might”!

Because nothing mandates that all those who have overcome the material constraints of this world and have successfully integrated themselves in the social milieu will ever become a ‘better version of themselves’.

Need examples? Have you ever heard about people like Bernie Madoff, Martin Shkreli or Myron Scholes?

‘But the last guy, Myron Scholes, was recognized by the Nobel committee as a world class economist!’
Exactly! What more could a person want? Money, fame, worldwide recognition… he was on the fast track to becoming whoever he wanted…
Yet he had chosen to associate himself with one of the deepest financial black-hole ever… Knowingly, unknowingly… doesn’t matter!

‘But what does it mean to become a full fledged human?’

To be free. To consider them-self a free person and to be recognized as such by their peers.

‘Scholes wasn’t a free person?!? Shkreli?!? Madoff?!?’

Nope. Neither was free from greed!
Greed for money, power, public recognition… or any combination thereof.

‘But “greed is good”!!! Isn’t this the current mantra? Aren’t we all driven by this sentiment?!?’

First of all, greed is not good. Read Adam Smith’s Theory of Moral Sentiment.
But yes, we are bombarded from all sides with this notion. That ‘greed is good. That greed is the engine of capitalism, which capitalism has brought us here. Where it is good.’

Yes, here it is indeed good. Only for fewer and fewer of us. It used to be better but since ‘greed has become good’ every ‘bump’ we encounter along the ‘free market’ road has proven to be quite a challenge. An insurmountable challenge for more and more of us.
An unsustainable arrangement. For us, as a community.
And yes, capitalism is the best economic paradigm to date. Only, as all paradigms, it has to be put in practice. By us, the people. In the right way. In the free market way.
Only we are no longer free! Those who cannot escape their sentiment may not consider themselves free. And too many of us have been enslaved by their greed!

‘But greed is written in our DNA!’

Indeed! So is the urge to have sex!
Only we’ve managed to teach ourselves, community wise, that while sex is good, rape is bad!
Not so long ago, rape was more or less condoned. ‘She must have enticed him’. ‘What was she doing there at that hour?’ And so on…
Nowadays, rape is shunned. By most of us.

Only we still live surrounded by rape culture. Seeped in greed.

Will we ever learn?
Will we, as a community, ‘actualize’ ourselves?

While everything mentioned above is absolutely true, we must also remember that it was the whites – who had first reached the ‘proper stage of development’, who had given up slavery and invented ‘human rights’.
On the other side, it is also true that the whites did reach the ‘proper stage of development’ by exploiting the rest of the world.
Only ‘this’ wasn’t invented by them! I don’t want to go into the finer details. All of you know, very well, what had really happened ‘on the ground’.

So.
What are we going to do next?

‘Delete’ everything the white people have contributed only because they have been the last to exploit the rest of the mankind?

Or accept the fact that evolution works in an oblique manner?

Culture is to human communities what DNA is to biological species.

It transports vital information from one generation to the other. Hence providing a venue for survival.
Furthermore, both culture and DNA can change in time. Hence providing a venue for evolution.

The difference between culture and DNA being, of course, the fact that culture is way more fluid than DNA.
DNA changes only once for each generation – what you get at birth is what you’re taking to the grave, while culture is in constant flux.
No individual organism has anything to say about their genetic information but almost every human is capable of learning almost anything.

Now for the historical part.

Stage one.

Veneration of the elders. The elders were the depositories of the common knowledge. Hence everybody took good care of the ‘data bases’.

Stage two.

Somebody learned to write.
Elders were no longer indispensable. More and more information could be ‘warehoused’ in alternative ways.
A structure was needed to manage the new ways of dealing with the vital information.

Stage three.

The state is born.
At first the structures which insured that culture was passed from one generation to another had been rather empiric: kingdoms, monasteries, etc.
Soon after the Enlightenment things had become more rational. Cultured people became nations and the academic scholars gave us the state. As the structure charged to make sure that culture and people stay together. Hence providing for the nation’s survival.

States who had been in constant contact – read rivalry, kept each-other fit. Or else.
States ‘removed’ from reality – geographically, by becoming too powerful to care or both, had experienced a natural decay. The people at the top of the food chain had forgotten about those at the bottom and those at the bottom had lost faith in their leadership.

States too weak to survive – for various reasons, have succumbed while those too powerful for their own sake have eventually imploded.

Psychology to the rescue.

Culture is more fluid than DNA for a reason.
DNA follows exclusively the laws of nature while culture is heavily influenced by us.
We, men, are the measure of all things.
All life heavily transforms the place it inhabits.
So do we, humans. Only we do it willingly. On purpose, that is.

Now, that we have amassed so much information – about life in general and about how we relate, as agents, to the entire process, we have reached a reckoning moment. What next?

Are we going to choose the path of the cuckoo or that shown to us by Hokule-a?

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