Schneier on Security

AlanS • July 31, 2016 12:50 PM

@ P Gupta, Anon Coward

cooperating is good for the group at the expense of the individual

We’re always individuals in social groups. The question should really be: good for which group? What we should be concerned with is factionalism: how some groups collude and subvert the legal / institutional framework that sustains liberal democracies. Given the current situation in the UK, USA and elsewhere factionalism is a pertinent issue. Good for is also a time-limited term. As wealth and power are concentrated by factions, the inevitable result is either a police state or revolution.

AlanS • July 31, 2016 6:05 PM

Another critique of the “rational fool” theory of human behavior: Marshall Sahlins: On the culture of material value and the cosmography of riches.

The answer to Kenneth Boulding’s unasked question, as well as the reason it isn’t asked, already exists in the way he phrased its absence: as though “economic phenomena” were not themselves cultural facts, but some other kind of stuff embedded in a “cultural matrix” or “cultural context.” The problem is ontological: it consists of the banishment of the cultural organization of material life to the unexamined realm of “externalities,” the “non-economic,” whence this or that factor would have to be arbitrarily summoned on an impromptu basis—sometimes rather literally like a “god in the machine”—when needed to account for the (supposed) rationality of some particular pecuniary outcome. Yet when the so-called “exogenous factors” are thus conveniently translated into preferences of the hedonistic calculus, they are dissolved as such. The effect is merely to add various epicycles to the theory of the market as a self-regulating universe revolving around an egocentric individual by adducing one or another factor of imperfect competition or constrained satisfaction. To speak for example of a “segmented labor market” divided by race or gender is simply to appropriate a necessary (economic) condition from the cultural order that market theory itself cannot provide. Likewise for “risk aversion” and all such reservations on the rational dispositions of Max U (Maximum Utility): they may change his optimizing to satisficing but they leave intact the disguise of social values as personal desires, hence the resolution of material ways of life to individual interests. Yet for most material transactions in most (or all?) societies known to anthropology, insofar as these transactions take place among kinsmen, material interest in not even an individual fact.

AlanS • August 2, 2016 8:43 AM

The trouble with rational choice theory, game theory, neoclassical economics, the selfish gene and such arguments as applied to humans is that what it is to cooperate, act in one’s own interest, what counts as value, what counts as being rational are already sociocultural facts. Society doesn’t emerge from the rational, self-interested actions of individuals. As Sahlins points out in the paper I cited above all these theories are per-Copercican: “the effect is merely to add various epicycles to the theory of the market as a self-regulating universe revolving around an egocentric individual by adducing one or another factor of imperfect competition or constrained satisfaction.” And as such one might observe they nicely serve the established order of things, just as pre-Copercican theory did. These theories aren’t successful because the evidence supports them, quite the contrary.

AlanS • August 2, 2016 12:30 PM

Also see Hodgson, Geoffrey M. On the Limits of Rational Choice Theory. Economic Thought, no. Vol 1, No 1, 2012.

For the neoclassical economist, the fact that utility theory can ‘explain’ a wide variety of types of economic behaviour is regarded as a strong vindication of this general approach. I take a different view. First, the sheer generality of a theory tells us nothing of its explanatory power. We could conceive different general theories, such as that we all are programmed by aliens from outer space, or that we are all pawns of God. These would be quite general in their scope and could be applied in principle to any behavioural manifestation. But we would rightly be sceptical of their explanatory value. A theory does not explain anything unless it points to an underlying causal mechanism. In the case of individual behaviour, explanations must thus relate to the known mechanisms of the human psyche and human interaction and draw upon psychology, anthropology, sociology and other disciplines. This is precisely what the neoclassical advocates of utility theory refuse to do. They take the utility functions as given and give the job of grounding them theoretically to somebody else. By this refusal they indicate that utility theory itself cannot provide a real explanation. Arguably, human societies are partly differentiated from other animals in terms of developed institutions and cultures. If utility maximising behaviour not confined to humanity, then these differentiating elements are effectively absent from the universal picture. Whether true or false, this picture can tell us little of importance about historically specific human cultures or institutions. That is the unintended achievement of the exponents of ubiquitous rationality and economic imperialism. The causal mechanisms through which culture and institutions mould and constrain human agents remain unexplored in this paradigm. Essentially, there is no adequate and substantial theory of human agency at the core of the standard theory. It tells us nothing of significance that is specifically about the human psyche or about human interaction. Outside the realm of the universal, no particular causal mechanism is identified by the theory. With respect to specifically human characteristics and specific human societies, it is causally vacuous. Its very weakness stems from its excessive universality. Indeed, to attain the status of universality it has to be evacuated of much of its real content.