Monday, March 29, 2010

Externalities Reconsidered

Via Robin, a thought-provoking post at Meteuphoric about managing externalities between our present and future selves:

[O]ne situation where it seems quite likely that other people would be better informed on your preferences and how an outcome will affect you is when you are making decisions that will affect you far in the future.  The average seventy five year old probably has more in common with the next average seventy five year old than they have in common with their twenty five year old selves, at least in some relevant respects. The stranger people are the less true this is presumably, but most people are not strange.  So for instance a bunch of old people dying of lung cancer have a much better idea of how much you would like lung cancer than you do when you are weighing it up in the decision to smoke or not much earlier in life.

. . . . .

You could still argue that I have much more of an interest than anyone else in my own future, if only a slight one compared to how much my future self cares about herself. But I also have a lot to gain by exploiting her and discounting her feelings, so it’s not clear at all from a utilitarian perspective that I should be free to make decisions that only affect myself, but far into the future.

The simple way to make this argument is to say that the ‘individual’ is temporally too big a unit to be best ruled over by one part in a (temporal) position of power. The relevant properties of the right sized unit, as far as the usual arguments for libertarianism are concerned, are lots of information and shared care, and according to these a far future self is drifting toward being a different person. You shouldn’t be allowed to externalize onto them as much as you like for the same reasons that go for anyone else.

Of course, preventing these externalities would mean the further empowering of elites on whose goodwill and disinterest in predicting the future we would have to rely.  Nobody watching the slow-motion collapse of the AGW hypothesis should be entirely sanguine about that prospect.

In a similar vein, I want to plug Half Sigma’s post on Libertarianism and World of Warcraft:

I think that if there is a link between online role playing games and libertarianism, it’s that the economies in online games work the way that libertarians like to think the real world works.

The economy in online role playing games is much closer to the model of perfect competition, which is the standard method of analysis that libertarians like to use to evaluate the real world economy even though there is very little perfect competition in the real world.

The irony is that the key to perfect competition, based on the online gaming model, is government regulation. In an online role playing game, the company which owns the game, such as Blizzard (which owns WoW) or Square Enix (which owns Final Fantasy XI), acts as the government, and creates inviolable laws ensuring fair competition.

. . . .

Libertarians like to believe that the real world operates this way; that the only thing that prevents you from being as rich as Bill Gates is that Bill Gates put in the effort to raise his character to level 99, while you were too lazy to do the same thing. In the ideal libertarian world, there is no HBD, no luck, no credentialism, no irrational behavior, no Black Swan events (to use the term coined by Nassim Nicholas Taleb), no winner-take-all effects, no insurmountable barriers to entry, no value transference.

In other words, the online role playing economy is fair in a manner that the vast majority of people would define fair, but the real world is not.

Without making a judgment about whether and to what extent the factors HS lists make the American economy “not fair”, I wonder if the belief in its fairness has utility beyond its literal truth.  Would not the belief that one is primarily responsible for his own fate produce better life outcomes for him than the belief that the game is rigged against him from the outset?

Maybe this isn’t always true.  Belief in HBD is a much darker worldview than DZGD, for instance, and I can’t think of any reason why we should prefer it . . . except for the harm that DZGD has wrought in public policy.

1 comment:

Anonymous said...

Regarding your latter point, I think the opposite is also true. If people don't believe that they can get ahead in this country no matter what they do, that represents a pretty serious problem. Even if they're completely wrong about that.