Monthly Archive for February, 2007

The Market and the Leviathan: Changing Incentives to Bring About Cooperation

Published on February 28, 2007 in Philosophy. 1 Comment

In Hobbes’ state of nature, self-interested robots descend into mutual warfare, because they cannot resolve their resource conflicts by non-violent means. If every robot is programmed to maximize its own welfare, if all goods are rivalrous, and if there is no powerful central authority to change the cost/benefit calculus, then a state of mutual warfare is indeed inevitable. Hobbes solution to the problem of coordination is to introduce the Leviathan, a social construct whose primary job is to impose massive costs on non-cooperators. Hobbes’ solution is ingenious, not in the least because he does not rely on re-programming his robots to make them more social or even altruistic. Rather, he changes their environment (their incentives) so that the prisoner’s dilemma conditions are neutralized and coordinated behavior emerges among single-mindedly self-interested agents. One can fault Hobbes for having underestimated the possibility of social organization emerging as a result of mutual trade. His natural state is a zero sum game, which is an assumption of questionable value. But at the end of the day, Hobbes’ asocial robots became the type-case from which modern economics with its undersocialized rational actors emerged.

Against that backdrop, it appears that the persistence of the equilibrium model of perfect competition is at least in part the result of its ability to provide a formal answer to Hobbes’ challenge of how social order can be achieved and maintained. Hobbes’ answer was: Change the incentives of the rational actors through a central authority. The economist’s answer comes in two steps.

  • First, the economists replaces the zero sum game assumption with a theory of mutual gain from trade.
  • Second, he or she replaces the central authority of the Leviathan with the disciplining force of a perfectly competitive market.

Under conditions of perfect competition, no individual actor can afford to use violence or deceit to maximize their profits, because the other market participants will simply contract around the “difficult” participant. (Perfect information, which is part of the conceptual framework, includes not only perfect information about the goods but also about the market participants.) Since no single actor can influence the market clearing price, the “difficult” market participant harms him or herself (that is, internalizes the costs of his or her behavior) with the force of a natural law. The impersonal punishment meted out by the market is structurally similar to the costs imposed on the non-cooperator by the Leviathan. Both, the market and the Leviathan are impersonal institutional arrangements that change the actors’ incentives so as to make cooperative behavior more profitable than violence or deceit.

[tags]hobbes, economics, market[/tags]

Excellent Syllabus For Cory Doctorow’s Course on Copyright, IP, DRM With Links

Published on February 26, 2007 in Law and Society. Closed

Cory Doctorow is teaching a course on copyright, DRM, and IP policy at USC. His syllabus contains a wealth of well-chosen links, which make for a great introduction to the subject. The lectures are available for download here (podcast subscription link).
[tags]IP policy, DRM, doctorow[/tags]

Neal Stephenson on Human Nature

Published on February 23, 2007 in Culture. Closed

One of my favorite descriptions of human nature is from Neal Stephenson’s Cryptonomicon. Here it is:

Let’s set the existence-of-god issue aside for a later volume, and just stipulate that in some way, self-replicating organisms came into existence on this planet and immediately began trying to get rid of each other, either by spamming their environments with rough copies of themselves, or by more direct means which hardly need to be belabored. Most of them failed, and their genetic legacy was erased from the universe forever, but a few found some way to survive and to propagate. After about three billion years of this sometimes zany, frequently tedious fugue of carnality and carnage, Godfrey Waterhouse IV was born, in Murdo, South Dakota, to Blanche, the wife of a Congregational preacher named Bunyan Waterhouse. Like every other creature on the face of the earth, Godfrey was, by birthright, a stupendous badass, albeit in the somewhat narrow technical sense that he could trace his ancestry back up a long line of slightly less highly evolved stupendous badasses to that first self-replicating gizmo–which, given the number and variety of its descendants, might justifiably be described as the most stupendous badass of all time. Everyone and everything that wasn’t a stupendous badass was dead.

That sums it up quite nicely, as far as I’m concerned.
[tags]human nature, badass[/tags]

Moral Views of the Market Society

Published on February 19, 2007 in Law and Economics, Law and Society and Philosophy. 1 Comment

The morality of the market is one of the most significant issues not only in ethics but also, at least since Durkheim and Weber, in sociology. As is often the case, the more pervasive a practice, the harder it is to describe and analyze. Marion Fourcade and Kieran Healy, in their forthcoming paper Moral Views of Market Society do an excellent job surveying and classifying the contemporary sociological literature. The “liberal dream” of the market as a civilizing force (doux commerce) has three major themes:

  1. The promotion of individual virtues (integrity, honesty, truthfulness, etc.) and interpersonal cooperation
  2. Markets as enabling conditions for personal liberty and political freedom (Hayek, Friedman, etc.)
  3. Markets as enabling conditions for cultural production and creative flourishing.

The “liberal dream,” however, in good dialectic fashion, already contains the seeds of a “commodified nightmare,” where each element of the doux commerce thesis is negated.

  1. “Instead of virtue, [markets create] envy and wants.” Markets don’t just satisfy, they create wants, feeding the human drive towards pointless, conspicuous consumption (Veblen). Moreover, on an empirical level, the correlation between want-satisfaction and happiness is not at all clear.
  2. “Instead of cooperation, [markets create] coercion and exclusion.” Severe inequality makes a mockery of the formally free nature of market exchange, and because of its hegemonic aspirations, the market as one mode of valuing things, is crowding out modes that price cannot capture (a modified commodification argument.)
  3. “Instead of creativity, copyright.” I very much like the authors’ reference to Marcuse, Adorno and Horkheimer in this context, whose works provide an often overlooked conceptual background to understanding the battle between the owners of the 20th Century industrial means of producing mass culture (studios, networks, distributors, etc.), designed mostly to provide instant and easy gratification, and the counter-movement aimed at democratizing the means of cultural production (e.g., blogs, iMovie, Reason, etc.) and keeping open the cultural commons from which all cultural production — both industrial and decentralized — draws (e.g., Creative Commons, FSF, etc.)

The article concludes with an overview of reflexive theories of markets and morals, discussing how theories primarily invented to observe and understand markets became entangled with their objects and were thus transformed into code, executed by markets (e.g., financial derivatives). A similar story could be told about the recent translation of antitrust law into the language of antitrust economics. First, economic concepts were used to describe (and criticize) the state of the law. Over time, the external categories of observation were imported into the law and then transformed into executable legal code, now defining the practice of antitrust law.

In summary, for most of its history, intellectuals have variously praised, reviled, or downplayed the moral consequences of market capitalism. These positions are still very well represented in today’s literature. Still, the distinctive quality of contemporary scholarship is that it goes much further in opening the black box of morality and dissecting the cultural and technical work necessary to produce, to sustain or — conversely — to constrain the market. In doing so, it also reveals the role social scientists play in this process. Continuing this task, then, implies a reflexive approach, where economists, political scientists and sociologists critically consider their own participation in the definition of the market’s moral categories, and in the construction of competing moralizing instruments and techniques.

Download it while it’s hot![tags]economics, sociology, market, Frankfurter Schule[/tags]

Facebook and Information Ethics

Published on February 3, 2007 in Law and Society. 7 Comments

Like most people interested in social science, I am a social misfit. That is, I have various and sundry habits that upset a certain type of person: I slurp my soup, swear publically, really don’t like ironing my pants, and sometimes I even wear a horrible moustache. These are all forgivable sins, I hope. But for someone like me, it never hurts to have a backup: somewhere where I could go and socialize without my more autistic tendencies getting in the way. Facebook seemed like a logical choice.

I suppose it wasn’t.

First, there are certain terms used in legal contracts that annul the entire point of a contract in the first place. A contract is, by necessity, temporary. For the contract is nothing more than the expression of two or more wills being expressed to make a promise, and to bind themselves with some pre-established penalty. After the will breaks, and the penalties laid out, there is nothing left of the contract. That is, either party may plausibly fail to uphold the contract, and after penalties are laid out, the contract can be renegotiated. So when we hear of words like “inviolable” or “irrevocable”, it is smoke and mirrors: no such things may be claimed by anyone in a genuine contract. When they are asserted, i.e., by the state over its citizens, it is a product of the eclectic bases of law which may or may not have anything to do with social contracts. And the force applied by the state is a special case; nothing “irrevocable” may be claimed by private entities, unless the meaning is, “irrevocable without penalty”.

Facebook’s terms of service tell us that “By posting User Content to any part of the Site, you automatically grant, and you represent and warrant that you have the right to grant, to the Company an irrevocable, perpetual, non-exclusive, transferable, fully paid, worldwide license (with the right to sublicense) to use, copy, publicly perform, publicly display, reformat, translate, excerpt (in whole or in part) and distribute such User Content for any purpose on or in connection with the Site or the promotion thereof, to prepare derivative works of, or incorporate into other works, such User Content, and to grant and authorize sublicenses of the foregoing.” Luckily, they weren’t all that serious about use of the word “irrevocable”, since the removal of content leads to the expiry of the license. One wonders, though, what the point of the word may be, especially when conjoined with fun Highlander adjectives like “perpetual”.

My second point requires some priming. Nobody here needs to be reminded that the field of information ethics is defined, in part, by its emphasis upon the importance of privacy. That is, at minimum, a person should be able to have a say how their personal information is shared. There is a distinction, of course, between private information and intellectual property: demographic details are ethically different from music and art, in that art is by definition the stuff that has been intended to be made public, while personal information cannot be presumed to be. With this distinction follows a few ethical implications: while one may ethically share art (in the non-profit sense) without penalty — since that is necessarily in line with its purpose as art — one may not share personal information unless informed consent has been given.

The clauses ask us to re-examine the distinction between art and personal information to see if it hasn’t gone up and dissapeared. No, all we have is “User Content”, which is implied to be “the photos, profiles, messages, notes, text, information, music, video, advertisements and other content that you upload, publish or display (hereinafter, “post”) on or through the Service or the Site, or transmit to or share with other Users (collectively the “User Content”)”. We do not have, here, two categories — one having to do with who I am as a person, the other to do with my silly pictures of my fat cats and failed attempts at flirting online. There is a lumpencategory, where the two run together. Evidently, they claim the right to conflate fiction and reality, and then give that to whoever they want — protests to the contrary notwithstanding. In reassuring language, we are told that Facebook won’t do this or that. “Legally can’t” is absent entirely, not even suitably and reasonably restricted to the few intelligible domains.

I expect this is all par for the course. Certainly the same sorts of thing have been alleged against Deviant Art. My place of work produces a disincentive for innovation by claiming for itself the legal right to any improvements I personally make.

The only solution is to become a nonperson, and keep my art to myself.