$INV: Modern economics fails to adequately capture Individualism-Collectivism dynamics | Dec 2019

Glen Weyl has fascinating ideas around the relationship bwt private & public goods (& btw individualism and collectivism) that call for us to potentially transcend the nation-state & the corporation as currently conceived.

Here’s me gathering & making sense of his ideas: 

One big idea is that modern economics doesn’t take into account increasing returns (aka public goods).

Increasing returns is the idea that a collection of people can achieve more than the sum of what they could achieve individually.

What business schools call SYNERGY. 1+1=3.

Modern economics operates under what Weyl calls ALONE.

Atomistic Liberalism & Objectivist Naïve Epistemology.

Binary between Individuals, conceptualized as largely presocial, and some global coordination device various referred to as the social planner, objective truth, the state.

Why is this wrong? Reasons:

Backing up: What’s an individual?

Individuality stems from the social circles you’re part of.

In premodern society, your circles overlapped heavily.

In modernity, this separates out.

Your unique intersection of theses social groups individuates you.

Put differently:

Your memetic code is made up of quantitative measures of commitments to these different communities, and what makes you unique is your mimetic code is not the same as anyone else’s

His critique of libertarianism is that it fails to realize precisely that it’s the combination of private property and the fact that we live in a society that is fundamentally social that creates the conditions libertarian object to.

Their solution is the cause of the problem.

Whereas if you start by recognizing the power of social patterns and try to build for them, that opens you up for possibility of fluid, overlapping, emergent identities that enable us to be individuals in the first place.

Backing up again:

If you think of consumption we do, none of it is private goods on which standard economic theory is premised — most economists would admit that.

We consume things in families, for example.

We’re massively social overdetermined.

Other Examples: Most things that make it nice to live in, say, SF, aren’t features of my home but of the ambient environment around it that make it desirable to live there.

Most of my life’s comforts are a function of the fact that I live in the US.

2/3 of income inequality is between countries.

The production and consumption of most value and the origin and standards of ideas/beliefs/truth are fundamentally social (as opposed to individual), but not universal, in nature. 

Instead they emerge from diverse and often intersecting social contexts. Once you get this, you realize that the whole edifice on which modern economics depends is totally flawed.

It doesn’t take into account the enormous complexity of system we’re actually dealing with. In economics we have all these models where there’s the this GLOBAL adiministrator — THE STATE — the social planner, etc.

Then there’s this market process where everything’s a private good, there’s no increasing returns, people are just these atomized market participants.

This is how we model the state, countries, social platforms, companies — there’s 100 different entities at a 100 different levels of resolution that are all being modeled by this global incredibly important “I’m setting all the parameters and everyone’s atomized underneath me” 

Standard political economy built on 2 tokens:

1 identity token for individual identity

2 Anonymous value token for $

N dimension vector – for any person here’s how much $ they have

We need N by N-representation of relationship everyone has with every other person in the network.

Then you can represent social relationships with each other.

The problem isn’t how do you reconcile individual interest w/ common good, the problem is how do you flourish under conditions of ideological diversity (conflict theory).

Markets that treat symmetrically the interactions btw people who are similar and ppl who are different are problematic bc they don’t overcome fundamental problem which is difference & conflict

Consider auctions as an example: 

Auctions treat people as equal.

Imagine auction for piece of art w/ four entities:

– Two people in the same office building
– Art museum in the city they live in
– Indigenous representative from the place where the art was allegedly stolen from 

To treat these four entities as the same doesn’t make sense:

Person winning down the hall is nearly as good as me winning, given proximity.

Art museum is close, b/c in same city, and indigenous participant isn’t worth anything, b/c in another country. 

If the auction doesn’t treat the social relations between people in ways that are meaningful, it’s missed what’s actually happening in the design problem.

Money and individual identity as markers don’t have sufficient content to design for most of the problems we care about.

We need partially overlapping, non-exclusive, non-absolute rights where everything is belonging partially collectively to many layers of ownership

What we have today is THE INDIVIDUAL has a share and THE COLLECTIVE has the rest.

Backing up:

Most of our problems today are trying to treat increasing returns processes as private property (e.g. social networks, climate change, housing).

Democracy doesn’t work either (e.g systemic bias against minorities).

For any social policy issues, there is a natural polity and an actual polity.

Problems come from misalignment.

There’s some cases that only serve minority, but whole society is asked to vote for them.

Drug war affects many ppl in Latin America, and yet people in US vote on it.

What could replace states & corporations?

“Public good provisioning organizations funded by efficiently enhancing taxes & are governed by an efficient composition of the interest of its members”

Coherent interests represents union of interest of its members.

I’ll rephrase later.

To bring us back to the beginning, this works the other way too:

Individuals are the intersection of groups of which they are a member.

Individuals are members of different collectives, and those collectives are formed by total interest of members. 

The way in which you describe yourself is usually as an assemblage of groups of which you’re part.

Girlfriend of this person, son of this person, I work at this company.

We can see individuals as collective actions of groups, and groups as collective actions of individuals.

The problem w states & the problem w corporations, then, is 2 sides of the same coin.

Problem with capitalism is that individualism monopolize groups.

Problem with statism is that groups monopolize individual and exclude from that individual all the other groups of which they’re part.

This framework obviates classic individual (need autonomy) vs collectivist (composed into a whole) schism.

Both are problematic: One isolates an individual, the other isolates a group.

Neither of them have richness & complexness that an optimal balance of the two would have.

You can see how silly these extreme binaries are:

In politics, within country do whatever you want.

Outside countries, BUILD THE WALL.

In economics, barriers are fluid.

Unless its private property. Then I can kill you.

Weyl wants us to regain sense of political economy.

Rather than corporate or states, we could have a whole range of public good providing organizations.

Everyone would be a range of polities.

Family, community, federal, global

Amazon river polity, speakers of Spanish polity, etc. 

In the future, w improved transportation tech, geographical borders may not make as much sense.

New clusters form around on optimal distance.

e.g. You don’t walk more than 10 blocks so u have neighbourhoods.

You don’t take aeroplane more than a certain amount, so u have countries, etc.

So you have new technologies there will be more different levels of sociality, and of course there’s non-geographical versions of this which have to do with social distance, ideological distance.

Multiscale fitness landscapes in which all these types of sociality flourish.

The logical conclusions of these ideas are pretty radical indeed (no more private property AND no more states as we currently understand them), so they’re by definition very long-term.

Unclear what the exact solution is, but Weyl’s approach is “design w/ democratic spirit” Glen differentiates btw American and French revolutions, and prefers the former.

American: Build communities that grow and gain legitimacy, and then formalize them. Don’t replace the king until you do.

French: Overthrow the king and then invent legitimate solutions in real-time.

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