Paul Bloom's essay "Is God an Accident?" in the latest issue of The Atlantic, suggests that humans' belief in God, Intelligent Design, and the afterlife is an artifact of brain structure. In this essay, I am going to suggest that the same artifact that explains why people are instinctively anti-Darwin explains why they are instinctively anti-economic. Bloom says that we use one brain mechanism to analyze the physical world, as when we line up a shot on the billiard table. We use another brain mechanism to interact socially, as when we try to get a date for the prom.
The analytical brain uses the principles of science. It learns to make predictions of the form, "When an object is dropped, it will fall toward the earth." The social brain uses empathy. It learns to guess others' intentions and motives in order to predict their reactions and behavior.
The difference between analytical and social reasoning strikes me as similar to the difference that I once drew between Type C and Type M arguments. I wrote, "Type C arguments are about the consequences of policies. Type M arguments are about the alleged motives of individuals who advocate policies." Type C arguments about policy come from the analytical brain and reflect impersonal analysis. Type M arguments come from the social brain. In my view, they inject emotion, demagoguery, and confusion into discussions of economic policy.
...What I take from Bloom's essay is the suggestion that our type M brain seeks a motive and intention behind the events that take place in our lives. This type M brain leads to irrational religious beliefs and superstitions, as when we attribute emotions and intentions to inanimate objects.
The rest of the essay has some excellent examples of how type M thinking leads people to poor economic analysis, here is a great example:
Economists view international trade as equivalent to the discovery of a more efficient production process. As Alan Blinder put it recently, "It has long been a mystery to economists why so many people view creative destruction that stems from technology as okay, while similar creative destruction that stems from international trade is something to be opposed."
Hardly anyone feels guilty about using tax preparation software rather than paying an accountant to handle their tax returns. Yet many people would tell you that there is something wrong with outsourcing tax preparation to accountants in India.
Neither economists nor non-economists tend to think of tax preparation software as an alien outsider trying to steal our jobs. However, many non-economists' type M brains instinctively think of Indian accountants as trying to do us harm. Economists are trained to look at international trade through the same type C eyes that we view technological innovation, and we are constantly amazed by the general public's hostility toward it.
There is really no difference to our country's economy if we buy tax preparation software from India or spend the same amount to get equivalent service from an outsourced accountant in India. Yet the former does not invoke the social calculation part of our brain, the latter does. There is clearly some module in our brain that was trained on a zero-sum world, where one person's gain was another's loss, that gets triggered in one case and not the other, even though they are economically equivalent. And that module is miswired for the current world, one in which enriching an Indian accountant is not a "loss" for "our tribe".
Given that this behavior seems to be hardwired, it is presumably defined in our genome, and can be edited out. If so, I suspect it will make the world richer - and dry up the poker games.
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Comments
I liked this article too, and that point was interesting to think about, but I think there are reasonable C perspectives as to why we'd rather buy software than accounting knowledge.
From a C perspective the tools and their manufacture are in theory kept at least partly in our tribe. Even if we outsource manufacture of software in india, there has to be significant resources inside the US to faciliate distribution, sales, customer service, keeping up to date with code, etc. So that's a win win scenario. Presumably some infrastructure exists for services as well (phone lines) but to a lesser degree.
Second I think tools are generallly equalized if commodity items, since tools can be easily exported/exchagned everyone can benefit roughtly equally, provided they can afford them. If it's valuable competition will eithe pirate it to make it more accessible and soon everyone has t-shirts and refrigerators, if it turns hostile, then everyone has a gun and the playing field is level. Skilled Labor is harder to export, creating hot spots that are slow to diffuse, and in some cases (say nuclear weaponry) this knowledge is a liability if widely accessible, so if the supply side tries to use whatever they have agaist us, we are at a loss to defend or support ourselves.
Say there's some set of environmental standards that will (by broad consensus) maintain our current air quality. I decide that this result is worth $500/year to me, compared to the projected air quality without any standards. Buying only from companies that adhere to the standards and adhering to the standards myself will cost me an extra $50/year. However, my actions and consumption represent only one billionth of the effect on my air supply. My $50/year gets me one billionth of my goal and so is worth a tiny fraction of a cent to me. My independent decision should therefore be to save the $50 and to hell with the standards.
Yet say I represent the average citizen in the US. If there's a proposed law to enforce the standards, I would be in favor of it. It would cost me $50/year, and the benefit would be to achieve 30% (300M/1B) of my goal, which is worth $150/year to me. The nation-wide benefit would be $30B/year (($150 - $50) * 300M).
How would an-cap achieve this same benefit? In this example, a huge amount of value is created (or saved) by having everyone go along with the standards, yet I don't see how you'd get there without a massive organization (in this case, representing at least 100M people) to coordinate it.
1)Some appliances use that current to do something which really doesn't really need to be done at all. For instance, most microwaves have a clock in them, in order to allow people to pre-program it. Do you know anyone who has ever done this? I don't; and yet most microwaves use power 24/7 for this purpose. Removing unneeded functionality would both save power and appliance cost.
2)Other appliances merely have their switch after their transformer. If you put the switch before the transformer, it would draw no current while off. The increased cost if any would be very small.
3)For some the problem as I said is wanting to be able to turn the TV on with a wireless remote. Normally what is done is to leave a circuit powered which waits for a signal from the remote. This circuit draws current.
The easiest way to fix it is to get up and turn the TV on with a manual switch. Millions of TVs were built this way, and somehow Americans managed to survive. Heck, the switch can be by your chair if you want.
If you insist on keeping on-the-remote on/standby capability, I can think of several ways to do it, most of which involve using the power source on the remote. For instance, using a silicon diode as a sensor, which produces current when hit by light, use the current to activate the TV. A sound sensor could be made to work the same way.
An answering machine (one of the big problems for people trying to live off-grid) can be made to use the line voltage from the telephone (admittedly this doesn't save a lot of power, just moves the producer). I believe there are some that do this, but they are simple units. A more complex unit could be built which used ring voltage to switch the unit on (I have never heard of one).
As a side note, my receiver has a physical switch in addition to a 'soft' switch. I can turn it off; I don't because it is on the same power switch as all the others.
The way to make this cost relevant would be to create some sort of "electricity usage" standardized labelling which would inform the consumer of the typical cost of using a device and leaving it plugged in. Something like the labels on refrigerators would work.
Andrew (way behind on reading...)
or forestall something like this:
http://news.independent.co.uk/environme
Wait a minute, on the whole are you *getting* the law you favor? Is government doing a good job of producing what you want without imposing costs on you that you don't want?
Representative democracy theoretically offers this kind of benefit, if everything is working as intended.
I'm just asking the same question of an-cap:
If everything is working as intended, can anarcho-capitalism theoretically offer this same kind of benefit? If so, how would it work?
John Sabotta
There is plenty of science about hardwired modules in the brain. For example, there are several books about people with localized brain damage, say because of trauma, where the effect is to take away some weird tiny little ability. Like "The ability to recognize faces", "the ability to notice cheating", etc. Plus we can watch the brain with imaging systems while people tink. Plus we can test people and find specific, limited areas of irrationality.
But *do* we buy tax prep software from India? How many of these "creative destruction" things are actually coming from abroad? Or, on a related note, what proportion of them are *perceived* as coming from abroad? (Anecdotally, my own perception is that it's quite low.) While I largely agree with what you're saying, I don't think you're actually making the point very effectively.
I don't see this. Most people who complain about accountant jobs going to India complain just as vociferously about software jobs going to India.
I think that trying to make economics into a science by removing all the human emotionally based judgements is doomed to failure until you you remove the human emotionally based judgements from the economy itself. At which point, of course, you won't need economics.
And people often do see the same kinds of dark conspiracy in workers being "replaced" by technology. They see it wherever they don't like the result.
And I don't think people are much worried about outsourcing accountants anyway, that's too high up on the food chain for most of protectionist constituency to identify with.