Cactus Club June 1998

Cycle III:Part 2

2 June 1998.................ignorance and engineering

Once again one of our members, Don Boudreaux, has made an article available from THE FREEMAN for the consideration of TCC members and observers. This article was written by Wendy McElroy. Called "Human Ignorance and Social Engineering", it will be a good start for Cycle III: Part 2. Any comments?(PD).

4 June small compromise

Quoting from CHAOS by James Gleick---------------"Weather was vastly more complicated, but it was governed by the same laws. Perhaps a powerful enough computer could be the supreme intelligence imagined by Laplace, the eighteenth-century philosopher-mathmatician who caught the Newtonian fever like no one else: 'Such an intelligence', Laplace wrote, 'would embrace in the same formula the movements of the greatest bodies of the universe and those of the lightest atom; for it, nothing would be uncertain and the future, as the past, would be present to its eyes.' In these days of Einstein's relativity and Heisenberg's uncertainty, Laplace seems almost buffoon-like in his optimism, but much of modern science has pursued his dream. Implicitly, the mission of many twentieth-century scientists---biologists, neurologists, economists---has been to break their universes down into the simplest atoms that will obey scientific rules. In all these sciences, a kind of Newtonian determinism has been brought to bear. The fathers of modern computing always had Laplace in mind, and the history of computing and the history of forecasting were intermingled ever since John von Neumann designed his first machines at the Institute for Advanced Study in Princeton, New Jersey, in the 1950s. Von Neumann recognized that weather modeling could be an ideal task for a computer.

There was always one small compromise, so small that working scientists usually forgot it was there, lurking in a corner of their philosophies like an unpaid bill. Measurements could never be perfect. Scientists marching under Newton's banner actually waved another flag that said something like this: Given an approximate knowledge of a system's initial conditions and an understanding of natural law, one can calculate the approximate behavior of the system.. This assumption lay at the philosophical heart of science." Questions: Why do economists have so little success with the important task of forecasting--- especially when the problem requires more than a mere extrapolation of current trends? Is this a significant problem for social engineers? (PD)

7 June 1998................impulse, science/ mathmatics, and missionaries

Quoting from COMPLEXITY by M. Mitchell Waldrop--------------"In 1973, Arthur included his population analysis as the final chapter in his dissertation: an equation-filled tome entitled 'Dynamic Programming as Applied to Time-Delayed Control Theory'. "It was very much an engineering approach to the population problem," he says, looking back on it ruefully. "It was all just numbers." Despite all his experience with McKinsey and Dreyfus, and despite all his impatience with overmathematized economics, he was still feeling the same impulse that had led him into operations research in the first place: let's use science and mathematics to help run society rationally. "Most people in development economics have this kind of attitude," he says, "They're the missionaries of this century. But instead of bringing Christianity to the heathen, they're trying to bring economic development to the Third World." What brought him back to reality with a jolt was going to work for a small New York think tank known as the Population Council." Questions: What's wrong with using science and mathematics to help run society rationally? What impulse was Arthur feeling and does it have an explanation in terms of evolutionary psychology? Who is likely to do more good for Third World countries------missionaries or economists? (PD)

9 June 1998..................sensitive dependence and civil society

Quoting from CHAOS, MANAGEMENT, AND ECONOMICS by Parker and Stacy-------------"Traditionally, both natural and social sciences have explained the behaviour of systems in linear terms. They knew, of coure, that the true relationships were non-linear, but non-linear relationships are notoriously difficult to handle and it was generally held to be a useful and acceptable simplification to employ linear approximations (Pesaran and Potter (eds.), 1993, p.vii). ___________In fact, the links between cause and effect disappear in the complexity of interactions. In consequence, the long-term future of the system is inherently unpredictable. In such systems, a butterfly taking flight in Tokyo may trigger a hurricane in New York and nobody will be able to trace the steps back from the hurricane to the butterfly. Nobody will ever be sure what caused the hurricane. In such systems, synergy becomes all-important. We have to understand behaviour in systemic, holistic terms rather than reductionist, causal ones.

The implications of this discovery are indeed revolutionary. In the presence of sensitivity to initial conditions, the purpose of science can no longer be detailed predictions. Instead, its purpose becomes that of explaining and understanding (Gleick, 1988; Waldrop, 1994). Systems which demonstrate 'sensitive dependence on initial conditions' will not be successfully engineered or planned. They cannot be controlled through monitoring their performance against some standard. They cannot be driven to realise anyone's prior intention. Instead, such systems evolve through a process of self-organization from which their futures emerge. Members of such a system contribute to its unfolding future, but none can be in control of it." Comment: Adam Ferguson reached the same conclusion in his book AN ESSAY ON THE HISTORY OF CIVIL SOCIETY when he wrote in 1767------"Every step and every movement of the multitude, even in what are termed enlightened ages, are made with equal blindness to the future; and nations stumble upon establishments, which are indeed the result of human action, but not the execution of any human design." Questions: What is meant by the phrase "sensitive dependence on initial conditions"? Is the presence of this characteristic a significant difference between the so-called hard sciences like physics and chemistry and social science? (PD)

11 June 1998...................complexity theory and social engineering

Will the new science of complexity theory cause social engineers to become more productive or unemployed? It's an important question and one of the reasons I have tried to get someone from the Santa Fe Institute to participate in our Dialogue. But due to what appears to be a lack (conflict?) of interest on their part, we will have to consider this question on our own. For some thoughts supporting the former position (more productive), please read the following: Complexity Theory (#1) and Complexity Theory (#2). Question: What do you think......more productive or unemployed? (PD)

12 June engineers vs. real engineers

The term "social engineer" makes me think of something Dave Barry once wrote about labor pains being called "contractions." His idea was something to the effect that they were called that because, if you called them horrible ripping pains that make you wish you'd never let a man touch you, no children would ever be born.

And so "social engineers" hide behind a beneficent- and scientific-sounding name because, if they called themselves "people who take your money and force you under threat of death to live the way they decree," nobody would buy the pablum they offer.

Social engineers make two mistakes (well, to start with, anyway). The first is their assumption that a society, which is a horribly complex interaction of millions and millions and millions of individual actions each and every day, can be "fine-tuned" by their meddling. And the second is their assumption that real engineers are good at knowing what will happen in the inanimate world.

It's apodictically clear the first assumption is indeed a mistake. But as to the second -- don't engineers calculate with almost perfect accuracy the real-world results of their designs? As an engineer, I can reply with an emphatic, "Rarely!" The truth is that in even the simplest designs, an engineer really doesn't have perfect information about the materials, forces, and interactions involved in the real-world application. So we "fudge" by using what's known as factors of safety, which are really nothing more than multipliers to cover our tails against weak metal, or poorly-made components, or voids in concrete, or anything like that. In the few cases where using a simple multiplier isn't a good solution (like designing a nuclear plant or a space shuttle), we test and test our materials and structures until we've spent gobs of money making darned sure the things won't fail. (But remember Three Mile Island and Challenger?)

The difference between real engineers and social engineers is this: we generally have very imperfect knowledge of the materials and situations we work with, but we have fantastic equations and time-tested theories to apply in our designs. Social engineers start with less on both counts.

First, if inanimate materials are unpredictable, the human materials a social engineer tries to mold to his designs are much, much more so. Politicians, economists and planners like to think of us as a homogeneous lot, but anyone with an ounce of sense can see it just ain't so.

But to even greater error, the social engineer has no valid theories or equations to work with. Oh, we're told about all sorts of wonderful statistical and psychological means the planner has at his disposal, but such drivel is a case of the "engineer" trying to force a recalcitrant real world to fit his terribly flawed mold.

A good engineer knows his shortcomings, and either takes measures to guard against possible ill effects arising from them, or else takes a pass on proclaiming a problem solved. A social engineer (which term I find a horrible offense against those of us who are real engineers) acknowledges no shortcomings, and beats the real world with his stick until, by God, it fits his idiotic theories. (JV)

14 June 1998.............what is "methodological individualism" and why is it important?

Quoting from Individualism and the Philosophy of the Social Sciences by Murray N. Rothbard in AUSTRIAN ECONOMICS: A Reader by Richard M. Ebeling (editor)-----------------"Only an individual has a mind; only an individual can feel, see, sense, and perceive; only an individual can act. This primordial principle of "methodological individualism," central to Max Weber's social thought, must underlie praxeology as well as the other sciences of human action. It implies that such collective concepts as groups, nations, and states do not actually exist or act; they are only metaphorical constructs for describing the similar or concerted actions of individuals. There are, in short, no "governments" as such; there are only individuals acting in concert in a "governmental" manner._________Arnold W. Green has recently demonstrated how the use of invalid collective concepts has damaged the discipline of sociology. He notes the increasing use of "society" as an entity which thinks, feels, and acts, and, in recent years, has functioned as the perpetrator of all social ills. "Society", for example, and not the criminal, is often held to be responsible for all crime.____________Similarly, during the 1930s and 1940s many economists proclaimed that in contrast to debts owed overseas, the size of the domestic public debt was unimportant because "we only owe it to ourselves." The implication was that the collective national person owed "himself" money from one pocket to another. This explanation obscured the fact that it makes a substantial difference for every person whether he is a member of the "we" or the "ourselves."__________The use of such analogical terms is an attempt to overlook or even negate individual will and consciousness in social and economic affairs." Questions: What is "methodological individualism"? Does it really do any harm to talk about "American exports", "German productivity", and "social welfare"? (PD)

15 June 1998...............response to 14 June 1998

I contacted the Ludwig von Mises Institute about having someone from that organization participate in TCC. Their expertise in Austrian economics would be beneficial to our Dialogue. But, as with the Santa Fe Institute, I have had no success. I could say that both the Mises Institute and the Santa Fe Institute are not interested in The Cactus Club. But I won't since I believe in methodological individualism as a way of thinking (i.e. Institutes don't think, feel, or act). I now issue an open invitation to anyone from either of these organizations to participate in TCC and enlighten us on the socionomics of complexity theory and Austrian economics. The same goes for the Bionomics Institute (see below). Since all three sets of concepts are part of socionomics, it would be good to have representatives from these institutes as members of TCC. I will continue trying to accomplish this goal.

Now, regarding the concept of methodological individualism. I think it is important not to treat groups as if they were individuals. When we start thinking of individuals first as group members and second as separate human beings, we are likely to have more confrontations (see TCC Dialogue, 21 November 1997). Blacks vs. whites, Americans vs. Japanese, men vs. women, one inner-city gang against another. The potential for escalating discord and violence emanates from group thinking which is the opposite of MI thinking. If A, B, and C are part of Group X, and D,E, and F are part of Group Y, what happens when A harms D. Often the answer is E and F go after B and C as well as A. This results from group thinking in terms of X harmed Y instead of A harmed B. Northern Ireland and the Middle East are examples of this regrettable process. Societies don't think, feel, choose, or act, but they can and do get sick. Binding children's feet, sacrificing virgins, and eating each other is indicative of what one might call a social virus, a negative meme if you will. When some people see this as a wrong and point it out to the others (The king has no clothes!) they will be ridiculed and perhaps outcast as a threat to the status quo. With time and determination on the part of these few, the society may recover and develop to a more advanced stage of social organization. Learning to use MI thinking instead of group thinking must be part of this development. (PD)

17 June 1998................Darwin and Marx and their theories of conflict

Quoting from BIONOMICS by Michael Rothschild------------"Despite making several complimentary references to Darwin, Marx borrowed none of Darwin's ideas. In fact, most of Marx's writings, including the first draft of CAPITAL, were completed before THE ORIGINS OF SPECIES was published. Marx's ideas grew out of his study of philosophy, history, and economics, not biology._________Darwin's objectives were purely scientific. He offered a theory to explain seemingly incompatible observations of nature. Marx's goals were primarily political. He wanted to relieve the suffering of the working class, and, after outlining his theory of economiic history in THE COMMUNIST MANIFESTO, he went on to propose a program of radical political and economic change. To emancipate society from all further exploitation and bring an end to class struggle, he called for the abolition of private property, the revolution of the working class, and the centralization of all instruments of production (land, machines, and factories) in the hands of the state." Questions: How do the conflict based theories of Darwin and Marx contrast with each other? Can anyone provide a concise socionomic analysis of Marxism in terms of its impact on social development (trust, toleration,etc.), order (economic perfomance, cooperation, etc.), and harmony (peace, strong civil society, etc.)? (PD)

19 June, morality, and legalized plunder

Quoting from TOWARD A FREE SOCIETY by Gary Wolfram-----------------"Today there is a subdiscipline of the economics profession called the theory of rent-seeking which is based upon the fact that what Bastiat says is true. Economists call the practice of spending resources trying to influence the outcome of government in order to better one's position "rent-seeking." Articles by the dozens attempt to explain why rent-seeking occurs, estimate the loss in resources which occurs because of rent-seeking, the optimum method of rent-seeking, etc..But the bottom line is that as long as the government is able to create laws which subvert our rights to property, then rent-seeking will occur. A second effect of accepting as just government's ability to take from one person and give to another is the erasing of the line distinguishing justice from injustice. When you find yourself in the position where you think it is morally right for the government to pass a law which takes my property from me and gives it to you, then you must either give up your moral sense or your respect for the law. For how can you distinquish between robbery by a gang of thieves and those taking your grandmother's property through a property tax? Bastiat described the situation where government power is used to violate the prescription that government is organized to protect an individual's right to property as "legalized plunder." He gave us a prescription for identifying legalized plunder: (1) see if the law takes from some persons that which belongs to them and gives it to another person to whom it does not belong, and (2) see if the law benefits one person or persons at the expense of another by doing what the other person could not do without committing a crime." Comment: I teach my students that when it comes to public policy issues there are four levels of analysis that are mutually exclusive. The first is what I call the Simpleton method which considers only the intended benefits. The second is the Utilitarian method which is more sophisticated and analyses the anticipated actual benefits in relation to the anticipated actual costs including a consideration of unintended consequences. The third method is Public Choice Theory which looks at who pays the cost and who gets the benefit and how things get done in our democratic process (i.e. rent-seeking). The fourth method is an approach based on Natural Rights moral philosophy which is as easy to apply as the Simpleton method but usually provides diametrically opposed conclusions. Economists thrive on methods two and three given the need for complicated applications of complex theory, research, and methodology. In my economics class, we recently discussed the government's current Microsoft antitrust suit as an example of how to separate the four levels of analysis (try it yourself). What you think about a particular policy issue will depend as much on which level of analysis you select as on the actual analysis itself. Question: Do you agree that "legalized plunder" challenges our moral sense and respect for the law or is it possible to justify the double standard? (PD)