Aaron Renn on partisan divides over family; Timothy Taylor on trends in U.S. government debt; Dan Williams on over-estimating our pro-sociality; The WSJ on stock prices rising, volatility falling
Williams’ point about human cooperation hinging on incentives, regardless of economic framework, is on target. How did our ancestors come to cooperate? Same as us - there has to be a payoff for me to help you. Status, food, security, etc. or I won’t do it. People don’t like to admit this because it tarnishes altruism and sounds crass. Welcome to flawed sapiens.
"People don’t like to admit this because it tarnishes altruism and sounds crass."
Yes, but that merely kicks the real question further upstream, since we are ok with it in other contexts. In arms-length business relations between sophisticated parties where there aren't frequent iterations in a long-term relationship, it is now normal to expect and accept as appropriate such crassness in dealing (though this wasn't always true even in such circumstances and even in the fairly recent past.)
The answer from "the game theoretic approach to evolutionary social psychology" is that we are programmed with strong impulses towards making certain moves in the game, and enforcing certain cultural norms, that deviate from overt, explicit, knowing and conscious maximization of personal interests / "consequentialist utilitarianism", while subconsciously and hypocritically deceiving ourselves and others about the extent these are still our 'true' motives.
The problem is that there is no way to be a maximizer of personal interests while also credibly committing to be loyal to the interests of another person, group, goal, etc. because loyalty in that context can be defined as contradictory, precisely as a willingness to risk the sacrifice of ones personal interests for the collective interest or goal. That is, loyalty means you aren't going to bail or defect the moment your calculation flips to "expected present value is no longer in my personal interest."
In most social contexts it is simply not possible to cooperate and run groups and organizations in a functional and productive way without strong impulses that cause people to be more group-focused than selfish maximizers, and to deceive themselves and others about being even more group-focused than that, and to pay lip-service to norms about good and bad attitudes about the appropriate level of group-focus.
So our impulses are optimized to encourage a lot of 'denial' that we and others are pursuing selfish interests, and reaching social consensus on a particular mindset and "unrealistic alternative narrative framing behavioral model" that we are supposed to think explains why we and other people do what they do, so we don't have to admit why we and they actually do what they do.
The one exception is that it's always easy to drop all this conscious and subconscious hypocrisy and pretense about the origin of behaviors when one is analyzing the behaviors of THEM, opponents, enemies, etc., who, being bad people, can only be expected to think and do the selfish and evil way bad people think and act.
My thought on debt is that a large amount of it has taken the place of productive private sector investment because taxes at least fall more on consumption than borrowing does. Growth suffers. The missing growth is the "burden" that future generations bear as a result of our fiscal disfunction.
"For people to be motivated to help others, they must, at some level, view it as promoting their interests—for example, because it will be reciprocated or improve their reputation or because failing to help will be punished. Without such incentives, cooperation evaporates…."
Bullshit. If and when I stop reading this Substack, it is likely to be in order to avoid the negatism pervasive in the posts and the comments.
While people do indeed help others because it promotes their own interests, the number one reason people help others is because the acts themselves feel good. And with the notable exception of long-term caregivers, people who help others are generally much happier and healthier.
And the evolutionary explanation for why it feels good is that in small nomadic bands, it is best to have a reputation as a person who freely enjoys selfless behavior to others in the local group (but not so much as to make this person a mark for cheats).
However, this doesn’t scale up well to larger society. A society made up of billions of people and hundreds of nations, such as a global market requires the addition of institutions which facilitate mutually beneficial interactions and also institutions which address free riders and cheats.
This isn’t negativism. Just essential self awareness. A global market by necessity needs to operate differently than a weekend camping trip.
That would be "an" explanation, not "the" explanation and it's not a very good one. It is not by any means a proved fact.
Helping others never feels good before we do it and more often than not doesn't feel good while we do it. It mostly feels good AFTER we do it. The would be a really bad evolutionary prompt to do good to improve one's standing in the group.
Altruism has to be explained to fit within an evolutionary perspective. In the dozens of books and articles I have read on the topic, the best theory explaining cooperation is that human altruism is based upon reputation and indirect reciprocity. This matches well with how foragers actually behave with non-kin. Direct reciprocity and mutually beneficial interactions supplement reputation, though I am not aware of the rates of reputational altruism vs mutualistic benefit in the makeup of total cooperation among foragers.
With modern day society, only a tiny fraction of our cooperation and coordination are based upon altruism and self sacrifice (not “the number one reason”). Modern economies are built up from trillions of mutually beneficial interactions, many among complete strangers connected only via complex webs of interaction (I have no clue who designed, built or delivered the Ipad I am typing on).
If memory serves, one point of the referenced article is how some people deceive themselves by pretending that altruism explains (or can support) complex modern society. It can’t. If you think it can, I think you need to re-examine your understanding of both markets and human nature. To paraphrase EO Wilson, socialism (and altruism) is a great theory for ants and naked mole rats, not for humans.
I read Dan Williams. I strongly agree with most of it. I'm uncertain how much I agree on a couple points I find a little ambiguous but don't disagree with any of it.
That said, it doesn't change anything I said and I see no conflicts between it and my words. I explicitly stated my agreement that self interest is involved, I simply disagreed on which self interest is the biggest driver. I do not agree with the following,
"for example, because it will be reciprocated or improve their reputation or because failing to help will be punished. Without such incentives, cooperation evaporates…."
I see these as pessimistic explanations, often but not always present, that could all go away and where I think most altruism is driven by it simply making us feel good.
Note: the word cooperation also gets used at various points. While altruism is a form of cooperation, other types of cooperation, specifically trade, are mostly about mutual benefit, an important topic which I see as very different than anything written in this conversation.
Most of what I accomplish every day in concert with other strangers doesn’t really require institutions to make these beneficial exchanges possible. I just bought some tasty chewing tobacco at the local 7-Eleven. I’m into Copenhagen Pouches right now for some odd reason, but that’s beside the point. Neither the checker nor myself ever once thought of these supposed glorious institutions in our exchange since they were entirely irrelevant. In our society where we can count on the innate propensity of people to do the right thing 95%+ of the time is what makes all of the difference. The institutions can only police at the margins and would be completely ineffective if the propensity to cheat were much higher than it is. In short, it is my belief that cultural norms and innate tendencies are far more important than the institutions themselves. Of course you could include cultural norms in your definition of institution, but at that point the definition itself starts to become meaningless.
Not just your tobacco, but pretty much every thing you and every other person in a developed nation ever owned has been purchased via mutually beneficial interactions. The tobacco was grown because someone thought they could profit from the sale. The 7-eleven was built there because someone thought they could profit from the store. The employee hired on in exchange for a salary and so on with extended networks of billions of interdependent people.
Doing the right thing is great, but none of this would have come about due to good will, and if someone tried to create a complex market on nice intentions, it would fail due to missing feedback of the price and profit system (which is mutualistic).
I certainly agree that cultural norms are super important, and yes they too are the softer side of institutions.
The point of all this is that altruism and good intentions works great for camping trips with friends. It is grossly insufficient though for large scale, decentralized institutions necessary for modern prosperity.
Our entire system is predicated on people doing the right thing. If criminality was 30% instead of the actual of <5%, the whole project would fall apart and, short of a police state, there is nothing that the institutions would be able to do. They would quickly get overwhelmed.
As an Example: Zimbabwe could copy/paste our institutions at anytime. There’s no patent or copyright on them and all of the architectural plans for building them are readily available. Yet, even if they successfully implemented our institutions over there, I’m relatively certain that it would still be a 3rd world hell hole. Why is that? Maybe they have the wrong cultural norms?
“the number one reason people help others is because the acts themselves feel good.”
Acts of kindness do feel good in and of themselves. Recently, my car battery was dead in the parking lot of the local Wally Mart. I was going to be stuck for hours waiting for the tow truck to show up. Instead, the graciousness and willingness to help with jumper cables by random strangers was something to behold. There were no ulterior motives involved on their part and if I had offered to pay or buy them a cup of coffee for their time and tools, it would have been met with well deserved disgust. Sometimes we should just embrace the innate kindness in people without boiling it down to self interest. I won’t forget their kindness and look forward to paying it forward when the next opportunity arises. In other words, leave a tender moment alone.
I wonder how closely the spread and deepening of 401k plans, combined with the decrease in the number of public companies following Sarbanes Oxley, correlates with medium-term stock price changes.
Correlation is a bit irrelevant but you raise at least two good questions.
How much of the stock price increase is due to a flood of 401k money? Probably some but how much stock investment money comes from 401k and how much of that would have been held in taxable accounts and other alternatives before 401k's.
How much of the stock price rise is due to fewer public companies? Maybe not so much if the increased private equity investment came from people withdrawing funds from public companies.
The Stock Market: The Treasury REALY ought to issue a NGDP security (the "Trillionth") to give markets and especially the Fed a better indication (together with TIPS whihc should also be issued in some shorter tenors) of real and nominal GDP expectations.
Williams’ point about human cooperation hinging on incentives, regardless of economic framework, is on target. How did our ancestors come to cooperate? Same as us - there has to be a payoff for me to help you. Status, food, security, etc. or I won’t do it. People don’t like to admit this because it tarnishes altruism and sounds crass. Welcome to flawed sapiens.
"People don’t like to admit this because it tarnishes altruism and sounds crass."
Yes, but that merely kicks the real question further upstream, since we are ok with it in other contexts. In arms-length business relations between sophisticated parties where there aren't frequent iterations in a long-term relationship, it is now normal to expect and accept as appropriate such crassness in dealing (though this wasn't always true even in such circumstances and even in the fairly recent past.)
The answer from "the game theoretic approach to evolutionary social psychology" is that we are programmed with strong impulses towards making certain moves in the game, and enforcing certain cultural norms, that deviate from overt, explicit, knowing and conscious maximization of personal interests / "consequentialist utilitarianism", while subconsciously and hypocritically deceiving ourselves and others about the extent these are still our 'true' motives.
The problem is that there is no way to be a maximizer of personal interests while also credibly committing to be loyal to the interests of another person, group, goal, etc. because loyalty in that context can be defined as contradictory, precisely as a willingness to risk the sacrifice of ones personal interests for the collective interest or goal. That is, loyalty means you aren't going to bail or defect the moment your calculation flips to "expected present value is no longer in my personal interest."
In most social contexts it is simply not possible to cooperate and run groups and organizations in a functional and productive way without strong impulses that cause people to be more group-focused than selfish maximizers, and to deceive themselves and others about being even more group-focused than that, and to pay lip-service to norms about good and bad attitudes about the appropriate level of group-focus.
So our impulses are optimized to encourage a lot of 'denial' that we and others are pursuing selfish interests, and reaching social consensus on a particular mindset and "unrealistic alternative narrative framing behavioral model" that we are supposed to think explains why we and other people do what they do, so we don't have to admit why we and they actually do what they do.
The one exception is that it's always easy to drop all this conscious and subconscious hypocrisy and pretense about the origin of behaviors when one is analyzing the behaviors of THEM, opponents, enemies, etc., who, being bad people, can only be expected to think and do the selfish and evil way bad people think and act.
All of the debt is publicly held no matter who is actually holding it on the books. It is a distinction without a difference.
My thought on debt is that a large amount of it has taken the place of productive private sector investment because taxes at least fall more on consumption than borrowing does. Growth suffers. The missing growth is the "burden" that future generations bear as a result of our fiscal disfunction.
We’ve borrowed to stimulate consumption, and the missing growth is yet come come.
Well the missing growth starts going missing as soon as the tax is not levied, but yes the harm continues into the future.
"For people to be motivated to help others, they must, at some level, view it as promoting their interests—for example, because it will be reciprocated or improve their reputation or because failing to help will be punished. Without such incentives, cooperation evaporates…."
Bullshit. If and when I stop reading this Substack, it is likely to be in order to avoid the negatism pervasive in the posts and the comments.
While people do indeed help others because it promotes their own interests, the number one reason people help others is because the acts themselves feel good. And with the notable exception of long-term caregivers, people who help others are generally much happier and healthier.
And the evolutionary explanation for why it feels good is that in small nomadic bands, it is best to have a reputation as a person who freely enjoys selfless behavior to others in the local group (but not so much as to make this person a mark for cheats).
However, this doesn’t scale up well to larger society. A society made up of billions of people and hundreds of nations, such as a global market requires the addition of institutions which facilitate mutually beneficial interactions and also institutions which address free riders and cheats.
This isn’t negativism. Just essential self awareness. A global market by necessity needs to operate differently than a weekend camping trip.
That would be "an" explanation, not "the" explanation and it's not a very good one. It is not by any means a proved fact.
Helping others never feels good before we do it and more often than not doesn't feel good while we do it. It mostly feels good AFTER we do it. The would be a really bad evolutionary prompt to do good to improve one's standing in the group.
Altruism has to be explained to fit within an evolutionary perspective. In the dozens of books and articles I have read on the topic, the best theory explaining cooperation is that human altruism is based upon reputation and indirect reciprocity. This matches well with how foragers actually behave with non-kin. Direct reciprocity and mutually beneficial interactions supplement reputation, though I am not aware of the rates of reputational altruism vs mutualistic benefit in the makeup of total cooperation among foragers.
With modern day society, only a tiny fraction of our cooperation and coordination are based upon altruism and self sacrifice (not “the number one reason”). Modern economies are built up from trillions of mutually beneficial interactions, many among complete strangers connected only via complex webs of interaction (I have no clue who designed, built or delivered the Ipad I am typing on).
If memory serves, one point of the referenced article is how some people deceive themselves by pretending that altruism explains (or can support) complex modern society. It can’t. If you think it can, I think you need to re-examine your understanding of both markets and human nature. To paraphrase EO Wilson, socialism (and altruism) is a great theory for ants and naked mole rats, not for humans.
"Altruism has to be explained to fit within an evolutionary perspective."
No. It doesn't. Not everything has an evolutionary fit.
The rest of your comment puts me as having a position I never stated and don't hold. You need to reread what I wrote
Yes it does. An action which sacrifices fitness for the benefit of an unrelated individual directly contradicts evolutionary theory.
Here is an interesting article I was just reading on the issue which hits upon some of the issues.
https://www.conspicuouscognition.com/p/strategic-altruism-the-machiavellian
Enjoy
I read Dan Williams. I strongly agree with most of it. I'm uncertain how much I agree on a couple points I find a little ambiguous but don't disagree with any of it.
That said, it doesn't change anything I said and I see no conflicts between it and my words. I explicitly stated my agreement that self interest is involved, I simply disagreed on which self interest is the biggest driver. I do not agree with the following,
"for example, because it will be reciprocated or improve their reputation or because failing to help will be punished. Without such incentives, cooperation evaporates…."
I see these as pessimistic explanations, often but not always present, that could all go away and where I think most altruism is driven by it simply making us feel good.
Note: the word cooperation also gets used at various points. While altruism is a form of cooperation, other types of cooperation, specifically trade, are mostly about mutual benefit, an important topic which I see as very different than anything written in this conversation.
Most of what I accomplish every day in concert with other strangers doesn’t really require institutions to make these beneficial exchanges possible. I just bought some tasty chewing tobacco at the local 7-Eleven. I’m into Copenhagen Pouches right now for some odd reason, but that’s beside the point. Neither the checker nor myself ever once thought of these supposed glorious institutions in our exchange since they were entirely irrelevant. In our society where we can count on the innate propensity of people to do the right thing 95%+ of the time is what makes all of the difference. The institutions can only police at the margins and would be completely ineffective if the propensity to cheat were much higher than it is. In short, it is my belief that cultural norms and innate tendencies are far more important than the institutions themselves. Of course you could include cultural norms in your definition of institution, but at that point the definition itself starts to become meaningless.
Not just your tobacco, but pretty much every thing you and every other person in a developed nation ever owned has been purchased via mutually beneficial interactions. The tobacco was grown because someone thought they could profit from the sale. The 7-eleven was built there because someone thought they could profit from the store. The employee hired on in exchange for a salary and so on with extended networks of billions of interdependent people.
Doing the right thing is great, but none of this would have come about due to good will, and if someone tried to create a complex market on nice intentions, it would fail due to missing feedback of the price and profit system (which is mutualistic).
I certainly agree that cultural norms are super important, and yes they too are the softer side of institutions.
The point of all this is that altruism and good intentions works great for camping trips with friends. It is grossly insufficient though for large scale, decentralized institutions necessary for modern prosperity.
Our entire system is predicated on people doing the right thing. If criminality was 30% instead of the actual of <5%, the whole project would fall apart and, short of a police state, there is nothing that the institutions would be able to do. They would quickly get overwhelmed.
As an Example: Zimbabwe could copy/paste our institutions at anytime. There’s no patent or copyright on them and all of the architectural plans for building them are readily available. Yet, even if they successfully implemented our institutions over there, I’m relatively certain that it would still be a 3rd world hell hole. Why is that? Maybe they have the wrong cultural norms?
No argument from me. I agree very strongly on cultural norms plus effective institutions.
“the number one reason people help others is because the acts themselves feel good.”
Acts of kindness do feel good in and of themselves. Recently, my car battery was dead in the parking lot of the local Wally Mart. I was going to be stuck for hours waiting for the tow truck to show up. Instead, the graciousness and willingness to help with jumper cables by random strangers was something to behold. There were no ulterior motives involved on their part and if I had offered to pay or buy them a cup of coffee for their time and tools, it would have been met with well deserved disgust. Sometimes we should just embrace the innate kindness in people without boiling it down to self interest. I won’t forget their kindness and look forward to paying it forward when the next opportunity arises. In other words, leave a tender moment alone.
Farmer seems to be following Minsky, who believed that comfortable returns and easy credit led to greater risk-taking and leverage
I wonder how closely the spread and deepening of 401k plans, combined with the decrease in the number of public companies following Sarbanes Oxley, correlates with medium-term stock price changes.
Correlation is a bit irrelevant but you raise at least two good questions.
How much of the stock price increase is due to a flood of 401k money? Probably some but how much stock investment money comes from 401k and how much of that would have been held in taxable accounts and other alternatives before 401k's.
How much of the stock price rise is due to fewer public companies? Maybe not so much if the increased private equity investment came from people withdrawing funds from public companies.
The Stock Market: The Treasury REALY ought to issue a NGDP security (the "Trillionth") to give markets and especially the Fed a better indication (together with TIPS whihc should also be issued in some shorter tenors) of real and nominal GDP expectations.
See:
https://thomaslhutcheson.substack.com/p/improvements-in-macroeconomic-data
please:
leave me alone