| | Fred,
It all comes down to the cost of cooperation. This cost is imposed by two kinds of "thieves": regulators and bona fide criminals. Regulation has a business cost to it and so does dealing with bona fide criminals. Dealing with a criminal sucks. Think about it. Think about entering into a contract with someone and having them defect on you. Even though you can take them to court, there are costs to that, too. In the long run, it's the average cost of "effectively" dealing with 'criminals' that determines whether a society collapses or not. I define 'societal collapse' as a 50%+ reduction in economic output. We put out about $13 trillion a year in the private sector. If criminals or hyper-regulation drove up the cost of doing business so high that half the producers left the market (or all the producers stayed, but for half the old profit) ... then that'd be "bad" either way.
The end result would be the same if it was due to actual criminals committing fraud and theft rampantly, or to an arrogant, disdainful, aristocratic, social-engineering, egalitarian elite (ADASEEE) making "rules" rampantly. Cooperation with criminals hurts, and cooperation with the Rule of Law can hurt (if the Rule of Law becomes "excessive"). Those 2 are the costs of human cooperation.
Prisoner's Dilemma as a paradigm of human trade? -------------------------- S When you strike a deal with a neighbor and he defects on you then, in scientific Prisoner's Dilemma terms, you are called a Sucker (S), or get a Sucker's payoff. The payoff for S is negative**, often -1. The negative payoff chosen for this outcome is designated as the cost (c) of cooperation (C).
P When you try to screw your neighbor as your neighbor is trying to screw you then, in scientific Prisoner's Dilemma terms, you get a Penalty (P). The payoff for P -- the payoff for a mutual defection (D) -- in many studies is 0 or even greater than 0, but it has not ever been shown how you can get a greater than 0 payoff from getting screwed over. If nothing else, you wasted potentially-productive time. I might accept a P = 0 payoff for a game in Game Theory to correspond to reality, but I cannot accept a positive pay-off to what amounts to 2 criminals duking it out or bilaterally lying to each other. It just doesn't jive with real life.
R When you strike a deal with a neighbor and he turns out to be a capitalist (i.e., he respects the contract), then you get a Reward (R). The payoff for R is positive and is thought to include both the benefit (b) and cost (c) of cooperation: R = b - c
T When you try to screw your neighbor as your neighbor is trying to do right by you (i.e., respecting the contract, trusting you with a cash payment, etc.), then you experience a Temptation (T). In Prisoner's Dilemma, T has the highest payoff, but it remains to be seen that when you act like that that you will reap the most reward out of life. What would happen, for instance, if you accidentally built up a reputation and other people "got wise to you"? If I see a dude screw someone over, I'm not likely to deal with him in the future. It is said that the payoff for T involves the benefit (b) of cooperation without any of the cost (c) of cooperation. T = b. It is unclear whether you can experience the benefit of something without ever paying the cost of that thing. Sooner or later, it seems, you will be paying a cost. --------------------------
At any rate, if the cost of cooperation is so high that defection is the only way to scratch yourself ahead in the world (for an admittedly short-lived time), then you get something that Game Theorists call: ALLD. You do not want to see ALLD! Trust me. You do not want to attempt to live in a population that evolutionarily selects for ALLD. Hobbes envisioned what that would look like. The film, Mad Max, came close. The film, 28 Days Later, came real close. It doesn't happen naturally -- man is not "wolf to man" (as some really old guy once said) -- but you can accidentally create this dystopic scenario by interjecting a whole lot of collectivism into a society -- which drives up the cost of cooperation.
Ed
**Absent-minded professors, not realizing what they are talking about, have sometimes accidentally stipulated payoffs for S that are 0 or even positive! Science is about real life, so we can ask: What would that look like, in real life? ...
Sally strikes a deal with Suzy and Suzy accepts the offer and signs the contract in apparent good faith. Suzy takes Sally's money and runs for the border, leaving her high and dry. Sally is somehow "better off" (has received a positive payoff!)
??
How in the Sam Hell can you be better off from getting 'monetarily raped' like that?? ... Anyone? ... Anyone? ...
[crickets]
(Edited by Ed Thompson on 11/11, 7:24pm)
|
|