On modes of reasoning

2006-08-03

in Daily updates, Politics, Science, The environment

Electricity danger sign

One major tenet of liberalism is the idea that greater awareness of the world gained by people collectively through science and individually through education can improve overall human welfare in the long term. Firstly, the idea is that people will gain a more accurate understanding of the world and how it works. Much more controversially, they might improve the way they reason.

A game much loved by economists illustrates the controversy:

There are two players. The first player is asked to divide $10 into two parts and offer one to the second player. If the second player accepts the offer, each player gets to keep their share. If the second player refuses, nobody gets anything.

Standard economic logic would call upon player one to offer exactly $0.01, which player two should happily accept. Both players are made better off and should thus be willing to make the deal, and each player has maximized their earnings, given the rules of the game.

Of course, the game doesn’t work this way with real people. Hardly anyone will accept an offer of less than $3. This is entirely logical if you view the game not as an isolated occurrence, but one event in a life. Over the course of a life, it pays to develop strategies that keep you from having advantage taken of you. Likewise, over the course of repeated interaction, it pays to have strategies by which other people can be compelled to give you a better deal. This one choice may not offer the scope for such development, but the existence of such heuristic devices (like rules of thumb) can be extremely efficient where people have limited information and thinking power.

Economists, on the other hand, are about the only people who make offers of less than $1. More tellingly, they are also about the only people who accept such meagre offers. Through exposure to economic theory, their mechanisms of logical thinking have been altered. It is probably fruitless to speculate on whether they have been improved. Economists can understand the importance of factors like those listed above, so playing this way isn’t obviously a sign that their thinking has worsened. Of course, if economic trailing makes them less likely to anticipate that people might reject a $0.01 offer, perhaps they are worse off overall.

What is more interesting than the consideration of whether the economically optimal strategy is inferior or superior is the consideration of how frameworks of understanding affect decision-making and, furthermore, what effect that has on the liberal conception of welfare improvement through improved knowledge. The previous blog entry, for instance, portrayed the costs of global warming in terms of how much it would cost people to deal with (a very common economic representation). Drowned polar bears and damaged ecosystems only matter insofar as they affect people. Personally, I find such an approach reprehensible – for the same reason I think the wholesale denial of animal rights is morally unacceptable.

One can defend that position on pragmatic grounds: human beings with a reverence for nature have a better chance of living good lives and/or not wiping ourselves out. Saying we should cultivate the belief on those grounds is similar to Rorty’s conception of ironic liberalism. By contrast, the belief that the integrity of natural systems matters for its own sake has an intuitive appeal of a sort very un-chic and difficult to defend in a world full of poststructuralist rejections of firm ontological foundations to moral truth. Anyone who can devise an argument for the inherent value of nature not subject to such criticism will earn my appreciation.

PS. Inside nested padded envelopes, the dust-infested Canon A510 is en route to a registered service depot. If they decide to cover the problem under the warranty, I expect they will replace the camera outright, rather than trying to open and clean it. Doing so would take a fair amount of some technicians time and, if the camera isn’t properly sealed, it would only be a matter of time before parts of my sensor would start getting opaque again. Hopefully, it will come back in time for my trip to Ireland later this month.

PPS. I just upgraded to WordPress 2.0.4. Please report any bugs you come across on the bug reports page. Note also that, due to a barrage of spam comments, I have tightened the comment filtering settings. My apologies if any of your comments get zapped by the filters.

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{ 9 comments… read them below or add one }

Milan August 3, 2006 at 10:52 pm

Thanks for pointing the spam comment out. It’s some kind of attack based on the creation of hundreds of phony blogs which then post snippets of your posts and links back to your site.

If the Buddhists are right, these people should come back as intestinal parasites. It probably won’t be too much of an adjustment, really.

Ben August 3, 2006 at 10:55 pm

Funny you should bring up that stuff about ultimatum games and such, I’ve been reading about them this week – only this afternoon I read something about how few people behave ‘rationally’ unless ‘trained’ to do so, and how economists are less likely to give to public goods and tend to be more selfish as a result.

B August 3, 2006 at 10:59 pm

It should be noted that when you played just such a game as part of an experiment, you chose the selfish bastard option.

Too many econ classes…

Milan August 3, 2006 at 11:08 pm

B,

Kathy Baylis, David Green, Robert Gateman, et al would have been terribly disappointed with me if I ignored all their lectures on inflection points, curves, and optimization.

R.K. August 3, 2006 at 10:50 pm

From all I can see, the upgrade worked. Shame about the spam comments. I think the one above is one of them.

Mike Kushnir August 4, 2006 at 4:38 am

i have one foot out the door, but i will (try to) comment later.

very interesting.

m.

ps. i’m happy about your camera.

pps. the macbook arrived. it’s a thrill to steal the wireless connections of others. all i need now is a fictional application that will “swing” the NIC from one network to another smoothly, therefore allowing me to steal internet along a densely populated corridor while in motion, such as on skytrain.

Rob August 4, 2006 at 11:43 am

Milan,

ignore Rorty-style ironic anything. If, as Rorty claims, the truth doesn’t matter, or is inaccessible, or whatever, it doesn’t matter if our moral beliefs aren’t true. If that’s the case, then there is no reason to endorse moral skepticism, and hence there is no reason to express our moral beliefs in the ironic fashion Rorty demands that we do. The man is virtually a parody of himself.

. February 5, 2008 at 10:15 am

The best way to make money in residential real estate is to buy the worst home on the best street.

The moon covers half a degree of sky.

When digging a grave by hand, haul away 17 wheelbarrow loads of dirt and pile the rest by the hole. You will have just the right amount to backfill.

For marketing purposes, elderly consumers think they are 15 years younger than they actually are.

The price of a telescope increases proportionately to the cube of the lens diameter.

Recovering an unused physical skill takes one month for each year of layoff.

If you walk into a bar where a lot of people wear baseball caps, it’s a good place to sell lottery tickets.

Eclipses often come in pairs. A lunar eclipse is followed frequently by a solar eclipse two weeks later, and vice versa.

If the cats aren’t sleeping on the radiators, turn down the heat.

One chemical toilet serves 15 employees per week.

It takes two minutes for the sun to drop out of sight once it touches the horizon.

If a woman can walk around during contractions, she is not fully dilated.

When you are working in the vicinity of high voltage, keep 1 foot of distance between you and the power source for each 1,000 volts. For instance, stay 13 feet away from a 13,000 volt power source.

. February 26, 2008 at 9:53 am

“As you journey through life take a minute every now and then to give a thought for the other fellow. He could be plotting something.”

-Hagar the Horrible

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