Philosophical Conceptions and Equilibrium Results

Imagine a strategy in an iterated prisoner’s dilemma game called “Pessimistic Tit-for-tat” (PTfT). It is functionally the same as normal Tit-for-tat. The player plays the same move that their opponent played last round. The only difference is that this player plays Defect in the first round instead of Cooperate. If both players play PTfT, they’ll receive the infinite series of (D,D) payoffs. The good news is, if I know that the other player will copy my moves, maintaining defection rarely holds as an equilibrium.

The question stands however, why wouldn’t they start with normal TfT? We might presume that a player who is pessimistic plays PTfT at the outset. They begin with the belief that the other player will play Always Defect (AD). If both players begin with the pessimistic mindset befitting the PTfT strategy then an infinite stream of both defecting is an equilibrium no matter what their discount rate is. Not only that, but given that the players cannot communicate in any way except through the strategies of the game, the stream of (D,D) that both players observe does not refute their initial pessimism. Little does either player know, but if they only took one small leap of faith and played C, just for the heck of it, a window of opportunity and the ability to communicate would open up that could lead both players into each other’s loving arms. 

Robert Hardin describes a similar thought experiment in his 2003 book Indeterminacy and Society. The supposedly unique equilibrium of a finitely repeated prisoner’s dilemma is (AD,AD). The trough equilibrium is due to the ability of both players to backwards induct and anticipate the final round of defection, unraveling any prior possible cooperation. Hardin proposes that in the first round, one player plays Cooperate. By making this simple sacrifice, one player has opened up the window of possibility and no longer given the game a strictly determinate outcome. Interestingly enough, this strategy was exactly what was played in a 100 period prisoner’s dilemma game played by Armen Alchian and John D. Williams as recorded in William Poundstone’s Prisoner’s Dilemma. For the remainder of the game the two economists used the two strategies as both a means of punishment and reward as well as a means of communication.

In his 1898 essay “Philosophical Conceptions and Practical Results”, William James attempts to clarify the pragmatic maxim with an example. 

“The question, is matter the producer of all things, or is a God there too? would, for example, offer a perfectly idle and insignificant alternative if the world were finished and no more of it to come. Many of us, most of us, I think, now feel as if a terrible coldness and deadness would come over the world were we forced to believe that no informing spirit or purpose had to do with it, but it merely accidentally had come. The actually experienced details of fact might be the same on either hypothesis, some sad, some joyous; some rational, some; odd and grotesque but without a God behind them, we think they would have something ghastly, they would tell no genuine story, there would be no speculation in those eyes that they do glare with. With the God, on the other hand, they would grow solid, warm, and altogether full of real significance. But I say that such an alternation of feelings, reasonable enough in a consciousness that is prospective, as ours now is, and whose world is partly yet to come, would be absolutely senseless and irrational in a purely retrospective consciousness summing up a world already past. For such a consciousness, no emotional interest could attach to the alternative. The problem would be purely intellectual; and if unaided matter could, with any scientific plausibility, be shown to cipher out the actual facts, then not the faintest shadow ought to cloud the mind, of regret for the God that by the same ciphering would prove needless and disappear from our belief.…Accordingly, in every genuine metaphysical debate some practical issue, however remote, is really involved. To realize this, revert with me to the question of materialism or theism; and place yourselves this time in the real world we live in, the world that has a future, that is yet uncompleted whilst we speak. In this unfinished world the alternative of materialism or theism? is intensely practical!”

William James “Philosophical Conceptions and Practical Results”

Now think back to the two pessimistic players. It appears that their pessimism leads them into a trap, and that in their debates about what theory more properly describes the past AD or PTfT, there will be endless pedantic debates. But when each player, iteratively choosing a strategy, must decide whether to remain in their pessimism to a predictable conclusion, or to take a momentary leap of faith, the question of what the other player is truly playing remains a lively and interesting question. So appears the game between man and the theories which he imposes upon his surroundings. As James notes, metaphysical debates remain live practical issues as long as there is a future to keep them alive.

Liberty, Stability, and Action: James, Lewis, Hayek, and Tolkien

https://www.reddit.com/r/lotr/comments/agiwpa/a_different_1988_lotr_chess_set_w_chessboard_i/

One of my walking routes on campus is through the Music and Theater Building bridge that borders College Hall. It’s a spot for either econ students or music students, and lucky me this time got to see my good pal Hayden Busby. Hayden was sitting with a friend of his, Luke Ratcliffe. Luke and I have a lot in common. We both are half-Armenian, we both visited the homeland this summer, and have unorthodox (and ironically heterodoxical orthodox) theological views. Oh, and we both listen to progressive metal. It was a wonderful friend meet friend moment that happens all too rarely. And I had another one a couple of nights ago in my mind when I realized that C.S. Lewis and F.A. Hayek have an eerily similar conception of freedom.

William James had a famous articulation of the relationship between God and Man as a chess-game. 

“Suppose two men before a chessboard, the one a novice, the other an expert player of the game. The expert intends to beat. But he cannot foresee exactly what any one actual move of his adversary may be. He knows, however, all the possible moves of the latter; and he knows in advance how to meet each of them by a move of his own which leads in the direction of victory. And the victory infallibly arrives, after no matter how devious a course, in the one predestined form of check-mate to the novice’s king. Let now the novice stand for us finite free agents, and the expert for the infinite mind in which the universe lies.”

(James 1896, 180.) 

In this case, God’s power is not diminished and free-will is allowed. The novice player has free will in its moves, but can never defeat the master. This model has a double practical punch. First, it places God in time. He will be making moves in the future that we cannot yet foresee. Second, it gives meaning to each individual move that we make in the here and now. Though, we know who wins the game, our moves now are a part of that tapestry.

The power of this metaphor transferred over to C.S. Lewis. In the second chapter of The Problem of Pain, Lewis is addressing the technical issues of God’s Omnipotence. A standard objection to the Augustinian theodicy (that God has granted us free will thus resolving the problem of evil) is that even if we freely choose evil, God ought to intervene repeatedly to correct all of our errors. 

“We can, perhaps, conceive of a world in which God corrected the results of this abuse of free will by His creatures at every moment: so that a wooden beam became soft as grass when it was used as a weapon, and the air refused to obey me if I attempted to set up in it the soundwaves that carry lies or insults. But such a world would be one in which wrong actions were impossible, for the cerebral matter which we use in thinking would refuse its task when we attempted to frame them. All matter in the neighborhood would be liable to undergo unpredictable alterations.”

(Lewis 1944, 24-25)

If God was to take this course, we would actually lack the freedom he wants to give us. Omnipotence means that God can do anything but impossibilities are not even things in the first place. If the arena of my free action is entirely controlled, I was in fact never free. Free will is not a mere attribute of a soul, but rather a by-product of the interaction between a being and its environment.

Miracles, however, do happen and are an important part of the Christian faith.

“That God can and does, on occasions, modify the behavior of matter and produce what we call miracles, is part of the Christian faith; but the very conception of a common, and therefore stable, world, demands that these occasions should be extremely rare. In a game of chess you can make certain arbitrary concessions to your opponent, which stand to the ordinary rules of the game as miracles stand to the laws of nature. You can deprive yourself of a castle, or allow the other man sometimes to take back a move made inadvertently. But if you conceded everything that at any moment happened to suit him – if all his moves were revocable and if all your pieces disappeared wherever their position on the board was not to his liking-then you could not have a game at all. So it is with the life of souls in a world: fixed laws, consequences unfolding by causal necessity, the whole natural order, are at once limits within which their common life is confined and also the sole condition under which any life is possible. Try to exclude the possibility of suffering which the order of nature and the existence of free wills involve, and you will find that you have excluded life itself.

(Lewis 1944, 25)

Lewis invokes the same metaphor of a chessboard to get his point across. God can make exceptions to his own rules and preserve the stable environment for free action, but he can’t go all the way.

The Constitution of Liberty (1960) is Hayek’s first comprehensive shot at articulating his political vision. He is not talking about a mystical document, but rather asking “What constitutes Liberty?” It’s very difficult for him to articulate directly what Liberty is. Most of the book is a description of the institutional conditions of liberty. Liberty, simply put for Hayek, is the absence of coercion. He then goes to great lengths to show what coercion is. Coercion (though he squirms on his own definition) is when one person’s will absolutely dominates another. When one man’s mind is made into the tool of another’s. Hayek curiously finds like Lewis that control of the environment is tantamount to control of the other’s actions.

“By ‘coercion’ we mean such control of the environment or circumstances of a person by another that, in order to avoid greater evil, he is forced to act not according to a coherent plan of his own but to serve the ends of another…Free action, in which a person pursues his own aims by the means indicated by his own knowledge, must be based on data which cannot be shaped by the will of another. It presupposes the existence of a known sphere in which the circumstances cannot be so shaped by another person as to leave one only that choice prescribed by the other.”

(Hayek 1960, 71)

In more political language, one may have freedom of thought, and freedom of desire, but if they have no freedom of property, their previous freedoms are meaningless. Whoever controls the means controls the actual ends. As Hayek took lengths to point out in The Road to Serfdom, one cannot be liberal in their politics, but be socialist in their economics.

Unfortunately, coercion is sometimes necessary to prevent coercion. To preserve a sphere of freedom, the defensive coercion must be institutionalized in rules which are generally fixed and announced beforehand. The realm of government action may include coercion, but it must be in a fixed rule. Thus, the executors of government power have little control over its actual scope.

“Coercion according to known rules, which is generally the result of circumstances in which the person to be coerced has placed himself, then becomes an instrument assisting the individuals in the pursuit of their own ends and not a means to be used for the ends of others.”

(Hayek 1960, 72)

I hope the similarity is not lost. Government, like God, has the power to manipulate the environment, though in a much more limited sense. In both cases, God to man and government to citizen, individuals are only free if the rules instituted above are generally untampered with. They are “fixed and announced beforehand”. The actor’s free constructions can only be erected on stable ground. The expectation that a certain zone will not be tampered with is an important facet of the willingness to build anything out of it in the first place. 

Hayek stresses in his first chapter, that he is not speaking about metaphysical but simply personal liberty. I’d like to push against him on this. The Bible can be read as a social story between God and his creation. If we are in a relationship with a personal God, then metaphysical liberty is just a form of personal liberty that Hayek articulates. Both God and government, if they are to offer us freedom (which God does and government can), establish the rules by which they operate and only rarely deviate. Churches must operate in the same way so that parishioners are not the theological slaves of their priests. There’s a lot more to unpack here in church history and economics of religion that I hope to work on in the future.

Appendix: Tolkien’s Theodicy

In the 2nd chapter of the Quenta Silmarillion titled Of Aulë and Yavanna, we find a wonderful example of the chess-playing God at work. Eru had created the world, and the Valar (the pantheon of archangels/gods) were hard at work preparing it for the coming of the Firstborn Children of Illúvatar, the elves. Aulë, Valar of stone, became impatient with the dumbness of the world, and he made the first dwarves and hid them under a mountain. Eru, in a very Garden of Eden fashion, sees under the mountain and rebukes Aulë for his impatience. The elves are the intended firstborn, and the dwarves are a deviation from Eru’s plan. Eru commands Aule to destroy his own creation with his hammer, but at the last moment stays his hand (in a very Abraham and Isaac fashion). 

Eru, though displeased with Aulë’s disobedience, sees that the dwarves are good handiwork and permits Aulë to keep them as long as they stay asleep until the elves awaken. Yavanna, Aulë’s wife and Valaress of Arda’s flora and fauna, become worried at the prospect of the dwarves. Dwarves, when they awaken will have no affinity for the trees, but they will need lumber for their mining operations. To counter this propensity in the dwarves, Yavanna creates the ents as shepherds of the trees. 

Neither the dwarves, nor the ents, were necessarily part of Eru’s design, but he allows his creation the ability to go in that direction. Regardless, every fixed element of his plan still goes as follows. The elves are still his firstborn children to experience the world, and the rest of Arda’s history unfolds despite several new tensions that arise.

The Angel of Scarcity

So He Drove Man Out by Stephen Gjertson

21 The Lord God made garments of skin for Adam and his wife and clothed them.22 And the Lord God said, “The man has now become like one of us, knowing good and evil. He must not be allowed to reach out his hand and take also from the tree of life and eat, and live forever.” 23 So the Lord God banished him from the Garden of Eden to work the ground from which he had been taken. 24 After he drove the man out, he placed on the east side of the Garden of Eden cherubim and a flaming sword flashing back and forth to guard the way to the tree of life.

Genesis 3:21-24; NIV

Consider three sets of plans or projects (p) that we can pursue in this life.

T= Those that are technologically possible.

E= Those that are economically feasible.

M= Those that are morally enriching.

These need a bit of clarification. T describes the set of plans that you imagine can be built given the limitations of natural law. These plans violate no general natural principle such as Newton’s Laws. We slowly refine our knowledge of which projects reside in this set as we grow in scientific knowledge. E contains the set of plans that if undergone would come to full fruition. We refine our knowledge of the particulars of time and place for the relevant resources over time. While T is about general rules, E is about particular circumstances. Is this within my current budget constraint? M contains the subset of plans that if pursued and if they come into their maturity are looked on with approval by the Divine, Most High, and Impartial Spectator.

As Peter Boettke likes to say, Property, Prices, and Profit & Loss, the constellation of guiding stars that guide those under the system of free enterprise will sort out the economically feasible plans from the merely technologically possible ones. A socialist planner can have general technical knowledge but not particular economic knowledge sans prices. E is a subset of T.

But I am curious about M. First, what is the relationship between M and T? If T and M are subsets of one another they are equal. Everything we can do, we should do. This would be meaningless. Morals are tools to guide our hearts, heads, and hands. If all is permitted, morals aren’t at all. Our morals must be derived in such a way to guide and making them equivalent to the possible doesn’t point anywhere. This logic also applies to the question of whether or not T is a subset of M. God, being merciful and loving, assures us that there is no p in M that is not in T. M is a subset of T.

Now, what is the relationship between M and E? The same logic above applies to whether or not E and M are equivalent or whether or not E is a subset of M. Again, if E and M are disjoint, we are doomed and God withdraws his loving hand. Now, we have another option. E and M are both subsets of T, but could they not be subsets of one another and not disjoint?

I will show that M is a subset of E with a proof by contradiction. Assume that E and M are subsets of T and that E and M are not disjoint. Also, assume that elements now exist in these three sets: M and ~E, M and E, ~M and E. Hold it right there, cowgirl. The existence of p such that p is in M and not in E is a contradiction with Axiom GE3:24. What is that you ask? Oh, why the truth of Genesis 3:24. God appointing the angel to guard Eden is evidence that he disapproves of attempts to do the infeasible. The Angel of Scarcity mandates that man toil for his food. Attempts to get to Eden, where beauty is plenty, but work is unnecessary are attempts to get around the mandate. Thus elements still exist in both M and E, and some exist not in M but still in E. M is a subset of E.

Prudence is a virtue. Prudence is the act of sorting out what is and is not in E. There is no honor in doing things you can’t, even if in your God approves in your imagination. Striving for goals that are in M and not in E is not love at all but shallow romance.

Edit: From Pascal’s Pensee No.431: We cannot conceive Adam’s state of glory, or the nature of his sin, or the way it has been transmitted to us. These are things which took place in a state of nature quite different from our own and which pass our present understanding. Knowing all this does not help us to escape. All that it is important for us to know is that we are wretched, corrupt, separated from God but redeemed by Christ’ and that is what is wonderfully proved to us on earth.

Making Austrian Economics Easy (by using Vector Addition)

If the origin point represents our actor then each vector is a unique goal that they pursue.

Oranges = [2,2]

Apples = [-4,-1]

Bananas = [-1,2]

The sum of the vectors represents the amalgamation of the preferences, constraints, and goals of the actor. Their resultant behavior.

Sum = [-3,3]

Another person with different valuations will have this graph.

Oranges = [-6,4]

Apples = [1,1]

Bananas = [2,-2]

The sum, however, is the exact same.

Sum = [-3,3]

From the outside, all that we can see is the sum as expressed by the action of the individual. This is all that appears in aggregated data. From the perspective inside the mind, the individual can see each vector. If new goals developed or new means were discovered. We would have no way of knowing how each of these two actors would respond from merely analyzing present behavior. Human behavior is rational in the sense that we have commonly understandable concepts about it (in this case represented by vector addition). The mind locks up particular knowledge of time and place.

In “Shadow Economies: Size, Causes, and Consequences”, while discussing empirical studies of the shadow economy (underground wheelings and dealings that don’t get counted in official GDP Tony Soprano, crime, untaxed labor etc.), two findings are noted. The first is that increases in the marginal income tax rate are positively correlated with the size of the shadow economy. Second, that the size of the shadow economy is correlated with “ineffective and discretionary application of  the tax system and regulations”.

A country with high tax rates and effective bureaucracy or a country with low tax rates and ineffective bureaucracy might show the same behavior in terms of shadow economy activity. Both economies would react differently with respect to different changes. If we only go by empirics here, we cannot tell which country requires which policy. We require a conceptual dimension of economic science to understand what is going on inside each economy. To know which move to recommend forreform ,we need to know about the hidden and locked away beliefs, goals, and perceptions of individuals, or at least have a concept of them. This is the contribution that the conceptual economics of the Austrian school offers.

Behavior doesn’t reveal preferences; in many ways it clouds them.


Citation: Schneider, Friedrich, and Dominik H. Enste. “Shadow Economies: Size, Causes, and Consequences.” Journal of Economic Literature 38, no. 1 (2000): 77-114. http://www.jstor.org/stable/2565360.

Towards a Practical Justice Part 3: The System of Natural Liberty and Smith’s Three-Tiered Justice

From the background of Smith’s moral psychology, I can now demonstrate the meaning that Smith ascribes to term justice. Smith employs the term justice in three ways, described by Daniel Klein (forthcoming). The first is commutative justice or “abstaining from what is another’s”. The second is distributive justice or “making a becoming use of one’s own” (what my neighbor did when he cleared our sidewalk for free). The last is estimative justice (Klein’s term), which is the hardest to define. It refers to treating things with due respect or estimating objects properly. I do a truly magnificent painting justice by giving it a prominent place on the wall in my house. Though Smith typically employs the term justice to mean commutative justice or the respect of property, Klein counts 30 times in TMS that he uses it to mean distributive justice and 36 times he refers to estimative justice (Klein forthcoming, 13 and 23).

In Part II of TMS, Smith uses the term beneficence to refer to distributive justice and uses the term justice to mean simply commutative justice. Beneficence can never be extorted from an individual. Taxation and redistribution do not make an individual generous or loving. Commutative justice, on the other hand, can be prompted by coercion. If someone takes your money by force, you have the right to take it back by force. Justice, in the form of general rules, prevents individual passion and partiality from corrupting a society. To the extent that simple respect for justice does not suffice, fear of law enforcement may be needed to fill in the gaps. Notice that this does not require aview of human nature that is fundamentally selfish, but only one that sees humans as partial and prone to make errors of passion. Justice and Beneficence play two distinct, but important roles to the functioning of a society.

Beneficence…is less essential to the existence of society than justice. Society may subsist, though not in the most comfortable state, without beneficence; but the prevalence of injustice must utterly destroy it… [Beneficence] is the ornament which embelishes, not the foundation which supports the building, and which it was, therefore, sufficient to recommend, but by no means necessary to impose

The Theory of Moral Sentiments pg.86

A society that wants to rely on only beneficence will surely collapse. Respect for Justice is needed because we cannot rely merely on an assumed love for all. We can, however, develop a serious love for the rules of just conduct. Justice can recommend us to behavior that makes us unintentionally useful to our neighbors, while simultaneously preventing us from intentionally harming them. Furthermore, like the example of the generous neighbor, beneficence focuses on the actions of individuals and not on the distribution of outcomes. Beneficence satisfies the pragmatic test in a way that schema of social justice does not.

There are many ways in which commutative justice is unique. Unlike other general rules, commutative justice is precise and accurate. There is little room for varying interpretations in the court of law. The rules of property are negative; they are upheld by not doing something. There are usually no rewards for not trespassing, whereas there may be rewards for acts of public service (distributive justice). Also, Smith makes clear that commutative justice is only intended for disputes between equal citizens. It may be bypassed by certain social entities. It may be proper for the government to violate property rights to extract taxes in the same way that it is okay for a parent to take away their child’s toy. This does not justify all government actions, in the same way that it does not justify all parental choices.

When the government does respect commutative justice, we call that liberty. In The Wealth of Nations (WN), Smith expounds on the “system of natural liberty”, a society in which the economy is guided by the invisible hand and the government largely respects property rights. Natural liberty is the system that Smith wants policy-makers to fall in love with when considering the well-being of the people. There are times when Smith does recommend government intervention in the economy as a matter of distributive or estimative justice. These include taxation, restrictions on notes of small-denomination, and usury laws among others.

In Book I, Chapter 2 of the Wealth of Nations, Smith says: “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest” (WN 27, emphasis added). I highlight the word expect because ignoring it has led many to believe that Smith recommends we all remain selfish. That interpretation misses a lot of context. First, the butcher, the brewer, and the baker are living in a society where commutative justice is respected. In a market society, few have the time to develop intimate relationships, but they can recognize a duty to one another by respecting rules of just conduct. Second, Smith clearly does desire beneficence to be added to a society over and above commutative justice and self-love, but we should not expect our bread to be provided by it.

A similar misreading is done of Friedman’s famous article, “The Social Responsibility of Business is to Increase its Profits”. He says that executives have a duty to meet the demands of stockholders, but many forget that he continues, “…while conforming to the basic rules of the society, both those embodied in law and those embodied in ethical custom” (Friedman 2007, 173-4). Friedman wants executives to respect commutative justice, but also the general rules that are laid out for the conduct of distributive and estimative justice.

Smith is able to straddle the demands of social justice while recommending a practical guide to personal conduct. Though the rules for distributive and estimative justice are less precise than those of commutative justice, they still pass the pragmatic test because they are tailored to individual conduct. The rule that makes the man sacrifice his pinky for the “immense multitude” is directed at the person making the decision, not the at distribution of pinkies worldwide. I do not mean to imply that Hayek had no concern for issues of higher justice. Smith, however, does a better job at describing all the types of justice that we may want to address without sacrificing coherence. Some sentiments we are born with and some we develop over time. If we develop respect for property rights without love for our neighbor, we will have only an ugly foundation. Social justice, however, attempts to pursue love for our neighbor with disregard for commutative justice, a path that leads to the disorders of partiality and ignorance. Moving into the future, I recommend a multi-faceted justice to take advantage of the fruits that Adam Smith intended for the system of natural liberty.

Bibliography

  • Friedman Milton (2007) The Social Responsibility of Business Is to Increase Its Profits. In: Zimmerli W.C., Holzinger M., Richter K. (eds) Corporate Ethics and Corporate Governance. Springer, Berlin, Heidelberg
  • Klein, Daniel B., Commutative, Distributive, and Estimative Justice In Adam Smith (March 10, 2017). Adam Smith Review (Vol. 12), Forthcoming; Working Paper in Economics No. 17-11.
  • Smith, Adam (1759) The Theory of Moral Sentiments. Liberty Fund.
  • Smith, Adam (1776). An Inquiry into the Nature and Causes of the Wealth of Nations, edited by RA Campbell and AS Skinner Indianapolis: Liberty Fund.

The Form of Justice

Image result for lady justice

One of Hayek’s biggest faults is that he is nearly impossible to read sometimes.  Sometimes to the point that you have to read the same paragraph multiple times, only to get more confused each time.  In the second volume of Law, Legislation, and Liberty entitled The Mirage of Social Justice, Hayek associates multiple principles with what he calls rules of Just Conduct. Among these are impersonality, universalizability, generality, and end-independency.  The cohesion between these principles was not apparent to me at first until I experienced them directly.

As I was walking home from the Mercatus office this afternoon, I took my usual route through the Johnson Center.  I like to take the Northeastern door as it has very efficient automatic door openers. This instance, however, I had an additional hurdle.  Someone was coming through in the other direction! We both kept up our regular pace, but if neither of us deviated from our regular path we would collide.  As we only noticed each other seconds before the imminent disaster, we had no time to make a plan as to who would go through first. I stepped to the side and waited for a moment while he passed through.  On reflection, it was decided implicitly between the both of us that I would be the one to step to the side as he was closer to the door when we both noticed each other. At the time, I didn’t make an efficiency calculation and judge from a total social welfare position what the optimal distribution of door usage would be.  I just knew the rules of justice and followed them.

In this case, the rule was end-independent as it didn’t take into account how much either of us needed the extra 2 seconds of time.  It was impersonal as it did not I.D. either of us to make sure we were of the right class to participate in such a rule. It was general as it could apply to any situation in which two people try to use a door, but only one must be chosen.  It was universalizable as I (and I presume the other gentleman) would have applied the same rule regardless of the gender, race, or otherwise distinguishing feature of the other person. We would treat all humans equal according to such a rule.

I lost two seconds not because it is more just for him to have those seconds and me to lose them, but because such rules are blind to circumstance, and can have no comment on the outcome.  If we discover that some rules often create certain kinds of outcomes then we may have reason to change the rules. But those rules again must be changed by other rules of this general type.  In no way does Hayek mean to say that all inherited rules are principles of an eternal justice, but that a certain form of rule, one that is generalizable, universal, impersonal, and end-independent, the product of human action but not of human design, is necessary to a general form of cooperation.  Social justice then acts on the ignorance of the existence of such laws and the belief that the criteria of justice at the outcome level can be used to judge such rules.

The Essential Hayek: REVIEW

Hayek, by far my favorite economist, gets overlooked by a vast majority of those engaging in political discourse or those studying economics. Too often he is dismissed as a “free market shill”, a “greedy capitalist”, or another form of right wing pundit. For certain figures I admire, this very well may be true, but Hayek is profoundly different.

Hayek’s break from other libertarians is in that he doesn’t rest his argument on a particular case for natural rights to homesteaded property, or on the efficient allocation of resources that come from markets. Hayek’s argument rests on first the infallibility of government to centralize economic or social knowledge, and second in the ability of liberty to open up previously unopened paths that manifest themselves in spontaneous order.

If that seemed complicated don’t worry! Because there is a book for you! The Essential Hayek by George Mason Economist Donald Boudreaux. In less than 80 succinct pages you will understand basic concepts that underlie Hayek’s work. To me what was most interesting was the point that people believe they can apply small scale planning structures like the family to the nation. An idea that might seem intuitive to some, but is woefully misguided.

I recommend for absolutely everyone.

8.5 out of 10

“But nobody can be a great economist who is only an economist – and I am even tempted to add that the economist who is only an economist is likely to become a nuisance if not a positive danger.”

Game Over? – The Economics of Video Game Death

My father, being a casual video game player, will occasionally spectate my endeavors into virtual realms.  Being interested in game design he will on occasion comment on my game, usually ridiculing it and very rarely praising it.  One particular gripe that he has had with many games is in the respawn function in which your character can die and then continue the game.  Compared to the arcade games that he would have played back in the 80s, the consequences of failure or death in a video game is no longer a simple and blunt GAME OVER.  Players are just slapped on the wrist with a loading screen and then plopped back perhaps a few steps.  Essentially, games with narratives are just models of plots in which the players provide some of the exogenous variables as I discussed in my article on Economics and Plot Vol 3.  Various models of death have significant impacts of both artistic importance and in the construction of a solid game without plot holes.  

 

To start we could categorize game death models into two categories.  The first being permadeath, and the second being some sort of respawn.  Permadeath would entail that once the game has decided that you have died, then the game ends and you must start over from the beginning.  This would be similar to the arcade games of my father’s era.  A respawn would not make the player begin the game again, but would bring the player back at some checkpoint or when they last saved.  Most games today function this way.  Perhaps because most games are in the home rather than a quarter a play.  Respawns can be brought down to two additional categories as well.  One being the in-game universe respawn and the other being the out of universe respawn.  In-universe respawns give an explanation in the story of why the player can continue playing after death.  Out of universe respawns merely let the player continue from a checkpoint or their last save.  There are of course some games that fall in between these respawns and permadeath, so they are not all-encompassing.  Some examples would be Super Mario Bros. and Contra where they have a respawn model until the player runs out of lives.  The permadeath model is fairly self-explanatory and now mostly out of date so I will focus on the respawn model.  

One of the most important features of any game is the separation of knowledge between the player and the character they are meant to represent.  Both Skyrim and Diablo have respawn models.  In Skyrim, the player respawns at the last save.  In Diablo, the player respawns at the last town (checkpoint).  If a player is in a Skyrim dungeon and dies, they will now replay the area on the path to their quest between the save and the location of death.  Since the path will be the exact same that was just experienced, the player then has knowledge that the character does not lead them to make decisions that would disrupt the coherence of the plot, damaging both the player’s experience and the artistic integrity of the game.  In Diablo (or my preferred clone, Path of Exile) each dungeon or area is randomly generated every time that the player goes through.  If the player dies and re-enters the zone, the player and character have the same amount of information with roughly the same difficulty.  If the player is meant to represent the choices of the character then their knowledge must match to allow the game to maintain a coherent series of events.  

 

Subsequently, it becomes quite difficult for the game designer to construct a story that surrounds their death model.  The Skyrim or “Last Save” model can be copied into most stories quite easily, but the Diablo model might be quite difficult.  A game I have found to have a quite good integration of the death model and the lore is the MOBA SMITE.  In Smite, you play as one of the gods of ancient mythology battling it out over various eternal battlegrounds.  When you die, there is a penalty period depending on the strength of your character, and then you respawn at your team’s base.  This makes total sense in the context of deities fighting with one another as they are presumed to be immortal.  The epic saga Bioshock respawns the character in a nearby Vita-Chamber which were apparently reincarnation tools used by the crazed residents of Rapture. However, you still lose the bullets that you used before you died, so there really is no complete do-overs.  The popular FPS Counterstrike also takes a hard line as opposed to its
counterpart Call of Duty in that a death is a death.  There are no respawns until the next round.  This has led to Counterstrike having a much more respected competitive community than COD, but that might have to do with the target demographic for both games.

 

In conclusion, video games, like any other narrative art form, is to some degree subject to economic law.  The player-character dichotomy can likely be further studied and the split is almost reminiscent of the classic problem of mind-body interaction that plagued the modern philosophers.  However, in this case, it becomes a problem that the mind knows more than the body ever experienced, and can reincarnate itself after the body has already died.  Spooky.  The death problem and other player-character problems hopefully will inspire game designers in the future to get ever more creative with their stories and break new ground in the art form of the future.

Photo Credit: https://i.ytimg.com/vi/votpmwC25Ek/hqdefault.jpg

Jean Baptiste Colbert: The Rise and Fall of Mercantilism

This is a short video that I did for my AP Euro class last year. Again thanks to Mr. McCauley.  It’s on the topic of mercantilism and particularly the policies and ideology of Jean-Baptiste Colbert.  This is the first upload to theeconplayground youtube channel so be sure to subscribe to that as well.