56. Keystone Economics

Note: This post is the fifty-sixth in a series. Click here for the full listing of the series. The first post in the series has more detail on the book 'Systems of Survival' by Jane Jacobs.

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"A chain is only as strong as its weakest link"

Proverb


I was driving across the prairies a couple of weeks ago (long story) and I noticed the sign on the Manitoba border claimed that Manitoba was the 'keystone' province, and it got me thinking.

Wikipedia notes that,

"The term [keystone] is used figuratively to refer to the central supporting element of a larger structure, such as a theory or an organization, without which the whole structure would collapse,"

while also noting that the actual meaning of keystone is

"the architectural piece at the crown of a vault or arch which marks its apex, locking the other pieces into position."

It was the literal meaning that reminded me of an old figurative use of the word, one we encountered a few posts back from David Hume,

"The happiness and prosperity of mankind, arising from the social virtue of benevolence and its subdivisions, may be compared to a wall, built by many hands, which still rises by each stone that is heaped upon it, and receives increase proportional to the diligence and care of each workman. The same happiness, raised by the social virtue of justice and its subdivisions, may be compared to the building of a vault, where each individual stone would, of itself, fall to the ground; nor is the whole fabric supported but by the mutual assistance and combination of its corresponding parts."

Imagine a prisoner's dilemma type situation with more than two participants. For the sake of example, let's say 10 people. But the cooperative benefit is only gained if all 10 people cooperate. If even just one person defects, then the whole effort of everyone else is wasted. You could imagine a game where 10 people choose to put money in to a collective pot and if everyone contributes, the money is doubled, but any person is able to choose to take what the others have contributed instead of contributing themselves. Are there situations like this in real life? Well, in a military battle, only a single traitor can have a disastrous impact on his/her erstwhile allies. That may be one reason why treason is considered the most serious of crimes.

Or consider another type of prisoner's dilemma. In this one, the cooperative benefit is proportional to how many people cooperate. So if, say 7 out of 10 people cooperate, than there will some benefit, but not as much as if all 10 did. But now imagine that this dilemma is repeated over and over, and that people can see what the others are doing. After the first instance where the 3 defectors take advantage of the 7 cooperators, it seems likely that some of the 7 will cease to cooperate. As the number of cooperators drops, the number of people taking advantage of the remaining cooperators grows larger, and the pressure grows for everyone to defect.

In 'The Efficient Society' Joseph Heath gave the example of littering as a situation where if there is no litter, then people feel embarrassed to litter themselves, but if they are surrounded by litter dropped by other people, the situation reverses and they feel embarrassed to be the sucker carrying their litter to the garbage instead of just dropping it.

These sorts of situations resemble a hand on a clock face that can have one of two equilibriums. One with the hand pointing upwards towards 12 which is unstable because any perturbing of the hand (i.e. defection from the people in the dilemma) will cause the hand to fall toward the other equilibrium with the hand pointing towards the 6. The equilibrium at 6 is stable because, even if you give the hand a little push, it will return to the 6 due to gravity. Similarly, even if a few people try to start a move towards cooperation in the group prisoner's dilemma, unless they can get everyone involved, the effort is likely to fail.

Now, if you assume that people are hardwired to defect in prisoner's dilemma type situations then you might see the problem here as one of how to change the incentives of the situation so that it is in people's self-interest to cooperate. If, on the other hand, you believe that there are 2 (or more) types of people and that some people are inclined to cooperate while others are inclined to defect, you might see the question as being, how do the cooperators keep the defectors in line. This calls to mind another quote we encountered a while back, this time from Hans Ritchsl,

"This understanding of the fundamental power of the communal spirit leads to a meaningful explanation of coercion in the state economy. Coercion is a means of assuring the full effectiveness of the communal spirit, which is not equally developed in all members of the community. Coercion forces the individual to act as if he were inspired by communal spirit. Coercion is only the outer clasp and fastening of the community, but if communal spirit be lacking, coercion can replace it only in part."

The main point of this post is that there are situations where the best outcome can only be achieved if everyone (or very close to everyone) is on board. In these situations, giving people freedom of choice means nothing more than allowing defectors to frustrate the desires of cooperators to achieve a better outcome. Now, you could say (if you had a very good memory) that I'm just rehashing the points Tom Slee made in his book that we covered back near the start of this series - given a prisoner's dilemma type structure, giving people a choice leads to inferior outcomes. And that's true, but what I wanted to emphasize this time around was three things:

1) That the repetition over time of a Prisoner's Dilemma situation can mean that even in situations which don't necessarily have an all or nothing outcome at first, there might be an all or nothing outcome over time
2) In a multi-participant dilemma, full cooperation and monopoly behaviour are equivalent descriptions.
3) If a large group wants to achieve cooperation over time, given different behaviour types regarding defection/cooperation, it is likely to be necessary for an element of coercion or punishment to be employed by the cooperators against the defectors

This is different than simple economies of scale where a larger effort is more productive (per amount of effort) than a smaller effort. This is not a case of natural monopoly as much as it is a case of necessary or efficient monopoly.

10. The Efficient Society (Part 4): Market Failure, Corporations and the State

Note: This post is the tenth in a series. Click here for the full listing of the series.

Chapter 6 of The Efficient Society is all about market failure, and the main point is that although the situation is often framed as if the vast majority of markets work fine but occasionally there is a market failure, the truth is closer to the idea that almost all markets fail and it takes a lot of work to gradually construct more functioning markets.

For the most part the chapter is a pretty straight forward account of the various well known ways in which markets fail, generally similar to what Tom Slee covered in 'No One Makes You Shop at Wal-Mart' - externalities, assymetrical information, etc.. Wikipedia also has a good article on the topic of Market Failure which is worth reviewing if you want an overview.

What gets more interesting is chapter 7 where Heath talks about how corporations are primarily created and grow for the purpose of overcoming market failures of one form or another. Some of these failures occur for no other reason that markets take place in a certain time and space.

For example, why have an assembly line all owned by the same company rather than allow independent assemblers to come together in a market and offer their best price to, for example, take a partially assembled product and add one more piece to it before selling it on to the next assembler and so on.

The reason is that an assembly line actually consists of a series of very localized monopolies. Imagine if each person on the line was able to demand whatever price they wanted of the next person down the line before passing down the item being assembled. The next person on the line would have little choice but to pay an amount close to the final value of the product being assembled because where else are they going to get a partially assembled product to add their piece to?

Heath notes that this logic explains why corporations will often buy up suppliers or distributors in order to avoid being held captive by a local monopoly. And a similar reasoning explains why people with specialized knowledge are retained on a salaried basis rather than working on contract (because they have a monopoly on specific knowledge that the firm needs).

I remember my dad talking once about a company that decided to contract out some of the technical work they used to do in-house, because that was part of the business philosophy of 'getting lean' and not carrying more staff members than necessary. Of course, the factory quickly realized that in the relatively small town they were located in - there wasn't anybody else who could do the job of the people let go, and they were soon rehired for a much higher amount of money on a contract basis.

Heath notes that rather than relying on people to follow their self-interest, as is intended in a market, companies instead go to great lengths to build a sense of teamwork and get employees to put the companies interest ahead of their self-interest. They want their employees to cooperate to achieve company goals while at the same time competing for promotion within the company. The primary way companies secure the efforts of their workers is of course to pay them, but it quite clear that companies see significant value in getting workers to 'buy in' to the company rather than simply work for a paycheque.

The chapter concludes with a discussion of how market failure in the insurance industry for health care led to the growth of large health management organizations (HMOs) in the U.S. Companies providing the insurance didn't have the know-how to determine what was medically necessary and what wasn't, so the market ended up providing more and more services to customers since for each customer an additional service was a free benefit, but the increase to their premiums didn't show up until later after the insurer tallied up the cost of all the medical procedures done.

And, as in every classic prisoner's dilemma, any individual customer had no incentive to stop the rise in premiums by having less work done for themselves, since they would suffer the whole cost of not having the procedure, while the benefit of the lower premiums would be spread across all the plan members.

By combining the organization doing the medical procedures with the insurer that would eventually have to pay for them, the new integrated Health Management Organization could control costs and stop the increase in premiums.


The discussion of health care leads naturally into chapter 8 which talks about the role of government in solving market failures. Heath gives a couple of examples of Prisoners Dilemmas that the state often plays a role in solving:

1) Enforcing a switch to unleaded gas (ideally for a self-interested individual, they continue to buy the cheaper leaded gas, but everyone else switches to unleaded so they get the cheaper gas plus benefits of air that doesn't have lead in it - hence the prisoners dilemma).

2) Providing security services (better for me if my neighbours get together to do this and I reap the benefits of a safe neighbourhood without having to help out.

Heath notes that although corporations can fix some prisoner's dilemmas, they can't do much about those where the benefits from fixing the dilemma don't provide a monetary reward sufficient to pay the necessary employees and make a profit for a company. If moral suasion can't fix the dilemma, and money can't fix it, then the coercive power of the state is the only option left.

Heath notes that with respect to insurance, competition between companies takes place not on the basis of offering a lower price, but rather on the basis of denying coverage. Because companies insure only a subset of the population, the biggest driver of their profitability is ensuring that they don't provide insurance to people who are high risk. As a result, insurance markets tend to end up charging extremely high premiums to higher risk clients, they often leave a number of people entirely uninsured and there is a huge amount of overhead consumed by paperwork with respect to verifying and disputing claims.

In this environment, the efficiency gains from having a single insurer that needn't spend money on all the administration required for screening clients are large and outweigh the lost efficiency from having a monopoly provider. This is a major reason why governments are so heavily involved in providing insurance to their citizens.

A final point is that Heath comments on how GDP does not measure income but instead measures the value of transactions that take place through markets. Therefore, a country which organizes more of its transactions through the state rather than through a market may have a lower GDP than a country that uses more markets and less state intervention, but the difference in GDP reflects a difference in the structure of transactions, not a difference in actual income (as measured by goods and services provided).

9. The Efficient Society (Part 3)

Note: This post is the ninth in a series, Parts one, two three four five six seven and eight

In chapter 5 of The Efficient Society, Joseph Heath discusses the virtues of markets, the primary one being that they allow us to solve the question of how much stuff of different types should be produced to make a complex society work, a problem that is too mathematically complex to be solved mathematically but can be resolved by allowing individuals to make their own decisions and then allowing the market prices determined by those decisions signal where more of goods that are in demand are needed and vice-versa.

He notes that it is possible to have trade and markets without necessarily having competitive markets, using the example of the early days of the fur trade in Canada, when the British government gave one company (the Hudson’s Bay company) a monopoly on the fur trade, rather than encouraging competition.

Heath makes a few key points about competition in this chapter:

1) Competition is a way of getting people to put in more effort. It isn’t really tied to capitalism specifically as competition is used in many areas, from Soviet factories that were offered prizes to whoever could produce the most, to Girl Guides who have a competition to see who can sell the most cookies.

2) Competition, by its nature, creates Prisoner’s Dilemma type situations. All will make the effort to achieve something, but it wouldn’t be a competition if there weren’t people who end up losing the competition. Heath explains how businesses in competition with each other are trapped in a Prisoner’s Dilemma since even though they would all be better off to cooperate to keep prices high, each of them has an incentive to undercut the other's prices for their own benefit.

3) Because of its Prisoner’s Dilemma type structure, competition is generally considered a bad thing (why do you have to be so competitive all the time, anyway?) – competition is only good when there is something good produced as a result of the competition.

4) Competitions can only produce a good result, when they follow certain rules.

Picking up the third point in more detail, a competition between two hockey teams is valuable because of the entertainment it provides. Competition between various companies is good because it results in a push for innovation to better serve customers and it serves to lower prices for customers (note these could be considered positive externalities to the competitive process).

Moving to chapter 6, Heath notes that in the market, a proper price signal reflecting the true level of supply and demand is only created when the people in the market follow their self interest. We’ve all been in the situation of trying to decide on where to eat, and each person wants to go along with what the other person wants, but as a result can’t be sure if what the other person is saying is what they really want or just what they think you want. Heath gives the example of electrical generators being sent to Montreal after the ice storm in 1998. There was a backlash against people 'gouging' the residents by offering to ship generators there for an extremely high price, but that high price also has the benefit of signalling the true level of demand and encouraging more people to ship generators there.

(Note that this ties back to chapter 10 of 'No One Makes You shop at Wal-Mart' where we saw that the reason for the backlash in this case is that there is an involuntary component to a transaction involving selling a generator to someone who might otherwise freeze to death or be forced out of their home.)

It is this aspect of markets - that in the market the best action is to pursue your self-interest rather than altruistically pursue a collective good - which Heath believes accounts for the historically 'dishonourable' nature of being in trade or being a merchant (of Venice, or otherwise).

In an interesting passage, he comments on how Nietzsche saw morality as a conspiracy of the weak against the strong, and that Ayn Rand picked up this thread but made it more plausible she "dilute[d] this Nietzschian animus towards morality with a fawning respect for capitalism"

More plausible, In Heath's view because of the point above that when you are in a market, the outcome is better if you compete and follow your self interest rather than being altruistic and cooperating.

He then notes that markets don't require no morality, they just require less morality. He says,

"In order for capitalism to function smoothly, we need to refrain from stealing, from using violence to achieve our ends, from making fraudulent misrepresentations, etc. The list goes on and on. These are all legal and moral obligations. If people did not respect these basic rules, the entire system would fall apart"

Actually, if the list really does goes on and on, I wish Heath would have continued. For now, I'd just note that if you think back to Jane Jacobs' 'Systems of Survival', her list of 15 commercial ethics included 'Respect Contracts', 'Shun Force' and 'Be Honest' which matches up pretty well with Heath's 'refrain from stealing, from using violence to achieve our ends, from making fraudulent representations'.

Both this idea of Heath's that the markets require 'less morality' to function and the contract between Nietzsche and Rand's concepts of ethics are things that I'll likely return to before finishing this series.

More on chapter 6 and the concept of Market Failure in the next post.

8. The Efficient Society (Part 2)

Note: This post is the eighth in a series, Parts one, two three four five sixand seven

Note: I previously posted on chapters 3-5 of 'The Efficient Society' here, back in 2005. This time around I'll cover much of the same ground, but I'll go into a little more detail, and maybe emphasize some different points.

Chapter 3, "Perverse Outcomes" covers situations where people make rational choices intending for a certain outcome, but 'perversely' end up with results that are the opposite of what they are aiming for. This, again, comes back to Prisoner’s Dilemma and Arms Race type situations and has already been described here and here so I won’t say too much more other than to highlight a couple of key passages.

"As we have seen, the mere fact that people realize they're in a prisoner's dilemma, and realize that their own behaviour is contributing to the misery, does not mean that they have any incentive to change what they are doing. For example, just knowing that it's a 'bad thing' for everyone to be running around with guns does not mean that individuals do not have an incentive to own a gun (and especially not if everyone else is going to be running around with a gun, regardless of what you do). In order to actually change the pattern of behaviour, people must be given some sort of incentive.

(These incentives actually come in two flavours: internal and external. The interior controls are what we normally think of as morality and these can be quite effective under certain circumstances. But this is complicated and so I will set aside until the next chapter.

The last example, Heath provides in the chapter describes how the city of St. Louis, back in the 1970's decided that rather than raise taxes to pay for street maintenance, they would sell the streets off to neighbourhood groups who would own the streets and do the maintenance themselves. But after a while, the new street owners figured that they saw no need to let just anyone drive on their streets and so, many streets came to be blocked off to through traffic. Eventually, a local university had to negotiate with various street owners to negotiate a passageway that would allow students to be able to get through to the university.

This highly inefficient situation results from the American unwillingness to sacrifice liberty for efficiency (you might be thinking about Health Care after reading that sentence, but Heath doesn't cover that until chapter 7)...

Instead, let's go on to chapter 4, picking up Heath's concept that the necessary incentives to overcome prisoner's dilemmas are often internal or moral in nature.

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Chapter 4 starts off with a great line, "Anyone who has ever lived with roommates understands the Hobbesian state of nature implicitly"

Heath goes on to explain how if 4 students sharing an apartment, because all like to live in a clean place and all prefer others to do the cleaning, it is a prisoner’s dilemma type situation where everyone has an incentive to free ride on other people’s cleaning efforts so nobody wants to be the sucker who cleans while other people take it easy and the place ends up looking like a pigsty.

Eventually, the students might come together and make up a list of rules that divide out the tasks in order to make for clearer accountability and allow people to punish those (typically in fairly low key ways such as by making sarcastic remarks) who are not doing their part.

Heath then goes on to the question of why people tend to follow rules, even when the benefits to breaking them might exceed any potential punishment that might be imposed. He gives the example of cleaning up after your dog in a park, even when there is nobody around to see if you don't. He points out that cleaning up after the dog is something you do because if people (in general) didn't do that, the results would be a mess. This corresponds with the sort of 'golden rule' (do onto others as you would have them do onto you) that is found in the moral code of almost every culture. In other words, sometime our sense of morals suffices to prevent prisoner's dilemma type failures of cooperation from occurring.

Heath then tackles the question of why we can sometimes rely on our morals to escape prisoner's dilemma type situations and why sometimes our morals fail us. They key element, he argues, is trust. People don't like to be taken for suckers so if they can be assured that others are doing their part (keeping the house clean, cleaning up after their dog, paying their taxes, etc.) they will usually do the same. Situations where this sort of trust can't be established lead to failures where we are trapped in the Prisoner's Dilemma without some sort of external incentives (punishments or rewards for cooperative behaviour) being used to bring about cooperation.

He concludes the chapter looking at one of the ways people have traditionally used to overcome the problem of securing cooperation among large groups of people - hierarchies. The hierarchy, where those who cooperate to achieve the collective objectives are promoted while those who don't cooperate are punished, allows a large group of people to work together without constantly undermining each other putting their personal interests ahead of the cooperative goal.

Chapters 5 and 6 of the Efficient Society discuss markets, and will be covered in the next post.

7. The Efficient Society (part 1)

Note: This post is the seventh in a series, Parts one, two three four fiveand six

After a post on the concept of Pareto efficiency, it is natural that the next book I want to talk about is Joseph Heath's, 'The Efficient Society'

Much like Systems of Survival, this is a book I've already discussed at length her on the blog so for this post, I'm simply going to be lazy and reprint my earlier post on chapter 2 of The Efficient Society, where Heath contrasts a society based on the notion of a shared set of what is right with one which tries to allow people to pursue their own vision of what is right in as efficient a manner as possible.

A few notes before I cut and paste my old post in:

* I reproduced the post, but there were a number of excellent comments on the original which are worth reading.

* At the time, I commented that chapter 2 was the one I found most interesting, but now I consider chapters 3-7 (to be covered in the next post or two in this series) as the heart of it.

* In the comments to the original I mentioned that, "All this stuff is like pieces of a jigsaw in my head, which I can't quite put together" so you might consider the current series of posts as an effort, not so much to put the jigsaw together, but to at least set all the relevant piees out on the table, so to speak.

* The concept of efficiency that Heath is using, is Pareto efficiency, as defined in the last post - meaning situations where nobody can be made better off without making someone else worse off.




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Same-Sex Marriage & The Efficient Society: Perfection vs. Efficiency:

In chapter 2 of The Efficient Society, Joseph Heath compares two possible value systems for a society: trying to achieve perfect virtue vs. trying to be as efficient as possible.

Heath argues that throughout time most societies have viewed the pursuit of good (virtuous) living as the goal of society. Whether in the world of Islam, Europe in the middle ages, or Communism in the Soviet Union, society functioned by requiring everyone to buy into the same set of moral values. Of course this required getting agreement on what actions are virtuous and which are vices - here religion traditionally (although not always, as the Communist example shows) plays a big role in determining which actions are good (those which please God) and which are bad (those which offend God).

The (potentially) fatal flaw in this type of arrangement is pretty clear - it only works if there is near unanimous agreement about what is virtuous and what is bad. Seen from this perspective, the greatest threat to this type of society is the heretic or dissident - which helps explain why heretics and dissidents have been treated so appallingly (by modern standards) throughout history and why so many societies/religions work so hard to 'convert' people to their beliefs.

Heath argues that the combination of advancing technology (which made disagreements much more lethal) and the Reformation which split the church in Europe and caused numerous civil wars led people to reconsider whether this was a sustainable model for society. He suggests that it was the 'social contract' theorists, Thomas Hobbes, John Locke et al, who developed a new set of values for society. In this new model, the state would no longer seek to impose values on society but would only use the powers which society agreed (contracted) that it should have, most notably a monopoly over the use of force to enforce contracts and prevent disagreements over values from getting out of hand and causing more civil warfare.

Heath calls this new model 'the efficient society' because, with the state's role reduced to enforcing contracts rather than values, legitimacy is shifted to those transactions which both parties enter into voluntarily. And since both parties enter voluntarily, it is presumed that both gain something - i.e. it is a win-win transaction. But in order for both parties to gain, the transaction must be doing things more efficiently than in the past. Since nobody stands to lose anything from these win-win contracts, there is no reason for violence over clashing values, and everyone can just get along.

In this model, everybody keeps their values to themselves, since to impose them on (unwilling) others would require the use of force, and this is reserved to the state which is mandated not to intervene in matters of values (what we generally refer to as the separation of church and state).

This should become a lot clearer with an example. For a topical example (which Heath also dwells on at length) let's consider the debate on Same Sex Marriage.

In a society which depends on a shared set of values, it is necessary to assess the virtue of various activities, with sex being a major topic of interest. Pretty consistently, societies have decided that the virtue of sex (God's purpose in creating sex, if you will) was for the creation of children - which makes a fair bit of sense. From there it is an obvious next step to say that all sex which can lead to the successful upbringing of children (i.e. intercourse between a married couple) is good and pretty much everything else (gay sex, straight sex which won't lead to children, contraception, abortion, etc.) is bad.

Now consider sex in a contractual society. In this society, the state's role is simply to enforce contracts and to maintain it's monopoly on the use of force. So as long as some sex act has been agreed to by two (or more) consenting adults - that is a win-win 'efficiency' gain1 and the state has no right to interfere. Only where there is a lack of consent (rape, pedophilia) has the monopoly on force been violated and the state needs to step in and punish the offenders.

So, as Heath says, opponents of same-sex marriage may question the values which lead us to accept this act, but these are the same values our society has been built on for hundreds of years now and approval of same-sex marriage is just an artifact of these values finally being reflected in our laws after a long lag time.

We can see this clash of values: perfection vs. efficiency, very clearly in the Canadian blogosphere.

Consider this post from Curt at Northwestern Winds. He quotes an address to the UN by Chris Kempling,

"One would think that tolerance would mean that social liberals would be tolerant about our religious beliefs. In the Newspeak of today, however, tolerance means everyone is obliged to take a liberal attitude towards immoral sexual behaviour, but those who practice that immoral behaviour do not have to tolerate Christian beliefs which oppose such behaviour."


...and then concludes with,

"This trend is appalling abuse of the vaunted separation of church and state, itself ironically an American concept. Too many people think that slogan runs only one way. Get a clue: it means the churches can't set bars to the levers of government and it means that the government will not hinder the thoughts and teaching of the churches in the private sphere. What is happening, and this is why the trend is so alarming, is that the understanding of what is private is shrinking, and very rapidly too."



By suggesting that same-sex marriage supporters are being intolerant themselves and trying to deny the rights of religious people to enter into contracts (speaking engagements for example), same-sex marriage opponents can use the efficiency values of our society against same-sex supporters, and feel as though they have the upper moral hand, even on an efficiency basis.

The trouble is that there is really no significant movement of any kind to prevent churches from doing whatever they want on the issue of the treatment of gays. The catholic church still doesn't allow women(hardly a particularly downtrodden group, especially in comparison to gays) to become priests and the government isn't stepping in and forcing them to and it's not going to.

The reason statements against gay marriage by church leaders draw opposition in our society is that, while the statements are obviously made in the private sphere (where else could they be made?), their objective is to influence the public sphere. Specifically, the objective is to use the coercive power of the state (as Bishop Henry so honestly stated) to prevent gays from entering into win-win contracts (in this case marriage). That is where the opposition to church statements against gay marriage comes from - because, while accepting that society in general operates on values of efficiency, many religious people view the particular case of gay marriage as being so extremely unvirtuous that it requires state intervention to impose the values of one group on another.

Previously, I had never really understood why gay marriage opponents would put themselves through logical contortions and make exaggerated claims but I see now that a lot of it stems from trying to find a rationale for opposing same-sex marriage which doesn't conflict with our society's efficiency values.

Now, consider this post from Skippy over at The Amazing Wonderdog:

"I can understand why some people are so vehemently opposed to gay marriage, why people simply feel that something about this is, well, wrong - and it's why I feel that I'm not vilifying anyone by accusing Stephen Harper of pandering to the homophobe vote.

But there's a difference between me and the people Harper is pandering to: I recognize that this [being uncomfortable with the idea of gay sex] is my problem, and mine alone."


...

"We have no right to limit their rights, or their happiness, or to place obstacles in their lives purely to make ourselves comfortable.

Your right to swing your fist ends at the end of my nose, as the old saying goes."

...

"Tolerance is not a matter of having no qualms; if it were, we wouldn't call it "tolerance." It's a matter of putting aside your qualms and recognizing that you cannot impose them on others."



Skippy has fully internalized the efficiency values of our society. The monopoly of the state on the use of force (coercion), the true nature of tolerance and why it's important, and the fact that in an efficiency based society we have no right to deny others from entering into win-win contracts.

For a final word, see why Andrew at Bound by Gravity is such a good blogger in this recent quote from him:

"If we [the Conservative party] are ever going to unseat the Liberals then we MUST stop acting like the Christian Heritage Party, and start acting like Canada's next government. Canadians, by and large, don't give a rat's ass about issues of conscience - they care about day-to-day things like money, medicare, and infrastructure. Talk their language and you might be surprised at how so many of them are willing to listen."



I had to give Andrew the last word because he sums the whole situation up in a few short sentences. Canadians, by and large don't care about perfection of virtue (issues of conscience), what they care about is efficiency (money, medicare, infrastructure). Therefore the Conservatives have to stop speaking the language of shared virtue (acting like the Christian Heritage Party) and talk to Canadians in terms of efficiency. Well said.

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Anyway, this was probably my favourite chapter in the book because, even just in the week since first reading it, it has really sharpened my understanding of both history and some current debates such as same-sex marriage.

One thing that I'd like to investigate further is a possible link between these two value systems Heath describes and the two systems of ethics described by Jane Jacobs in 'Systems of Survival'2. Jacobs argues we have two different sets of ethical rules, one for activities which are generally based on taking things (generally government/military activity - things involving the use of force) and one based on trading things (affecting commercial activity primarily).

Clearly there is some overlap here, although Jacobs argues that successful societies need to use both ethical systems simultaneously with each supporting the other, whereas Heath argues that 'efficiency values' have gradually been driving out 'Perfectionist/Common Virtue' values ever since the days of Thomas Hobbes (centuries ago). Food for thought for another time I guess.


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1 keep in mind that Heath uses the word efficiency in the sense of increasing overall welfare, not in the narrow manufacturing sense of producing more widgets per worker

2 I've posted on Systems of Survival a few times, most thoroughly here in the context of the NHL lockout.

The Efficient Society: Cooperation vs. Competition

Note: This post is a continuation of this post and this post.

Second note: This post doesn't really add much new to this excellent post from Andrew Spicer from over 2 years ago (which you really should read), but I wanted to write it all out in my own words to get a grasp on the ideas involved


Chapters 3 through 5 of 'The Efficient Society' all revolve around the concept of the Prisoner's Dilemma¹.

From the wikipedia site on the Prisoner's Dilemma:

"The classical prisoner's dilemma (PD) is as follows:

Two suspects A, B are arrested by the police. The police have insufficient evidence for a conviction, and having separated both prisoners, visit each of them and offer the same deal: if one turns Kings Evidence against the other and the other remains silent, the silent accomplice receives the full 10-year sentence and the betrayer goes free. If both stay silent, the police can only give both prisoners 6 months for a minor charge. If both betray each other, they receive a 2-year sentence each.

Assume both prisoners are completely selfish and their only goal is to minimise their own jail terms. Each prisoner has two options: to cooperate with his accomplice and stay quiet, or to betray his accomplice and give evidence. The outcome of each choice depends on the choice of the accomplice. However, neither prisoner knows the choice of his accomplice. Even if they were able to talk to each other, neither could be sure that they could trust the other.

Now, let's assume our protagonist prisoner is rationally working out his best move. If his partner stays quiet, his best move is to betray as he then walks free instead of receiving the minor sentence. If his partner betrays, his best move is still to betray, as by doing it he receives a relatively lesser sentence than staying silent. At the same time, the other prisoner thinking rationally would also have arrived at the same conclusion and therefore will betray. Thus, in a game of PD played only once by two rational players both will betray each other and the world will become a place for monsters. Betrayal is their only rational choice.

However, if only they could arrive at a conspiracy, if only they could be sure that the other player would not betray, they would both have stayed silent and achieved a better result. However, such a conspiracy cannot exist, as it is vulnerable to the treachery of selfish individuals, which we assumed our prisoners to be. Therein lies the true beauty and the maddening paradox of the game.

If only they could both cooperate, they would both be better off; however, from a game theorist's point of view, their best play is not to cooperate but to betray. This treacherous quality of the deceptively simple game has inspired libraries full of books, made it one of the most popular examples of game theory and made some people appeal for banning studies on the game.

If reasoned from the perspective of the optimal interest of the group (of two prisoners), the correct outcome would be for both prisoners to cooperate with each other, as this would reduce the total jail time served by the group to one year total. Any other decision would be worse for the two prisoners considered together. However by each following their selfish interests, the two prisoners each receive a lengthy sentence."

Clearly, the outcome of the dilemma depends upon where on the axis running from perfect cooperation to perfect competition the people involved happen to be. If people always cooperate then prisoner's dilemmas have no impact at all. If people always compete then the prisoner's dilemma becomes inescapable no matter how obviously damaging it becomes.

Now consider the following two prisoner's dilemmas (both taken from 'The Efficient Society'.

Dilemma #1:

"Imagine a situation in which there are no police or security guards, and no official rules to prevent you from doing what you want. Everyone will therefore be responsible for his or her own protection. In order to guarantee your personal security, you might reasonably decide to carry a weapon. Let's say you have a choice between carrying a knife and carrying a gun. Your potential assailant will have the same choice. So if you do get attacked and need to defend yourself, the set of possible scenarios looks something like the following (in descending order of desirability):

1. You have a gun; your opponent has a knife.
2. You both have knives.
3. You both have guns.
4. You have a knife; your opponent has a gun.

Both of you will try to get your own number one, and as a result you will both get number three. Everyone will carry a gun. Thus the desire to achieve greater personal security has the effect of increasing the deadliness of any eventual conflict (and thus the overall level of insecurity).

Dilemma #2:

Suppose you and your competitor each are holding substantial quantities of some good. If you both charge six dollars per unit, buyers will purchase 100 units total, probably 50 from each of you. However, at a price of five dollars, buyers would be willing to purchase 120 units. Suppose that your cost is three dollars per unit. Here are the possible scenarios:

1. You lower prices; your competitor doesn't. Sold: 120 @ $5. Profit: $240 [120 * (5-3)]
2. Neither of you lowers prices. Sold: 50 @ $6. Profit $150 [50 * (6-3)]
3. Both of you lower prices. Sold: 60 2 $5. Profit $120 [60 * (5-3)]
4. Your competitor lowers prices; you don't. Sold 0. Profit 0.

Whether you are chasing after windfall profits or simply trying not to get frozen out of the market, your best strategy is to lower prices. The same goes for your competitor. As a result, you will both lower prices, and so instead of making profits of $150 each, you will make only $120 each. It is clearly not in your interest to pursue this competition, but you don't have much choice. ... That is why they say every free market is but a failed cartel.

Note that from the perspective of the person involved in the dilemma, these two situations are identical. In both cases they will benefit by cooperating and suffer by competing. But from the perspective of society as a whole the two cases are quite different: in the first case cooperation is beneficial (less deadly violence is good for society) but in the second case competition is beneficial (lower prices are good for society).

So what does an efficient society do? Clearly, an efficient society encourages cooperation in the first type of dilemma but encourages competition in the second kind.

---

So, chapter 3 of the Efficient Society looks at the role of government in solving dilemmas with negative impacts on society. Because the government has, by definition, a monopoly in any given territory, if the government takes responsibility for some activity than we can ensure that there is no competition within that particular territory for that particular activity. Here we see why the monopoly on the use of force is so fundamental to government. Not only is competition in the use of force (violent crime/civil war) the most devastating prisoner's dilemma problem we face, but unless the government controls the use of force, it has no power to enforce its monopoly in any other area.

The above examples and Chapter 3 may give the misleading impression that we always need government to intervene in cases where cooperation is beneficial. In fact, for the vast majority of these situations, government intervention is not required, and we rely on our sense of what is right to cooperate rather than having the government force it on us.

In chapter 4, Heath looks at situations where moral suasion replaces the role of government in helping us to cooperate with each other,

"the practice of lining up is itself an efficiency promoting institution. The reason we line up for things is that any kind of rationed access to a good generates a prisoner's dilemma. Everyone has an incentive to push his or her way to the front, but when everyone does this, the mob scene that ensues results in everyone getting through more slowly. This is especially true in the case of emergency exits. When I was young, it always seemed strange to me that parents and teachers expected us to line up to escape from burning buildings. The reason, I later discovered, is that more people can escape in a given time if the exit is conducted in an orderly fashion. This is not much comfort to those at the back of the line, and so the rule requires fairly powerful moral incentives in order to have any force."

The fact that morals supporting cooperation have always been a bulwark of society not falling apart into a million prisoner's dilemmas helps explain why trade, in which competition is promoted over cooperation, has been, throughout history, consistently regarded as a base or shameful occupation.

In chapter 5, Heath looks at prisoner's dilemmas which have positive outcomes for society and shows how markets, by facilitating competition, make it impossible for sellers to get out of their prisoner's dilemmas.

The one thing I would take issue with Heath on here is his statement,

"In point of fact, the central "discovery" that led to the development of the market economy is not that one can do without morality but that one can permit a selective decline in morality without having society fall apart."

In fact, I would argue, based on 'Systems of Survival' by Jane Jacobs, that the market system does not depend on a decline in morality as much as on the usage of a second set of (equally valid) morals - ones specifically suited to prisoners dilemmas with positive outcomes for society. Instead of looking at prisoner's dilemmas, Jacobs tracks the two systems of morals back to 'taking' and 'trading' as our two means of making a living - but clearly there is considerable overlap between activities based on 'taking' and prisoners dilemmas with negative outcomes for society and a similar overlap between trading activities and prisoner's dilemmas with a positive outcome for society².

Jacobs tracks 'commercial' morality back to the ancient Greeks and through societies such as the Romans, Japanese, Indians and medieval Europeans which were effectively divided into classes or castes with one caste living by 'taking' / cooperative morality and one caste living by commercial / trading / competitive morality.

Somewhere along the line, for some reason, the commercial set of morals became greatly strengthened in Europe coming out of the middle ages leading to the expansion of markets, the enlightenment, the industrial revolution etc. etc.

Which brings us back to chapter 2. In chapter 2, Heath suggested that our move to a society where the state stayed out of questions of values was a result of improved technological weaponry which made disagreements much more deadly than in the past. At this point, I am more inclined to think that the shrinking role of the state has more to do with the increased role of commercial/competitive morality in our society than it did to the Reformation, the invention of gunpowder or to the European civil wars. I suspect that Hobbes, with his social contract, was simply reflecting the changes in society which had already had taken place rather than actually having much of an impact on the course of events himself.

For instance, Jacobs tracks most our current individual rights back to the development of the medieval European Custom of Merchants, noting that, "So many of what we call civil rights are actually rights to make contracts as equals" and that, "Another variety of sexism has often denied homosexuals the benefit of contractual law". Of course, none of this disputes the truth of what Heath wrote in chapter 2, just the source of the changes he described.

And of course I don't really have any answer to explain how it was that in Europe at that particular time commercial morality became so much stronger and more influential than it ever had anywhere else. I suppose Heath's guess is as good as any.

Well, my head hurts, so I think I'm going to leave it at that for now. The amazing thing is that there is actually still a lot more stuff in 'The Efficient Society' that I want to discuss (the usefulness of bureaucracies, problems with GDP as a measurement tool, the need for global government and the challenge presented by an information economy, among others), but I'll have to save that for future posts.



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¹As Andrew points out in his post,

"the more applicable generalization is that of the problem of suboptimization. As defined on the Principia Cybernetica web site:

Optimizing the outcome for a subsystem will [in many cases] not optimize the outcome for the system as a whole. This intrinsic difficulty may degenerate into the "tragedy of the commons": the exhaustion of shared resources because of competition between the subsystems."

²To see why, note that when you take for a living you are basically relying on nature's bounty (or the work of others), and when you take something for yourself, then nobody else can take the same thing. So taking amounts to being a zero-sum game.

When trading, however, it can be assumed that because both people make the exchange voluntarily, both must benefit so the outcome of a trade is a net gain.

Now imagine introducing competition into a taking activity and into a trading activity. In the zero sum world of taking, increased competition accomplishes nothing other than to make everybody work harder (and to fight more), so an optimal strategy in a taking environment is to cooperate rather than to compete. In the positive sum world of trading, however, competition makes everybody work harder which (because it is a positive sum game) leads to a better outcome for everybody - assuming that everybody competes within the rules of the trading game, sticking to voluntary exchange rather than using force.

This is why when people who take for a living start to compete with each other it is generally referred to as treason, while when people who trade for a living stop competing with each other it is known as collusion.

Of course, trading can occur and be beneficial even without competitive markets, but competitive markets help a lot because it is the competition which creates the prisoner's dilemma which ensures that prices are set efficiently and which motivates traders to work hard.


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A couple of other related posts on this topic:

Andrew Spicer describes in detail an interesting (and surprising) prisoner's dilemma involving trucks passing other vehicles on the highway.

I write about when competition is good and when it is bad in the context of industrial subsidies, as per Systems of Survival.

Same-Sex Marriage & The Efficient Society: Perfection vs. Efficiency

Note: This post is a continuation from this earlier post

In chapter 2 of The Efficient Society, Joseph Heath compares two possible value systems for a society: trying to achieve perfect virtue vs. trying to be as efficient as possible.

Heath argues that throughout time most societies have viewed the pursuit of good (virtuous) living as the goal of society. Whether in the world of Islam, Europe in the middle ages, or Communism in the Soviet Union, society functioned by requiring everyone to buy into the same set of moral values. Of course this required getting agreement on what actions are virtuous and which are vices - here religion traditionally (although not always, as the Communist example shows) plays a big role in determining which actions are good (those which please God) and which are bad (those which offend God).

The (potentially) fatal flaw in this type of arrangement is pretty clear - it only works if there is near unanimous agreement about what is virtuous and what is bad. Seen from this perspective, the greatest threat to this type of society is the heretic or dissident - which helps explain why heretics and dissidents have been treated so appallingly (by modern standards) throughout history and why so many societies/religions work so hard to 'convert' people to their beliefs.

Heath argues that the combination of advancing technology (which made disagreements much more lethal) and the Reformation which split the church in Europe and caused numerous civil wars led people to reconsider whether this was a sustainable model for society. He suggests that it was the 'social contract' theorists, Thomas Hobbes, John Locke et al, who developed a new set of values for society. In this new model, the state would no longer seek to impose values on society but would only use the powers which society agreed (contracted) that it should have, most notably a monopoly over the use of force to enforce contracts and prevent disagreements over values from getting out of hand and causing more civil warfare.

Heath calls this new model 'the efficient society' because, with the state's role reduced to enforcing contracts rather than values, legitimacy is shifted to those transactions which both parties enter into voluntarily. And since both parties enter voluntarily, it is presumed that both gain something - i.e. it is a win-win transaction. But in order for both parties to gain, the transaction must be doing things more efficiently than in the past. Since nobody stands to lose anything from these win-win contracts, there is no reason for violence over clashing values, and everyone can just get along.

In this model, everybody keeps their values to themselves, since to impose them on (unwilling) others would require the use of force, and this is reserved to the state which is mandated not to intervene in matters of values (what we generally refer to as the separation of church and state).

This should become a lot clearer with an example. For a topical example (which Heath also dwells on at length) let's consider the debate on Same Sex Marriage.

In a society which depends on a shared set of values, it is necessary to assess the virtue of various activities, with sex being a major topic of interest. Pretty consistently, societies have decided that the virtue of sex (God's purpose in creating sex, if you will) was for the creation of children - which makes a fair bit of sense. From there it is an obvious next step to say that all sex which can lead to the successful upbringing of children (i.e. intercourse between a married couple) is good and pretty much everything else (gay sex, straight sex which won't lead to children, contraception, abortion, etc.) is bad.

Now consider sex in a contractual society. In this society, the state's role is simply to enforce contracts and to maintain it's monopoly on the use of force. So as long as some sex act has been agreed to by two (or more) consenting adults - that is a win-win 'efficiency' gain¹ and the state has no right to interfere. Only where there is a lack of consent (rape, pedophilia) has the monopoly on force been violated and the state needs to step in and punish the offenders.

So, as Heath says, opponents of same-sex marriage may question the values which lead us to accept this act, but these are the same values our society has been built on for hundreds of years now and approval of same-sex marriage is just an artifact of these values finally being reflected in our laws after a long lag time.

We can see this clash of values: perfection vs. efficiency, very clearly in the Canadian blogosphere.

Consider this post from Curt at Northwestern Winds. He quotes an address to the UN by Chris Kempling,

"One would think that tolerance would mean that social liberals would be tolerant about our religious beliefs. In the Newspeak of today, however, tolerance means everyone is obliged to take a liberal attitude towards immoral sexual behaviour, but those who practice that immoral behaviour do not have to tolerate Christian beliefs which oppose such behaviour."

...and then concludes with,

"This trend is appalling abuse of the vaunted separation of church and state, itself ironically an American concept. Too many people think that slogan runs only one way. Get a clue: it means the churches can't set bars to the levers of government and it means that the government will not hinder the thoughts and teaching of the churches in the private sphere. What is happening, and this is why the trend is so alarming, is that the understanding of what is private is shrinking, and very rapidly too."

By suggesting that same-sex marriage supporters are being intolerant themselves and trying to deny the rights of religious people to enter into contracts (speaking engagements for example), same-sex marriage opponents can use the efficiency values of our society against same-sex supporters, and feel as though they have the upper moral hand, even on an efficiency basis.

The trouble is that there is really no significant movement of any kind to prevent churches from doing whatever they want on the issue of the treatment of gays. The catholic church still doesn't allow women(hardly a particularly downtrodden group, especially in comparison to gays) to become priests and the government isn't stepping in and forcing them to and it's not going to.

The reason statements against gay marriage by church leaders draw opposition in our society is that, while the statements are obviously made in the private sphere (where else could they be made?), their objective is to influence the public sphere. Specifically, the objective is to use the coercive power of the state (as Bishop Henry so honestly stated) to prevent gays from entering into win-win contracts (in this case marriage). That is where the opposition to church statements against gay marriage comes from - because, while accepting that society in general operates on values of efficiency, many religious people view the particular case of gay marriage as being so extremely unvirtuous that it requires state intervention to impose the values of one group on another.

Previously, I had never really understood why gay marriage opponents would put themselves through logical contortions and make exaggerated claims but I see now that a lot of it stems from trying to find a rationale for opposing same-sex marriage which doesn't conflict with our society's efficiency values.

Now, consider this post from Skippy over at The Amazing Wonderdog:

"I can understand why some people are so vehemently opposed to gay marriage, why people simply feel that something about this is, well, wrong - and it's why I feel that I'm not vilifying anyone by accusing Stephen Harper of pandering to the homophobe vote.

But there's a difference between me and the people Harper is pandering to: I recognize that this [being uncomfortable with the idea of gay sex] is my problem, and mine alone."

...

"We have no right to limit their rights, or their happiness, or to place obstacles in their lives purely to make ourselves comfortable.

Your right to swing your fist ends at the end of my nose, as the old saying goes."

...

"Tolerance is not a matter of having no qualms; if it were, we wouldn't call it "tolerance." It's a matter of putting aside your qualms and recognizing that you cannot impose them on others."

Skippy has fully internalized the efficiency values of our society. The monopoly of the state on the use of force (coercion), the true nature of tolerance and why it's important, and the fact that in an efficiency based society we have no right to deny others from entering into win-win contracts.

For a final word, see why Andrew at Bound by Gravity is such a good blogger in this recent quote from him:

"If we [the Conservative party] are ever going to unseat the Liberals then we MUST stop acting like the Christian Heritage Party, and start acting like Canada's next government. Canadians, by and large, don't give a rat's ass about issues of conscience - they care about day-to-day things like money, medicare, and infrastructure. Talk their language and you might be surprised at how so many of them are willing to listen."

I had to give Andrew the last word because he sums the whole situation up in a few short sentences. Canadians, by and large don't care about perfection of virtue (issues of conscience), what they care about is efficiency (money, medicare, infrastructure). Therefore the Conservatives have to stop speaking the language of shared virtue (acting like the Christian Heritage Party) and talk to Canadians in terms of efficiency. Well said.

---
Anyway, this was probably my favourite chapter in the book because, even just in the week since first reading it, it has really sharpened my understanding of both history and some current debates such as same-sex marriage.

One thing that I'd like to investigate further is a possible link between these two value systems Heath describes and the two systems of ethics described by Jane Jacobs in 'Systems of Survival'². Jacobs argues we have two different sets of ethical rules, one for activities which are generally based on taking things (generally government/military activity - things involving the use of force) and one based on trading things (affecting commercial activity primarily).

Clearly there is some overlap here, although Jacobs argues that successful societies need to use both ethical systems simultaneously with each supporting the other, whereas Heath argues that 'efficiency values' have gradually been driving out 'Perfectionist/Common Virtue' values ever since the days of Thomas Hobbes (centuries ago). Food for thought for another time I guess.


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¹ keep in mind that Heath uses the word efficiency in the sense of increasing overall welfare, not in the narrow manufacturing sense of producing more widgets per worker

² I've posted on Systems of Survival a few times, most thoroughly here in the context of the NHL lockout.

Much Ablog About Nothing

I try to vary my topics here at CAtO, but I can't deny that some stories just seem to push my blogging buttons, so to speak. Still, making a strenuous effort, I am not going to blog about today's front page National Post story, "Canada 'adrift': CEOs. Political 'vacuum' threatens nation's standard of living" -

- other than perhaps pointing out that when the article warns of "skyrocketing government spending -- up 20% on a per-capita basis over the past five years", and the CEO's say, "The country's fiscal base remains strong, but is threatened by runaway spending growth,", a balanced approach might have contrasted this whining with the fact that CEO compensation increased by roughly 100% last year.

If this pace of increase was to be sustained for 5 years (and as the Globe article notes, "Compensation experts say the surge in total payouts is likely the beginning of a string of banner years for top executives"), this would compound to a 3100% gain over 5 years.

Which kind of puts public spending increasing by 20% over 5 years (roughly 3.7%/year, which is probably less than nominal GDP growth over the same period) into perspective.

Also, when the CEOs put out a plan for Canada which says that, "Governments should ensure their activities contribute to future economic growth, rather than redistributing wealth for current consumption." they should perhaps pick their words more clearly or people will think they are suggesting an end to progressive taxation and all welfare programs, which might seem a little heartless and selfish coming from people who make millions of dollars a year.

But I'm not going to blog about that. The other thing I would normally blog about but am going to ignore because I've already said too much on this topic recently, is the stupidity of the Conservatives. In case you haven't heard, faced with the prospect of same-sex marriage legislation passing, here was the crybaby Conservative reaction (hat tip Gen X at 40):

"Conservative Leader Stephen Harper says the government's same-sex legislation will make it through the House of Commons only because of support from the Bloc Quebecois, and that, says Harper, means the legislation "lacks legitimacy." BQ Leader Gilles Duceppe immediately pounced on Harper's remarks, saying his party has as much legitimacy as the Conservatives. On his way into question period on Monday, Harper told reporters that the majority of federalist MPs will vote against the bill that extends the right to marry to gays and lesbians. He warned that the Liberals will face a backlash from voters outside Quebec over the bill. "It makes it an issue of Quebec versus Canada. Most Canadians have a skeptical view of Pequistes breaking up the country," said Conservative deputy leader Peter MacKay."

I'm assuming you don't need me to point out how dumb it is to write off the elected representatives of almost an entire province as illegitimate so there's no need to blog about this either.

What I will blog about today, is the book, 'The Efficient Society' by Joseph Heath.

First, some background. Over the past Christmas holiday I read a book called 'The Rebel Sell' by Andrew Potter and Joseph Heath. I posted my review here and in the comments Andrew Spicer suggested I might like Heath's earlier work, 'The Efficient Society'.

Andrew recently reviewed the Rebel Sell and concluded that the two books were worth reading as a pair. It's too late for me to do it in the proper order, but nonetheless I got a copy of The Efficient Society from the excellent Vancouver public library (I'm coming to think of it as the free version of Amazon with a better backcatalogue) last week and even found enough free time to read it.

The central premise of the book is that Canada is an efficient society because, when faced with decisions over whether economic functions should be carried about by government or by the market, we go with whatever works best (most efficiently) in that situation - as opposed to just putting personal freedom / fear of government ahead of efficiency (the 'American' approach) or putting collective thinking / fear of the private sector ahead of efficiency (the 'French' approach).

I'm not going to write a review here, beyond saying that I think anyone interested in understanding the proper role of government in Canada (and the world) should get hold of a copy and read it for themselves (it's an easy, not particularly long read and even just reading the first few chapters will give you a pretty good sense of the book as a whole).

What I am going to do, in my next few posts, is to highlight and discuss a few of the concepts in the book I found most interesting, starting with the contrast between a society motivated by improving/maintaining the virtue of its citizens and a society motivated by improving efficiency.