Monday, 23 December 2013

Is trolling euvoluntary?

N.B.- This post has been edited in the light of a negative comment

Mike Munger, speaking of my own modest trolling efforts, suggests it might be. This is a link to a paper of his on Euvoluntary Exchange & the Rawlsian Difference Principle regarding which the following points suggest themselves

Munger isn't going for the low hanging fruit here- the most obvious one being
1) the argument from price/service provision discrimination w.r.t. Goods and Services which are either natural Monopolies/ Monopsonies or else Legally constituted as such. For e.g. the State may choose to define itself as having the monopoly of legitimate coercion.
In this case, Economics 101 (which Rawls assumes we have access to 'behind the veil of ignorance')
says that there will always be some goods and services such that price/ service provision discrimination will be both allocatively and Hicks/Kaldor efficient- i.e. yield higher output and potentially help the worst off for e.g. by the Monopolist distributing a small percentage of profits to the least well off One percent or half percent or setting up a hospice for lepers or something like that.
However, segmenting the market on the basis of things like ethnicity, gender, inherited status, having a PhD, etc may be the cheapest and most effective way of preventing 'leakages'. Thus, the Difference Principle might endorse Racism, Sexism, Credentialism etc.
More generally, by giving rich and powerful people preferential treatment, a Justice or Political System gives them an incentive to support the system rather than 'Hirschman Exit' or form a close dealing coalition designed to circumvent the System in question.
Munger does, however, point out that paternalistic Legislation which assumes that poorer, less educated, or lower bargaining power people can't be trusted to make fair bargains, may in fact end up hurting them.
Indeed, we would expect that either there will be 'Agency Capture' or some 'Goodhart's law' type perverse effect, or else a class of intermediaries will arise to circumvent the Govt's interessement mechanism.
(I may mention, that a Binmore type (i.e. with no external coercion) 'repeated game' approach comes unstuck for a similar reason because there is no way of distinguishing phenotypal 'canalisation' (which is in the core) from 'capacitance diversity' (which may not be and has high hysteresis and is associated with things like ressentiment and moral panics) within the Evolutionary Stable Strategy. What I mean is that a speciation type event occurs such that the co-operative representation of the underlying strategic game has a splintered grand coalition)
2) Munger is sticking with the notion that profit needs to be positive to motivate entrepreneurship and Capital formation. Actually, it can be negative because
a) Non-monetary returns - e.g. learning, status, and network effects
b) Precautionary Asset diversification and Strategic behavior.
c) Global contraction and negative Expected real interest rates. Here, people's need for diversified precautionary balances means that there is still an arbitrage opportunity.
One important point, generally overlooked in this context, is that Human beings have always had an incentive to practice charity because producing more than you need is a good hedge against lean years. This holds even if there are no 'reputation effects' or 'moral economy' type vesting of conditional Entitlements.
Portfolio Choice theory explains why an Entrepreneur who will never make a profit may yet gain wealth, status- even a seat in the House of Lords, like my old mess-mate, Karan Billimoria- without attracting the ire of his investors. On the contrary, the fact that they backed a 'neverwozzer' (Silly Billimoria chose a name for his beer that barred him from America) shows their methodology was correct.
My point is that the information processing function fulfilled by the Entrepreneur continues to attract a return even if Profits are negative. (I should explain, Economists define Income as what you can spend without diminishing your Wealth. In this case, Capital (broadly defined) is having to donate a portion of its depreciation to the Entrepreneur simply so as to continue to exist at all)
Human Societies have evolved to cope both with Expansionary and Contractionary phases. In a perpetual steady state, Munger's objection to tinkering with the outcome of a Rawlsian mechanism- viz. that this amounts to violating the veil of ignorance condition, seems merely scholastic. However, this ceases to be the case once we acknowledge the reality of  the coexistence (or indeed co-evolution) of Entrepreneurship with 'Negative Profits'. Capitalism is not a vampire. It is a wounded beast which dies to keep Entrepreneurship alive. The troll outlives the blog.
Certainly, the opposite may happen. The feudal lord may treat the Merchant as a fatted calf. But Entrepreneurship is the troll lurking under the bridge over which all the King's horses and all the King's men pass over to oblivion.   In India and China, comprador Merchants, in league with the Evil East India Company (vide Pirates of the Caribbean)  ultimately killed off the feudal lords only to be betrayed by their descendants, like Jappa Pallikathayil or Nina Burdwan, who studied Political Philosophy, and began jabbering about 'fairness' and 'exploitation' and other such nonsense. Which is why trolling bleeding heart blogs is actually euvoluntary.


  1. This is nonsense on stilts- 'A Binmore type (i.e. with no external coercion) 'repeated game' approach comes unstuck for a similar reason because there is no way of distinguishing pehnotypal 'canalisation' (which is in the core) from 'capacitance diversity' (which may not be and has high hysteresis) within the Evolutionary Stable Strategy.)'
    Canalisation is about robustness to perturbation and is precisely captured by E.S.S. Obviously, there are non ergodic processes going on all the time- but that's precisely why canalisation gains salience. Non ergodic processes get dammed up as Capacitance and gain ergodicity through canalisation.
    Actually, there are just too many things wrong with your sentence to fix.
    You are your own troll.

    1. Fair cop, Guv. I was thinking of the Binmore-Schirrmacher brouhaha which I think could be resolved by saying Binmore thinks canalisation is 'euvoluntary' (to use Munger's euphonious coinage) and this has to do with Human Evolution; but Schirrmacherites could argue this does not matter because capacitance would be strategic and non-ergodic in this model, because selfish reasons are adduced in its support, and that whatever robustness the ESS displays is an expression of capacitance and driven by its dynamics.
      I am not my own troll. What happened was I went to the pub and got chatting with a hot chick but then mixed up the rohypnol and viagra and ended up waking up under Blackfriars bridge in a condition similar to Ezra Pound's sailor who confessed on his deathbed to his son that '"I am not your fader but your moder," quod he, "Your fader was a rich merchant in Stambouli.'
      It is my secret shame.

    2. Sheer nonsense. I don't think you understand what capacitance means.
      You are trying two different approaches which share no commonality. It is a foolish attempt.

      You believe, and I quote, 'a notion of just price can be made rigorous with reference to the shadow vector of correlated equilibria in a repeated game such that all exigent circumstances get insured against- i.e. arbitrageurs operate in the market in a manner to equalize risk premiums and also all external effects, information asymmetries (and preference revelation problems) get 'internalised' in the Coasian sense by the co-evolution of Mechanism Design along with the Market. '
      This isn't particularly meaningful- I'd expect to see it on a College sophomore paper- but I suppose it is consistent with Binmore's essential position.
      What you written is nonsense.

    3. Did you read the article you linked to? It has nothing to do with what you are claiming- that is, if there is a claim there at all, I can't tell.
      Go and re-read this post of yours- I'm not saying it makes sense, but you appear to be saying that you accept Binmore's 'folk theorem'. Now you are saying something different- (or is it different? I can't tell. You may just be stringing words together at random)
      The question I put to you- and I want you to think about it before rushing to answer- is why you think cooperative game theory comes 'unstuck' when it faces the problem Munger & Guzman have identified- viz. that of introducing a Rawlsian type euvolnutary rule.
      I'm not asking you for a Mathematical proof- that would be far beyond your power- just an intuitive sketch. Munger may consider you as 'not just a troll' but unless there's something I'm severely missing, this blog post of yours does nothing to confirm his opinion.
      Incidentally, I have taught at U.K Universities and Second year students do know about Aumann correlated equilibria and a lot more besides.
      Stick to poetry, my dear troll.

  2. When I read the first paragraph, I assumed you were going to say that the troll is the least well off participant in an internet forum and that the difference principle dictates that everybody should come down to his level. I then expected you give provide an argument that 'lowest common denominator' discourse is actually what people would choose behind the veil of ignorance for some complicated reason involving Kolmogorov complexity or effectively computable functions or something of that sort.
    It seems you missed some low hanging fruit yourself, you great big troll!

    1. It hurts coz it's true.
      Personally, I blame David Cameron- that boy aint right.