Thomas C. Schelling, Micromotives and Macrobehavior, New York, W.W. Norton & Company, 1978.
When we analyze how people behave in trying to escape from a burning building we mean that they really are trying to escape. They are not simply acting, 'as if' they dislike being burnt. [18]
How well each does for himself in adapting to his social environment is not the same thing as how satisfactory a social environment they collectively create for themselves. [19]
The body of a hanged man is in equilibrium when it finally stops swinging, but nobody is going to insist that the man is all right.
...
Calling it an equilibrium does not imply that everybody - or even anybody - likes the seating arrangement, only that nobody alone can do better by changing to any available seat. Nor does it imply that there are not alternative seating patterns, very different ones, that could also be equilibria. [27]
Now for what is special about economics. Economics is mainly concerned with transactions in which everybody affected is a voluntary participant. [28]
If you buy somebody else's book, I may feel 'affected' by the transaction because the alternative I had in mind was selling you my book instead. I can wish that people wanted, and would pay for, the things I have to offer, and would offer me, at attractive prices, the things I would like to buy; but this is more like wishing for transactions that didn't occur than objecting to some that did. [31]
[marketplace's voluntary dynamic is highly efficient for production of conscientiousness and material innovation]
The free market, when it works, is that special case of knowledgeable voluntary exchange of alienable commodities. [33]
It may or may not occur to me that I am part of your problem as you are part of mine, that my reaction to the environment is part of the environment, or that the quantity or number I am responding to is the sum of the reactions of other people reacting like me. [78]
George Akerlof argued that the seller of a used car konws whether or not it is a lemon; the buyer has to play the averages, knowing only that some cars are lemons but not whether the particular car he's buying is. Buyers will pay only a price that reflects the average frequency of lemons in the used-car crop. That average is a high price for a lemon but understates the worth of the better cars offered on the market. The owners of the better cars are reluctant to sell at a price that makes allowance for the lemons that other people are selling; so the better cars appear less frequently on the market and the average frequency of lemons increases. As customers learn this, they make a greater allowance for lemons in the price they're willing to pay. The cars of average quality in the previous market are non undervalued and their owners less willing to sell them. The percentage frequency of lemons continues to rise. In the end, the market may disappear, although institutional arrangements like guarantees, or the certification of cars by dealers who exploit a reputation for good cars, may keep the used-car market alive.
Akerlof generalized this model to a number of markets in which there is unequal information on the two sides. [100]
[critical mass dilemma: market disappearance]
If it is proportions that matter - smoking cigarettes or wearing turtlenecks or speaking with a particular accent depending on the fraction of the relevant population that does so - there is the possibility of dividing or separating populations. If people are influenced by local populations - the people they live with or work with or play with or eat with or go to school with or ride the bus with, or with whom they share a hospital ward or a prison cell block, any local concentration of the people most likely to display the behavior will enhance the likelihood that at least in that locality, the activity will reach critical mass. [109]
[reorganization of network localities can induce critical mass mechanics]
Once travelers got used to Garrett Morgan's traffic lights, they learned that it was dangerous to cross against a flow of traffic that was proceeding with confidence. The lights created the kind of order in which non-compliance carried its own penalty. And there was impartial justice in the way the lights worked: unable to recognize individual travelers, the lights could hurt no one's feelings by not granting favoritism. [121]
[self-enforcing conventions require induced penalty for non-compliance and impartiality of coordination mechanism]
People do things, or abstain from doing things, that affect others, beneficially or adversely. Without appropriate organization, the results may be pretty unsatisfactory. 'Human nature' is easily blamed; but, accepting that most people are more concerned with their own affairs than with the affairs of others, and more aware of their own concerns than of the concerns of others, we may find human nature less pertinent than social organization. These problems often do have solutions. The solutions depend on some kind of social organization, whether that organization is contrived or spontaneous, permanent or ad hoc, voluntary or disciplined. [126]
A good part of social organization - of what we call society - consists of institutional arrangements to overcome these divergences between perceived individual interest and some larger collective bargain. [127]
Within the family we can save hot water on Friday night by taking brief showers, rather than racing to be first in the shower and use it all up. But that may be because within the family we care about each other, or have to pretend we do, or can watch each other and have to account for the time we stand enjoying the hot water. It is harder to care about, or to be brought to account by, the people who can wash their cars more effectively if I let my lawn burn, or who can keep their lawns greener if I leave my car dirty.
What we need in these circumstances is an enforceable social contract. I'll cooperate if you and everybody else will. I'm better off if we all cooperate than if we go our separate ways. In matter of great virtue and symbolism, especially in emergencies, we can become imbued with a sense of solidarity and abide by a golden rule. We identify with the group, and we act as we hope everybody will act. We enjoy rising to the occasion, rewarded by a sense of virtue and community. And indeed a good deal of social ethics is concerned with rules of behavior that are collectively rewarding if collectively obeyed (even though the individual may not benefit from his own participation). But if there is nothing heroic in the occasion; if what is required is a protracted nuisance; if one feels no particular community with great numbers of people who have nothing in common but connected water pipes; if one must continually decide what air-conditioned temperature to allow himself in his own bedroom, or whether to go outdoors and check the faucet once again; and especially if one suspects that large numbers of people just are not playing the game - most people may cooperate only halfheartedly, and many not at all. [129]
The trouble is often in making the bargain stick. [130]
Whatever the technology of cooperative action - whether every litter bit hurts, or the first few bits just about spoil everything - people who are willing to do their part as long as everybody else does, living by a commonly shared golden rule, enjoying perhaps the sheer participation in a common preference for selflessness, may have a limited tolerance to the evidence or to the mere suspicion that others are cheating on the social contract, bending the golden rule, making fools of those who carefully minimize the detergent they send into the local river or who carry away the leaves they could so easily have burned.
There are the cases, though, in which not everybody gains under the social contract. Some gain more than others, and some not enough to compensate for what they give up. [131]
[emotional reactions maintain the balance between cooperative and individual advantages - charity to spite]
The prisoner's dilemma generates an inefficient equilibrium: There is one way that everyone can act so that everybody is doing what is in his own best interest given what everybody else is doing, yet all could be better off if they all made opposite choices. This calls for some effort at social organization, some way to collectivize the choice or to strike an enforceable bargain or otherwise to restructure incentives so that people will do the opposite of what they naturally would have done. [225]
1.01.1978
1.15.1977
Kenneth Boulding
Kenneth Boulding, "Commons and Community: The Idea of a Public", ed. Garrett Hardin and John Baden, Managing the Commons, San Fransisco, W.H. Freeman and Company, 1977.
There are some very fundamental differences, however, between social and biological evolution. One is that biological individuals are biparental at most, whereas social artifacts are multiparental; hence the birth of social artifacts is directly involved with large numbers of other species. A horse can be produced by another horse and a mare; an automobile is produced by the interaction of designers, architects, engineers, corporations, trade unions, mines, ore ships, assembly line workers, salesmen, lawyers, politicians, and so on, and so on. [282]
Another very profound difference between biological and social systems is that in social systems human artifacts are made as a result of human decisions, which are very closely interrelated in human communities. Biologists call an ecosystem in a particular habitat a 'community', but the word is a metaphor and a very misleading one. The populations of a biological ecosystem are related by such things as predation, utilization of common food supplies, and physical niches. One species may help create a niche for another, but they are not in any strict sense a community. They have no government, and no individual member of the system has an image of the total system, only a very small fraction of it. Communities of human beings, because of their capacity for communication and shared images, have potentialities for conscious control which is not possessed by biological prehuman ecosystems [282]
[The kind of misconceptions of social evolution which must be addressed: purposefulness, conscious control, superior awareness & humans as the agents/replicators]
And ecological equilibrium, even when mathematically stable, is precarious and insecure, for there is always irresistible and irreversible change in the parameters of the system. For instance, we know very little about the sources of extinction. There are far more extinct species than extant ones. Species, like individuals, seem to have something like a life span, at the end of which their evolutionary potential is exhausted and they are displaced by species whose evolutionary potential is not yet exhausted. [283]
Malthus not only saw the great 'miserific vision' of the tragedy of the 'dismal theorem', as I have called it, but also had a very real answer to it, the trouble being that the answer is unacceptable. The answer is the segregation of misery through a class structure. This has been a very common answer in the history of the human race. If we privatize the commons, we will create an upper class who owns and administers it. It will be administered well. There will be no overgrazing. The boundary between the well-managed private property and the ill-managed public estate will stand out sharply as the famous irregular pentagon in the Sahel. Order and dignity will thrive in beautiful country houses, elegant gardens, productive farms within the boundary of class. Outside of this, the lower classes will breed themselves to egalitarian misery. If the upper class breeds too much it will chase out its youngest songs and unmarriageable daughters and will keep its population at the level at which it can enjoy per capita plenty. But outside the fence the lower class goes down to Hogarthian vice and misery. The pious and puritan middle class and upper working class may be admitted inside the territoriality fence and raise themselves above misery, restricting births, expelling the surplus, and catering to the rich, but there will always be the human cesspool of the poor, whose population is checked only by misery or vice. If the class structure can be preserved, if the fences hold through a combination of the threat system, the police and the military, and the opiates of religion, nationalism, and ideology, the system is pretty stable. [286]
We learn community as we learn everything else. It is a long and painful learning process. It begins in the hunting-gathering band. Everybody knows everybody and there is very general awareness of the nature and the resources of the community itself. Consequently, in spite of the fact that it operates usually in some sort of a commons, there is control of population, usually by infanticide, for everybody knows what the territory can support. The role of sacredness in the formation of communities, especially those of larger size, is an interesting and difficult question. Religion in some form seems to be universal in human culture, which makes one suspect that it is of great importance in the development of viable communities. Sacred sanctions that overcome the more self-centered images of individual interest might prevent the tragedy of the commons because of the community identity which the perception of sacredness creates in the individual. [287]
A very important dynamic in the building up of community is what I have called the 'sacrifice trap'. Once people are coerced, or even better, persuaded, into making sacrifices, their identity becomes bound up with the community organization for which the sacrifices were made. Admitting to one's self that one's sacrifices were in vain is a deep threat to the identity and is always sharply resisted. Martyrs create the legitimacy, identity, and community of the church; dead soldiers on the battlefield perform the same function for the national state, as innumerable war memorials testify. The sacrifices which parents make for children, or children for parents, bind them to each other much more powerfully than either love alone or hatred and fear alone could possibly do. The strongest communities, indeed, are those towards which we feel ambivalent. [288]
Where the boundaries of communities are not clearly defined and mutually accepted, the disputed space between communities becomes a commons which easily turns into a battlefield. War, indeed, is another example of the tragedy of the commons. In the absence of an overriding community, competing communities get into arms races and into conflict which is damaging to both sides. [288]
The effort to substitute ritual for actual fighting is a long-continued activity through human history. It results in the development of diplomacy, royal marriages, law courts, arbitration, ceremonies, treaties, all together comprising a very large range of human activity. As conflict becomes ritualized, the commons edges towards community. [289]
It may be, however, that ultimate sustainability is not possible, simply because of the exhaustion of what might be called 'social evolutionary potential' in any particular society or organization. It is strange how we take for granted that death is a universal law of living organisms and yet we deny this in the case of social organizations. [292]
There are some very fundamental differences, however, between social and biological evolution. One is that biological individuals are biparental at most, whereas social artifacts are multiparental; hence the birth of social artifacts is directly involved with large numbers of other species. A horse can be produced by another horse and a mare; an automobile is produced by the interaction of designers, architects, engineers, corporations, trade unions, mines, ore ships, assembly line workers, salesmen, lawyers, politicians, and so on, and so on. [282]
Another very profound difference between biological and social systems is that in social systems human artifacts are made as a result of human decisions, which are very closely interrelated in human communities. Biologists call an ecosystem in a particular habitat a 'community', but the word is a metaphor and a very misleading one. The populations of a biological ecosystem are related by such things as predation, utilization of common food supplies, and physical niches. One species may help create a niche for another, but they are not in any strict sense a community. They have no government, and no individual member of the system has an image of the total system, only a very small fraction of it. Communities of human beings, because of their capacity for communication and shared images, have potentialities for conscious control which is not possessed by biological prehuman ecosystems [282]
[The kind of misconceptions of social evolution which must be addressed: purposefulness, conscious control, superior awareness & humans as the agents/replicators]
And ecological equilibrium, even when mathematically stable, is precarious and insecure, for there is always irresistible and irreversible change in the parameters of the system. For instance, we know very little about the sources of extinction. There are far more extinct species than extant ones. Species, like individuals, seem to have something like a life span, at the end of which their evolutionary potential is exhausted and they are displaced by species whose evolutionary potential is not yet exhausted. [283]
Malthus not only saw the great 'miserific vision' of the tragedy of the 'dismal theorem', as I have called it, but also had a very real answer to it, the trouble being that the answer is unacceptable. The answer is the segregation of misery through a class structure. This has been a very common answer in the history of the human race. If we privatize the commons, we will create an upper class who owns and administers it. It will be administered well. There will be no overgrazing. The boundary between the well-managed private property and the ill-managed public estate will stand out sharply as the famous irregular pentagon in the Sahel. Order and dignity will thrive in beautiful country houses, elegant gardens, productive farms within the boundary of class. Outside of this, the lower classes will breed themselves to egalitarian misery. If the upper class breeds too much it will chase out its youngest songs and unmarriageable daughters and will keep its population at the level at which it can enjoy per capita plenty. But outside the fence the lower class goes down to Hogarthian vice and misery. The pious and puritan middle class and upper working class may be admitted inside the territoriality fence and raise themselves above misery, restricting births, expelling the surplus, and catering to the rich, but there will always be the human cesspool of the poor, whose population is checked only by misery or vice. If the class structure can be preserved, if the fences hold through a combination of the threat system, the police and the military, and the opiates of religion, nationalism, and ideology, the system is pretty stable. [286]
We learn community as we learn everything else. It is a long and painful learning process. It begins in the hunting-gathering band. Everybody knows everybody and there is very general awareness of the nature and the resources of the community itself. Consequently, in spite of the fact that it operates usually in some sort of a commons, there is control of population, usually by infanticide, for everybody knows what the territory can support. The role of sacredness in the formation of communities, especially those of larger size, is an interesting and difficult question. Religion in some form seems to be universal in human culture, which makes one suspect that it is of great importance in the development of viable communities. Sacred sanctions that overcome the more self-centered images of individual interest might prevent the tragedy of the commons because of the community identity which the perception of sacredness creates in the individual. [287]
A very important dynamic in the building up of community is what I have called the 'sacrifice trap'. Once people are coerced, or even better, persuaded, into making sacrifices, their identity becomes bound up with the community organization for which the sacrifices were made. Admitting to one's self that one's sacrifices were in vain is a deep threat to the identity and is always sharply resisted. Martyrs create the legitimacy, identity, and community of the church; dead soldiers on the battlefield perform the same function for the national state, as innumerable war memorials testify. The sacrifices which parents make for children, or children for parents, bind them to each other much more powerfully than either love alone or hatred and fear alone could possibly do. The strongest communities, indeed, are those towards which we feel ambivalent. [288]
Where the boundaries of communities are not clearly defined and mutually accepted, the disputed space between communities becomes a commons which easily turns into a battlefield. War, indeed, is another example of the tragedy of the commons. In the absence of an overriding community, competing communities get into arms races and into conflict which is damaging to both sides. [288]
The effort to substitute ritual for actual fighting is a long-continued activity through human history. It results in the development of diplomacy, royal marriages, law courts, arbitration, ceremonies, treaties, all together comprising a very large range of human activity. As conflict becomes ritualized, the commons edges towards community. [289]
It may be, however, that ultimate sustainability is not possible, simply because of the exhaustion of what might be called 'social evolutionary potential' in any particular society or organization. It is strange how we take for granted that death is a universal law of living organisms and yet we deny this in the case of social organizations. [292]
1.14.1977
John Baden
John Baden, "Population, Ethnicity, and Public Goods: The Logic of Interest-Group Strategy", ed. Garrett Hardin and John Baden, Managing the Commons, San Fransisco, W.H. Freeman and Company, 1977.
We can also expect a general recognition that reduction of personal freedom necessarily accompanies high population density in a highly modernized, interdependent society. In brief, the personal costs of crowding become increasingly apparent, so that people should be more receptive to the ideal of a stable population size. [254]
Public goods if supplied privately are undersupplied.
We can also expect a general recognition that reduction of personal freedom necessarily accompanies high population density in a highly modernized, interdependent society. In brief, the personal costs of crowding become increasingly apparent, so that people should be more receptive to the ideal of a stable population size. [254]
Public goods if supplied privately are undersupplied.
1.13.1977
John Baden
John Baden, "Neospartan Hedonists, Adult Toy Aficionados, and the Rationing of Public Lands", ed. Garrett Hardin and John Baden, Managing the Commons, San Fransisco, W.H. Freeman and Company, 1977.
There is little reason to believe that the bureaucracies involved would seek to maximize net social benefits. Bureaucracies tend to be run primarily for the bureaucrats, and the self-interest of the bureaucrats tends to be consistent with that of their stronger clients. Thus, a land manager would be expected to arrive at a system that is easy to administer and police, does not significantly disadvantage powerful groups in the political system, and improves the competitive position of the agency's stronger clientele groups. [247]
Casual observation leads me to believe that there is considerable resistance to the method of rationing by pricing at equilibrium because it precludes access by the poor. This argument assumes that poor people currently do visit national parks and wilderness areas, and that alternative rationing systems would disadvantage the poor less than a system based on price. This second point suggests that for the poor, time has a low opportunity cost; that the poor can plan ahead better than the affluent and, hence, can submit their reservations earlier than others; or that the poor enjoy greater success at corrupting officials than the affluent. [249]
There is little reason to believe that the bureaucracies involved would seek to maximize net social benefits. Bureaucracies tend to be run primarily for the bureaucrats, and the self-interest of the bureaucrats tends to be consistent with that of their stronger clients. Thus, a land manager would be expected to arrive at a system that is easy to administer and police, does not significantly disadvantage powerful groups in the political system, and improves the competitive position of the agency's stronger clientele groups. [247]
Casual observation leads me to believe that there is considerable resistance to the method of rationing by pricing at equilibrium because it precludes access by the poor. This argument assumes that poor people currently do visit national parks and wilderness areas, and that alternative rationing systems would disadvantage the poor less than a system based on price. This second point suggests that for the poor, time has a low opportunity cost; that the poor can plan ahead better than the affluent and, hence, can submit their reservations earlier than others; or that the poor enjoy greater success at corrupting officials than the affluent. [249]
1.12.1977
John Baden
John Baden and Richard Stroup, "Property Rights, Environmental Quality, and the Management of National Forests", ed. Garrett Hardin and John Baden, Managing the Commons, San Fransisco, W.H. Freeman and Company, 1977.
In sum, externality is recognized by many economists and political scientists as a necessary, but not sufficient, condition for government interference with markets. However, an important form of externality is pervasive also in all government forms of organization. At best, decision makers are held accountable by the threat of replacement. They do not directly receive the gains from better management (or costs from poor management) as private resource owners generally do. [236]
If the value of timber is expected to increase, then relatively intensive silviculture would be expected of the private operator, who had estimated both the costs and the benefits from various rates of harvest and levels of investment. The same incentives do not bear upon public managers insulated from market forces. The public manager is likely to find the prospect of increasing production more attractive than a rational consideration of the marginal benefits from this increase would indicate. Growing trees is fun. [237]
In sum, externality is recognized by many economists and political scientists as a necessary, but not sufficient, condition for government interference with markets. However, an important form of externality is pervasive also in all government forms of organization. At best, decision makers are held accountable by the threat of replacement. They do not directly receive the gains from better management (or costs from poor management) as private resource owners generally do. [236]
If the value of timber is expected to increase, then relatively intensive silviculture would be expected of the private operator, who had estimated both the costs and the benefits from various rates of harvest and levels of investment. The same incentives do not bear upon public managers insulated from market forces. The public manager is likely to find the prospect of increasing production more attractive than a rational consideration of the marginal benefits from this increase would indicate. Growing trees is fun. [237]
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