Economics: Inequality

Economics:
The Purpose of the Economy
A Problem-Solving Mindset
Production and Distribution
Motivations and Incentives
Inequality

We keep hearing these days that a very small percentage of people in the world own a large percentage of the wealth, and those numbers are getting more extreme. Usually, this is meant to shock us, assuming we will automatically see it as an indication that our economy is unfair. But does it really mean that?

The first time I heard about economic inequality, it was in a bar graph in a college textbook. It was relatively flat for most of the space, shooting upward at the rich end. The final bar, the one percent, went all the way to the top of the figure, wrapped around to the bottom, and stretched to the top again. And then again. Five times.

I was surprised, but I didn’t feel it was necessarily unjust. As long as things were getting better for everybody, I thought, what did it matter if the people at the top had a million, a billion, or a trillion dollars?

We might naively think we can see how the average person is doing by dividing the GDP over all of the people, the GDP per capita. But that would only be valid if the GDP were proportionally spread across all of the people in the country, and that is not the case. To get a better picture of what is happening with the average person, we need to look at the median income. Median income takes the person directly in the middle, with an equal number of people in the country who are richer and poorer.

US GDP, adjusted for inflation, since 1993.

Median income in the US since 2000.
The red line is raw dollars, and the blue line is adjusted for inflation.

In the United States, adjusting for inflation, the GDP has been on a fairly steady upward trend, but the median income has remained about even. The amount of wealth in the country is increasing, but it is not getting distributed to the average family. This means all that extra wealth is going to people who are already in the upper brackets. This is disheartening for many people, and makes them lose motivation and fear for their financial security.

Despite this, it is still possible that the average person’s condition is improving. This is because as technology and manufacturing improves, stuff gets cheaper. With the same amount of money, people can afford more, better stuff. On the other hand, some things are getting more expensive, like healthcare and college, so that argument is somewhat flaky. We would also hope that people accrue money over time, and the median is preserved by older people passing away and younger people coming into the workforce, but that doesn't always work out.

Inequality feeds on itself. The more money you have to start with, the better education, tools, facilities, resources, and services you can afford, which allow you to live healthier, longer lives, and make even more money. The richer you are, the more influence you can have on politics and the media, turning them in your favor. Add to this the fact that there is wealth inequality between races and genders, and we have a recipe that readily triggers a lot of people’s sense of injustice.

If we see inequality as a problem, how can we go about fixing it? First, we have to ask what we are aiming for. It’s very hard to find a reasonable goal where we can say we have solved the problem. So perhaps the answer isn’t to try to make a paradise, but just to strive to make things better than they are now.

Since the problem is inequality of wealth, an obvious solution is redistribution. One way to do this is through philanthropy. It may surprise you, but there are a lot of rich people who see inequality as a problem, and donate their money to help. Another way is through government taxation and distribution programs at the city, state, or federal level, depending on the specific problem in question.

The goal wouldn’t be just to give outside assistance, but to create strong, prosperous communities. This can be done by supporting local businesses, supplementing underpaid jobs, and empowering individuals through a basic income. And there are surely many other options I haven’t thought of.

When we talk about economic inequality, we mean more than just the difference in wealth between the rich and the middle class and its rate of  change. It also matters whether the average people are getting better or worse off, and how likely that trend is to continue in the future. As are all things with economics, it’s a complicated subject, and we shouldn’t settle for answers as simple as “it’s a disgraceful injustice,” or, “it’s nothing to worry about.” It’s a real issue, not just philosophical, and that means we have to look at the real consequences, both intended and collateral, of our solutions.

Imaginary Numbers and Beyond

Everyone knows what a number is. It is an amount of something. We have the natural numbers, 1, 2, 3, … We add zero and negative numbers to get the integers. Between the integers, we have rational numbers, which can be written as fractions or ratios. And we have the real numbers, which include numbers like π and √ 2  that cannot be written as fractions. It would seem like that’s all the numbers, because if we try to fit anything else in, it counts as a real number.

But let’s do something weird. If we multiply a number by itself, we get its square. 4² = 4*4 = 16. We can do the opposite, what is called the square root. √ 16  = 4. But when we play around with this, we notice something. A negative times a negative equals a positive, so -4*-4 = 16. Therefore √ 16  = 4 and √ 16  = -4. It might seem weird that there are two answers, but that’s all right. If we find a square root in a calculation in physics, it just means there are two right answers. For instance when you calculate the moment in time when a cannonball will be a certain height after it is fired, you find it’s at that height twice, once as it goes up and once as it comes down.

But consider the following operation: √ -1  . What is the answer? It’s not 1, because 1*1 = 1. It’s not -1, because -1*-1 = 1. So does it just not have an answer? No, it does. Everything in math has an answer. If the answer can’t be found in what we already know, we have discovered something new. We define √ -1  as i, and see what happens from there. In official math, the set of all real numbers *i is called the imaginary numbers, and the set of all combinations of imaginary numbers plus real numbers (for example, 8 + 4i) is called the complex numbers.

Let’s play around with i. i*i = -1, so i*-i = 1 logically, 4i*i = -4, and the same holds true when you substitute 4 with any other number. But again, what happens when we get to √ i  ? It’s not i or -i. It’s not anything that doesn’t include i. Do we have to postulate a new type of number? Something like j = √ i  ? Miraculously, we don’t. √ i  can be written as a number that doesn’t involve j or any other letter besides i. That number is:

√ i  = 1/√ 2  *(1 + i)

Hold on. That looks weird. Let’s do the calculation to make sure it actually is the answer. We start by squaring it:

(1/√ 2  *(1 + i))²

By association, this is equal to

1/√ 2  ²*(1 + i)²

The left part is easy.

1/2*(1 + i)²

Next, we need to know the rules for how to square groups of numbers that are added together. (1 + i)² does not equal 1^{2 +} i². It equals, not forgetting the 1/2

1/2*(1² + 1*i + i*1 + i²)

We simplify this to

1/2*(1 + 2i + i²)

i² = -1, so we have

1/2*(1 + 2i - 1)

The 1 and the -1 cancel each other out, so

1/2*2i

1/2*2 = 1. So when we simplify it completely, we are left with

i

And there it is! We have just proven √ i  = 1/√ 2  *(1 + i). No new dimensions of numbers are required.

Are imaginary numbers just a math thing, or do they have applications to the real world? One significance of imaginary numbers is that they represent things that don't exist. For instance, you can calculate the moment in time when a cannonball in flight will be higher than its highest point, and you get an imaginary number. On the other hand, sometimes complex numbers are shortcuts we can take to make math easier. For instance, in the famous Schrodinger equation in quantum physics, momentum is represented by an imaginary number. We could represent it by another dimension of real numbers and put in more sines and cosines, but imaginary numbers make it a whole lot easier.

But we can do other things besides take the square root. Complex numbers obey a rule called commutativity, which means 4*5 = 5*4, and the same is true with any other pair of numbers. But what if it weren’t? In math, it’s perfectly okay to ask questions like that. For this one in particular, we get a new, 4-dimensional set of numbers called the quaternions. Their units, and their basic operations are

1, i, j, k

i² = -1,     j² = -1,     k² = -1

i*j = k,     j*k = i,     k*i = j

j*i = -k,     k*j = -i,     i*k = -j

i*j*k = -1,     k*j*i = 1

Notice the differences between the 3rd and 4th rows. If we switch the order of multiplication, we get a minus sign. This is weird, and you may wonder if it even makes sense, or if the mathematicians who dreamed it up were smoking something. To assuage your fears, there is a more intuitive way to understand it, and that is to use matrices. Although the quaternion i can be thought of as the same as the complex i, it can also be written as a matrix, as can j and k, and even 1.

To multiply matrices, you take the first row in the first matrix and the first column in the second matrix, multiply each pair of numbers in the order they appear in the row and column, add the results, and put the answer into a new matrix in the place where the row and column cross. If that was as confusing to read as it was for me to write, here is a single step as an example. Suppose we want to calculate i*j in matrix form. Specifically, we want to know what the top right element will be. To do that, we choose the first row of i and the last column of j

The top right element of the result will be

0*0 + -1*1 + 0*0 + 0*0

Or

-1

Do that with every other combination of i rows and j columns, and you’ll find that you end up with k, just like we expected. And the same is true with every other product combination. I won’t prove it here, because that would be a lot of work and no one would read it, but you can work it out for yourself if you like, or you can take my word for it. In any case, hopefully you are convinced that the quaternions make sense, and aren’t just random gibberish spouted by people who want to be seen as smart.

Quaternions aren’t just a quirk of math. They are useful in modeling 3D rotations, and they are used in all kinds of simulations, movie special effects, and video games. This goes to show that math is everywhere, and even the weird, out-there mathematics can have a practical use.

Are quaternions the end, or are there larger sets of numbers still? There are. By a process called the Cayley-Dickson construction, which I know nothing about, you can get an infinite amount of them, increasing in size by powers of 2. Beyond the quaternions there are the 8-dimensional octonions, and then the 16-dimensional sedenions, and on and on. What are these number groups useful for? Heck if I know. But it sure is fun to know they exist!

Hopefully, this discussion has shown you a glimpse into the wild depths of mathematics. If not, then at least you will be able to wow your friends with imaginary numbers, and brag that you know what the square root of i is.

The Science of Luck

Image by nitrolxstock on deviantart.

It happens to all of us every now and then. Something good happens that we didn’t expect, or that is incredibly unlikely. We get a check in the mail. We win at a game we aren’t very skilled in. The rain lets up just as we have to go outside, despite a forecast of unrelenting downpour. Then, it happens again. And again. And we get a feeling of elation, as if something unseen is messing with the fabric of reality. Or, the opposite happens. We lose the game by a one-in-a-million chance occurrence. An apple falls in the mud, and the one drop it throws out lands on our nice white clothes. And these things start happening one after another, and we feel an otherworldly sense of despair, as if the universe itself were conspiring against us. In both instances, our minds search for an explanation, and we call it “luck.”

The gambling type like to link luck with feelings, going with their gut whether or not to make another bet or play another round. The rationalist type like to say luck doesn’t exist, that it’s just an illusion. Who is right? You’re probably expecting me to side with the rationalists, being one myself. But as much as I am a rationalist, I am also a non-conformist, and I choose a third option: to examine the idea of luck from a philosophical perspective.

In our last discussion, about God, we talked about open and closed definitions, and this seems a good time to put that concept to use. If we give luck a closed definition, it would say something like, “luck is an immaterial force that is sometimes aligned with your wellbeing and sometimes against it,” and the question would be whether or not it exists. On the other hand, if we give it an open definition, “luck is the explanation of why strings of unlikely things happen,” then we are describing something that definitely does exist, and the question becomes, “what is it?”

Instead of coming up with some hypothesis to test, let’s first see what we would expect based on known science and math. We’ll start with the simplest random system, flipping a coin. If it’s a well-balanced coin, it has a 50% chance of landing on heads and a 50% chance of landing on tails. So we expect if we flip it a bunch of times, we will get roughly half heads and half tails. If we were to flip 10 heads in a row, we would say that is sufficiently far from the expectation that it counts as luck.

What is the probability of flipping 10 heads in a row? Well, if each individual toss gives us a probability of 50%, or 1 in 2, or 1/2, then the probability of each subsequent head multiplies it by another 1/2. Let’s look at what we need to get a second head. The second head is also 1/2, but it only counts if we get the first head, making it 1/2 of 1/2, or 1/4. If we want a third head, it becomes 1/2 of 1/4, or 1/8. We see the pattern, the probability of getting n heads in a row is 1/2ⁿ. Thus, the probability of flippeing 10 heads in a row is 1/2¹⁰, or 1 in 1024.

But wait, we said it would count as luck if we flipped 10 heads in a row. But if we flip 10 coins 10,000 times, we’ll see 10 heads in a row a few times by sheer probability! In fact, if 10,000 people flip 10 heads once, we expect to find several of them have flipped 10 heads in a row, and for these individuals to get excited about it.

Now extend this to everyday experiences. If the probability of something happening to any given person at any given opportunity is 1 in a million, it’s not really that unlikely. There are billions of people in the world, and they may each have many opportunities a day for 1 in a million events to happen. Although the chance at any one time is very small, we should not be surprised when we see them happening all the time, and even to the same person in a row every now and then. No magic, no mysticism, we have found the explanation for luck in good old fashioned mathematics!

This tells us something else about luck; it is only an observation of the past, and cannot be used to predict the future. When we get “on a roll,” with lots of good things happening in a row, we feel like it is more likely for the next outcome to be a good one too. But unless there is some causal connection between past events and future events, the probability of the next good thing happening is the same regardless of what came before it. The probability you will roll a seven on a pair of fair dice is 1 in 6, regardless of whether this is your first throw, or you have already rolled eight sevens in a row. Your luck so far is not a good predictor for what will happen next. There is a chance, of course—1 in 6 is not that bad of odds—but there is no mystical force influencing the outcome in your favor.

When strings of unlikely things happen to us, we shouldn’t be surprised. It’s perfectly normal, just what we would expect in a universe governed by plain old natural statistics. Maybe you think that’s boring, and I’m taking all of the wonder out of luck. But I see it as the opposite: keeping the wonder of luck in a deterministic, mathematical world. The universe is stranger and more amazing than we can fathom, and the nature and logic behind the scenes doesn’t have to change any of that.

The God of Physics

“The first gulp from the glass of natural sciences will turn you into an atheist, but at the bottom of the glass God is waiting for you.”
–Werner Heisenberg, pioneer of quantum physics.

The Helix Nebula, an amazing piece of Creation 700 light years away.

God is a complicated topic. When most people think of God, they think of God the person, a superhero-like entity who has the power to will things into existence, and to exert control over things and people once they exist. They also imagine God as the epitome of knowledge, wisdom, and goodness, a living archetype of the perfect human being. But many would say God is more than this, that there is a facet of God these two descriptions don’t capture. This is the God we are going to talk about today, the God of the universe, woven throughout the fabric of nature.

To understand this conception of God, we go back to a discussion we had a year and a half ago about the natures of things. Everything that exists has a nature, a “way that it is.” This brings up a question: why are the natures of things what they are, instead of something else? Why does General Relativity describe the nature of gravity so well, whereas Modified Newtonian Dynamics, an alternative theory, does not? Why is the electron charge what it is, instead of some other value? As Stephen Hawking famously said, “What breathes fire into the equations?” There must be something, some transcendental principle of existence that differentiates between that which exists and that which does not. This principle is what physicists call God.

“I want to know how God created this world. I am not interested in this or that phenomenon, in the spectrum of this or that element. I want to know His thoughts; the rest are details.”
–Albert Einstein

These are the equations of electromagnetism, the foundation which gives rise to light.

People have debated endlessly over whether God exists or not, most of the time getting nowhere. To help alleviate the frustration associated with this topic, I want to coin a couple of terms: open definition and closed definition. A closed definition is when you start with a clear conceptualization of something, and ask, “does it exist?” An open definition is when you start by observing something and giving it a name, and then ask, “what is it like?”

If we take God as described in a holy book, and say, “This is what God is like, and you either believe it or you don’t,” that is a closed-definition God. A closed-definition God is fair game to scientific investigation. It is often said, “You can’t put God in a test tube,” but in most cases that is not true. If God has the power to reshape nature by his will alone, then unless he is purposely trying to hide from us, we will be able to find signs of his meddling in nature; God’s fingerprints, so to speak. However, these are nowhere to be found. If we ask, “What would the universe be like if this God didn’t exist?” the answer is, “pretty much the same.” Nature goes along its merry mechanical course The weather is a result of currents and patterns and cycles in the atmosphere and ocean. Canyons are carved out by water eroding the rock away over centuries and millennia, which we can tell by examining the rock layers in the canyon walls. Life functions on biology, which is emergent from chemistry, which is in turn emergent from physics. Human societies function on psychology and tradition, shaped by our evolution and environments. Everything does what it does, moves the chain of cause and effect forward.

On the other hand, an open-definition God is another story entirely. If we look at the world and say, “Amazing! Why is it here?” and we call the answer “God,” whatever it is, then no one has grounds to say this God doesn’t exist. In fact, by its definition and the very existence of reality, this God must exist. However, we start out knowing nothing about this God. It is open for discovery and paradigm shifts and all of the things that breathe wonder into science and philosophy.

Through the early 20th century, it was fashionable for scientists and philosophers to talk about God. Today, it’s common for people in those fields to profess atheism, or at least disinterested agnosticism. This is because the emphasis of “God” has shifted back toward the personal aspect, and attention is being drawn to the negative social and political consequences of religious narratives. Sadly, much of the scholarly wonder at the mysteries of the universe has gone with it. Rare is the scientist who strives to discover the true interpretation of quantum physics, or the actual nature of physical reality.

This could change if more people realized God is not a package deal. God the person, God the archetype, and God the principle of existence are three separate concepts, and each may or may not exist independently of the others. If one does not see sufficient evidence supporting a personal God or and archetypal God, one can still believe in a universal God. For instance, I believe in the existence of God the archetype and God the principle of existence, but not God the person. I usually don’t call them God, but that’s just semantics.

“God is not He who is, but That which is.”
–Baruch Spinoza, Enlightenment philosopher

There are many great mysteries left in the universe, and sometimes adherence to religious narratives gets in the way of exploring them. But an uncompromising denial of religious narratives is sometimes no better. We need to realize that, whether you call it God or existence or fundamental reality, there is a transcendent wonder in striving to understand the mystery at the bottom of everything.

How did Life Begin?

The philosopher Immanuel Kant once said, “It is absurd to hope that another Newton will arise in the future who will make comprehensible to us the production of a blade of grass according to natural laws.” Soon after Kant died, Charles Darwin was born. And after Darwin came molecular biology.

Despite Kant’s pessimism, we have come a long way toward understanding life in terms of physics and chemistry. Darwin’s theory of evolution by variation and natural selection has been substantiated and improved upon by the discovery of DNA and genetics. We now have a robust theoretical picture of how, over billions of years, life can evolve from single-celled organisms to the variety and complexity we see today.

Yet still, one piece of the puzzle eludes us. How did the first spark come to be, when life formed from non-life? We have not seen this happen anywhere, not in nature, nor the controlled conditions of the laboratory. So far, Kant's prediction has held.

But Kant's claim is a lot stronger than perhaps even he would have meant. It is far easier to show something is possible than to prove it impossible. For instance, it was once said that there are no black swans. Nobody in Western culture had ever seen one, and it was taken for granted as common knowledge. But when explorers set out to map the coast of Australia, there they were, black swans, swimming around like nothing was out of the ordinary. The claim that we will never find a naturalistic explanation for the origin of life is the same as saying there are no black swans. To disprove it, all we have to do is find one.

How do we go about looking for a theory of the origin of life? We need to look for what all life absolutely requires, its reductionist building blocks. First is water. We know of nothing living or semi-living that does not incorporate liquid water as an essential part of its makeup. The next is organic molecules. All of the complex molecules making up life forms are constructed from small organic molecules. Finally, life needs an energy gradient. This is a technical term for “food source,” although it sometimes literally means energy is being transferred through the environment, like in photosynthesis. In the realms of physics and chemistry, energy gradients are the drivers of reactions and increasing complexity, making it look on a small scale like the second law of thermodynamics is being violated.

All three of these are common in the universe, water especially. But there is another element we haven’t talked about yet: the information the organism is made of. This consists of DNA and RNA, long chains of molecules that act like source code. DNA and RNA are only known to exist on Earth, within living or quasi-living organisms, and in laboratories. When we look for it in nature, in places we guess life might have emerged from, we don’t find it. Is this evidence Kant was right? No, because of one important factor: life already exists in all those places. Anywhere the ingredients for life could be found are swarming with bacteria gobbling it up. Once life exists in a place, we can safely bet it won’t get started there a second time.

So what do we do now? The next obvious course to investigate is the simplest life we can find. So far, the simplest natural living organism we know of is a bacterium called mycoplasma genitalium. This little bugger has less than 600,000 base pairs in its DNA. Contrast that with humans, who have billions. Still, 600,000 base pairs is far from simple, and it has a cell wall to boot. M. genitalium does not look like a good analog for the bridge between non-life and life.

If existing life is not the answer, we can perform experiments to try to make something simpler. Nine years ago, Craig Venter took the DNA from M. genitalium, deleted as much as he could, and put the results into an inert cell, creating the worlds simplest and first synthetic life form, mycoplasma laboratorium. The number of nucleotides it had was . . . still over 500,000. It was an improvement, and a major breakthrough for science, but did not get us much closer to the origin of life. At least, not yet.

However, we have not yet talked about quasi-living organisms. These are organisms that are kind of alive, but don’t replicate themselves, instead relying on the reproductive machinery of other living things. There are two kinds of quasi-living organisms: viruses and viroids. Viruses have their own DNA and cell walls, but viroids are just small closed loops of RNA. How small? Between 200 and 500 nucleotides. Not genes, nucleotides. And they don’t have a cell wall, or organelles, or supporting macromolecules.

Model of the potato spindle tuber viroid.

Now we might be getting somewhere! Of course, viroids could not be the original life forms, because they require other life in order to reproduce. Still, it is now within the realm of possibility that the first quasi-living organisms were similar to viroids. We know that small amounts of DNA and RNA can perform various types of mechanical tasks, as shown by the field of DNA nanotechnology, so we seem to be on the threshold of a solid theory of the origin of life.

You may sometimes hear people talk about the probability that life will arise on its own. But no number you hear is valid. Whenever I’ve dug into these calculations, I’ve found the math formulae that are used treat the molecules as if they are drawn out of a hat. That is not how chemistry works. To do the calculation properly, we would have to know the physics of the environment, the chemistry of every step along the way, how common such environments are in the universe, and how big the universe is. We don’t know any of that stuff, so we can’t say anything at all about the probability.

Some people don’t want to believe it’s possible that life arose naturally in the universe. Some of them just aren’t interested in the science, and don’t have the time to learn the mental skills and do the research to get up to speed. That’s understandable. Others are averse because they are loyal to a religious narrative, like I once was. Still others may be uncomfortable at the thought that human life had such a humble beginning, believing it takes away from our innate worth. This is a fallacy. Human beings are priceless and have innate dignity because of what we are. How we came to be this way has no effect on what we deserve or how we should treat one another.

Based on what we've talked about, we can construct a crude hypothesis, a guiding tool, a proof of concept. This may or may not be close to how life began, but it will stand as evidence that there is an answer, and we can find it. Here it is:

Suppose, deep in the ocean, where vents spewed heat from the Earth’s mantle, there was a soup of organic molecules. These molecules bumped into each other, reacting millions or billions of times every second, to make more complex molecules. Some of these complex molecules would fold and unfold, or spin parts of themselves around, or be attracted to certain parts of other molecules. Some of these molecules could break other molecules apart and reconstruct them. This process was random, and mostly resulted in junk. But a few made copies of themselves, which in turn made more copies. There, Darwinian evolution took root, with variations in each generation, and natural selection favoring those that reproduced better. With further generations, the molecules bonded with other, non-reproducing complex molecules, forming a symbiosis which allowed them to do more tasks. Eventually, one of these constructed a shell of molecules around itself, and the first cellular organism was born.

This process, and others like it, can be tested in the lab. One of the most interesting mysteries of all time, it's a popular subject of research. So far, there has not been a Newton for the blade of grass. But it is no longer absurd to think one will arise one day soon.

How We Choose what to Believe – Narratives and Rationality

Every moment we find ourselves alive, two questions drive us: What should we do, and what should we believe? When looking for answers, we find narratives, stories about existence and right and wrong. Many narratives gel with one another, and many contradict. Our natural method for evaluating narratives is by our narrative senses, coherence and fidelity.

If that sounded like Greek, let me explain with a type of narrative that is easy to understand: fiction. Despite fictional stories being made-up, there are things about them that “ring true,” specifically the parts that are coherent and fidelitous. Coherence is how well the elements of the story fit together and remain true to themselves, like the believability of the characters and the consistency of the science and magic. The fidelity of the story is how well it resonates with our values, like when the characters act heroically, or when its exploration of the themes includes views we sympathize with.

That’s fine for stories, but what about real life? We might naively believe we see the world in terms of facts. On the contrary, our view of the world is colored by layer upon layer of narrative, with facts getting only the smallest amount of our attention. It is our first instinct to apply our narrative senses to everything we hear, from religion to politics to science. We think we’re good at determining what is true, that we and those who believe as we do have a knack for common sense.

But this “common sense” is really just our narrative senses telling us what feels true. If we want to know what is true, we need to change the way we evaluate narratives. A method that keeps us focused on our goals and the relevant facts. We need rationality.

Rationality is the practice of forming beliefs through observation and logic. By anchoring ourselves to evidence and mathematical thinking, we can overcome the pull of narratives, and follow truth wherever it leads. Rational thinkers recognize that almost everything is more complicated than they know. They arrive at their beliefs by knowing their values, and assessing facts and possibilities to best act in accordance with those values. They keep their minds open to be changed by good counter-arguments, recognizing the difference between having a solid foundation for their beliefs and being stubborn.

I’m sure this came as no surprise. Of course we should be rational, not chase after what feels true. But knowing this in our heads and putting it into practice are very different things. It is human nature to believe ourselves much more rational than we really are. Rationality is a skill, requiring constant exercise. Our natural method of determining truth is our narrative senses, and unless we admit this about ourselves, it is likely we are not very rational at all.

I grew up believing the Earth was created six thousand years ago. I also believed myself to be rational. My mind changed a few years after I started college, and I became obsessed with the question, “Why do people believe things when there is clear and easily accessible evidence to the contrary?” You could say it has been one of the overarching themes of this blog. And now, I’ve found a narrative that just might be the answer: Rationality is not natural. The only reason anyone is rational is because they stumbled upon the rationality narrative, and it appealed to their narrative senses.

If you truly understand this, if comprehension sinks into your bones, then you see how profound the implications of this statement are. Narratives are everywhere, and their persuasive power does not necessarily have anything to do with how truthful or rational they are. Our views of the world are shaped by narratives about morality, human nature, religion, science, the nature of reality, the structure of society, justice, honor, history, and the list goes on and on. Many of these narratives use dirty tactics to appeal to our narrative senses and shield us from the rationality that would show us how hollow they are. Here are some to watch out for.

1. Trying to take control of the space of ideas allowed by language. Narratives do this by changing the meanings of words, making words taboo, or introducing new ideas in such a way as to feed the narrative. For instance, they might fiddle around with the definitions of “truth” and “rationality” to confuse people into believing the narrative is rational when it is not.

2. Pointing to individuals or groups as scapegoats. This is an effective tactic to redirect doubt and discomfort from the narrative. After all, if you’re convinced the immigrants, or the homosexuals, or the straight white men are the ones causing you problems, then you feel less need to question the narrative.

3. Treating faith in and loyalty to the narrative as virtues. If something doesn’t make sense, this kind of narrative would say, don’t worry, it’s still true; it’s just beyond your comprehension right now. This makes people feel small and insignificant, and it can be especially depressing when one believes everyone around them understands, and they are the only one who does not.

4. Using guilt and shame. Making people feel they are bad or worthless unless they espouse the views of the narrative and act in accordance with its rules. Double points if the rules are vague and contradictory.

5. Viewing interactions with people who disagree with the narrative as fights. This attitude stimulates our deep-seated light versus dark mentality, where the light is the Truth (i.e. the narrative) and the darkness is doubt, questioning, and the hearts of those who would lead you astray. Less dramatically, it manifests in the idea of using arguments to “defend your beliefs.” Discussions about beliefs should be had with an open mind and a desire to learn, not to further cement yourself into what you already believe.

6. Presenting themselves as the only alternative to another narrative which is clearly bogus. If you see the world as us versus them, and realize the “us” part has problems, the “them” starts to look pretty good. It’s the false dichotomy fallacy. If you look, you will find plenty of other narratives to choose from, and perhaps even forge your own.

Some people craft and perpetuate narratives like this for the sake of power. Others spread these narratives because they honestly believe them to be true. We find ourselves in a world full of narratives that have almost taken on a life of their own, competing with each other for dominance. Being pulled to and fro from every direction, it is so easy to get lost in the currents of narrative, forgetting our skepticism and rationality. Nevertheless, it is worth it to remain steadfast to yourself, even when the path of reason seems to disappear.

If you find your own way, forming your own narrative, observing the world around you and taking the rational and good parts from other narratives, then you will find a kind of confidence that cannot be found any other way. It won’t be a straight shot to the truth. In fact, you will constantly be making adjustments as new information comes in or you see connections or contradictions you missed before. But the goal is not to have the “right” view of things, it is to get ever closer to truth and wisdom. And having a solid structure you built yourself, which you keep crafting and tweaking and making more beautiful, is so much more satisfying than merely trusting in the stories you have been told.

Economics: Motivations and Incentives – Take 2

Economics:
The Purpose of the Economy
A Problem-Solving Mindset
Production and Distribution
Motivations and Incentives
Inequality

While reading over the past entries in the Economics series, I found the previous discussion of motivations and incentives was too narrow. So I decided to rewrite it, making it more general, and adding in a few more thought I’d had since then. I’m actually happy about backtracking like this, because the whole point of this series is to journal my economic views as I construct them, and things like this happen. So here we go, a new and improved version of Economics part 4.

In order for an economy to run, work must be done. Producing and distributing goods and services takes labor and organization. So naturally, the question arises, what motivates people to do these things?

The most common motivation for individuals throughout history, past and present, is the threat of poverty and starvation. You work, you get paid, you pay your bills. But given the opportunity, people will also work for other reasons. Some like the promise of wealth and moving up in the hierarchies of society. Others work because it provides joy and purpose to their lives. Still others have a strong sense of duty, and cannot rest unless they have given their fair share of effort toward supporting society. Others see problems in society, and their compassion moves them to help.

People also generally like to do what is right, especially if it is easy. For instance, if recycling means taking a load of trash in your car to a facility twenty miles away, not very many people will recycle. However, if there are conveniently-placed blue bins all over the place that somebody else takes care of, almost everybody will recycle.

Individual workers are not the primary drivers of the economy, though. The real economic power is in organizations: businesses, corporations, cooperatives, governments, fiefdoms, and plenty of others I haven’t thought of. Although these organizations are run by people, they can be treated as if they have their own motivations. It is an emergent phenomenon.

Like individuals, organizations have a diverse range of motivations. These could be to provide high-quality services, to solve problems for humanity, or to gain economic power (profit, in modern society). Here we find a feedback loop. If an organization makes it its goal to gain more economic power, it will become more powerful than organizations that value other things. Therefore, the organizations that have the most influence over the economy are naturally going to be the ones that prioritize accruing economic power.

This can lead to all kinds of practices that are not in alignment with the greater purpose of the economy, to provide people with what they need in order to pursue fulfilling lives. These organizations might form cartels, agreements between producers of a certain commodity to raise prices ridiculously high. They might buy out competing companies, becoming monopolies with total control over a market. They might leverage governmental influence in their favor, either through lobbying or direct political power. And they do whatever they can to raise prices and lower wages.

Organizations aiming to increase economic power can also cause collateral damage. Pollution, for instance. If it is more cost-effective to dump chemicals in the river than to properly dispose of them, such an organization is going to dump them in the river. Damage caused in this way might be temporary, or it might build up over long periods of time and cause serious damage later on. Even when it is best for all organizations in the economy collectively if they don’t cause collateral damage, it is often more advantageous for each individually to do so, no matter what the others do. In game theoretical terms, this is called a Prisoner’s Dilemma.

No matter what kind of economy we live in, we want to mitigate these negative effects of power-seeking organizations that inevitably rise to the top. Luckily, there are ways to do this. If a large number of people come together in a social movement and refuse to use a certain provider’s product or service, the organization will lose out unless they change their behavior. Workers can band together in unions to demand more reasonable wages and benefits. And the government can add incentives, like minimum wages, taxes, subsidies, regulations, and plenty of others.

It is important to note, however, that things are not black and white. It is not simply the good people versus the bad forces of the economy. Strong economies do a lot of good for humanity, and we want the Elon Musks of the world to be able to do their thing. The key is smart legislation. It is not enough to simply be “for people.” When coming up with policies, it is important to make decisions based on data and science, so we can be sure they will actually do the good we want them to do.