The Magic of the Market Place
The magic of the market, and its genius, is simply that it is heuristic. At its best, it seeks multiple goals, such as improving community, the environment as well as personal well being. This was also the genius of Benjamin Franklin’s Junto.
The question, then, is about the goals the heuristic process seeks. Do they tend to work within the heuristics of the Constitution and the leading philosophies of the world to create something greater than the sum of the parts? Or are they in conflict with the majority of other belief systems and thus destructive?
The problem is that over the past decades the market’s goal seeking has been corrupted by greed and hubris which has badly distorted the results of “The Magic”. The market’s goal seeking has been reduced to too few goals, principally pushing the drugs of consumption and greed. When we correct this situation, we must be careful that we do not throw out the heuristic baby with the hubris, greed and consumption in the wash water.
Now it is interesting that the government is clearly far more algorithmic and prescriptive in its regulatory approaches. To wit, the FCC and spectrum: not goal seeking at all, but VERY prescriptive.
This creates a paradox. For example, the heuristic market, praised by so many, is currently enamored of the algorithmic FCC’s spectrum as scarce property model. To be consistent, the market should demand that spectrum be governed by a regulatory approach that is congruent with the market’s fundamental embrace of heuristics. If the market corrected itself and demanded a consistent heuristic regulatory approach, we would quickly move to a model of spectrum as abundant based on Open Spectrum approaches . Historically, the FCC tried to do this in the early 80s, but the algorithmic forces in the government and market killed the FCC’s innovative initiative. Today, we can see the price we are paying for this blind derailment of the evolutionary competitive process in the sad condition of our inadequate and over priced communications infrastructure when compared to many other nations. Our communications are becoming less and less competitive and competent every day. This is has the result of forcing innovation off-shore.
The consequence of this paradox is that we yo yo between governmental algorithmics in response to market failures and, at the other extreme, a market based on heurstics in response to government failures.
The answer to this internal inconsistency is neither “Communism” nor unregulated free market capitalism. It will have to be an internally consistent approach that mimics the emergent process driven by evolution. The goal of creating a continuously learning and adapting society: a resilient society, would be an improvement on the goals of consumption and greed. One of the great lessons is that the US Constitution, as much as it has survived the ravages of recent episodes of greed and hubris, is, in fact, a goal seeking heuristic document. The Constitution is not a rigidly prescriptive document.
This is the source of another deep problem. The Constitution’s goal seeking is bounded by a respect for equality, justice, limits, responsibilities and consequences The current market’s goal seeking has gone off the tracks seeking an end to limits, consequences, responsibilities and consequences. This has the effect of reducing the goal seeking to the single goal of “greed”. It also perverts the market into a fundamentally anti-constitutional force. As a result, we now see market behaviors that are lawless and without concern for truth — thus fundamentally tautological as well as anti-constitutional. This sad state of affairs has now spilled over into our government in proportion to its take over by errant market forces.
The answer to this is not to swing back to heavy duty prescriptive government, but to eliminate the internal contradictions and restore normative, multiple goal seeking within the Constitutional process with a respected system of checks and balances. In the end, nature has shown over the millennia that heuristic approaches are the most successful ways to deal the problems created by the universal state of imperfect knowledge.
Originally posted on Dewayne Hendricks’ list.
4 comments Jock Gill | Democracy, Economy, Empowerment, Politics
Dewayne’s analysis, which I agree with, still leaves us with a political question: in a greed driven economy in which donations from the wealthiest have come to dominate both the electoral process and the legislative process (in the form of lobbyists), where will the power come from to roll back the ever-increasing lawlessness that we see oozing out from behind the locked doors of the Bush regime?
The conflation of capitalism and democracy, under the rules we are now operating under, has given the powers of darkness the cover they needed to subvert the principles of democracy. However marvelous the heuristics of a well-oiled market may be, if the price of efficiency is ultimately the demise of democracy, I’m in favor of sacrificing some of that much vaunted efficiency in favor of preserving the principles of freedom embedded in the Declaration of Independence, the Constitution, and the Bill of Rights.
The market does not give an inch. And for every inch we give the market, it takes a mile. If history since 1980 (Reagan) is any guide, there would appear to be a fundamental inequality between the forces of the market and the forces of freedom that is titled against freedom and democracy. We need to be much more skeptical about the alleged virtues of unfettered markets, and much more vigilant about creating whatever rules are necessary to ensure that markets serve, or are subservient to, the values of democracy.
I read your post on Dewayne’s list recently; a thoughtful and provoking piece. I took your idea of “heuristics” as a way to explain the swinging pendulum of capitalism in this country, and the result of good ole human greed and avarice when it swings too far in one direction. You seldomly hear people discuss what happened in the 30′s in this country. Well, we may just get another chance to continue that discussion in our lifetime. There are some who think it is just this type of upheaval that will be required for any substantive change. Such is the state of despair and cynicism in our country today. I think some lovers of freedom silently hope for it.
Yours is a beautifully practical idea and I must say, I thought of Plato’s Republic when reading it. In a similar way, he offered a systemic, prescriptive formula for preventing bad government and nurturing a dynamic where the probability of good government would inveigh against human frailty. Subsequent thinkers have thought him naive. True, this isn’t the 4th century BCE, but if that is so, why is the course of Western thought still grappling with his core ideas, many of which are expressed in that very work, “The Republic”? Perhaps the notion of good government via Democracy isn’t so naive. Don’t we all benefit from “good government” in the way Plato describes?
However, the cynicism within, and that surrounds our system, is reinforced by the ideal of individual advantage and the “virtuous resilience” of our laws and cultural ethics to accommodate it. The “greater good” is then clearly just a political prop for gaining power. The attainment of vast individual wealth props up that power in the name of the “free market” and the current Constitution becomes servile to an ethos of lust for power and greed; a culture of ignorance. Doesn’t that heuristic tend to take on a life of its own as well? What does it care for justice, good government or an engaged community and populace? We have real experience of that phenomenon in the 20th century as well. If unchecked power is inevitably corrupt, which the authors of the Constitution understood very well, how did we come to this present juncture in a country that is the oldest living Democracy with a working model of checks and balances?
There are so many changes required in all three branches of government (the fourth estate of the press has forfeited its relevance for the same reasons), but the Constitution must now be the place to start. I thought I would never, ever make such a statement, but here I am doing it. In fact, your article reminds me again of the notion that it is necessary, or as you said, to “eliminate the internal contradictions and restore normative, multiple goal seeking within the Constitutional process with a respected system of checks and balances.” I agree that we should build on what we have. But, the current Constitutional system doesn’t work for me and as you might also say, needs to “evolve.” That’s an understatement! It’s more like a revolutionary evolution. In nature, that often means after some catastrophe but the Constitution’s hold is so tenuous now that any upheaval could destroy its opportunity to evolve. IMO, the Constitution needs to be thought-through with a major, “non prescriptive” revision applied, and we need to take stock in ourselves in understanding the numerous abuses we have endured in its name. Throw out the useless and keep the good stuff, and expand on it. After 300 years and the experiences of my generation alone, this seems appropriate to me now, if not overdue.
I often think of the words of Rousseau these days. “Man was born free and everywhere he is in chains.”
Yes. Put the pot on high heat. Stir when boiling. Leave on high heat, and then stir some more.
Charles Brown
During arguments about strategy in the Vietnam antiwar movement, I vividly remember the certainty of some of the splintering factions of SDS that the only way to make things better, which in this case meant getting to “the revolution”(whatever in hell that was), was to make things worse.
The temptation to seek redemption through pain, even self-inflicted pain, is a very old one in the civilizations of the last 10,000 years.
Yet as the Vietnam antiwar movement learned so bitterly at the hands of Richard Nixon and his henchmen, making things worse, far from igniting revolutionary acts transcending the old order, could just make things worse.
This argument plays out today constantly across the blogosphere in the angels-on-a-pinhead argument about how activists should interact with the Democratic Party. There is a deep confusion about strategy and tactics in this debate, with far too much time spent elaborating procrustian manipulations of the party, stretching it to the left, pulling it to the center, leaning to the right–as opposed to developing a strategy that takes whatever tactical advantages are possible to take of the resources of the Democratic Party, but not making the strategic goals co-terminous with those of the existing Democratic Party leadership.
Our opponents like nothing more than seizing on those occasional public statements which either imply or even directly suggest that some terrible national crisis is necessary to correct what is wrong.
While history is far from an infallible guide, my own reading of the 20th century suggests that periods of great economic distress tend to favor the rise of authoritarians and fascists, whose message of security through strength is reassuring to those in fear. Bush has taken great advantage of this dynamic in leveraging the horrors of 9/11.
Yes, it’s true that the Great Depression created conditions under which Roosevelt and the Democats of the time were able to pass legislation which could not possibly have passed under more normal circumstances, like Social Security.
And an economic crisis brought on by the subprime meltdown might eventually lead to such ameliorative legislation at some point in the future.
But I admit to being frightening by the many ways in which Bush and his lawyers have strengthened the power of the executive branch to act unilaterally in times of crisis, with the power to define such a “crisis” resting entirely in the hands of the rogue President.
Amending the Constitution seems like a very unlikely answer to the problems we face at this point. I would be happy if voters simply understood and were willing to vote for or against candidates on the basis of the candidates upholding the provisions that are already in the Constitution.
Unless the Congress, backed up an organized and aggressive movement, is willing to exercise its power, no amount of fiddling with the Constitution will save us.
Ten years ago, who would have imagined the Congress lying supine while the President claimed the right to unilaterally designate any American citizen an “enemy combatant,” lock that citizen away with no access to a lawyer or to the courts, and to hold that citizen until the person’s death without ever charging him or her with any crime.
Yet that is the country we live in today. No change in the Constitution by itself can protect us from such blatant lawlessnes. Unless free men and women are prepared to stand up and fight, even to give their lives in that struggle if necessary, we are on the edge of losing our freedoms and our republic.
[Posted with permission.]
Richard,
Thank you for your comments. You make many good points with which I agree, thank you. I draw essentially the same conclusion that you have below. And, I am in complete agreement with your last paragraph.
The intractable problem that I see is effecting change under the current system. Congress is corrupt.
When we have had strong leadership like Jefferson, Madison, et al, to mitigate and humanize the forces of greed, avarice and ignorance, our system works reasonably well. We are experiencing a time now where the Congress and the Executive are both corrupt. Their combined power is overwhelming for the courts, which are unable to respond in a timely fashion anyway, and the fourth estate is MIA. This seems to me to be the cause of the despair of the populace. People are angry, but they are also leaderless and powerless. They decry the choices they are offered at election time. They despise their current leaders and the grooming factory that molds the next generation of political leaders.
The probability of Congress standing up for our Republic on any substantive issue that doesn’t involve pandering to the lowest common instincts for a reelection vote or with a $ sign on its head, are minimal.
Another ominous sign is that the political system is attracting only mediocre people. As in any bad organization, good people leave.
I propose just one Amendment, and that would be to define how political campaigns are financed. Power itself is enough of a corrupting influence so the first step is to get the money out of the process. Otherwise, we always have Hobson’s Choice, which is not choice at all.
I am not a skeptic by nature or temperament. I prefer to think of my views on this subject as realistic rather than cynical. But I have no confidence, zero, that Congress will ever be able to reform itself. I’m not proposing that we roll a guillotine into the Capital Mall, but I do think it must be forced down their throats like the bad-tasting medicine it will be for them and their minions. For this, I see an Amendment as an effective method so they can’t legislate it away later, assuming it can be done.
I would put it only slightly differently. Our Republic will most certainly fail without leaders of substance and integrity, as the Roman Republic and the Athenian Democracy before it, dissolved into clouds of greed and corruption. Our system must have a way to allow people of integrity and vision into the political process, and for the people to sustain them once they have found an honorable representative. If the people can’t tell the difference, we are doomed anyway. Let’s at least remove the temptation to buy influence with the populace with games and bread.
Charlie