Friday, March 20, 2009

The opportunity for "just-so" stories strikes me as too great.

TO BE NOTED: From EconLog:

"In Be the Solution, Michael Strong writes (p. 66-69),

Are altruists occupationally prone to anger? Well,, it turns out that they are, in fact, biologically inclined to be angry and punitive toward those who they perceive to be not being helpful.

Evolutionary psychologists believe that status is correlated with perceived community altruism because in part it was in our evolutionary interest to prevent free riders...

we are willing to punish those who do not contribute to collective action even at a cost to us, another finding that is inconsistent with rational choice...

Thus, the very fact that we have moral impulses to support the public good is necessarily intertwined with the facdt that we have moral impulses to punish those who do not (and to punish those who do not punish those who do not, and so on)...

This instinct is especially harmful when used to punish those who are perceived not punishing free riders. This is the source of the bigotry against market economics among the do-gooders: It is believed that those who describe the positive outcomes of free enterprise are not doing their job to behave punitively toward free riders, and that therefore they, too, must be punished.

In other words, because economists do not want to punish rich people, altruists believe we must be punished.

But it's worse than that. You can signal that you are an altruist not by engaging in altruistic acts, but simply by expressing a desire to punish others. For example, by taking away AIG bonuses, you do a great deal to signal altruism, even though the actual social gains from taking the bonuses away are miniscule (the gains may even be negative).

This topic of signaling and deception is worth some extended remarks, below.

1. Tyler Cowen and Robin Hanson both think that signaling and deception are very important. If you listened to their bloggingheads and cannot remember anything about signaling and deception, then you need to listen again.

2. The most original idea that Robin Hanson has about health care expenditures is not that much spending is wasted--many other economists believe that. The original insight is his explanation for high spending, which is that we encourage the health care spending of others in order to show that we care. This hypothesis has the added bonus of helping to explain why so much of health care spending is paid for by "insurance."

3. I thought that the most fascinating parts of Tyler's Discover Your Inner Economist where the parts on self-deception. I wish that Tyler would do a whole book on deception and signaling. Alternatively, maybe I should do a book on Masonomics, and include a large chapter on the importance to Masonomists of deception and signaling.

4. I think that signaling and self-deception are in the back of Tyler's mind in his blogging heads with Peter Singer. (Note that Singer's debating technique is to begin by appearing to concede Tyler's points, and then to push back. I call this the "Yes, but" approach.)

5. A reason to focus on deception and signaling is that they appear to have great evolutionary survival value. Even stupid plants have evolved powerful tools for deception and signaling, looking tasty when it is helpful and looking unappetizing when that is helpful. Animals have many behaviors that are designed to deceive--think of animals that appear more fierce than they are, for example. But in all of nature, the most powerful tool for signaling and deception is the human brain.

It is plausible that a great deal of the evolution of the brain has been to make us better players of the game of deception. Think about that.

6. A lot of mating behavior involves signaling and deception.

7. A lot of political behavior involves signaling and deception.

8. Perhaps a lot of economic behavior (think of marketing and sales) involves signaling and deception.

9. As we become wealthier, perhaps signaling and deception increase. We do not have to focus as much on meeting basic needs, so we have more energy to devote to competition for status, which is mostly a matter of signaling and deception.

10. Michael Strong suggests that altruists may be particularly inclined to punish alleged free riders. But it could be that you signal altruism by showing an inclination to punish. You don't necessarily have to be an altruist if you want to take away AIG bonuses. You could be very selfish, but coming out against AIG bonuses is a cheap way to signal your altruism.

11. On the other hand, what is being signaled by those who are skeptical of taking away AIG bonuses?

12. I am not as comfortable as other Masonomists are with using signaling explanations. The opportunity for "just-so" stories strikes me as too great. "Counter-signaling" seems to me to take signaling completely out of the realm of testable theory and into the realm of nonfalsifiability. If a peacock growing a useless tail can be explained as a signal, then what would falsify the theory of signaling?

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