Thursday, October 24, 2013

Centralization and the Inverse-Square Law

The fundamental tension between planning and discovery forces utopian philosophers to walk a tightrope between their visions and our choices.  

The farther away you are from something, the less you know about it.  Information decreases by the square of the distance.  At about a kilometer or half-mile, it is difficult to know whether a vehicle is moving toward you or not.  Outdoors in a meadow your indoor voice for the kitchen is ineffective at about 10 meters (30 feet).  The boss in her office knows much less about the shipping dock than the workers who are there. The President of the United States knows very little about your needs.  

Trading the specialized division of labor among ourselves delivers to the participants greater rewards than are possible (even conceivable) in a world of self-sufficient generalists.

Organization lowers transaction costs and rationalizes the allocation of resources. Rather than just instinctively grabbing whatever is available, think things through a bit. Use your imagination to create possible outcomes. Then choose among them. Keep records. Then, when you try different ways to achieve a desired result, you will know whether and to what extent one or another methods or procedures or formulas is better, perhaps (nominally or putatively), the best of all possible.

Entropy is the barrier to the organization of specialized labor. Information lowers entropy. Market price measures entropy because market price is information about how much resistance must be overcome to achieve a desired result. 

Trade began as ritual gift exchange. Gifts create reciprocities, if only in the intangible of good will which creates the potential for other exchanges.  Trade became a social pattern that allowed rational actors to maximize their real gains and their expected gains.  The exchange of tangibles is the trading of information. 

Christopher Hitchens was a rational man. He was never recorded to have initiated force against another human being. He was also a member of the Socialist Workers Party and an admirer of Leon Trotsky who commanded the Red Army in the Russian Civil War. Therefore, the passing of Christopher Hitchens leaves unanswered how he would have imagined the consequences of one person offering another person a novelty (sea shells daubed with red ochre or a silver coin) in exchange for help with a project.  That is the story of Ayn Rand's Anthem. Fundamentally, all choices are the desire to discover electricity and invent the lightbulb.

But not all choices are equally informed. Higher entropy brings worse outcomes.  Better information lowers transaction costs.  Smarter people can foresee the errors committed by others, thus the name Prometheus (Fore-thought), whose brother Epimetheus (After-thought), gave all the claws and fangs and hides to all the other animals, leaving Man defenseless.  Prometheus gave us fire. And so, utopians such as Christopher Hitchens - as well as Ayn Rand, if not Leon Trotsky - perceive the potential of a world in which all people are as rational as they are.  To me, that would be a world without religion and without government. But "with" what I cannot imagine. That better day will come... 

In the mean time, the inverse-square law limits both Hitchens and Rand. They were metaphysically constrained in their ability to perceive the future of humanity.  The broad latitudes of science fiction offer a wondrously more varied array of expectations. But all we here and now can do is to hope for the future while we attempt to manage our own lives in the mutable present.

Workers Paradise Promised an End to Money
The Cure for a Failing Empire
Monsters from the Id

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