Updating Hayek: Can 'The Market' Prioritize Well?
Hayek viewed markets as distributed-intelligence systems that evolved to compute resource allocations. We can now update that view with ideas from computer science, biological signalling, and evolution.
This is diablog 9 between David Sloan Wilson (DSW) and me (JB).
2) DSW: Hayek had two way-ahead-of-his-time insights. First, that economic systems have a distributed intelligence that cannot be located in any individual. Second, that this intelligence evolved by cultural group selection. Contemporary science — complex systems and multilevel evolution — validate those claims. But Hayek fans are mistaken to believe that his insights mean markets should be unregulated.
3: JB: OK, markets use evolved distributed intelligence to compute resource allocations. So let’s add more computer science, and ideas about biological computation and signaling.
4. JB: Hayek’s right that no “central planner” can know what’s distributed among people in markets. But computer scientists have studied distributed processing’s limits. Many tasks can’t be efficiently distributed. Most still need central coordination. Aren’t market computations similarly limited?
5. JB: Plus, free markets “compute” using only one kind of data, in only one way. Their distributed intelligence is hardwired reflexively to local price signals. That’s like having no central nervous system.
6. JB: Central nervous systems evolved specifically to enable non-reflex, non-distributed responses and decisions that prioritize for the organism as a whole. But “the markets” decide musical toilets take priority over basic needs. Their distributed intelligence invests in lifestyle drugs (here's an example currently in the news) but ignores failing antibiotics. And a mindless markets mindset suggests we can’t save the planet unless that’s profitable.
7. JB: Imagine an organism that used only one price-like signal for all its internal coordination. Human blood-sugar allocation needs eight separately varying regulatory signals.
8. DSW: Comparing a healthy economy to an organism shows that Hayek was both right and wrong. Organisms regulate a mind-boggling number of processes to stay alive. Every one of them is a distributed process — even the central nervous system (viewed closely enough). Every one was produced by natural selection: The distributed processes that work better winnowed from the much larger number that didn’t. And distributed “invisible hand” processes aren’t all good.
9) DSW: We can draw two implications for economics. First, distributed processes that work often include both the public and private sector [both central and distributed elements]. It’s stupid to think the private sector works well and the public sector just gets in the way (see economist Mariana Mazzucato’s explanation). Second, more winnowing is required for economic processes to adapt to current and future conditions. Natural selection can’t work fast enough, so it will have to be policy selection informed by evolution and complexity science.
10: JB: Effective market regulation should heed biology’s regulatory lessons. Economies, like complex organisms, need distributed reflexes and a central nervous system. They need more than one price-like signal to prioritize and regulate for the whole, and to manage systemic risks. That doesn’t happen automatically. Take, for example, the 2008 crash, in which [Alan] Greenspan confessed: Self-regulation failed).
11. JB: Centrally guided and regulated doesn’t mean “centrally planned” (Hayek and [Adam] Smith both understood regulation’s role). It’s more like steering a ship, and adjusting for shifting conditions.
This is the last post in this diablog series.
Earlier diablogs covered: (1) evolution’s score keeping (relative fitness), (2) its built-in team aspects, (3) its self-destructive competitions, (4) its blind logic, (5) how division of labor complicates, (6) why economics needs a version of evolution's "inclusive fitness," (7) why whatever your politics, you need needism, and (8) why biology shows relying on the “invisible hand” is a monumental mistake.
PS - Hat tip to Robert Kadar who provided input.
To create wiser adults, add empathy to the school curriculum.
- Stories are at the heart of learning, writes Cleary Vaughan-Lee, Executive Director for the Global Oneness Project. They have always challenged us to think beyond ourselves, expanding our experience and revealing deep truths.
- Vaughan-Lee explains 6 ways that storytelling can foster empathy and deliver powerful learning experiences.
- Global Oneness Project is a free library of stories—containing short documentaries, photo essays, and essays—that each contain a companion lesson plan and learning activities for students so they can expand their experience of the world.
Philosophers like to present their works as if everything before it was wrong. Sometimes, they even say they have ended the need for more philosophy. So, what happens when somebody realizes they were mistaken?
Sometimes philosophers are wrong and admitting that you could be wrong is a big part of being a real philosopher. While most philosophers make minor adjustments to their arguments to correct for mistakes, others make large shifts in their thinking. Here, we have four philosophers who went back on what they said earlier in often radical ways.
Numerous U.S. Presidents invoked the Insurrection Act to to quell race and labor riots.
- U.S. Presidents have invoked the Insurrection Act on numerous occasions.
- The controversial law gives the President some power to bring in troops to police the American people.
- The Act has been used mainly to restore order following race and labor riots.
It looks like a busy hurricane season ahead. Probably.
- Before the hurricane season even started in 2020, Arthur and Bertha had already blown through, and Cristobal may be brewing right now.
- Weather forecasters see signs of a rough season ahead, with just a couple of reasons why maybe not.
- Where's an El Niño when you need one?
Welcome to Hurricane Season 2020. 2020, of course, scoffs at this calendric event much as it has everything else that's normal — meteorologists have already used up the year's A and B storm names before we even got here. And while early storms don't necessarily mean a bruising season ahead, forecasters expect an active season this year. Maybe storms will blow away the murder hornets and 13-year locusts we had planned.
NOAA expects a busy season
According to NOAA's Climate Prediction Center, an agency of the National Weather Service, there's a 60 percent chance that we're embarking upon a season with more storms than normal. There does, however, remain a 30 percent it'll be normal. Better than usual? Unlikely: Just a 10 percent chance.
Where a normal hurricane season has an average of 12 named storms, 6 of which become hurricanes and 3 of which are major hurricanes, the Climate Prediction Center reckons we're on track for 13 to 29 storms, 6 to 10 of which will become hurricanes, and 3 to 6 of these will be category 3, 4, or 5, packing winds of 111 mph or higher.
What has forecasters concerned are two factors in particular.
This year's El Niño ("Little Boy") looks to be more of a La Niña ("Little Girl"). The two conditions are part of what's called the El Niño-Southern Oscillation (ENSO) cycle, which describes temperature fluctuations between the ocean and atmosphere in the east-central Equatorial Pacific. With an El Niño, waters in the Pacific are unusually warm, whereas a La Niña means unusually cool waters. NOAA says that an El Niño can suppress hurricane formation in the Atlantic, and this year that mitigating effect is unlikely to be present.
Second, current conditions in the Atlantic and Caribbean suggest a fertile hurricane environment:
- The ocean there is warmer than usual.
- There's reduced vertical wind shear.
- Atlantic tropical trade winds are weak.
- There have been strong West African monsoons this year.
Here's NOAA's video laying out their forecast:
ArsTechnica spoke to hurricane scientist Phil Klotzbach, who agrees generally with NOAA, saying, "All in all, signs are certainly pointing towards an active season." Still, he notes a couple of signals that contradict that worrying outlook.
First off, Klotzbach notes that the surest sign of a rough hurricane season is when its earliest storms form in the deep tropics south of 25°N and east of the Lesser Antilles. "When you get storm formations here prior to June 1, it's typically a harbinger of an extremely active season." Fortunately, this year's hurricanes Arthur and Bertha, as well as the maybe-imminent Cristobal, formed outside this region. So there's that.
Second, Klotzbach notes that the correlation between early storm activity and a season's number of storms and intensities, is actually slightly negative. So while statistical connections aren't strongly predictive, there's at least some reason to think these early storms may augur an easy season ahead.
Image source: NOAA
Batten down the hatches early
If 2020's taught us anything, it's how to juggle multiple crises at once, and layering an active hurricane season on top of SARS-CoV-2 — not to mention everything else — poses a special challenge. Warns Treasury Secretary Wilbur Ross, "As Americans focus their attention on a safe and healthy reopening of our country, it remains critically important that we also remember to make the necessary preparations for the upcoming hurricane season." If, as many medical experts expect, we're forced back into quarantine by additional coronavirus waves, the oceanic waves slamming against our shores will best be met by storm preparations put in place in a less last-minute fashion than usual.
Ross adds, "Just as in years past, NOAA experts will stay ahead of developing hurricanes and tropical storms and provide the forecasts and warnings we depend on to stay safe."
Let's hope this, at least, can be counted on in this crazy year.
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