Frontiers, or Values as Instruments

There is no larger North American metro area colder than Minneapolis- St. Paul that is larger than Minneapolis- St. Paul. We are on the size-cold frontier. But the same might be said for Edmonton, Alberta and Barrow, Alaska, as well as Mexico City.

On the brawn-brain frontier, Stanford ranks highly, no university with smarter students has a better football team. Cal-Tech might say the same. As might Ohio State in 2015.

Combining different things into a single metric is inherently arbitrary. Economics likes to monetize everything, so instead of noise, we have monetized noise externality, which is directly comparable with monetized time, monetized crash death, and monetized air pollution.

In the end this is sometimes useful, especially at the margins. We have to decide how to spend limited money to reduce pollution vs. increase safety vs. reduce travel time. But this is also problematic, especially when dealing with wholes.

People don’t think that way. And people don’t think that way because nature doesn’t reduce to a single metric. No amount of nitrogen in the air could offset too little oxygen (while 100% oxygen would kill you, so something needs to dilute it). We are advised to have a balanced diet. Some things are inherently un-substitutable, and therein lies a conundrum for comparing alternatives.

To oppose something, you just say you value X and Y, (transportation and the environment), but some aspect of the environment is irreplaceably special, so you can’t have your transportation project. And it is special, and strictly speaking it is not perfectly replaceable. Facts are on your side. Unfortunately the idea of “utility” is strictly theoretical, and not something people actually possess in their society of mind.

Arguments about projects and policies are usually over unstated values not facts. And if the arguments were good faith, people would clearly state their values, agree on the facts, and then some democratic process would resolve the values and achieve compromise, side payments, and so on. People would go home, a decision would be reached, and we could move on with the next thing.

Instead the arguers corrupt truth and self-select facts to achieve rhetorical aims, without consideration of the longer term consequences of devaluing what objectivity actually does exist in the world (it sometimes goes by the name of ‘science’) and destroying trust in the democratic process in general.

We individually assume that we want to achieve the best trade-off for ourselves (the most house in the best climate) subject to budget constraints. Certainly economists assume that.  I can have a smaller house in California or a larger one in Minnesota. California has (or at least had) a better climate than Minnesota.

Society “wants” the same thing, except society doesn’t “want” anything. The simple illustration demonstrates convergence to a single preference is not guaranteed.

  • Alice Likes Blue over Green over Red
  • Bob Likes Green over Red over Blue
  • Chuck likes Red over Blue over Green

From which logic tells us:

  • Two people like Blue over Green
  • Two people like Green over Red
  • Two people like Red over Blue.

So Blue is preferred to Green is preferred to Red is preferred to Blue. Ergo, society does not have  well-defined preferences. I will argue people are individually just as irrational, since our minds are themselves just a bunch  of individually networked neurons. Sometimes I like Blue, sometimes green, and it may be entirely unpredictable by an observer. Some people are sufficiently self-aware to identify their own contradictions (Walt Whitman for instance said: “Do I contradict myself? Very well, then I contradict myself, I am large, I contain multitudes.”) Most people are oblivious to this fact, others in mere denial if not self-denial.

And if people don’t know what they want individually, how can society? We devolve into deferring to the most confident sounding, the brashest, the blow-hardiest, the strongest, the wealthiest, to avoid being eaten by the lion.

Strong opinions, weakly held” is a strategy to address this. Yet if someone changes their opinion, they are criticized as a flip-flopper, and are assumed to be easier to roll in the future. Keynes had the best response: “When my information changes, I alter my conclusions. What do you do, sir?” Institutions in particular fall prey to the infallibility doctrine, that if they admit one of their decisions was wrong, any of them might be.

We try to operate at the frontier in production space in economics, anything else is an inferior solution.  Why be not as smart and not as strong (good at American Football) as another university? And if we are not on the frontier (football skills vs. IQ) we thought we wanted to be on, redefine terms of the argument (maybe we educate more students or are more equitable, maybe our city is Windier than any larger city instead of Colder). But we need to be flexible in our thinking and pliable in out goals to have the nimbleness to identify our competitive advantage.

In short, our values are arbitrary, we believe them so as to make ourselves superior in some dimension or set of dimensions, so we can feel good about ourselves and have high status in some clique (which presumably has evolutionary payoff). We convince ourselves that one particular value trade-off is what we actually care about, and internalize this belief so we can better convince others. My final quote is Upton Sinclair ““It is difficult to get a man to understand something, when his salary depends on his not understanding it.””