Daniel Rosenblatt offered this comment on the "sapphire ring and the cunning of James I" post (yesterday):
The briefest of comments on the story about James I (there is much in recent posts I want to comment on at more length, but haven’t had the time): To me the story points to the fact that markets and incentives are human inventions, tools which can serve certain purposes. Refining their design can help them serve those purposes better, or make them serve new purposes. They can’t necessarily serve all purposes, nor are they necessarily the only or best way to serve some purposes. As an anthropologist, my objection to much economic theory is not that it is interested in how markets work but in that it imagines the product of our collective agency as instead part of the natural world–imagines that there can be a difference between "intervention" and "leaving things alone."
Daniel evokes a sentiment that has currency in the field of anthropology and the ideological community from which most anthropologists come. (I hope Daniel will forgive me as I now impute to him positions he may or may not hold. I am now generalizing shamelessly.) This sentiment says, in effect, that we make too much of markets and incentives. These are after all merely "human inventions," and ‘tools for certain purposes." Economic presuppositions should not serve "all purposes and they should not be privileged as the only or the best tools at our disposal." From this point of view, economic assumptions and activities have usurped their place. They belong to one part of the social world, and they are now increasingly being made the stuff of, and the surrogate for, our "collective agency." There is still a place for intervention. We may not, we must not, leave things alone.
But let’s rehearse some of the things we know about First World cultures.
1) these societies are highly individuated. The individual is broken out of the family, kinship group, community, ethnicity, religion that once defined him. This individual is free to choose and forced to choose who he is and with whom he stands.
Further to the discussion with Deighton (last post), this means, among other things, that the individual is no longer born into but must create or enter various forms of association. It also means that the bonds of association will have less to do with trust, and more to do with incentive. Incentive is the only "friend" a fully individuated creature can rely on. All other bets are off.
At the limit, this is the "society of strangers" miracle that Sahlins and others talk about. In traditional society, trust is "decided" by ties of kinship, community, and religion. I know who you are and what I can expect of you because I can identity the group and the role that define you. In a society of strangers, where individuals are individuated, this is no longer true. I can’t know what to expect of you. Our relationship works (and work it must because there are no other architectures for exchange), only when I can read what incents you. Only then may I trust you. (This is the point of the original James I post. The monarch finds himself in a predicament where trust is not enough to protect him. He finds an incentive system that will.)
Something in the community of anthropologists (and other academics) recoils at this. They yearn for a kinder, gentler world, a small town, a neighborhood bar, in which "everyone knows your name." Here everyone has preexisting roles and with them come nice, clear specification of what everyone owes to, and may expect from, everyone else. Incentive has nothing to do with it. Trust is it.
The problem here, I think, is that these communities demand a price our individualism is not prepared to pay. These communities almost always presume to say who we are and how we must behave, not just in transactions, but in our claims to personhood, in the way we define ourselves. The ugly side of the small town, where everyone knows not just our name but our business, is that it presumes through gossip and relative inclusion to police our choices. When anthropologists yearn for the kinder, gentler community, they are always thinking, it seems to me, of a place that knows our name, but not our business, a place where we have the liberties of anonymity some of the time, and the comforts of pre-existing association when it suits us. They want, in short, to have their cake and eat it too. (And when forced to choose between anonymity and presumption, they usually choose the former. This was not true in the 60s commune or the present day cult, where people appear to trade away the liberties of self definition for the comforts of a more traditional association. And what a bad trade-off this turns out to be.)
2) Western, First world societies are broken away from cultural continuities and shared definitions. Things change. We are unmoored. There is almost no domain in which change is not constantly "on the boil. Religion, politics, family, community, entertainment, communication, all of these rewrite themselves and unmoor us.
Where does order come from in such a world? The Hayekian economist has no problem here. Order emerges from the aggregate effects of individual choices. Family is what families do. People will make their own choices, and in the process, new cultural forms will rise up (e.g., blended, same sex, single parent, two residence, no kids, or 2 pet families). Now we may decide which of these forms suit us, or whether we must engage in innovations of our own.
Anthropologists, on the other hand, are stunned by this. Emergent cultural forms are not like anything we have ever seen before. In our world, cultural forms come from ‘time out of mind convention. They are passed down to the individual by tradition. We are, I would submit, quite unprepared to think about such a world. And the solution for many anthropologists has been resounding: lets not think about it. Lets insist that this is a corruption and an inauthenticity we need not think about. Lets shut it out from the realm of discourse. What we cannot shut out, we will shout down. We will devote some of our anthropology to the recitation of the things that should be true of the world, and we will make the market place and economists the villain of the piece.
"But what about the cultural commons? comes the cry of protest. Why shouldnt culture be more like language, a shared resource no commercial interest can commandeer? I believe that a commercial culture is indeed a lot like language. It is, at least, a lot like English. English as a language is famously responsive to what people want to say. We may contrast it to French which is, as a language, a good deal more particular. When the anthropologists call for a "cultural commons they seem to me to be thinking about something that would have to be policed by an Academie Francaise. (And we all know how well thats turned out.)
The sticking point is the suspicion that cultural innovation that is "birthed by the market place must be the slave of special interest. Culture ruled by commerce must be the captive of the corporation. And thats bad, no? No. I have some ethnographic data here. I work for corporations and I watch them struggle to keep up with the innovation taking place "out there. If they are controlling or successfully manipulated this innovation, it is very hard for me to see. The image of the controlling corporation that bends culture to its will is a fantasy that can only be cultivated by academics who take the precaution of never leaving their studies, preferring instead the "intelligence fed to them by the likes of Michael Moore. Dudes, you have to get out more.
The question here, I think is that anthropologists have to start again. We need to take on the challenge of thinking about a culture that comes out of individual choices, made in markets, constrained not so much by trust as by interest, by highly individuated, highly innovative individuals who will no longer defer to what they must do, or to what anthropologists think they should do, but who engage in all that getting and spending in a society of strangers that somehow, miraculously, works. This is the miracle of "emergent order and it seems to me that we have to turn to the people, especially the economists and complexity theorists, who are good at thinking about it. Our reward? Making the miraculous a little more intelligible.
And that is the point of this blog. It will be clear to the economics reader of the blog that I have at any given moment only a rough idea of what I am doing. To use a too dramatic metaphor, I feel like someone who has escaped one of those prisons in the deep American south. You know the Hollywood stereotype. No sooner have you gone over the wall than you find yourself lost in a thicket of brambles in a boot sucking swamp. The gators are waiting. The dogs are coming. Light is fading. You have lost your bearings and your way. No, it would be wrong to say that I am entirely comfortable, but even this is better than the prison cell of anthropology. (Hey, I told you it was too dramatic.)
With thanks and apologies to Daniel Rosenblatt. Clearly, I have attributed to him things he did not say and does not think. This is the thanks he gets for contributing! Sorry, sorry, sorry.