First Steps

In the step by step evolution revolution, what might be some of the first steps? There are many, many  possible first steps we could take in moving away from our present system towards the just distribution we want. We should not spend too much time debating which of several possibilities is the best one to try first. Think about it, analyze it, yes. But remember there is no perfection. There is no way to know which of several possibilities is best. We cannot accurately predict the future in detail. (See Kahneman’s chapter “The Illusion of Validity”.) There is no grand theory to guide us. We have only our goals to guide us. The only way is to try something that seems like it would move our systems in the direction we want. If, after we make the change (in our laws, in the way our system works) we look at the result after some trial period. If the modified system is closer to our goals, keep the change; if it is not, or if there are negative unintended consequences, then reverse that change and try something else.

Here are some possible first steps.

Change our unemployment insurance system so that when people are unemployed they get more money if they go to some school to improve their skills and knowledge.

Go back to a free education system for all people through college and graduate school.

Limit credit creation since unrestrained credit creation by banks seems to be a root cause of cycles of booms and busts, bubbles and crashes.

Separate commercial banking from financial speculation (gambling with other people’s money).

Limit the level of allowed derivatives. No more derivatives of derivatives of derivatives …  No more CDO’s squared, etc.

Devise and implement a system for electing legislative representatives that does not depend on candidates spending (or others spending for them) large amounts of money.

Eliminate victimless crime laws.

All time in jails and prisons to have an education component, say, eight hours per day developing useful skills and knowledge.

All education to include significant components for developing interpersonal communication skills, developing improved thinking, eliminating precursors to the various mental illnesses such as phobias, paranoia, depression, etc.

Pay people a livable wage to educate themselves to a level that allows them to be productive members of our societies as if educating oneself were work, since it is work.

Change the money system. Adopt Modern Monetary Theory (MMT). Governments speed up research and development of non-carbon emitting energy production. Tax carbon emissions.

Break up large corporations. Beyond a certain size corporations become less efficient. When they are too large they are dangerous, too powerful, destructive of the well-being of others, uncontrollable, the leaders can’t possibly know what all the parts are doing, and they have the same deficiencies as communistic systems — they are too complex for central planning to work, they are subject to looting by employees, executives, and others.

Tax excessive inherited wealth out of existence or down to some reasonable size. Heirs surely don’t do anything to “deserve” their inherited wealth.

Reestablish the rule of law.

Establish a practical concept of just law whereby courts could declare laws or parts of laws unjust and thereby nullify them. Laws would be unjust if they mainly benefited select individuals or groups and harmed the people as a whole or the system as a whole. The details here would be critical, but the idea does not seem impossible.

Require Congress to declare war per the Constitution and to reauthorize each war in each country yearly. War would mean any military, covert, or other activities carried out by any agencies of the government whose intent is to capture, detain, torture, physically harm or kill people or to destroy other people’s property.

I could go on and on, but this is enough for now to give you some ideas about how we might begin to change our systems to move them closer to our goals of a just distribution system. Remember each of these is a possible first step. Some are bigger steps than others. And of course other people have good candidates too. There are many good ideas. We might try several at a time, but we must be careful because if we try to change too many things at once, we run a greater risk of negative unintended consequences (or maybe some positive unintended consequences). And if the outcome is good, we may not be able to separate out the effects of each action. So we shouldn’t try too many at once. Then after some period of time when we have had enough time to verify that the changes made have moved our systems toward the just distribution goal, we can evaluate, estimate, analyze, guess, a second step and then try it for some period, etc. Maybe the evaluation period will be built into the law — for example the laws to try a step might be written to expire after two years, or five years, or whatever seems reasonable; and if the step wasn’t successful, don’t renew the law. Thomas Jefferson suggested that all laws expire after twenty years. That still might be a good idea.

Speeding up Cultural Evolution

In previous posts I have discussed deficiencies in human thinking as described in Daniel Kahneman’s book “Thinking, Fast and Slow”. The discovery and explanation of these deficiencies can reinforce pessimism. We might conclude that human thinking is so messed up that we are doomed to failures, confusions, mistakes that it’s a wonder we ever do anything right. Our economic theories are mostly crap; our democracy has been captured by the 1%; wars continue. Our understanding of human thought and behavior is wrong. Why bother to try to change or improve anything. Since our thinking is full of errors, confusions, illusions, delusions, conceits, and unwarranted optimism we would be foolish to try to fix anything that isn’t working or is working poorly.

If unwarranted optimism is bad, unwarranted pessimism is much worse since unwarranted pessimism leads to inaction, depression, and even death.

So how can we be optimistic after reading “Thinking, Fast and Slow”? We can be optimistic because we can see it as part of the larger process of cultural evolution. Groups of humans more or less working together — families, tribes, clubs, associations, corporations, towns, cities, states, nations, all organizations — change and evolve their social and individual behaviors by discovering, generating, assimilating new ideas through doing science and art and other social and individual activities. We invent new things, we make inspiring movies and videos, we speak and write stories and novels and poetry, we create images, symbols, illustrations and paintings. This is the process of change and evolution of human groups and of human cultures in general. Evolution is more than just change. Evolution builds on what came before. Change could be anything. The way cultures change is by building on what they already have. Thus cultures change through evolution.

Kahneman provides scientific facts about mistakes in human thinking he and other psychologists discovered by doing psychological experiments on groups of people living mostly in the last half of the twentieth century. Some of the mistakes in thinking he described may result from the physical structure of the human body and brain. Examples might be certain optical illusions and the fact that our memories do not store all the information about an event that we have at time of the event (see the cold hand experiment — Kahneman p. 381-383). A person might think that if a deficiency results from such structural factors that the error is then inherent to the nature of humans. But humans are adaptable. I am not saying that we can learn to store in our memories all the relevant information for the cold hand experiment (although I suspect we could with training), or that we can train our sensory systems to avoid sensory illusions. But we can, if are aware of dangerous situations, if we learn the categories of situations in which mistakes sometimes or often occur, then we can work around them, we can avoid them by thinking in a different way. As Kahneman said:

“The way to block errors that originate in System 1 is simple in principle: recognize signs that you are in a cognitive minefield, slow down, and ask for reinforcement from System 2. This is how you will proceed when you next encounter the Muller-Lyer illusion. When you see lines with fins pointing in different directions, you will recognize the situation as one in which you should not trust your impressions of length. …” — Kahneman p. 417.   

So Kahneman discovers and spreads the word about deficiencies in human thinking. This is not bad news. It’s good news. Now we know more about mistakes we often make and so we can correct these mistakes, work around them, or otherwise avoid them. This is progress. This is cultural evolution at work.

Most importantly, this new knowledge, as it spreads through the human population, will speed up cultural evolution since cultural evolution depends on human creativity which depends on human thinking, human choices, human decisions. So if we can learn to think better, learn to make better choices, learn to make better decisions, this will help us create new useful and beautiful things, help us create more humane and just social arrangements, improve our own individual behavior both with respect to ourselves (improved physical and mental health) and it will improve our behavior with respect to others.

There are many other things which have speeded up and which will speed up cultural evolution in the future besides just improving our thinking. Some are: cooperation, competition, care for others, maximal individual freedom, democracy, art, science, engineering, many human inventions such as writing, printing, mechanized farming and transport, mass education, computers, expansion of interpersonal communications (cell phones, the internet).

And for the future, to speed up cultural evolution, very shortly after now, maybe directed non-violent revolution — a pushed non-violent evolution towards a world whose economic and political systems will more justly distribute the goods produced by humans as a whole so that each individual person has the basic human necessities in order to live and thrive. These include food, clothing, shelter, education, health, maximal individual freedom consistent with the freedom and well-being of others, all in accord with the earth’s limited resources and preserving other life on earth.

This is not impossible. We can adopt this goal and work toward it. We will modify our economic and political systems carefully, one step at a time, always with the goal in mind, evaluating each step (did it get us closer to the goal, did it cause harm, did it have any unintended consequences). Then repeat, repeat, repeat. This is trial and error. But trial and error is mostly all we have here or in any other human activity. The grand, glorious theories have failed. Forget them. Maybe take some parts of them, some smallish principles, and see if we can use them to modify our present systems and move us closer to our just distribution goal. Since this is a non-violent evolution we must build upon what we know now. If some idea from our present systems would seem to bring us closer to our goal, use it, try it out, test it to see if it actually does work to bring us closer to our goal.

But look for new ideas too. Especially those which look likely to speed up our directed revolution.

Perhaps the very idea that there is some grand and glorious theory that can explain, model, and predict human economic behavior is itself a monstrous example of the Illusion of Validity. See Kahneman, chapter 20, “The Illusion of Validity”.

The very idea that such theories exist, or must exist, or could exist if only we could find them leads to a lot of wasted time and mental energy. Worse this idea is pernicious for at least two reasons. First is that the current candidates for grand theory are so wrong that they cause serious harm in the real world. Second, when people glom onto one such theory as the correct theory, the one and only true way, they cut themselves off from the possibility of change, and they try to cut everybody else off from the possibility of change and improvement too.

These are reasons why the revolution must not glom onto any grand economic type theories. Discard them all: Capitalism, Socialism, Communism, Anarchism, etc. (What other “ism”’s are there?). At most take pieces, smallish parts, maybe certain principles, certain ideas from any of them which look like they might make sense, might work in a new pragmatic framework that is being evolved carefully from our present system, and then adopt provisionally, check, test, evaluate, to determine if this old idea might actually work in our new evolving system to actually bring us closer to our just-distribution system.

Down with Grand Theories. The only test for any modification of our systems, any policy change, any new law, should not be does it conform to some theory, but rather it should be: Does it bring our systems closer to our just-distribution goals.

Ideas Diffuse

We are looking at the possibilities for the revolution that may result from understanding some deficiencies in human thinking as described in the book “Thinking, Fast and Slow” by Daniel Kahneman. The basic idea is simple and to some people obvious: If we understand biases, errors, mistakes in human thinking then we should be able to fix or avoid them. Let’s not waste time by getting into the “strange loop” (See Douglass R. Hofstadter’s “I am a Strange Loop”) of whether we are trapped since if human thinking is defective, how can we think our way out of it using our defective thinking? The answer is simply that human thinking is not perfect (nothing is) but it is useful, it works for us in many situations. Besides what else do we have?

I have argued that as human culture evolves, we will incorporate the scientific knowledge about these deficiencies in almost everybody’s minds and thus almost everyone will be able to avoid many or all of the errors and mistakes described by Kahneman. This is how cultural evolution works. New scientific knowledge is discovered. If the new knowledge is sufficiently useful to individual people then it should diffuse to almost everybody in some period of time. New knowledge can also be pushed by our social institutions — schools, churches, corporations, governments, any groups or organizations, as well as by individuals. And to better make a revolution, we should push this new knowledge, since for one thing, it will make propaganda less effective.

Simple. A nice, simple, coherent story. Just the kind of thing System 2 likes and sometimes accepts too quickly. We all know simple explanations can be wrong. There is nothing new about that. But I don’t think this explanation is wrong. Besides I’m going to elaborate this explanation, I’m going to make it less simple. And I am not just relying on my intuition or anyone else’s.

So, let’s look at a specific example. I ended an earlier post with the claim that some day there will be no more stock pickers. This is an example of the above type of argument. Research for more than 50 years has shown that stock pickers cannot consistently beat the stock market averages.

“Although professionals are able to extract a considerable amount of wealth from amateurs, few stock pickers, if any, have the skill to beat the market consistently, year after year. Professional investors, including fund managers, fail a basic test of skill: persistent achievement. The diagnostic for the existence of any skill is the consistency of individual differences in achievement. The logic is simple: if individual differences in any one year are due entirely to luck, the ranking of investors and funds will vary erratically and the year-to-year correlation will be zero. The persistence of individual differences is the measure by which we confirm the existence of skill among golfers, car salespeople, orthodontists, or speedy toll collectors on the turnpike.” — Kahneman p. 214.   

Yet, after 50 years of scientific research showing that trying to pick stocks is a waste of time and money —-

“… Typically at least two out of every three mutual funds underperform the overall market in any given year.” Kahneman p. 215.

—- there are still large numbers of mutual fund managers and individuals who think they have a skill to pick stocks and are still trying to do it. What’s going on here? Doesn’t useful knowledge diffuse? In the above formulation I said “in some period of time”. OK, so there is a fudge factor. Just wait. 50 years isn’t long enough.

This is too simple. It doesn’t really explain anything. Why is 50 years not enough time for the stock picking idea to die out? Kahneman has some relevant comments:

“The illusion of skill is not only an individual aberration; it is deeply ingrained in the culture of the [financial] industry. Facts which challenge such basic assumptions — and thereby threaten people’s livelihood and self-esteem — are simply not absorbed. The mind does not digest them. …” Kahneman p. 216.

“Finally, the illusion of validity and skill are supported by a powerful professional culture. We know that people can maintain an unshakable faith in any proposition, however absurd, when they are sustained by a community of like-minded believers. Given the professional culture of the financial community, it is not surprising that large numbers of individuals in that world believe themselves to be among the chosen few who can do what they believe others cannot.” Kahneman p. 217.

OK, here it is: Facts which challenge basic assumptions are not absorbed.

And the more a new fact is perceived to challenge a person’s livelihood or self-esteem, the more quickly and completely and silently is that fact ignored by individuals and by groups. So the reason stock picking isn’t dead yet is because the idea that stock picking is useless has been prevented from entering the financial community by those in that community. Maybe our cultures are collections of cults. Cults deliberately try to isolate their members from outside influences. They don’t want any new ideas coming in and changing things.

The sea of human ideas is not uniform enough so that any idea can diffuse anywhere. There are partial barriers, compartments enclosed by semi permeable membranes that ideas have to cross. An idea — in order to get into the mind of any individual person and stay there and be used by that person — has to fit in with the ideas that are already there. If a new idea contradicts an idea already there, much mental work will need to be done for it to fit in. So the idea that stock picking is useless will have a very hard time getting accepted into the minds of stock pickers.

Is the idea that useful knowledge will diffuse to almost everybody itself useless? No, because in addition to passive diffusion, there is also active diffusion. Ideas can be pushed deliberately through human communication, education by social institutions, organizations, and individuals.

Ideas don’t exist in isolation. They move around together. So multiple ideas have to be spread together or in some sequence where the earlier ideas prepare the way for later ones. Stock picking may only fade away when our present broader financial systems are changed drastically because of their failures and the great harm they have caused and are causing to our societies. We must help to modify the cults of our present financial systems. We must decrease cultish thinking in general — any systems of ideas that close themselves off from new scientific knowledge. To make a revolution, we will have to push many new ideas at once.

One curious consequence of Kahneman’s book may be a reluctance of people to study and try to understand and use the discoveries about human thinking described in the book because it can be demoralizing to contemplate all the many ways all of us so often get things so completely wrong. Who would want to risk commenting on these mistakes in human thinking and in the process make some of the mistakes being commented upon? I am probably one such person. But we need to try to understand and use this new knowledge. Otherwise, why did Kahneman (and other psychologists) do all this work?