Sunday, March 10, 2013

Incentives and political philosophy

In Incentives: Defining and classifying incentives, I tried to define and classify incentives. Briefly, "An incentive is a social institution that encourages some or all citizens to do what they would not do without the incentive." I classified incentives into five broad categories:
  1. Psychological incentives - ways that individuals reconcile conflicts within their own minds
  2. Natural incentives - hunger, thirst, etc.; ways that "nature" impels us to do certain things
  3. Coercive incentives - ways that social institutions make people do things they just don't want to do
  4. Negotiated incentives - trade, reciprocity, quid pro quo
  5. Game-theoretic incentives - social institutions to change Prisoner's Dilemma or Snowdrift/Chicken games to win-win games

Interestingly, we can broadly classify political philosophies using this classification of incentives.

Moralist political philosophies say that there are things people ought to do, but that they just don't want to do, at any level; a sound society, therefore, requires coercive incentives to make them do it. For example, a moralistic political philosophy might say that people really do want to kill each other, and must be actively coerced (or tricked) into not doing so. Plato's Republic, for example, is moralistic through and through: the masses simply do not even perceive reality; therefore, their desires cannot possibly reflect reality. Only the philosopher-kings and -queens can perceive reality, only they can know the good, and therefore they must rule the masses for the masses' own good. Plato relies almost exclusively on fraud, but fraud is just as coercive as force. Moralistic political philosophies are necessarily elitist, because the common, majoritarian prevalence of natural incentives is insufficient for creating a good society, a society where the masses do what they ought to do.

Liberal political philosophies take the opposite view: natural incentives are, at a sufficiently abstract level, a basis for a sound society. In the liberal view, the chief impediment to the good is not that the masses fundamentally do not want the good and thus have to be forced or tricked into the good. Instead, the chief impediments are game-theoretic problems: everyone naturally wants a degree of mutual cooperation in some things, but without a state (or state-like social institutions), individuals cannot create game-theoretic incentives on their own. A sound society with a state exists not to coerce people into going the good they do not naturally want to do, but to allow them to have the good they want but cannot achieve on their own.

Anarchist political philosophies do not believe that game-theoretic incentives justify the creation of states. The actual members of state-like institutions always come to believe their own narrow interests constitute the higher good. While they might have a noble purpose, states inevitably slip from providing liberal game-theoretic incentives to moralistic coercive incentives. If repeated interaction, the free adoption of belief systems, or other non-state mechanisms fail to solve Prisoner's Dilemmas/Chicken games, the cure of the state is worse than the disease.

One liberal critique of anarchism is that the use of violence is ineluctable; the best we can do is centralize the use of violence so that we can socially control it. Violence dispersed to individuals is, in the liberal view, much more difficult to socially manage. Furthermore, because violence is more effective when it is concentrated and disciplined, when violence is initially dispersed, it will tend to concentrate, and states, which are really nothing other that institutions that concentrate and discipline the use of violence, will form more-or-less automatically, regardless of any underlying theoretical justification. Even if state-like institutions really do have a tendency to elitism and moralism, we are stuck with them, at least in the short-term. The best we can do is make them better in the short term, and look at long-term solutions for eliminating the state.

One communist critique of capitalism is that capitalism is a fundamentally moralistic political system masquerading as a liberal political system. In the communist view, capitalism is based on the moralistic view that people ought to work, they ought to continually increase the productive capabilities of a society, but they have no natural incentive at any level of abstraction to do so. The problem, in the capitalist view, is not a game-theoretic problem — it is not that people naturally want to work and want to increase the productive capabilities, but are concerned about free-riders. The capitalist view really is that the masses just don't want to work, and have to be forced to do so. Capitalism's chief innovation is that the compulsion to work stops being direct — work for the feudal lord or be killed — and becomes abstractly economic — work or you don't have enough money to feed yourself. But a peek under capitalism's liberal rhetoric shows its fundamental moralism. As von Mises said, Ayn Rand "had the courage to tell the masses[:] ... you are inferior and all the improvements in your conditions which you simply take for granted you owe to the effort of men who are better than you." Capitalism is a fundamentally moralistic, elitist system which uses liberal rhetoric to create a "noble lie" to dupe the masses into believing the capitalist state does nothing but give the masses what they want and prevent free-riders from gaming the system. It is, however, the capitalist ruling class itself that is free-riding the system

In my view, communism is the only political philosophy that takes liberalism and utilitarianism seriously. In the communist view, people want to work. Capitalists believe that people have to be forced to work, but communists believe that people have to be forced to work for the benefit capitalist ruling class. Indeed, it is this compulsion to labor for the capitalist ruling class, not work itself, that causes the alienation between individuals and their labor.

At present, our productive forces are insufficiently developed, and nature forces us to work. Communists such as myself believe that capitalism can never build an economy that ameliorates natural compulsion (why should they?). In the transition from capitalism to communism, therefore, communists will inherit insufficiently developed productive forces. Therefore, there will be a phase, transitional communism or democratic socialism, where the state must ensure that some do not free-ride on others' response to nature's compulsion. However, because communism does not view work as inherently alienating and contrary to natural impulses, a transitional communist state can focus only on the game-theoretic incentives and abandon coercive incentives.


  1. Surely whether or not people basically want to work has quite a bit to do with what type of work we're talking about? I've never known anyone who had a keen desire for data entry, let alone repetitive factory labor.

  2. Surely whether or not people basically want to work has quite a bit to do with what type of work we're talking about?

    Mais oui, mon frère. There are some jobs that are undesirable, but need to be done. There are other jobs that are undesirable, and do not need to be done. Game theoretic incentives can make the first jobs desirable; the second need no incentives, because they need not be done.

    Let's say, for example, that the sewers need to be cleaned. It's a dirty, smelly job, but most everyone realizes it does need to be done. We will come up with some way that the job gets done. Perhaps we make sewer cleaning a very high-status job, and consider the abstract part of abstract labor time to have a high premium: an hour working in the sewer is equivalent to two hours, or two days, of working in an office. Alternatively, we all take turns cleaning the sewers.

    On the other hand, no one enjoys data entry or repetitive factory labor, so perhaps we shouldn't be doing such jobs. It's only because the capitalist system is inherently coercive that these types of jobs are seen as viable in the first place.


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