High Hermeneutics

When you read the word "satire," tell me: what springs to mind? Do you imagine the aroma of freshly-roasted Irish baby? Do you recall that four legs are good, yet two legs are better? Do images of Dorian Gray fill your memory? Would it offend you if I claimed that Swift, Orwell, and Wilde were plebeian satirists, that if you want the good stuff, you have to look a little deeper?

Middle-tier satire will still be eminently accessible to the pedestrian reader. A pusillanimous high school student is quite capable of recognizing that Inferno is much less an ecstatic religious treatise than it is a savage condemnation of 13th century Italian aristocracy. Mediocre college sophomores are more than adroit enough to grasp that Niccolò Machiavelli wrote The Prince not as actual advice to the Medici family, but rather to mock an entirely different cohort of corrupt Italian aristocrats two centuries after they failed to take Dante's hint. Same goes for Chaucer: if the Knight's tale doesn't convince you he's taking the piss out of Feudal notions of propriety, the Reeve's Tale surely will.

But top-shelf satire? That rarefied spirit? That hermeneutic philosopher's stone? That ambrosial bathtub gin nearly impossible to brew without a pint of divine genius? That stuff is hard to find. It's harder yet for most folks to enjoy properly. I confess without great embarrassment that a great deal of the finer satire the world of literature has to offer will often escape me. I occasionally see some double meaning in Coleridge or Wordsworth. Milton was so peerless in concealing his savage condemnation of the Stuarts to the extent that even an attentive reader might mistake Paradise Lost for an actual account of Lucifer's fall. And Joyce? Impenetrable. Half the time I read Finnegan's Wake, I imagine it's a fever dream brought on by whiskey and tuberculosis. The other half, I think he's playing a great practical joke on the popular press and his peers. Of course, these interpretations are far from mutually exclusive, which makes him one of the rare masters of the form.

Masters which now include one "Jencey Paz."

Writing at The Yale Herald, this lugubrious essay manages to accomplish in a mere ten paragraphs what it takes Ann Coulter an entire novel-length book to achieve [ed.: the link appears to be broken, excerpts are as-is. Apologies for the inconvenience]. What Paz appears at first glance to deride is the shrinking violet sensibility recently popular on college campuses:

Today, when a group of us, organized originally by the Black Student Alliance at Yale, spoke with Christakis in the Silliman Courtyard, his response once again disappointed many of us. When students tried to tell him about their painful personal experiences as students of color on campus, he responded by making more arguments for free speech. It’s unacceptable when the Master of your college is dismissive of your experiences. The Silliman Master’s role is not only to provide intellectual stimulation, but also to make Silliman a safe space that all students can come home to. His responsibility is to make it a place where your experiences are a valid concern to the administration and where you can feel free to talk with them about your pain without worrying that the conversation will turn into an argument every single time. We are supposed to feel encouraged to go to our Master and Associate Master with our concerns and feel that our opinions will be respected and heard.

Good stuff so far. Middle-tier, if you will. But what elevates Hurt at Home to TOP KEK-grade satire is that it has the audacity to take on a pernicious, yet cherished political metaphor: that of organization-or-nation-as-family. Witness:

My dad is a really stubborn man. We debate all the time, and I understand the value of hearing differing opinions. But there have been times when I have come to my father crying, when I was emotionally upset, and he heard me regardless of whether or not he agreed with me. He taught me that there is a time for debate, and there is a time for just hearing and acknowledging someone’s pain.

I have had to watch my friends defend their right to this institution. This email and the subsequent reaction to it have interrupted their lives. I have friends who are not going to class, who are not doing their homework, who are losing sleep, who are skipping meals, and who are having breakdowns. I feel drained. And through it all, Christakis has shown that he does not consider us a priority.

Whatever else you might believe about the Ivy League institutions, you have to appreciate any school that can produce students who can produce such sublime satire. I aver here and now, my beloved readers, that I have with my own two ears heard Very Serious Thinkers fall prey to the bizarre assertion that the family is different only in scale to the state, that the relationships that blood kin share are only a matter of scope difference to the anonymous community. I have seen with my own two eyes words written by Humans to be Taken Seriously that the nation is basically just an extended family. That parents must expunge the fallacy that their children belong to them. And as the little child proclaimed the emperor has no clothes, a Yale student has unceremoniously mooned the great nattering mass of aspirant despots who seek dominion with sleazy appeals to faux kinship.

And the best part? Otherwise bright people appear to have fallen for the ruse. Cervantes at his best couldn't have hoped for more success. I doff my cap, Jencey Paz. You are a modern virtuoso of satire. Please, for the sake of the art, continue to write. The world is richer for having you in it.

It's been fun watching some of the campus conflict from afar. Viewed as unstructured negotiation, it's obvious that there are some pretty severe strategic lapses on both sides. The transaction of higher education services appear to be less and less euvoluntary over time, at least on the aggrieved margin.

Dear Mr. Takei,

Prominent LGBTQ activist and Star Trek alum George Takei has called for a general boycott against the state of Indiana in response to the controversial SB101, a bill that permits businesses to refuse service on religious grounds. Like many other bills of its ilk, it's couched in religious terms, but no one is fooled by the kayfabe: it is a general license for bigoted business owners to discriminate against gay customers.

Without disagreeing with the sentiment that it's generally loathsome to shun someone for mere extracurricular bedroom peccadilloes, it seems to me unjust to condemn the good and honest people of Indiana for the barbarity of a few.

Targeted economic sanctions do occasionally work. But they work best when deployed against a single firm with the authority to respond swiftly and accurately to the demands of the protesters. In this case, the chain of communication linking firms to the state government is extremely weak. Local businesses, the ones hurt worst by a general boycott, have as much say in the state legislature as any ordinary citizen: next to nothing. A general boycott of Indiana is closer to the US embargo of Cuba or Iraq than to a picket line around a misbehaving department store: it will immiserate the local residents and the track record suggests it will do very little to sway the hearts of the legislature.

Consider the following alternative approach. Crowdfund a campaign to print out stickers for LGBTQ & allied businesses to put in their windows. Spread the word: "this sticker stands for solidarity in the face of bigotry" or something (I confess to not being especially talented at writing slogans). Customers will then know which businesses to support and which to boycott. If acrimonious identity politics must be a part of the marketplace, let's find a way to reward people for a principled refusal to discriminate.

So Mr. Takei, I implore you: please reconsider your position. There are better ways to serve both the Indiana LGBTQ community and businesses friendly to the cause. By all means, punish the guilty, but please, I beg of you: spare the innocent.

Swiper No Swiping or: How I Learned to Stop Worrying and Love the Game Theoretic Analysis of Hookup Culture

"It is a truth universally acknowledged, that a single man in possession of a good fortune must be in want of a wife."

-J. Austen, Pride and Prejudice

I gather from the kids these days that mobile phone applications have replaced seedy dive bars as the go-to venue for taking a spin on the ol' genital mashing lottery¹. "Swipe right" is the "hey baby" of 2014. To credit technology for the apparent rise of casual sexual encounters is perhaps a bit premature. To illustrate why, let's swipe right on some elementary game theory.

Consider a single player. Call her Ann. Ann finds herself at the start of her sexual career and is faced with two options:
a) Participate in the casual sex market
b) Participate in the marriage market
Since this is ~elementary~ game theory, omit from consideration opting out altogether, or exotic choices like... well, use your imagination.

Before that choice, Ann was secretly assigned by Nature to one of two types.
Type L (for licentious). There is no penalty for choosing (a) after type is revealed. There is a penalty for choosing (b) after type is revealed.
Type D (for demure). There is a penalty for choosing (a) after type is revealed. There is no penalty for choosing (b) after type is revealed.

My conscience urges me to point out that what I'm about to do is methodologically suspect. I am going to assign numbers to utility. Doing this covertly drafts several stealth assumptions into this model, some of which I find terribly implausible. I excuse myself by noting that I'm doing a comparative statics problem here, rather than utility comparison. On the margin, you can (probably) toss out assumptions of well-ordered convex utility functions and still get similar results. Whether or not the model holds up when tested at extreme parameter values is questionable. So as far as a bit of insight into why some people might marginally choose regrettable mating decisions, this might be useful, if not entirely accurate.

My conscience temporarily sated, let's define a few structural parameters.

First, we need Ann's type assignment probability. Remember that Ann doesn't know what her type is as she makes her choice over (a) or (b). Only afterwards will she find out. Let's call this probability α. With Pr = α, Ann is Type L, and with Pr = (1-α), Ann is Type D.

Next, we'll want a parameter for a successful casual sex match. With Pr = β, Ann finds a partner for the evening. With Pr = (1-β), she spends the night alone.

Next, let's define γ as Ann's discount rate. For arithmetic purposes, this is just a multiplier that lets us compare payoffs earned in the future to payoffs earned now. For social science purposes, this is a contentious mess. Empirically decomposing the inputs to individual discount rates is a hassle, and even when aggregating, it's hard to measure, and harder yet to isolate specific treatment effects. Over a person's lifespan the discount rate can change wildly, some of it because of normal lifecycle reasons, some of it for cohort reasons, some cultural, some from exogenous shock, some for psychological reasons, some from conformity, some idiosyncratic. Beware stories that attempt to reduce discount rates to a monocause. I include this here for discussion, but I'll omit it from the model since I don't want to make things too intractable. Not yet anyway. Maybe in a follow-up post.

Finally, we'll need a parameter for the probability that Ann will participate successfully in the marriage market. Let's use ω. With Pr = ω, Ann marries. With Pr = (1-ω), Ann ends up with cats. Lots of cats.

At the risk of drifting into differential equations territory, β and ω are both partially functions of [potential partners'] α parameters. That is to say, the more people in the {temporary mating|marriage} market, the higher the probability of finding a match in that market. For the purposes of this exercise, assume that participants know which market they are in and that no participants attempt to participate in both markets at the same time. Modeling infidelity is another exercise entirely.

Let's say that a successful booty call yields v and a successful marriage yields w units of pleasure. Failure of either one yields 0.

If Ann is Type L, she'll pay a penalty of -c for successfully participating in the marriage market, no penalties otherwise.
If Ann is Type D, she'll pay a penalty of -d for successfully participating in the casual sex market, no penalties otherwise.

With Pr = α, Ann earns a payoff of:
β*v + (1-β)*(0) for playing (a)
and
ω*w + (1-ω)*(0) + ω*(-c) for playing (b)
With Pr = (1-α), Ann earns a payoff of:
β*v + (1-β)*(0) + β*(-d) for playing (a)
and
ω*w + (1-ω)*(0) for playing (b)

Ann is therefore indifferent between playing (a) and (b) when
α(β*v + (1-β)*(0)) + (1-α)(β*v + (1-β)*(0) + β*(-d)) = α(ω*w + (1-ω)*(0) + ω*(-c)) + (1-α)(ω*w + (1-ω)*(0))

simplified:
βv - βd + αβd = ωw - αωc

If βv - βd + αβd > ωw - αωc, Ann will play (a). Casual sex.
If βv - βd + αβd < ωw - αωc, Ann will play (b). Marriage market.

Casual sex is increasing in the probability of a successful right-swipe and costs of regrettable marriage; decreasing in social stigma against licentiousness and the probability of a happy marriage. Reverse that for marriage market participation.

And this gets interesting when we consider that the probability parameters are something of a commons. The more people that participate in the casual sex market, the greater the probability that Ann will find a match for any given attempt. If, ex post, Ann is a Type D attempting an (a) strategy, she would prefer to have had incentives encouraging her to pursue a (b) strategy instead. Similarly, if Ann is a Type L attempting a (b) strategy, she'd regret settling down and probably be a bit disgruntled that her society had provided her incentives to marry that schlub Jasper (no relation to the Peanut Butter Kid).

Think of "traditional" marriage and everything that goes along with it as a set of institutions that attempt to avert the regrets of licentiousness. The tradeoffs are the foregone opportunities of short-term associations. Knocking down that Chestertonian fence can reveal that if Ann is a Type D living the life of a Type L, the costs could be quite real and quite salient.

There's an interesting tragedy in there. If identifying type ex ante is either very costly or downright impossible, and if Ann's incentive structure is the product of human action, but not human design, a semi-stable equilibrium emerging from the joint and several negotiations between human minds, what is her optimal strategy? Which parameters should she try to strengthen? Which should she try to weaken? She can't choose her culture. Can she choose her discount rate? Can she select her cultural filters? By choosing the non-dominant strategy, does she run afoul of a concentrated costs-diffuse benefits dilemma? How can she overcome this problem? What would you do?


¹ Apologies for the horrific idiom. Blame it on my low blood sugar.

Mulish Stewardship

Again with the idiosyncratic definitions, this guy. Stewardship is a stab at mimicking a euvoluntary exchange when one of the transacting parties is unable or unwilling to haggle the terms of an exchange for one reason or another. The wards of a steward could be minors, infirm, comatose, mentally vacant, or brute animals. For that matter, 'tis common usage to assign stewardship over land, intellectual property, or other intangibles.

Over at Sweet Talk, I followed up yesterday's post with some musings about environmental degradation that often gets a lot of talk, but not so much conspicuous accounting (by this, I mean that many journalists and activists balk at the notion of attaching a dollar value to the environment, even though the BLM and USGS do indeed provide these estimates). My question is this: is stewardship euvoluntary? There must be some price at which keeping a species alive can no longer be justified. But since necessarily one party is unable to advocate on its own behalf, what is the just way to find that margin?

Majority rule probably isn't very good. People with no resources directly on the line have no incentive to vote prudently. How about fiat rule by elites? Is that any better? Why or why not?

Economists like to flog the idea of private (or quasi-private) ownership of wild herds. Assigning residual claims to a human foists all the good private incentives where they can be calculated more-or-less accurately with all that lovely skin in the game that keeps folks honest. But with global-scale threats, this is... well, let's call it "problematic" to assign residual rights to a single individual. In lieu of that, what's the next best way to solve the knowledge problem when we've got looming stewardship issues for the several species under the threat of extinction?

For those exchanges that can never be euvoluntary, it seems wise to seek robust surrogate pricing methods. Primum non nocere bleeds the coffers dry, laissez faire soaks the veldt in innocent blood. Surely there is a better way. Surely some reckoning is at hand.

The APEEmath vol 1: Giberson and Kiesling Unbundle the Grid

The Association of Private Enterprise Education concluded its annual meeting this past Tuesday. I attended a generous abundance of fine panels, rubbed elbows with a generous abundance of fine scholars, and enjoyed a generous abundance of excruciating back pain. My back has largely recovered, so I find my mental satchel full of puzzles, questions, conundrums, pleas for clarification, and challenges to much of what I witnessed in (relative) peace and quiet. So for the next few days, I'll be sifting through the aftermath of APEE 2014. The APEEmath, if you will forgive me some bad dad humor.

And since it is often advised to start at the beginning, let's start with Session M1. The session I attended featured Michael Giberson and Lynne Kiesling, our friends at Knowledge Problem. Combined, their presentations told a story that I think we've all felt shimmering in the air since the 70s: decentralized energy production is a matter of when, not if. However, it is far less sure that energy distribution faces a similar threat, or if it does, it's certainly not clear that the grid will share the same time schedule as the power plants.

Please indulge me a brief digression here. My firsthand experience is in Naval nuclear propulsion. There are three and a half distinct divisions in the nuclear side of a submarine's engineering department (the Sailors charged with monitoring and maintenance of primary plant chemistry are, strictly speaking, part of Machinery Division, but they boast specialized skills and training that set them apart from the ordinary knuckle-draggers; they are the half division, but the ones I know personally also count among some of the finest men it has been my honor to have ever met, so don't let this imply that I think any less of them). We, the gaunt twidgets, the reactor operators, pasty from lack of sunlight, fine-and-brittle-boned from the many months spent hunched over Byzantine mazes of electronic components, yapping discontentedly in our odd tongue of resistance, capacitance, induction, and reduction—our eyes filled with cascading arcs of ionizing radiation detection, our ears stuffed with the harsh syllables of a routine critical checkoff, our sinuses subverted by the penetrating aroma of the loved-and-hated chemical that unceremoniously replaces the roiling breath and fart of 160 of our fellow shipmates into something vaguely resembling a breathable atmosphere, it is we who wrangle, harness, command the broken soul wrought from the enraged heart of uranium-23X, bending its fury to the diligent task of whispering life and vigor into the cold, coiled copper snaking arterial ardor up and down the stubborn corpse of the underwater pig, grunting and snuffling beneath the dismissive swell of an indifferent father ocean. The Electrical Division is responsible for shipboard load distribution and maintenance of generators, batteries, and the interface of the AC and DC portions of the network. Why do I mention this? Well, in the mind of a Sailor serving in an engineering department (again, many apologies to A-gang for not including you in my reindeer games), there is a perfectly natural cleavage between the generation and distribution functions in the quest to turn fuel and fire into warmth and comfort.

So here's the thing: rooftop solar is becoming not only more technologically efficient, but more economically efficient. This implies that legacy utility plants are rapidly advancing towards obsolescence. They are soon to be the twinkling phylacteries in which dwell the souls of the dear departed wizards of Thomas Edison's coven. But the grid? The grid is a thing alive, pulsing with the lifeblood of shared electricity. When its vitality can be sustained by bough and twig alone, the Big Capital power plants (with all the attendant costs) will end up clinging, vestigial, to the undercarriage of a sprightly distribution network. They are and shall be an unseemly legacy cost that threaten to burden a critically important component of ye moderne œconomy.

So why not split the utilities along their production and distribution seams? Might we get a jump on the inevitable transitional gains trap by half a league onward? Sure, there might be some negotiation costs for the intermediate bits, but determining who gets the line item for a decoupling station seems a lot more tractable (from the point of view of the end customer) than worrying about how to resolve the inevitable problem of how to keep rooftop solar providers from getting sucked under the waves when the pod of power rorquals go belly up and burst under the unforgiving gaze of the sun.

Power generation is not euvoluntary. Neither is power distribution. Keeping them bundled multiplies the risk without providing much extra reward. It's time to cut the cord, people.

Homeowners' Associations: Euvoluntary?

I live in Northern Virginia. More specifically, I own a home in Northern Virginia, which means that like it or not, I am also a member of a homeowners' association. I have a few guesses about why HOAs are so popular in NOVA, but they're all just-so stories. My favorite tale right now is that the HOA system is a way to coordinate political transients with the permanent bureaucratic class. Every few years, there's a regime change with the elected officials and there's a key swap with the outgoing elites. This gives the carpetbagging element an incentive to personalize their temporary dwellings with their potentially tacky imported local flavor, wrecking the aesthetic of the area. Career bureaucrats, Beltway Bandits and other locals guard against this by forming stable coalitions. The HOA offers some basic services in exchange for a fee and an enforceable pledge of conformity. 

Is this a euvoluntary exchange?

I might be a little close to this question to answer it objectively. I think I should first point out that I'm pretty happy with my HOA. Apart from some rocky billing issues early on, I haven't had any run-ins with them. My neighborhood is reasonably attractive, property values are fairly stable, and the pool is clean. No complaints. However, it does occur to me that even though I'm happy with the ex post outcome, my exchange with my HOA isn't euvoluntary. Why?

Because unattractive alternatives, that's why. My choices are the following:

1. Buy a house with an HOA at a normal market price (which may or may not be eye-popping for those not familiar with the real estate market here) and get a decent place to live.
2. Continue to rent and keep flushing a grand a month down the toilet.
3. Move further west, thereby enduring morning I-66 traffic between Manassas and Fairfax, which may be marginally better than driving in Italy, but not by much.
4. Find alternative living arrangement, like my car or a refrigerator box or a university basement.
5. Worst of all, move to Maryland.

I could pay the premium to do any of these, but I could also turn down a $10 bag of ice after a hurricane or refuse to pay $1000 for a bottle of water off a taco truck in the desert. Despite the ugly BATNA, I don't know for sure if people feel ripped off when they move here. I've lived a lot of places in the US, and I think I'm comfortable saying that as far as regions go, Northern Virginia holds its own against most contenders. In other words, even if the terms of trade are circumstantially coercive, the quality of the product being exchanged admirably makes up for the lack of decent outside options. 

I sort of wonder if there's a more general point in there. If there's a good balance between value generated on both sides of a trade, I don't think people cry exploitation even if there is some violation of another condition of EE. Naturally, this is a matter of perception, and people tend to be pretty bad about donning the shoes of sellers, if even they try. Could it be that HOAs aren't so bad because new arrivals to the DC area have a pretty clear counterfactual picture in their mind already, but if you take those same folks to a factory in Bangladesh, they don't have the appropriate snapshot ready?

What do you think? Do you think people get worked up more over the preconditions for euvoluntary exchange or over the immediate terms of trade? Does moral ire change vary based on near vs far bias? Where else in the world might HOA-type arrangements prove sustainable?

Collective Bargaining, State Employment and You: Garbage on Strike

Many of our excellent readers here may have at one time or another worked in some capacity for a government. If so, and if you've read your employment contracts carefully, you'll often find a clause in there prohibiting strikes.

As for me, I've only had one private union job and the stipulation against striking was for wildcat strikes only, which makes sense once you understand the public choice arguments about the function of unions, including regulatory capture, rent-seeking, and loss aversion.

When workers strike, the suffering is felt by customers, owners and the workers themselves (via foregone wages and having to trudge a picket line in often unforgiving weather). For private businesses (mine was a button manufacture), public privation isn't much of an issue. Even if people needed to buy a handful of shirtwaist buttons each and every lovin' day with their morning latte, there are plenty of other sources of buttons than one small Connecticut factory floor. Ditto for cars: if UAW workers hit the picket line, sympathetic drivers can hold off on buying that new Explorer for a while until Ford yields.

State employees are another bag of kittens altogether. Suppose the fire brigade takes to the picket line and Mrs. O'Leary's cow kicks over a lantern. Chicago burns to the ground. For those of you who remember the parts of Robocop 2 that weren't Tom Noonan mugging in his exoskeleton, the local PD got fed up and took to the picket lines, leaving poor Robocop to the miserable task of battling an overpowered, drug-fueled foe in the mean streets of Old Detroit. The key difference here is BATNA. The state holds ultimate monopoly rights, and when a monopoly shutters operations, the customers are left twisting in the breeze.

Ease of substitution is one part of determining BATNA, but so is simply doing without. Fire and crime protection isn't something folks will gladly do without, so we bar strikes and make up for it by being generous with compensation.

I'm curious if this is really enough to make the whole arrangement euvoluntary. Notable exceptions aside (LAPD in the late 80s, eg), I think it's fair to say that most folks are happy with the police protection they've got*. Most folks send their kids to public schools and few clamor to shut down municipal fire departments in a bid to shift to volunteer forces (of course, those with volunteer fire departments rarely urge local councils to move to full-time protection).

It occurs to me that this is very much a taco-truck-in-the-desert scenario: citizens are at risk of dying of thirst (or from criminals or an inferno or a bad education or whatever) and what we've decided to do is mandate that there's only one Juan and he has to serve everyone all the time, or else (or else what, I don't know). Part of the compensating differential is that we make sure he's well-stocked and has a generous pension coming his way when his buddy Pedro takes over the business.

Can you think of other arrangements that might also solve the monopoly problems of so-called public services? How technically feasible are your solutions? How politically feasible? What other constraints might you encounter? Are vital services like fire and police protection different in kind than vital services like water, sewage, and electricity?





*this is a reminder-to-self to check up on this in the GSS when I get a chance