Over the summer, I wrote an essay on the spontaneous order of science (for the Carl Menger Essay Contest). I discussed the existence of systemic error in science and implications of sporder for improving science. My argument is basically that attempts at top down control or regulation of a sporder are doomed to fail, and we should be skeptical of government involvement in science. Instead, bottom up approaches that improve incentives should be emphasized.
Since then, I came across a mind-blowing paper by Robin Hanson that makes a powerful case for using prediction markets on scientific hypotheses to sharply reduce bias and systemic error from science: Could Gambling Save Science.I highly recommend looking at Hanson’s paper, it’s a very interesting and exciting idea. In light of this, I updated my paper with a section on prediction markets as the best solution we are likely to get.
Politics has a lot of problems. Lacking a price system to make rational decisions, government is very inefficient. Lacking the incentives of competition, government pursue’s it’s own interests and is unaccountable to the populace. Lacking effective external constraints, government overreaches its bounds.
How to go about getting better government is an age old problem. But economics has some profound insights to offer. In free markets, competition serves to create market prices, which enable economic efficiency and cooperation on a global scale; competition creates strong incentives for firms to be accountable to their customers; competition from other firms limits the power of any one firm.
Competition between governments can bring these benefits to politics. But governments are large territorial monopolies, and citizens are basically captive given the costs of switching countries. Enter Patri Friedman (grandson of the famous economist Milton Friedman), a visionary who wants to build floating self-governing cities on the ocean. Patri analyzes governance as an industry, and points out that there has been practically no innovation at all since the advent of representative democracy. There are no start-ups experimenting with new ideas in governance. This is because the costs of entering the industry are enormous: since all land has been claimed by governments, you would need to win a war or a revolution.
Patri’s solution is to build on the ocean and open up a new frontier for startup governments to innovate and compete for customers. He founded the Seasteading Institute to make it happen. A similar land-based vision is promoted by the fellow-traveler Free Cities Institute. A related project is the Charter Cities initiative, which is essentially to replicate the Hong Kong model by creating special economic zones governed by market friendly rules.
Provided that international legal challenges can be overcome, these projects to create start-up governments and increase competition between governments could very likely radically transform the world. The benefits are too many to count, but I’ll list a few important ones. There would be much more choice of what type of society you could live in. More importantly, people in countries with bad governance (i.e., the third world) would have new opportunities to escape, especially since start-up countries would be seeking new residents. Competition would foster innovation and discovery of better rules and institutions that every other government could adopt. And emigration from bad countries to good countries would put competitive pressure on bad countries to shape up or lose its residents.
This decentralized, bottom up approach to revolutionizing politics is a great example of the power of spontaneous order. In fact, this was the central motivation for the whole Sporder project. Our long term goal is to create a virtual frontier—in a massively multi-player video game—to allow for the emergence of social order from within the game. Let a thousand nations bloom!
Here’s a short video of Patri Friedman explaining why seasteading is such an amazing idea:
There is no leader directing the flock. Each starling follows local rules, and order emerges on a global level.
Starling flocks, it turns out, are best described with equations of “critical transitions” — systems that are poised to tip, to be almost instantly and completely transformed, like metals becoming magnetized or liquid turning to gas. Each starling in a flock is connected to every other. When a flock turns in unison, it’s a phase transition.
At the individual level, the rules guiding this are relatively simple. When a neighbor moves, so do you. Depending on the flock’s size and speed and its members’ flight physiologies, the large-scale pattern changes. What’s complicated, or at least unknown, is how criticality is created and maintained.
It’s easy for a starling to turn when its neighbor turns — but what physiological mechanisms allow it to happen almost simultaneously in two birds separated by hundreds of feet and hundreds of other birds? That remains to be discovered, and the implications extend beyond birds. Starlings may simply be the most visible and beautiful example of a biological criticality that also seems to operate in proteins and neurons, hinting at universal principles yet to be understood.
Following up on Ryan’s post about population fears, I find it interesting that almost nobody ever mentions the substantial benefits of greater population. I’ll admit that I struggled with the economic arguments at first. It just seems so obvious that a population of billions is too much for the planet. My problem was that I was thinking of it as a physical problem rather than an economic one.
The economic argument for greater population is so simple that I’m surprised it didn’t occur to me right away. It rests on Adam Smith’s insight: “The division of labour is limited by the extent of the market.” Simply put, in a world of just one person, there would be no division of labor, and that person would (maybe) barely survive. With more people in the world, trade makes specialization and division of labor possible, greatly increasing each person’s productivity through economies of scale. Moreover, the range of consumer goods expands, as low-cost mass production of a good is economical only with a sufficiently large consumer market for that good. More people makes us all better off. Likewise, more trade makes us all better off.
As Matt Ridley argues in The Rational Optimist, as population has increased, our ecological footprint has shrunk. Greater division of labor has decreased each person’s ecological footprint so much that it more than offset the addition of more people. For example, greater efficiency in agriculture allows more people to move to cities and reduces the amount of land needed to produce food, both of which lessen our ecological impact. So more trade and more population is better for the planet too!
So rather than celebrate falling rates of population growth, we should really consider it as a bad thing, and encourage more child-having.
Carl Menger explained the origin of money as a market phenomenon, the unintended consequence of people pursuing their own ends in the market. Money is the result of human action, but not of human design. Here’s how it works: Continue reading →
Science is an example of a bottom-up, emergent social order. The community of scientists is not organized in a top-down fashion with some guiding purpose; there is no scientific central planning board.
Rather, individual scientists pursue their own research interests—there is an ‘anarchy of production’ in scientific research. And yet science is quite orderly and productive: the global scientific community functions as a coherent, integrated whole. A bottom-up order emerges because of the incentives and feedback mechanisms that guide scientists in their decisions of where to allocate their research resources. Science, in a word, is self-regulating. Continue reading →
We’re making it happen. ”Sporder,” is short for “spontaneous order” and is used to describe any scenario where such an order can be found. It’s catchy, economical, and intuitive and it requires but 2 syllables as opposed to 7. We have come up with a precise definition for a sporder, as well as categories the various types of sporder found within our universe. Continue reading →