An Autonomous Agent

exploring the noosphere

Category: economics (Page 1 of 8)

Dunbar’s Law and Economic Relationships

On page 306 of Scale, Geoffrey West discusses Dunbar’s Law and its implication for human social networks. To summarize this law: it claims that humans have multiple levels of bonding strength. At the lowest level a human will have around five connections of the strongest type of friendship and intimacy. Typically this would include some members of one’s family or a best friend. At the next level there are around fifteen connections that are not as strong as the first level, but are still firm. This would include close friends you might talk to on a daily or weekly basis. At the next level there are about fifty connections… and so on… The numbers of connections scales by tripling the connections at each higher level. In the book the levels are labeled as: 1) Kin, 2) Super-family 3) Clan, 4) Tribe, and 5) Strangers.

When I first read this in Scale, I was immediately reminded of David Graeber’s anthropological work regarding economic relationships among humans. In his book Debt: The First 5,000 Years, Graeber observes on page 99-100 that baseline communism (sharing) follows a similar structure. Thus, using the terminology from above: At the kin level Graeber notes that there is much sharing between members and the relationship is baseline communism. Thus, you can extend this and map these economic relationships with those of Dunbar’s Law: 1) Kin (~5 people) : Almost all sharing with very little debt or IOU, 2) Super-family (~15 people) : IOU with a good amount of sharing, 3) Clan (~ 50 people) : Mostly IOU and little sharing, and 4) Tribe (~150 people) : Almost entirely IOU with very little sharing. Anything outside the tribe would be exchange via a cash medium except in rare occasions, such as a child falling in front of an on-coming vehicle (a person would naturally share his strength to save the child’s life). Although I may not have followed Graeber’s observations exactly I find this train of thought to be interesting as it requires one to rethink the concept of currency, exchange, and economic relationships. Indeed, Graeber’s book challenges the entire paradigm of the historical development of currency and debt by analyzing the anthropological record.

Scale – Geoffrey West

Scale, by Geoffrey West, is a thought provoking book about coarse grained quantitative network theories which concern the entire human species and its interaction with the environment. Although verbose — as I think the intended audience is upper high school and entry-level college — it is clear in its depictions and explanations. This book is an important summary of really profound work and research performed at the Santa Fe Institute. And it is a great introduction to understanding power laws and scaling in biology and network topologies.

Hidden Forces – Interview Series

Hidden Forces, hosted by Demetri Kofinas is an nice set of interviews with various people on topics including: finance, complexity, mathematics, and cryptocurrencies. I struggled listening to some of the interviewees because I did not agree with their ideas or conclusions; but I guess it is good to have conflicting opinions in order to encourage debate in the comments and to help review one’s own opinions and understandings. Regardless, Kofinas provides a highly accessible medium through which advanced ideas can be grasped.

I first ran across Hidden Forces while listening to the interview with Ray Monk about philosophical mathematics. Monk’s narration on the work of Frege, Russell, Whitehead, Wittgenstein, and Gödel is excellent – by far one of the clearest and easiest to grasp. It was learning about these paradigms and paradoxes of mathematics via Hofstadter’s famous book which led me to start this website.

Debt: The First 5,000 Years – David Graeber

Debt: The First 5,000 Years, by David Graeber, is a fascinating and astounding look at the ubiquity of debt in human affairs. It replaces many “accepted” theories on the origins of money and debt and disproves the Myth of Barter by studying the anthropological record. From my own experience, economic theories and models are almost never based on actual historical observations, only upon assumptions about human behavior and interaction that I personally find naive. Just look at the Efficient Market Hypothesis or the idea that humans are rational decision makers — these ideas or their assumptions quickly fall apart with a simple analysis. For instance, as Chomsky points out, the advertising industry exists to create irrational decisions. People can lie and manipulate; they can be greedy or ascetic. It is nice to finally have a down-to-Earth study of actual historical accounts of human interactions without forcing the current paradigm on the past. Graeber’s book provides a wake-up call for people to see a more realistic view of the interactions of humans, debt, markets, government and money.

Tragedy and Hope – Carroll Quigley

Tragedy and Hope by Carroll Quigley narrates and analyzes world history from the late 1800’s to 1964. Throughout Quigley’s narration he mentions details of individual people who welded enormous power and influence over events; it would be naive to suggest that they were “all powerful” – some of the time they successfully shaped history while at other times they failed. It is simply the nature of the hierarchical system of organization of society which encourages and allows such influence.

I would agree with G. Edward Griffin that conspiracy is an important force in the formation of history and is critical to understanding why events progress in various ways. However, we must be careful with attributing full power of determination to such forces. We should qualify with Bismarck’s comment that: “The statesman’s task is to hear God’s footsteps marching through history, and to try and catch on to His coattails as He marches past.”

It is humorous that most people on the far right recommend Quigley when he mentions several times in the book that he despises them and their motives. For instance on page 1244:

The second most numerous group in the United States is the petty bourgeoisie, including millions of persons who regard themselves as middle class and are under all the middle-class anxieties and pressures, but often earn less money than unionized laborers. As a results of these things, they are often very insecure, envious, filled with hatreds, and are generally the chief recruits for any Radical Right, Fascist, or hate campaigns against any group that is different or which refuses to conform to middle-class values. … They form the major portion of the Republican Party’s supporters in the towns of America, as they did for the Nazis in Germany…

This attitude is reflected in various forms throughout the book. On the other hand, Quigley greatly supports conservatism of an interesting type; on page 1232 he says:

… we might say that the whole recent controversy between conservatism and liberalism is utterly wrongheaded and ignorant. Since the true role of conservatism must be to conserve the tradition of our society, and since that tradition is a liberal tradition, the two should be closely allied in their aim at common goals.

He reflects on the underlying power relationships and how they function when he continues: “So long as liberals and conservatives have as their primary goals to defend interests and to belabor each other for partisan reasons, they cannot do this.” The traditions of society cannot be conserved because the power held by special interests opposes unification.

Far right people are the first to tell you about grand conspiracies like the Trilateral Commission or the Round Table groups as mentioned by Quigley. In fact, it was from a clip of Alex Jones that I learned about Quigley’s book. In my own experience both the far right and far left maintain ridiculous and unrealistic outlooks and understandings of power.

The Western Tradition, which Quigley mentions extensively, exists in his mind, if not in the real world, as a basis for all the progress and success of the people who self-identify as “Western.” He states on page 1229 that Western Traditions consist of six core fundamental ideologies:

  1. There is a truth, a reality.
  2. No person, group, or organization has the whole picture of the truth.
  3. Every person of goodwill has some aspect of the truth, some vision of it from the angle of his own experience.
  4. Through discussion, the aspects of the truth held by many can be pooled and arranged to form a consensus closer to the truth than any of the sources that contributed to it.
  5. This consensus is a temporary approximation of the truth, which is no sooner made than new experiences and additional information make it possible for it to be reformulated in a closer approximation of the truth by continued discussion.
  6. Thus Western man’s picture of the truth advances, by successive approximations, closer and closer to the whole truth without ever reaching it.

However, Quigley is no idealist, and his thoughts help to provide a realistic understanding of the nature of power in the hierarchies which control and function on various levels in nation-states. And he does this through a narration and analysis of “history in our time.”

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