Homo economicus is the perfect caricature, as humans usually make purchasing decisions for far from rational reasons. They buy for emotion, because of brand, etc. Read any current marketing book. The system within which we operate claims rationality solely on the basis of conveniently ignoring anything that might impinge: pollution, environmental damage, cost of cleanup or restoration of a site, societal and human damage. All of those get lumped in a category called "externalities" that might be more honestly labelled inconvenient truths.
A rational system would be more holistic and somehow account for the value of lives, planet, society and so on. It would find a market way to penalise those actors continuing to saw the branch on which humanity or other species sit.
The economy is very much built by Homo economicus. The consumers are just assume customer to be Homo economicus.
(except we know that it’s just poor old Homo sapiens, which is why the shiny stuff is at the checkout counter. Let’s ~~exploit~~ optimize for all those gaps in cognition.)
So I’d have to highlight that Economic man is hard at work, hacking Homo sapiens. ————
And that’s the issue, the rational choice for the world is very clear. But local equilibrium points are very different. People are going to clear the Amazon because that means they can sell more meat.
The cost of that externality will never get priced in fully, because it’s in the interest of people to pretend it’s someone else’s problem (especially when they’re people’s jobs and food on the line.)
I’m sorry for the bleak image, but let’s remind everyone that Kyoto was a joke. It’s the best we could manage and even then it was weak.
I understand everything you mean about externalities, but once you leave Econ talk, and move to policy - well Homo economicus is there, busy doing the rational thing and lobbying to keep his interests safe.
I predicted AGES ago and publicly a year or so, that we would all soon be championing terraforming projects.
What is the actual path forward, to an actual consensus. Whether we have to go through Homo economicus or corrupt him, or through reminding Homo sapiens that he is the only source of moral authority.
This confuses the map with the territory.
The economy is built by actual people, with dreams, desires, etc, whose behavior is usually far beyond what the "Homo economics" would dictate.
Homo economicus is just a crude model.
>The cost of that externality will never get priced in fully, because it’s in the interest of people to pretend it’s someone else’s problem (especially when they’re people’s jobs and food on the line.)
Well, it will be fun to see them suddenly rebalance their "interests" when they are plagued to death, and it's their life and the life of their children on the line.
Homo economicus is very busy figuring out exactly what those dreams, desires etc entail.
We know about how their brains work, I know how to design reward schemes, job happiness plans, legal documents and so on.
We are paid, to act as economic agents, and to do so rationally and to the best of our ability, with the moral aspect of it abstracted away.
How many times have you heard of people standing up and saying "hey I wont be the lawyer who buries the immoral and indefensible clauses in the contract".
Not very often, I'd bet. Furthermore if people did bring this up, or even leave their job over it - we can always find someone for whom the moral question is not a problem.
Its very easy to get people who are rational business actors and dont want to worry about the moral aspects of their work. They just want to do their jobs well, get paid and go home.
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>Well, it will be fun to see them suddenly rebalance their "interests" when they are plagued to death, and it's their life and the life of their children on the line.
That's my point - people will "rebalance", but I don't see a solid path to avoiding that re-balancing.
Who is going to pay for the billions of corpses of men, women, and children? (And the "reduction in growth" that that entails)
>It’s very rational for business firms to lobby against externalities being priced in. It’s rational for ranchers to cut forests for economic gains. And it’s rational for the many many people who are being propelled up out of poverty to want better food, clothing and power.
This confuses "profitable" with "rational".
Motives (e.g. the profit motive, or altruism, or thinking about the commons) are not "rational" or "irrational", they are personal and sentimental.
One can think rationally about what their actions will bring on. The decision depends on their intentions and feelings, which themselves have little to do with rationality.
Picking the most profitable of two courses of action, externalities be damned, doesn't require reasoned thinking (only as much as to figure out which is the most profitable).
But while calculation "this will bring me profit" involves rational thinking, so does the calculation "this will also eventually destroy this place, or hurt society".
People are perfectly able to reason about the general (e.g. societal) and future impact of their actions, and avoid doing stuff that will have negative consequences.
It doesn't take irrationality to do that -- just not being a selfish greedy prick, which is orthogonal to rational thinking.
Humans don’t act like a hive. Instead, we have local alliances and local optimums.
You know, I bet, right now, there’s a plan somewhere in America for what to do in a doomsday scenario to ensure survival of the American way of life.
Our way of life will end, our beautiful planet will lose its fish and insects and great fauna. But we’re busy creating fantasy world and games and movies. Kids are excited about magical beasts, and where to find them.
I’m being stark here, because I’m not finding an actual path to what I want ( a healthy planet and responsible species ). Instead the highest probable path I see is a husk of a planet and us figuring out a way to reintroduce life after terraforming is complete.
It's pretty much make or break for humanity.
(As an aside: we've pretty much exhausted the easily available fossil energy sources, so no re-starting a civilsation on the glowing embers of knowledge and wisdom hidden in deep bunkers. Nobody's going to read that, ever.)
Your fixes are fantasy, not reality.
I see this as the likely path forward. It is not a fix, it is essentially the car careening off the cliff and people the survivors picking up and moving on.
Could you let me know what was confusing in my text? I'll fix it up.
Terraforming is fantasy. Reintroducing life is a process that takes eons and is on the scale of the Gods, not of us mortals.
We have a functioning planet with a well developed eco-system, we do not have a back-up and we do not have the abilities you ascribe to us. We would not be around to do any of the things you describe because this is all we have and when it goes we go with it.
We have a functioning planet with a well developed eco-system, we do not have a back-up
It's like watching parrots trying to run a fusion reactor.
I put it forward for two reasons - To leaven the bleakness and because pursuit terraforming is inevitable.
It’s just the perfect PR product. Spend money; create jobs, fix the environment.
That is a short-term view. Look how growth will stall and turn into decline if we continue on our present path.
> Which is why the question. Are people really incentivized to bell the cat - to actually price in externalities ?
Probably not by themselves, because most people put their own self-interest first, and our economic systems stimulate them that this is the best way.
It needs the concerted effort of many to apply sufficient pressure to take the long-term view and affect real change.
And I guess this is particularly hard, as our current (broken?) systems also promote wealth inequality, and the rich and powerful - those who can help the most - are less inclined to do so, because they'll be among the last to really suffer the consequences of inaction.
Their conclusion was a rapid and uncontrollable decline in population and industrial capacity, and the signs of that would be apparent by 2072.
Given that the "business as usual" scenario has persisted, we are on track to that sudden crash "overshoot" scenario. In addition, now there is the looming climate catastrophy as well. Countries and regions have to become more resilient to all kinds of impacts from climate change, as it does not look like we can avoid or prevent it.
In addition, another economic system than one expecting continuous growth is required.
Therefore the question of "who pays for the reduction in growth" is a rather non-starter, as the reduction in growth is inevitable.
Edit: crash not at 2072, signs visible at 2072.
I had a good laugh at this. It's only "rational" (or efficient) at optimizing the parameters we give it.
I'd argue that if "saving ourselves" is not a priority, then right now there are some important parameters missing.
If we'd put a sizable tax/cost on causing environmental harm, you can bet that "economic system" is gonna optimize the heck out of its processes to not cause that harm.
Sure in the long run we will have a better planet, but then famously in the long run we’re dead too.
I do not think there is a rational incentive for many firms to actually allow externalities to be priced in. Making investment in lobbying more valuable (and America is case in point; it’s been decades of FUD and denial).
This is just the rational business game plan. Delay the onset of regulation for as long as possible, maximize profits and then adapt to the new world of regulations (hopefully diversify by the time regulations hit)
I’m hoping someone has a way to argue that this is incorrect.
Ultimately, we measure the success of our capitalist economies in total receipts, and optimise accordingly. Our markets (and our cultures) prioritise consumption over repair or even abstention. That last point might seem contentious but truth be told, most of us would rather buy something new than repair something broken unless it is prohibitively expensive or repair is easy. In short, if we changed the yardstick to determine progress then the matter becomes much simpler to solve. However, this is not likely to change so we are forced to look for solutions within our economic framework.
There are plenty of ways to correct these market failures but they must stem from government and have the support of the people. Private initiatives have nowhere near the influence or the scale to tackle such problems. Tax on goods and services could be proportional to how damaging it is to the environment. Regulations on animal welfare could be broadened and prioritised. Creative solutions exist for almost every issue, the problem is that they are not part of the public discourse.
For instance, while I personally abhor hunting, I feel we should encourage regulated African trophy hunting, where older animals are auctioned off so that the money can be reinvested to protect current populations from poaching. In places like Africa where money is the only thing that matters, it is of the utmost importance that conservation look to market solutions to assist wildlife, as we might as well nuke the poor bastards if their survival depended on African governments.
The biggest hurdle to overcome is the relentlessness of special interests to dictate policy around the globe. In fact, this is the root of the majority of global economic issues. I would imagine the only feasible way to do this is for the people to engage with these issues, which means we are most likely doomed.
But in a rational world, it is obvious that people will use whatever tools at their disposal to improve their chances.
So by definition, any sentient and rational society will have lobbying - anywhere in the universe.
So this is not a bug but a feature. In theory these lobby groups will be dragged to a stale mate by counter lobby groups, but practically the more unethical group will win just because of operational flexibility.
I don’t see any way this worst case out come doesn’t come to pass because of these very issues.
The collective action problem can’t be solved.
I want to touch on what you said about lobbies and give you my take on it.
The characteristics of successful lobbies have three key properties. Within any dispute/issue the most important quality that determines influence of a group/cause is organisation. An organised faction will always triumph over the disorganised masses. Then, the second most important factor is possession of any tactical advantages to advance their goal over their adversaries. These can be anything from superior methods to a willingness to do things that the other side is not. The last, and least important, is the size of the group. Each factor is meaningless without the preceding one.
As a consequence, I would agree that other groups would 'win' in this case. But they wouldn't actually need to win, they would just need engage in dirty tactics such as proliferation of fake news, muddying public discourse, bribe political officials, etc. Humanity would face the greatest difficulty dealing with the lengths that special interests are willing to go to to wield undue influence and stagnate progress.
However, I do not share your abject and defeatist view. I concede that humanity is facing a battle in the trenches to ensure the health of our ecosystems. We all must take responsibility for what is coming because to do nothing is to allow bad actors to get away with being shitheads. Given that the survival of our species and many others on Earth is at stake this should not be acceptable to any one with a shred of empathy to possible future generations.
By the way, If the issue is with my tone or perceived attitude, please note that this is my question- what precisely is the path to success?
I don’t get the issue with the term rational, I mean it in the same way you define it.
Locally solutions may not result in a global solution to the climate problem (because of externalities). What the issue with rational in this case ?
The path to success is simply education. It is not a sexy suggestion by any means, but I would point to how successful bad education is at stopping progress as evidence that it is the determinant factor. It is not a quick or a guaranteed solution. But by staying informed and engaging in conversation with people, this can have a knock-on effects on others. Further, key moments in contemporary human history show that shifts can occur seemingly out of nowhere. Will it be enough? Who knows? Realistically, this is our only play left and to squander it to apathy is not acceptable.
Re: rational. I guess this becomes a semantic issue, which means it is a non-issue to begin with as we are in agreement. I personally just feel that the word doesn't add much to the discussion as it is implicitly understood that economic actors will be driven to certain decisions by their own self-serving motivations. Using the word rational, while I agree that if we were to take your definition would be absolutely correct, connotes the notion that they are acting in absolute self interest, which is not the case in this example as that would mean individual actors would find a way to cooperate given that the existence of humanity is at stake. So, despite the fact that there is nothing wrong with the word, I avoid using it as I find it to be quite confusing.
My opinion on the matter probably reflects quite well on why I switched out of an economics degree :)
I suppose it’s a rhetorical construct I’m working on to effectively move the needle forward.
Unfortunately, my current iteration requires the negative attitude variant to move other people into the correct line of questioning. There’s other issues with it Too, I’m sure.
A major problem with discussing issues today, is getting people up to speed on the problem and having a shared language and idea base which is both accurate, flexible and easy to share and reuse to create new insight and tools to deal with the problem.
It takes a lot of work to unravel the various issues, without getting bogged down with minutiae- or just championing unworkable ideas (lets all stop showering; the world should go vegetarian)
As such this thread did well in serving as a test run.
In essence the term I’m trialing is “Homo economicus is hacking Homo sapiens”, and building from there into showing collective action problems
I really didn’t have a solution for the larger systemic issue, and recently the only one I’ve come up with is the gandhian idea of re-awakening people as moral actors.
The larger system is amoral, as you well know having done Econ. This is by design and not a flaw.
Morality is only exercisesble by Homo sapiens. Homo economicus is not designed to have that capacity, it is an assumed constant, imposed by “policy” or by “consumer choice”.
Since policy and consumer choice are pre reqs to targeting externalities, we need people to feel that they are moral agents who can impose rules upon the working of society.
anyway the goal of this statement was to get the bleak but correct picture forward. We can’t sit on the sidelines anymore.
Realistically, shouting "biodiversity" doesn't say all too much. What biodiversity? Deforestation is a different problem to the disappearance of the bee population (in terms of economic pressures on these things), and each needs to be tackled in a thoroughly researched, carefully considered manner. There probably isn't a single correct solution to this problem, and solving it will require a collection of viable solutions that incentivise economically, socially and morally.
Speaking of rational choices: if faced with paying everything you have or your own extinction, the most rational choice would be to pay everything you have. Nobody would spontaneously make that choice, but it really is.
Making this a very irrational question, in a way.
There are four scenarios to consider:
1. You do what’s best for the world, and the world is saved.
2. You ignore the big picture and the world is lost.
3. You do what’s best for the world, but the world is still lost because too many others didn’t do the same.
4. You ignore the big picture and the world is still saved because enough other people did the right thing.
Regardless of what happens, you’re personally better off ignoring the big picture and hoping that other people fix the problem. If disaster is coming, at least you’ll have a better life in the remaining time you have. If it’s not, why hurt yourself?
The exception to this is if your own personal actions make the difference to avoid disaster, i.e. that you go from scenario 2 to 3 above by changing what you personally do. But the chances of that being the case are extremely tiny. You need collective action to solve these problems.
If we put a price tag on different things, markets will shift.
We don't need to 'stop growth' we just need to grow differently.
We may need to slow down population growth, though.
"Is there some other plausible outcome?
Uhm, yes, people value walking around in clean air and would be willing to pay a premium for it.
It's one of the reasons people leave China and come to Canada, for example.
Completely implausible. Who's going to pay for these "domes"?
Part of the reason why we're doing so little to fight climate change is the misalignment of incentives because at least in the mid-term the groups who would have to pay for this fight don't overlap that much with the groups who'll suffer the first major consequences.
For the long term (100+ years?), there's tragedy of commons scenario - we want everyone else to restrict their economy, because doing it unilaterally won't help, so unless we can agree on binding restrictions for most countries, it's not going to happen; but in the mid-term it's not even a common environment, as the majority of expected harm is expected at places who don't have a meaningful impact on the global economy.
Extinction is not about money. The choice is to 'pay' now or to 'pay' later in a much harsher way.
Markets are levered if not overlevered, and maintenance of biodiversity is going to have both spending costs for the govt and resource extraction reductions (arguable), followed by compliance costs for firms.
Sure we save ourselves, but face it, our economic system is a rational system which at the end must put a finite price on a human life. Whether by market price discovery or by fiat, we are going to say, “there’s only this much we can spend”.
I’m really curious because I pretty much see a dead rock and humans under domes, in the far future.
Is there some other plausible outcome?
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Edit: people are correctly targeting the rational part of markets, but here’s the counter.
It’s very rational for business firms to lobby against externalities being priced in. It’s rational for ranchers to cut forests for economic gains. And it’s rational for the many many people who are being propelled up out of poverty to want better food, clothing and power.
That guy burning crops in India says “shit, sorry for the bad smoke Delhi. But it costs too much to do anything else. Sucks to be you.”
That’s why my point on our economy being levered. It’s not in anyone’s rational interest to halt growth. Every % of global gdp growth is millions of people out of poverty.
Which is why the question. Are people really incentivized to bell the cat - to actually price in externalities ?