Hayek’s Information

The economy has number. The term “economy” is singular, but its properties emerge from a collection of things which are numerous and diverse.  And it is important that the definition is always tied to its disparate components. When we create statistical aggregates to describe the economy, we lose information, we change the concept into something that is not real.  The economy is not singular.  It is a group, a set, of people, transactions, and ideas.  And the individual distinctness of its components, though unseen by the analyzing scholar, is precisely the quality that matters.

This is Friedrich Hayek’s insight in his famous essay, The Use of Knowledge in Society.

There are two kinds of “knowledge”.  There is the scientist’s knowledge, which seeks to understand the economy comprehensively, and the knowledge of the individual agent, who is uniquely aware of his own circumstances.  The individual’s knowledge is the disparate element, and the scientist’s knowledge is the conjectural, theoretic attempt to understand a complex system as a singular object.

As Hayek explains:

The sort of knowledge with which I have been concerned is knowledge of the kind which by its nature cannot enter into statistics and therefore cannot be conveyed to any central authority in statistical form.  The statistics which such a central authority would have to use would have to be arrived at precisely by abstracting from minor differences between the things, by lumping together, as resources of one kind, items which differ as regards location, quality, and other particulars, in a way which may never be very significant for the specific decision.

When Hayek uses the word “knowledge”, in today’s vernacular he means “information”.  We know that useful information is condensed, coded, and patterned.  The problem of economic coordination is the problem of transforming information for exchange.  And it is the system of price setting, by the natural mechanism of supply and demand, that achieves this end.

It is more than a metaphor to describe the price system as…a system of telecommunications which enables individual producers to watch merely the movement of a few pointers, as an engineer might watch the hands of a few dials, in order to adjust to changes of which they may never know more than is reflected in the price movement.

Thus, the interactions of numerous, disparate, autonomous individuals create economies by responding to supply and demand, communicating with price.  Information is exchanged, but the diverse elements of the economic system are preserved.

Recall that Margaret Thatcher famously said:  “there is no such thing as society”.  Hayek tells us why.  She was concerned that being oriented to  “society” can lead to ignoring citizens.

Hayek’s reasoning shows how aggregated information (the knowledge of the societal planner) doesn’t have relevance to any individual citizen.  The prudent policy maker doesn’t work on “society”, but on the liberty, safety, and opportunity of the individual.

Modal Consciousness

Zen Mind is described as a state of egolessness, devoid of self consciousness.   One can utilize this state of mind, Zen shows us, in archery, martial arts, and calligraphy.  Zen and the Art of Archery, by Eugene Herrigel, is the short classic story of a westerner’s attempt to achieve Zen Mind and become a skilled archer. During the author’s eight years of training he is continuously redirected from trying to hit the target.  The arrow should release itself, you see, like a tree branch that bends to release a load of snow.  One doesn’t aim.  Without ego the arrow finds the target.  Zen Masters blow out candles with their arrows at 80 yards, blindfolded.

The Philosophical Baby: What Children’s Minds Tell us about Truth, Love, and the Meaning of LIfe, by Alison Gopnik, reviewed by Michael Greenbergin the New York Review of Books, March 10, 2010, describes what the author has discovered about human consciousness before age 6.  Children this age, she reports, have “lantern” consciousness as opposed to “spotlight” consciousness, which develops soon thereafter.  In “lantern” consciousness one does not have a sense of being a self observer as one is having experience, one is just “taking it all in”, with no intentionally focused attention.  This is likened to what an adult experiences watching a movie, immersed in the unfolding visual and auditory experience, with a suspended sense of self.

In “spotlight” consciousness, after age six, we develop the focused intention of the self-conscious observing self.  We direct our ‘show’.  We have a sense of me looking to see what I seek to see.  We have ego, filtering and directing our experience.

As adults we seem to be able to do both “lantern” and “spotlight” consciousness. This is empowering, and maddening.  Zen shows us that suspending “spotlight” for “lantern” consciousness can take some effort and training – it doesn’t seem natural – but it can be quite beneficial for perceptual and motor tasks.  Having unattached attention, any golf professional will tell you, refines skill and improves ability to perform body kinesthetic and hand-eye movements.

“Lantern” consciousness seems more like animal consciousness.  “Spotlight” consciousness may be uniquely human.  Why did it evolve?   Perhaps “spotlight” consciousness is for social living.  Having me at the center of my perception may be very important for negotiating the interpersonal landscape.  The social environment is every bit as perilous for humans as the predator environment is for animals.  Human survival depends on successful membership in groups.

“Lantern” consciousness may be more effective for acts in the natural world.  Animals hunt, move, and fight very well.

This duality can be maddening.  Our consciousness can shift.  This is not fully manageable.  We choke in sports, freeze on stage, lose our golf swing, suddenly forget what we were going to say.

Something or Something else

“The more the universe seems comprehensible, the more it also seems pointless.” Steven Weinberg.

Science seems to have the unspoken goal of finding explanations that have no arbitrary element.   Nothing can be a certain way, when it could as well be another way.  Why it isn’t always has to be explained.   The result is that scientific explanations require that purely random elements somehow build the non-random world we know.

This is proving difficult.  The great mathematician, Kurt Gødel, proved that all logical systems require a ‘given’, an assumption that is unprovable by the logical system itself.  Reality seems so far to be the same.

Sean Carroll, in “From eternity to here“, 2010, tells us that the most important and baffling ‘given’ in our Universe is the unidirectional nature of time.  He traces the irreversibility of time to the Second Law of Thermodynamics, which states that entropy can only stay the same or increase.  Entropy is the measure of disorder of a system.  All of the other fundamental laws of physics seem to be time reversible.  Somehow, time reversible processes create time that is irreversible.  Carroll ventures to explain this.

Changing low entropy into higher entropy is the dynamic that creates our knowable world, the evolution of life, the existence of stars and planets, and galaxies, the unidirection of time.   And so entropy must have started low, but this is very improbable and therefore it must be explained, why didn’t it start high?

From eternity to here” gives us a wonderful tour of the advanced science that is grappling with this question.  We are presented the concepts behind  mathematical equations that have been found to predict the behavior of the universe.  In something like a parlor trick, science theory tells that what exists is what is probable. Anything can exist, however, no matter how improbable, given the immense time and space of the universe.  Infinity solves equations, Infinity has happened, yet the universe is only 14 billion years old. Empty space can have virtual particles that improbably, but actually, pop in and out of existence, and nothing can escape a black hole, except, improbably, something does. Probability helps explain reality, except when it doesn’t.  Cause and effect exists, except when it doesn’t.

Mr. Carroll is left engagingly unable to explain how entropy started low, and time is irreversible.  We seem to be left with a given.

Most people can accept many if not most scientific explanations, but most people, unlike Steven Weinberg, can’t really feel that it is all pointless.  There just seems like there is something when there could have been something else.

Coffee House Progressivism

People seem unusually polite in coffee houses. Coffee house patrons are often regulars,  and social interaction research, launched by the seminal book, The Evolution of Cooperation, by Robert Axelrod, 1984, has found that an ‘expectation of future repetitive interaction’ drives cooperative behavior. When people expect to see one another again, they have a stake in getting along, and so they are more civil. What is important it that this civility happens unconsciously. We tend to think that civility and good behavior are learned. Yet, here, a circumstance of human interaction – an expectation of future interaction – evokes civility and good behavior.  This is the central idea of communitarianism.

This should have profound implications for our political thinking.

There has always been a folk wisdom that holds that anonymity, living in crowds, fosters crime and uncivil behavior.   Think of Kitty Genovese, stabbed to death in New York City, pleading for help while her apartment neighbors did not act.  This is the corruption of the city, in contrast to the nobility of small town decency.  In The Lord of the Rings, by J. R.R. Tolkien, the moral decency – that literally saves the world – comes from small people form small community life, the shire.

Jane Jacobs, in “Death and Life of Great American Cities” 1961, famously opposed the freeways that would break up New York neighborhoods.  She highlighted the communal vitality of small enclaves of interactive, interdependent locations that have  ‘eyes on the street’.  She saved areas like Greenwich Village from the notorious highway planner Robert Moses.   She loved coffee houses.

Physically organizing the architecture of our social interactions such that ‘expectations of future repetitive interaction’ regularly occur would seem to deserve to be an essential element of our political planning.  Coffee houses, sidewalks, neighborhood schools, local business, front porches, all may drive civility more effectively than moral education.  The social hygiene that is created from the proper scale and pattern of social interaction is likely every bit as fundamental as clean air and water.

If Progressivism increases mass scale in all aspects of our civil life, and breaks up the dynamism and autonomy of small scale communities, and thereby reduces future repetitive social interaction – and Thinkagain believes it may – then Progressivism may be due for an overhaul.

Public schools are no longer neighborhood schools, food is no longer locally produced, health care is slated for national organization.  Progressives think of themselves as for small scale autonomy, like Jane Jacobs.  Yet, the effects of Progressivism seem more and more to be large scale, and centralized,  like Robert Moses.

Commit a communitarian act every day, repetitively interact.

Thinkagain is dedicated to coffee houses and Jane Jacobs.