Value Competition

"Auction a $20 Bill" or "Give Me $5"?

Rom and Ori Brafman's Sway is a light, Gladwellesque traverse through the greatest hits of behavioral economics and social psychology, ranging from prospect theory to groupthink to the fundamental attribution error of allowing a label to overcome reality: http://www.swaybook.com/

Chapter Two, "The Swamp of Commitment," uses business school professor  Max Bazerman's "auction a $20 bill" exercise as a parallel to LBJ's decision-making in Vietnam and, more briefly, to W's in Iraq.  In the auction exercise, a class of students is given the chance to buy the professor's $20 for as little as $1.  The nasty catch is that the second place bidder as well as the first place bidder has to pay the professor the value of his or her highest bid.  The result obtained by Professor Bazerman is that two bidders, neither of whom wants to lose, both wind up bidding more, sometimes much more, than $20.  The conclusion suggested by the brothers Brafman is that Vietnam and Iraq embody the auction exercise in real life, with US leaders initially hoping to win cheaply and then sucked in ever deeper by an irrational although behaviorally compelling unwillingness to let sunk costs be bygones and withdraw.  Here--as is usually the case in their book--the Brafmans uphold rational choice; by expounding people's deviations from RC in practice, they hope to encourage rationality.

Okay...but here, as is often the case with RC arguments, some cautionary notes are in order.  The world is full of models of how people deviate from RC, and it is often very hard to tell which if any model applies.  Further, it is sometimes very tricky to tell what the normative implications of an RC model are, assuming its applicability. 

Instead of the "auction $20" exercise, imagine a "Give me $5" exercise: Student A is given $20.  Student B can ask Student A for $5 on behalf of Students B-Z.  If Student A agrees, Student B must promise on behalf of the rest of the class that A will not be asked for more.  This promise is not binding on B or the other students, though, as the professor explains.  If it is broken by any of students B-Z asking A for another $5, another promise is made by the requesting student, and so on.  If A refuses at any point, the game ends and A has to give all his or her money to B-Z if a coin flip turns up tails; if the flip is heads A gets to keep what he or she has left.  The dominant interpretation of RC says that in the "Give me $5" (or "Munich" or "Falling Dominos" or "Bernie Goetz" game), a perfectly rational A who knows the other players are perfectly rational should refuse the first request for $5.  In practice, I suspect many students would wait to resist, a la Neville Chamberlain, and that a majority would fork over the first $5 if the game were played with only A and B rather than with B-Z.  To refuse the first request for $5, defensible as it is under RC, suggests that you are an untrusting person who would rather fight, with an expectation of only $10, rather than share and trust B or B-Z to keep B's promise and leave you with $15. 

None of this is intended to debunk RC.  The more RC stories one can tell and compare and contrast with an inevitably messier world the better, as long as one does not fall too much in love with any one of them and commit one's own RC version of the fundamental attribution error.  

 A VC story about how a society can reduce the likelihood and the magnitude of Chamberlain-style errors of appeasement on one side as well as LBJ-style errors of escalation on the other side:  In the current political system in the US and most other wealthy nations, a center-left that is more worried about errors of escalation competes for popular favor with a center-right that is more worried about errors of appeasement.  But the coalition of both sides as well as the group of voters in the middle contains numerous voters who not zealots for the party's tilt in favor of or against military force.  Compared to a consensus system like that of the US in the early 1960s in which the use of military force does not divide the sides, vote-seeking politicians of both the more force-averse center-left party and the more force-favoring center-right party have stronger incentives to look with care at the costs and benefits of military force and avoid being trapped in an escalation game or an appeasement game.  If there had been more of a division on military involvement between the parties under the New Deal system, Vietnam might well have been more like the comparatively manageable messes of Iraq and Afghanistan rather than the much deadlier quagmire it actually became. 

How about a flipped VC story, in favor of the New Deal system and against the current more polarized division between the Democrats and the Republicans?  There are plenty of those, some of which I find convincing.  But I can't think of one as of now that seems as convincing on Vietnam vs. Afghanistan/Iraq as the one I just gave.

The Moral Basis of a Backward Society

In his 1958 ethnography of life in "Montegrano," an impoverished village in the South of Italy, Edward Banfield contended that peasants and others in the village were "amoral familists" who acted to benefit the short-term interests of their nuclear families, assumed that others would do likewise, and avoided civic commitments.  Banfield suggested that enlightened self-interest (or what in value competition terms would be called egoistic values) on the part of villagers could help the situation, and made proposals for monitored local government and expansion of education, while expressing pessimism about the prospects for such measures being tried: 

http://www.amazon.com/Moral-Backward-Society-Edward-Banfield/dp/0029015103

Assuming the basic accuracy of Banfield's portrayal of uncooperative, often unhappy villagers in Montegrano in the mid-1950s--though there has been a dispute about whether he underrated community networks in the village and by extension in Southern Italy in general http://www.arts.mun.ca/congrips/newsletter/44%20-%20Fall%201995.pdf --there is a question as to whether his portrayal of social dysfunction applies to traditional societies in general.  I'm doubtful that it does; the uncooperativeness, miseria,and strong if inchoate group antagonisms between the peasants and the gentry in Montegrano that Banfield describes seem closely connected to the village being a lagging part of a more or less modern Italian state.

The Opposable Mind

In his 2007 HBS Press book, Roger Martin, dean of the University of Toronto's Rotman School of Management, contends that many successful business leaders benefit from an ability to hold opposing concepts in their mind and then to come up intuitively with a third-way approach that avoids being captive to either side of the opposition.  Excerpts:

http://www.rotman.utoronto.ca/rogermartin/ChoicesConflictandtheCreativeSpark.pdf

His examples, such as A.G. Lafley of P&G eschewing the commodity/high-end dichotomy in favor of combining cost-cutting with R&D, Isadore Sharp of Four Seasons avoiding the large hotels with services/small hotels without dichotomy in favor of smaller luxury hotels, and Jack Welch of GE combining his "Be #1 or #2" maxim on market share with a "Define your market so you have less than 10%" maxim, focus on the danger of being trapped by small-scale, field or organization-specific dichotomies.

My value competition take: In being able to avoid being trapped by polarizing local dichotomies, good managers benefit from an internal competition between calculation and culture that cuts across the local dichotomies, and that impels both sides of the manager to come up with creative, value-enhancing approaches.  Given my own rational choice proclivities, I think it's important to specify how that value-enhancing process works in an RC model, though there's also value in the qualitative empiricism of Martin's case studies.

Creative Capitalism

Michael Kinsley, in the latest installment of his second career as Bill Gates' roving and sometimes rebellious idea man, serves as the impresario of a collection of essays centered on a January 2008 speech Gates gave in Davos.  Gates called for "creative capitalism," which appears to differ from some versions of corporate social responsibility by virtue of being oriented toward employing market mechanisms as much as possible, and secondarily by being premised on a utilitarian claim about market transactions insufficiently weighing the preferences of the poor rather than on some other ethical theory.  

The book:

http://www.amazon.com/Creative-Capitalism-Conversation-Buffett-Economic/dp/141659941X

The blog on which the book is based:

http://creativecapitalism.typepad.com/creative_capitalism/what-is-creative.html

A signal virtue of Kinsley's book, in keeping with his intellectual range and his earlier career as a point-counterpoint television advocate on "Crossfire," is that it combines lively debate with avoidance of an overly simple dichotomy between pro-market skeptics of creative capitalism/CSR and egalitarian supporters of CSR.  He includes a substantial number of contributions by market advocates, many of whom (e.g., Gregory Clark, Clive Crook, William Easterly, Steven Landsburg, and Richard Posner, along with Milton Friedman in his famous 1970 NYT magazine article) are indeed mostly dubious about creative capitalism/CSR, but some of whom (e.g., Gary Becker and Ed Glaeser) are more favorable, as well as contributions by egalitarians like John Roemer, Robert Reich, and Kinsley himself who are skeptical or ambivalent.

Per value competition (or one plausible interpretation of it), for creative capitalism/CSR to improve its efficacy, it is important to have competition between pro-market and egalitarian versions of the concept, with both sides keeping the other honest.  Such competition could take place externally, in the form of openly pro-market CSR NGOs arising alongside openly egalitarian CSR NGOs like the Workers Rights Consortium, or internally, with people in the Gates Foundation, Nike, etc., having both kinds of values inside themselves, or, most plausibly, in both internal and external forms.  None of Kinsley's contributors call for such competition directly, though there are hints of the idea of pro-market CSR in Steven Landsburg's call for firms to uphold market principles on issues such as protection even at some cost to themselves. 

I suspect that part of the problem with pro-market CSR surfacing relates to the prestige of Friedman as a market advocate and to his trashing of CSR as a reflection of socialist, collectivist values.  If it is to emerge, Landsburg, Becker, or other similarly-minded folks need to say to Friedman's shade, "Milton, we agree with your pro-market values 100%.  But those values are sometimes most effectively advanced through pro-market CSR, and we should be creating pro-market CSR institutions, just as pro-market advocates in the US created market-oriented public interest law firms in response to the Naderite version." 

The Anxiety of Influence

In a 1973 work of criticism that owes a great deal to Nietzsche but that lacks Nietzsche's ability to fuse literary creativity with a scientific spirit--he has Nietzsche's passion and his flair for vatic utterances but not his logical clarity--Harold Bloom maintains that strong poets are formed through an agonistic, Oedipal grappling with their strong predecessors.  

http://www.nytimes.com/books/98/11/01/specials/bloom-influence.html

Bloom can be recast in rational choice terms: Poetry of the highest quality, like mathematics of the highest quality, demands familiarity with other work of the highest quality as a precondition to the advance of the discipline.  The lack of readily verifiable standards of quality and progress in poetry as opposed to mathematics leads to a personal engagement with past masters in the former discipline as opposed to the latter.

The RC recasting of Bloom, plausible as it is, leeches the lifeblood out of his portrait of the strong poet wilfully misreading his predecessors.  A value competition recasting, though not immune itself from the pale sickliness of utilitarian reason, is closer to the original: The strong poet is one in whom reverence for the tradition and iconoclasm are at war within the poet in an intense, fruitful way that for at least a moment, a moment that will soon enough be lost, lifts the poet's powers to the heights at which the great poets of the tradition dwelled in their moment. 

Waking Giant

Waking Giant: America in the Age of Jackson, by David S. Reynolds  http://web.cuny.edu/academics/oaa/distinguished/view_profLast=Reynolds&profFirst=David.html , aims at the broad American audience that purchases biographies and narrative histories on the Revolutionary and Civil War eras.  Compared to Ellis, McCullough, McPherson, and other popular historians of those eras, Reynolds concentrates more on religion, art, and social movements, appropriately so given the less martial and revolutionary nature of the 1815-1848 period.

Narrative history is a genre conducive to a value competition approach that examines how internal and social clashes of values may be conducive either to social progress or to undesirable group polarization.   Compared to Sean Wilentz and Arthur Schlesinger, whose politically-oriented accounts of Jacksonian America laud the rise of the democratic principle, Reynolds tells a story about cultural diversity and progress that is more balanced in its allocation of credit between the populism of Jackson's Democratic Party and the comparative elitism of the Whigs and other anti-Jacksonians.  In particular, he describes artistically successful American writers of the period like Hawthorne, Melville, and Poe as drawing from both a popular culture of melodramatic fiction and an elite, Europeanized literary culture; his nice portrayals of them strike me as entirely consistent with a value competition framework that focuses on productive value tensions within individuals. 

In his wistful remarks on how James K. Polk might have helped stem the political wrangling that led to the Civil War by taking a moral stand against the spread of slavery to new territories, I suspect that Reynolds underestimates the counterproductive regional polarization that was built into the Jacksonian party system in the form of the Democrats' commitment to the South and slavery.  (I'm much more inclined to think that things could have worked out differently if Jackson, as opposed to the comparatively minor Polk, had had a different attitude toward slavery.)  But I strongly agree with him to the extent he is implying that the regional polarization that culminated in the Civil War was not foreordained and was fostered by contingent factors in the party system and in the psyches of individual leaders like Jackson and Polk. 

Junot Diaz and Cathy Park Hong

...read at Rutgers-Newark yesterday: http://mfa.newark.rutgers.edu/writersatnewark0809.htm

A few value competition observations: Both writers rely on a tension between elite "MFA/MLA" language and immigrants' language.  That tension is useful in countering the "tyranny of MFA/MLA-speak" problem for creative writers (which is perhaps especially acute in poetry (Hong's field)), but creates a risk of writing that is a pastiche of MFA/MLA and immigrant argots rather than an effective fusion of them.  I was not convinced that Hong avoided that risk in her poems about Desert, an imaginary Las Vegas-like city, which juxtapose Borges/Calvino allusions and the Korean-American pidgin of the "Tour Guide."  Perhaps as a result of having read his novel previously (or perhaps even because of partiality toward him as a Rutgers graduate), I was convinced by the sparely-written passage that Diaz read of Oscar Wao facing his doom in the Dominican Republic in a field of sugar cane rustling like trifids. 

Laurence Tribe

The Invisible Constitution, the new book by Harvard Law School professor Larry Tribe http://www.law.harvard.edu/faculty/directory/index.html?id=74, is a semi-popular, footnoteless argument that judicial conservatives as well as liberals rely on factors other than the clear meaning of constitutional language in interpreting the constitution.  As a prominent judicial liberal himself, he extends an olive branch to the other side, suggesting that conservative federalism victories in Lopez (striking down gun-free school zones) and Printz (striking down some Brady Bill gun control provisions on the basis that they impermissibly commandeered local authorities) were warranted exercises in upholding "anti-slippery slope" and "anti-commandeering" principles that are latent in the constitution's logic, though not directly expressed in its language. 

A value competition take is more Janus-faced than Tribe's argument for the invisible constitution is.  Under VC, there is a case for Felix Frankfurter-style judicial process values that cut across liberalism and conservatism and that in doing so have the ability to discipline both sides.  Belief in the "invisible constitution" could be such a cross-cutting process value.  In that regard, VC converges with Tribe.  A likely difference with Tribe is that from a VC perspective,"invisible constitution" arguments will all else equal be sharper if there is also a "no invisible constitution" side with similar cross-cutting appeal among liberals and conservatives.   

Under VC, though, there is also a case for judicial liberals and conservatives adopting process values for or against the invisible constitution, plain meaning, original intent, purposive interpretation, rules, standards, etc., rather than having them cut across ideology.  The ideologizing of legal process can be understood as an intellectual "propertizing" that leads to better-developed process arguments, just as propertizing the commons leads to the better development of land.  In turn, the dangers of overcommitment and fanaticism associated with propertizing legal process can be reduced if the sides wind up, whether they are conscious of it or not, defending different process values in different domains of law.

Finally, under VC there is a normative case for an ongoing tension between the "propertizing process values" case for having opposing political ideologies committed to different process values and the "cross-cutting process values" case for the opposite position.  That tension between propertizing and cross-cutting is mirrored nicely in Tribe's book as a whole.  He does not dispel the sense that his version of the invisible constitution is a project tilted toward judicial liberalism, but he is persuasive in suggesting that the process value he is advocating has something in it for both sides. 

Perry Anderson

Anderson's essays, mostly from the London Review of Books, are collected in Spectrum: From Right to Left in the World of Ideas. He briskly lumps the very different Leo Strauss, Michael Oakeshott, Carl Schmitt, and Friedrich Hayek together as "The Intransigent Right," devoting the bulk of his critical energy to intellectuals identified with the left; he criticizes some (Rawls and Habermas) for descending into centrist consensualism and offers a "lefter than thou" mixture of criticism and praise to others (Hobsbawm is a milquetoast Popular Frontist on domestic policy, but a staunch anti-imperialist abroad). 

Although Anderson's comments on Robert Brenner on the English Civil War and many other matters have considerable acuity, I find myself doubting that his approach aids people on the left to align their work with social welfare.  Ideologues, including radical ones, who want to win a real or virtual election can serve their side and society by monitoring the foibles and failings of their cause.  But if ideology is detached from a desire to win some kind of election in some kind of actual if tiny society of all kinds of people by persuading swing voters of some kind, the self-critical ideologue is an inquisitorial upholder of doctrine for its own sake, not someone who will help the world.   

The Brief Wondrous Life of Oscar Wao

Junot Diaz's novel http://www.junotdiaz.com/ didn't work for me most of the way through, and then did.  I didn't find the narrator's incessant n-word references to Dominicans--perhaps another post on that theme--or his gangsta, babe-magnet persona persuasive, and the equally incessant Tolkien and other fantasy/sci fi references and analogies--Trujillo as Sauron, etc.-- seemed peripheral, distracting, and/or politically confused for a few hundred pages.  The story coalesced for me with the return of Oscar, the love-obsessed, fantasy/sci-fi-obsessed New Jersey Dominican-born hero, to the DR to meet his doom.  A semi-VC line on why: In New Jersey, the heroic quest of Frodo Baggins and the chivalry of Sir Galahad, and the aspirations of Oscar Wao to follow in their footsteps, are casualties of modernity and its rational culture of efficiency and democracy.  In the more traditional culture of the DR, on the other hand, Oscar in his fatal quest for the love of a prostitute with a vicious police officer boyfriend is more akin to Frodo and Sir Gawain.  Diaz does not make the lot of immigrants from the DR in New Jersey, or the possibility of the DR's becoming a modern, highly productive state like Japan, Norway, or New Jersey, nearly as sad as Tolkien made the passing of the age of the elves and Sauron--hurrah for that possibility, I should say, and I suspect Diaz might agree--but he did in the end make me believe emotionally in the analogy between beauty and brutality intertwined in a traditionalist, fatalist DR and evil and virtue bound together by rings and deeper forces of fate in Middle Earth before the Age of Man.