Rummel on Spontaneous Orders and path dependence

From: Technotranscendence (neptune@mars.superlink.net)
Date: Wed Jul 18 2001 - 21:53:47 MDT


Thought some of you might find this interesting. Not that it will solve any
problems here.:/

Verily!

Dan
http://uweb.superlink.net/neptune/
    See "The Many Births of Free Verse" at:
http://uweb.superlink.net/neptune/FreeVers.html

From: Rudy Rummel rummel@HAWAII.EDU
To: HAYEK-L@MAELSTROM.STJOHNS.EDU
Sent: Wednesday, July 18, 2001 7:12 AM
Subject: [HAYEK-L:] Path dependence, lock in, etc., and social behavior in
general

With regard to such terms as expectations, path dependency, lock in,
knowledge, remedial, cooperation, and efficiency as discussed on this
list regarding Peter Lewin's seminar, list members may be interested
in how these terms can be related to cooperative and conflict
behavior in general, especially within Hayek's spontaneous society.

Briefly, we can conceive of the spontaneous society as invisibly tied
together by nested, overlapping, and multivaried balances of
expectations between individuals, individuals and organizations as
Hayek defined them, and organizations themselves. These diverse
expectations form equilibriums, structures of expectations that are
social contracts between members of the society. It is a lock in of
their mutual behavior over a determinate future.

How does a specific social contract come about? Through conflict.
Now, conflict is a confrontation of interests, capabilities to
exercise power of one kind or another (powers such as exchange,
intellectual, love, coercion, authoritative, manipulative, etc), and
the will to do so. Conflict behavior is a knowledge exchange, a
learning process through which people and groups redetermine their
expectations of each other's interests, capabilities, and will. This
then establishes the social contract, which is based on an
appreciation through conflict of what each other wants, can get, and
is willing to do. This appreciation I will call a balance of powers.
Note that this balance and the particular expectations it supports
are specific and unique to the parties in terms of their values,
meanings, and norms. There is no concept of efficiency that is
relevant--the structure of expectations, the social contract, is what
each is satisfied with, given their reading of each other, regardless
of whether a third party interprets the contract to be unjust or
unfair, or one that could be better in some economic sense.

But expectations have high psychological and social viscosity. A
structure of expectations then will change slowly and incrementally,
but the supporting balance of powers--the interests, capabilities,
and wills of the parties--may change more quickly. This means that a
gap may form between a structure of expectations--who gets what,
when, and how--and the supporting balance of interests, capabilities,
and wills. Tension and friction then can result that like an
explosive gas, only needs a spark--a trigger event--to disrupt the
structure of expectations, and cause conflict.

This transition from one structure of expectations to another is
usually a jump--a discontinuity--in social behavior (which causes no
little problem for the use of continuous quantitative measures). That
is to say that major changes between parties in an spontaneous
society are not continuous, not a smooth evolution, but are leaps
through conflict to new expectations, like the apparent stability of
the earth is punctuated by sudden earth quaking movements in the
earth's crust.

Within this social framework and the spontaneous society, conflict is
then both a mechanism for rebalancing expectations and an empirical
indicator that expectations have broken down, Through conflict the
parties renegotiate their expectations and determine a simultaneous
solution to their different equations of interests, capabilities, and
wills.

The new structure of expectations established through conflict,
however, will only last until again the new balance of powers becomes
incongruent with expectations and a new conflict erupts. Social
cooperation and conflict are thus a social process (not a cycle)
through different but related episodes of cooperation and conflict as
people learn from and adjust to each other. As this process moves
through cooperation and conflict, the parties gain in new knowledge
and mutual learning from each conflict and the resulting
expectations, it will wind upward in more durable and harmonious
cooperation and less intense and extended conflict (like the process
of a marriage, from the conflict filled first year to the more
peaceful later years that become well structured by the empirical
expectations each had developed of the other). This process I call a
conflict helix.

This is path dependent sequence of changes (history matters) in which
chance can play a large role, as in the trigger event that sets off a
conflict. Whether the dependency is first, second, or third degree
depends on the actors and the situation. Indeed, in many situations a
third degree dependency may by itself be the factor in the breakdown
of the expectations and resulting conflict. The breakdown then
enables a party to change the perceived inferior who gets what, when,
and how to what was previously more desirable, but had to be given up
in the former conflict.

[Path dependence is when certain contingent events have an impact in the way
an economic process unfolds. For instance, the fact that someone invested
lot of money in a medical degree influences other decisions in their life,
such as what job to take and the like. First degree path dependence is just
the observation that there's persistence in human affairs -- or history
matters. Someone might, for instance, remark that since she grew up in such
and such a neighborhood, she learned to love Thai food. It implies nothing
bad or regretful about the contingent event. She's not regretting her not
having grown up exposed to some other cuisine. Second degree path
dependence is when, in hindsight, someone admits to having made the wrong
choice, but they didn't know it at the time. This is like going into a Thai
restaurant, already knowing she loves Thai food, then finding out the food
there isn't all that great. She regrets her mistake, but this is only after
the fact. When deciding to eat there, she thought she was making a good
decision. Third degree path dependence is when someone makes an inferior
decision knowingly. This is when someone feels locked into a bad decision.
Some question whether this last type even exists -- or if it does, what its
implications are. -- Daniel Ust, using Peter Lewin's "The Market Process
and the Economics of QWERTY: Two Views," _The Review of Austrian Economics_
14(1) as my reference. See his paper for more references on path
dependence.]

This universal social process towards grater cooperation and less
conflict depends on the vital conditions of a relationship remaining
unchanged in important respects (as such conditions would change
significantly through a new job, a sharp jump in product costs,
acquiring a degree, a discovered affair, coup, election,
assassination, joining the nuclear club, defeat in battle by a third
party, etc.). A wife's new Ph.D., for example, may radically change
her balance of interests, capabilities, and will regarding her
corporate executive husband; or a Marxist coup in Saudi Arabia could
suddenly and radically change its balance of powers with the United
States, leaving their mutual structure of expectations hanging in
air--without a base in congruent mutual interests and wills.

In sum, social behavior within a structure of expectations has no
room for the idea of efficiency, but path dependency, lock in,
expectations, and bargaining (exchange power)-the dominant power in a
spontaneous society--are very much part of the social picture.

I have modeled and tested the path dependency and jump from one
social contract to another by Catastrophe Theory at:

http://www.hawaii.edu/powerkills/CAT.ART.HTM

This theory formed the basis of my volumes on Understanding Conflict
and War, particularly War, Power Peace at:

http://www.hawaii.edu/powerkills/NOTE13.HTM

It is this theory and its successful empirical tests that underlie my
assertion that freedom is a method of nonviolence, and that nations
largely comprising a spontaneous society do not make war on each
other.

R.J. Rummel
Professor Emeritus
rummel@hawaii.edu
http://www.hawaii.edu/powerkills



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