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I was about to read Tom Slee‘s book review about Akerlof and Kranton’s Identity Economics and in the very introduction there was this summary of the individualism X collectivism issue (so i felt compelled to type down some of my own thoughts about this before i allowed the review’s ideas to contaminate my thinking. Maybe after i read it, i’ll make a second post):

For the fifty years since Gary Becker first applied economic techniques to social issues such as dysfunctional families and crime, the social sciences have been inhabited by two solitudes, seemingly incapable of communication. Sociologists and cultural theorists talk of ideology, identity, hegemony and discourse; economists deal in rational choice, individual tastes, incentives and the mathematics of game theory. Sociologists suggest that society shapes the individual; economists that individual traits shape society. Many economists come from a right-wing and market-friendly outlook; mainstream sociology has a more left-wing perspective.

My first reaction is: BOTH! Individuals shape collectives at the same time that they are being shaped by other collectives. Nowadays we are almost always involved in games consisting of so much more than one individual and one collective: Not feedback loops, but feedback mazes. And still, there is asymmetry between individual and society and we can ask: How does this difference work? My answer is context-setting.

Marx remarks somewhere that

Men make their own history, but they do not make it as they please; they do not make it under self-selected circumstances, but under circumstances existing already, given and transmitted from the past.

Context or Circumstance
is an homeomaterial arrangement of people and things that is in contact with the subject.
In other words, it is the space where someone or some group act and move about.

The important properties of the context do not arise from its material, but from its arrangement. In other words, what i am calling a context is not a group, ergo: Context is not Society. Groups work within contexts, for example a company within the current economic streams or an army within a battlefield.

In game theory terms, a context represents the rules of the game. Rules have to be enforced (even if passively like a mountain in the battlefield enforces the rule that going up is slower than going down). But the important fact is that both groups and individuals can influence the rules of the games they are involved with, both can set the context, but their capability to do so is asymmetrical. Individuals have small context-setting power but small context-setting inertia, while groups have big context-setting power and inertia, proportionally to the group’s size.

Let me illustrate. A big government group can influence the context of every business transaction in the country, in fact he almost can’t help doing so. Even tax cuts work as a form of signalling that sets the business context, influencing the transaction despite giving up money. On the other hand, if a big group needs to change the general direction or tone that his context-setting power had this change can only be produced slowly and with enormous expenditure of energy.

An individual, albeit he can influence directly just a bunch of friends or acquaintances, he can completely change his own rules almost instantly. Collectively the Greek pantheon could not be radically changed, even when Zeus was supposed to have overthrown the previous generation of Olympians, those he overthrew were still part of Greek myth. A new god could be added, and even sometimes an old god could be recast in new light, but the overall tone of everything remained the same. When Christianity proposed that the very idea of a pantheon was wrong, and that divinity should be sought in every bit of existence, it was only through personal, subjective, individual conversions that they could create this change — supposedly beginning with the first apostle that left his whole life behind to start a new faith.

Obviously, as soon as the new religion acquired a big number of faithful, it in turn became a large group instead, both with bigger power and bigger inertia. Thus if today there are hundreds of schismatic Christian groups, the reinterpretations of Catholic doctrine they propose are very minor compared with the radical ideas of the few dozen Christian groups of the early centuries of the Current Era.

Incentives are then conceived in a subtly different way now: Instead of being the all-reaching monetizeable force economists want they to be, incentives are just relatively distinct artefacts of the circumstance at hand. The mountain gives an incentive to the lazy soldier to run down and to the lazy commander to order the soldiers up. But all incentives have to be read by subjects, which means engineering incentives is always a hazardous enterprise.

Another important shift in conception is that the circumstance can never be strictly delimited. A given subject can never be completely sure he knows all the rules of the game he is in. In fact, there are many actions whose main (or only) purpose is to isolate the context from unforeseen influences. But contexts change, and sometimes they change fast. Thus sometimes the context that determines how a society (and the people inside this society) behave can be something no one is aware of.

In a way, this idea of context-setting dissolves the idea of society exactly as the idea of individual was dissolved by ethnography. There isn’t anything in a society that is permanent or intrinsic. It is just a set of groups that interact. And the scale of the group, from a single person to billions of them, is important but it does not determine anything.


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