Mediating variables and other depressing economic metaphors

by Rob Horning

20 March 2007


Economist Thomas Schelling’s Micromotives and Macrobehavior is the sort of book that changes the way you think about social situations for as long as you are under its spell; it forces you to consider how your own preferences affect the equilibrium of any particular scenario, making it obvious how the balances struck in society aren’t static or stable. He starts with an example of seating preferences in an empty auditorium and illustrates how individual preferences (not next to anyone; not in the front row; etc.) aggregate to produce strange outcomes, undesired outcomes. He piles on examples of how various unwanted outcomes—empty classes, intemperate rooms, segregated neighborhoods, etc.—nonetheless achieve equilibrium after we factor in the way each individual’s preferences yields behavior that’s affected by everyone else’s, and the way we tend to overshoot our preferred situation. This is a useful corrective to the view, derived from free-market dogma, that whatever equilibrium a situation finds is inherently justified, and it makes clear how dialectic much of our behavior is—it often doesn’t stem so much from conviction (from who we think we are, from our notion of our transcendent, unique self) but from the reactions of those we find ourselves mixing with. We end up having preferences and principles but find they are often frustrated by the presence of other people—this is partly why “convenience” so often means removing the other people or accommodating them so rotely that it is as if they have been disappeared.

Not only does Schelling shed skeptical light on our notions of transcendent, permanent selfhood, and our ability to act in accordance to our preferences, the book makes us question what really drives our friendships and invites us to consider how much of friendship is an arrangement of convenience rather than a true meeting of souls. At the end of a chapter on the sorts of dynamics that lead to segregation by age and income, he offers this passage, which I found equally stunning and dismal:

People who like privacy will associate with people who like privacy, not necessarily because they like the people but because they like the privacy. People who dislike dogs are happier among people who dislike dogs, not because they like the people but because there are no dogs. People who like crowds will be crowded with people who like crowds, without necessarily liking the people who like crowds. People who want to participate in a life-annuity scheme want to participate with short-lived people, without particularly preferring to have friends who are not long for this world.

A pretty devastating judgment on how we live, it seems. If this is true, then we form personal preferences about things and these become a set of dealbreakers, dictating who we can know, and ultimately our petty grievances will keep us in convenient company rather than that which might challenge and stimulate us.

Reading about economics brings up lots of concepts that can be seen as metaphors with ultra-depresssing ramifications. Consider, for instance, the Markov chain in which each state “is conditionally independent of the past states (the path of the process) given the present state.” In other words, what happens next in no way reflects what has happened in the past, and cause and effect no longer seems to apply—it’s the scientific term for the random walk behavior of stocks on Wall Street, but I’ve known people whose behavior has exhibited the Markov property, and have been accused of it myself. And then there’s the Sorities paradox, otherwise known as the problem of the heap—at what point does a pile of sand become a heap if you are piling it one grain at a time? You may be so fixated on the process that you never notice how it has grown up all around you. This seems an apt metaphor for all sorts of things in life, not merely combovers. When do you know you are in or out of love, for instance? How do you know when you’ve wasted too much time in a job or researching a topic? How do you know when to give up when life piles frustrations on you one grain at a time?

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