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ChristianKl comments on Open Thread Feb 22 - Feb 28, 2016 - Less Wrong Discussion
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As an econ PhD, I'm theoretically amazed that multicellular organisms could overcome all of the prisoners' dilemma type situations they must face. You don't get large corporations without some kind of state, so why does decentralized evolution allow for people-states? I've also wondered, given how much faster bacteria and viruses evolve compared to multicellular organisms, why are not the viruses and bacteria winning by taking all of the free energy in people? Yes, I understand some are in a symbiotic relationship with us, but shouldn't competition among microorganisms cause us to get nothing? If one type of firm innovated much faster than another type, the second type would be outcompeteted in the marketplace.(I do believe in evolution, of course, in the same way I accept relativity is correct even though I don't understand the theory behind relativity.)
In the absence of any state holding the monopoly of power a large corporation automatically grows into a defacto state as the British East India company did in India. Big mafia organisations spring up even when the state doesn't want them to exist. The same is true for various terrorist groups.
From here I could argue that the economics establishment seems to fail at their job when they fail to understand how coorperation can infact arise but I think there good work on cooperation such as Sveriges Riksbank Prize winner Elinor Ostrom.
If I understand her right than the important thing for solving issues of tragedy of the commons isn't centralized decision making but good local decision making by people on-the-ground.
The British East India company and the mafia were/are able to use the threat of force to protect their property rights. Tragedy of the commons problems get much harder to solve the more people there are who can defect. I have a limited understanding of mathematical models of evolution, but it feels like the ways that people escape Moloch would not work for billions of competing microorganisms. I can see why studying economics would cause someone to be skeptical of evolution.
Microorganisms can make collective decisions via quorum sensing. Shared DNA works as a committment device.
Interesting. Given that your field seems to be about understanding game theory and exactly how to escape Moloch, have you thought about looking deeper into the subject to see whether the microorganisms due something that useful in a more wider scale and could move on the economist's understanding of cooperation?
Beliefs have to pay rent ;)
I have thought about studying in more depth the math of evolutionary biology.
The British East India Company was a state-supported group, so it doesn't count. But you're right that in most cases there is a winner-take-all dynamic to coercive power, so we're going to find a monopoly of force and a de-facto state. This is not inevitable though; for instance, forager tribes in general manage to do without, as did some historical stateless societies, e.g. in medieval Iceland. Loose federation of well-defended city states is an intermediate possibility that's quite well attested historically.
That wasn't the argument I was making. The argument I was making that in the absence of a state that holds the monopoly of force any organisation that grows really big is going to use coercive power and become states-like.
Sure, but that's just what a winner-takes-all dynamic looks like in this case.
The argument is about explaining why we don't see corporation in the absence of states. It's not about explaining that there are societies that have no corporations. It's not about explaining that there are societies that have no states.
Large companies can definitely coexist with small states, though. For instance, medieval Italy was largely dominated by small, independent city-states (Germany was rather similar), but it also saw the emergence of large banking companies (though these were not actual corporations) such as the Lombards, Bardi and Perruzzi. Those companies were definitely powerful enough to finance actual governments, e.g. in England, and yet the small city states endured for many centuries; they finally declined as a result of aggression from large foreign monarchies.