Protecting heterogeneous activity

Freedom is the ability to allocate your resources differently.  The majority allocates their resources in one direction...and you can choose to allocate your resources in a different direction. 

The perfect example is the story of Noah's ark.  Does it bother you that the story is fictitious?  It really shouldn't.  As the story goes...God informs Noah that he's going to destroy the world with a flood.  This information provides Noah with the incentive to use his resources to build a giant boat.  Even though he shares his partial knowledge with others...he's the only one who acts on it.  Everybody else laughs at him because they really doubt the business model.  The majority believes one thing and an extremely small minority believes another thing.  Both groups can't be right.  And in this case, neither can both groups be wrong.  Either the world will be destroyed by a flood...or it won't be.  Despite the fact that each group is certain that the other is wrong...there's no attempt to restrict each other's freedom.  Each group can allocate their resources differently.  The majority takes one path...and the minority takes another path.  It's a good thing that Noah's freedom was not restricted because it turns out that he chose the right path. 

The moral of the story is that heterogeneous activity is essential.  Because the future is uncertain...we should hedge our bets by protecting individual freedom.  Doing so maximizes the variety of economic activity which maximizes discovery which maximizes progress.

More here, interesting throughout. Isn't this a great description of Silicon Valley? Worth remembering the next time someone is ready to publish another piece of outrage when some wacky startup like Yo raises a million dollars in financing or someone raises over $50,000 on Kickstarter to make potato salad (the latter is hilarious to me and not reason for mass outrage; consider it either as a mass Duchampian art installation or as an economic transfer from the gullible to the clever).

Cohen wants you to believe that your immediate intuition, sharing is caring, is the correct one.  But in reality, the correct intuition is that recognizing and respecting ownership results in far greater abundance of the things that we value enough to sacrifice for.  Protecting ownership incentivizes people to choose the paths that others have positively valuated or might positively valuate.  If we, as consumers, want a greater abundance of apples...then we have to reward the producers who've chosen to grow apples.  This ties into the idea of value signals...

Here's a summary...

  1. Sylvia discovers a bunch of apples (risk)
  2. Others are willing to pay for her apples (valuation)
  3. If the value signal is bright enough, others will start supplying apples (incentive)
  4. The result is the optimum supply of apples (abundance)

It's a long post that delves into many other topics including a discussion of war and its impact on government spending and whether that's an optimal outcome. But what struck a chord with me was the importance of a lack of centralized funding allocation structure in Silicon Valley, and why that's important to protecting heterogeneous activity within the technology sector. It's one of the secrets to the generative nature of this sector.

Pragmatarianism is one of the blogs I recently discovered that made it into my browser toolbar. I'll point you to one last passage from this same post.

Michael Michaud is the author of Contact with Alien Civilizations.  He's under the impression that chances are pretty good that alien visitors wouldn't have discovered that progress depends on freedom.  It shouldn't be a surprise though given that he himself hasn't made this discovery. 

As I've argued in a few blog entries...

...contrary to Michaud, I believe that it's highly unlikely that extraterrestrial visitors wouldn't have figured out that progress depends on discovery...and discovery depends on doing things differently.  You're really not going to get different results by doing the exact same thing over and over.  Thinking otherwise is, according to Einstein, insane. 

Regarding Michaud's specific history clearly proves...a certain amount of progress can be made without understanding that progress depends on freedom.  This is because it's extremely difficult to completely eradicate freedom.  But if Hitler had successfully managed to conquer the world...would the rate of progress have increased or decreased?  The rate of progress would have plummeted because far fewer people would have been free to allocate their resources differently. 

Could it be that the premise of almost every movie about our first encounter with extraterrestrial intelligence is flawed? Could the difficulty of traveling through space be an effective filter on war-mongering alien races, and should we instead presume that any civilization enlightened enough to travel light years across space to reach us would understand more than anyone the value of leaving us humans our freedom?

I'd love to see more utopic science fiction movies that use technology as a source of improvements in life. Not all roads have to lead to Skynet, and most probably don't.