Inequality and the poverty of atomistic reductionism

11 September, 2015 at 11:07 | Posted in Economics | 2 Comments

41xS7f+ClcL._SX322_BO1,204,203,200_The essence of this critique of the market lies in insisting on the structural relations that hold among individuals. The classic conception of the market sees individuals atomistically and therefore maintains that an individual’s holding can be justified by looking only at that individual. This was the original appeal of the libertarian picture: that the validity of an agreement could be established by establishing A’s willingness, B’s willingness, and the fact that they are entitled to trade what they are trading. Justification could be carried out purely locally. But this is not the case … Whether or not A is being coerced into trading with B is a function, not just of the local properties of A and B, but of the overall distribution of holdings and the willingness of other traders to trade with A …

If what we are trying to explain is really a relational property, the process of explaining it individual by individual simply will not work. And most if not all of the interesting properties in social explanation are inherently relational: for example, the properties of being rich or poor, employed or unemployed …

For the liberal the problem of economic distribution is raised by a simple juxtaposition: some are poor while others are rich. These two state of affairs are compared, side by side, and then the utilitarian question of redistribution becomes relevant. We could say that the liberal critique of inequality is that some are poor while others are rich, but, by contrast, the radical critique is that some are poor because others are rich …

tennis_520405In weakly competitive situations individualistic explanations suffice, whereas they are inadequate to explain strongly competitive situations. If A defeats B in golf and the question arises Why did A win and B lose?, the answer is simply the logical sum of the two independent explanations of the score which A received and the score which B received. But if A defeats B in tennis there is no such thing as the independent explanations of why A defeated B on the one hand and why B lost to A on the other. There is only one, unified explanation of the outcome of the match …

If anything is clear it is that society is not weakly, but strongly competitive and the presence of strong competition ensures that there are internal relations among the individual destinies of the participants. Consequently, individualistic explanations will not suffice in such cases.

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  1. A stickup (“your money or your life”) is a Pareto-optimal exchange that leaves both parties better off than the no-exchange alternative. Stanford’s Terry Moe was banging the table about this kind of problem during a pre-2008, Great Moderation, game-theory-as-key-to-all-mythologies triumphalism I think one has to have lived through in order to appreciate the courage of putting the below out when he did,

    https://politicalscience.stanford.edu/sites/default/files/powerpoliticalinstitutions.pdf

  2. The metaphor of tennis and golf is borrowed from Sober (1985), where he compares Darwinian selection to a game of golf, while Malthusian selection is closer the tennis – a point for one means no point for the other.


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