Prisoner’s Dilemmas-XXIII- Quiet Quitting

Photo by Ron Lach on Pexels.com

By now, most of you are aware of the new workplace phenomenon known as Quiet Quitting. Forbes defines Quite Quitting as “..unsatisfied employees put forth the least amount of effort possible to keep their paychecks…”. Most employees might think they are clever for only doing the bare minimum, but managers have their strategy for handling underperforming employees; Dehiring. Instead of outright firing the troublesome employee, management directly acknowledges their dissatisfaction with the job role. The hope is that this might prompt them to find another job.

Dehiring has been described as a win-win scenario because it acknowledges the mutual frustration of the worker and the firm. Side-stepping the legal and psychological hurdles of navigating the labor laws governing terminating a subpar employee. However, what if either employee isn’t getting the hint? Managers tend to be ineffective due to poor communication skills, which could muddle the succinct message of “Please find a new job!”. If there is any breakdown in the messaging, both worker and their boss; will result in a Prisoner’s Dilemma. The ineffectual expression of shared frustration will make this process protracted and end in an actual firing.

The reward for Mutual Cooperation: R= .5

Either the employee or manager could hope; if they play hardball, the other will eventually fold. The manager ultimately hopes the employee will change their ways, it is always easier and cheaper to have a current employee change their attitude than find a new hire. Concurrently, worker wishes that rules will loosen up, higher pay, or lighter workload, banking on the fact that their boss “needs” them.

Both parties holding these zero-sum strategies are being obtuse; neither outcome is realistic. The best approach would be for each coalition in this game (company/management vs. unhappy worker) to directly and honestly express their concerns. Not only would this path be more efficient, but if the manager is faithful to the etiquette of dehiring, the problematic employee should have time to find a new job. 

·     Punishment for Defecting: P=0

It would be improbable to have a central authority that can definitively prove and punish either the manager or the worker for using passive-aggressive or unclear communication. Since this is a game-theoretical model, for the sake of simplicity, let us assign the punishment value at zero.

·     Temptation to Defect: T=1

As mentioned previously, it is tempting to adopt the longshot strategy; after all, either coalition gets all their preferred conditions met; with exerting the least effort possible. It is easy to view ambiguity as an excuse to hold out for a no-compromise solution. 

·     Sucker’s Payoff: S=-1

In a no-compromise strategy, it has win-take-all dynamics. The costs of buckling for either coalition are high. Arguably, the monetary costs are much higher for the firm, but the subjective evaluation of the worker’s disutility of conforming to their boss’s parameters would be difficult to measure. 

Condition 1:

· T>R>P>S

· 1> .5> 0 > -1

Condition 2:

· (T+S)/2<R

· (1+-1)/2 <.5

· (0)/2 <.5

· 0 < .5

Overall, it appears as if the Quiet Quitting controversy, sloppy communication combined with employees and employers giving into their desire to be lazy and have all their preferences met engenders a Prisoner’s Dilemma. 

The Strategic Depth Theory of Diversity and Inclusion

Photo by Andrea Piacquadio on Pexels.com

Paul Gottfried has made many insightful contributions in his storied academic career; however, even the most erudite thinkers have their blind spots. One thing that Gottfried errs on is the ideological proclivities of American corporations (if applying methodical individualism, the expressed opinions of executive management represent the firm). In his article, Bourgeois Liberalism [1], Gottfried infers that the leadership of US firms has moved further to the left.

Superficially, this seems to be the case, especially considering the rapid and conspicuous growth of corporate Diversity and Inclusion programs. However, most office workers are not hardcore progressives. This is also true of management. Per Fos, Kempf, and Tsoutsoura (2022) 69 % of corporate executives identify as Republicans (p.8). In the current political climate in the United States, few registered Republicans want to be labeled as woke. Politics may not explain the increase in Diversity and Inclusion initiatives in corporate America.

If Gottfried is incorrect about the political preferences of U.S. corporate executives, what could explain the uptick in D&I in the workplace? It might be sensible to look at discrimination ligation to see why executives adopt corporate policies antithetical to their values. Lawsuits are not only monetarily costly [2], but also generate negative publicity. Frequently, public perception matters more than facts. The wisest policies in corporate governance would be to create distance between the firm and the perceived instances of workplace discrimination to dispel any claims of a hostile work environment.

  This phenomenon is known as the Strategic Depth Theory of Diversity and Inclusion because where firms try to distance themselves from the incident. Strategic Depth is best defined as:            

“… the distances between the front lines or battle sectors and the combatants’ industrial core areas, capital cities, heartlands, and other key centers of population or military production..”

(Harkavy, 2001, p.12).

In the field of military strategy, there are many notable applications of this concept in geopolitical struggles. The most obvious example is Israel [3]. Israel has long been a small nation surrounded by hostile neighbors (p.4), making the acquisitions of “..Sinai, the West Bank, and the Golan Heights..” critical in achieving national security (Eisenkot, 1997,p.5). Much as territorial expansion can act as a buffer between quarreling nations, the creation of programs fostering D&I figuratively acts as a geographic barrier between the firm and the plaintiff. Including these principles in the company’s culture; gives executive management the latitude to condemn the offensive actions of middle managers and hourly employees without appearing to be hypocritical.

Notes

  1. Thanks to Calculus of Decay for re-blogging the article back in early August 2022.
  2. Even if the firm avoids paying damages, there are still costs associated with legal defense. 
  3. This is not a commentary on the Israeli-Palestinian conflict , but a conspicuous example to illustrate my theoretical postulations.

Prisoner’s Dilemmas: XXII- Anti-Discrimination Laws

Photo by Christina Morillo on Pexels.com

Professor Bryan Caplan makes some impressive observations in his 2020 essay The Anti-Jerk Law. Caplan uses the hypothetical example of an Anti-Jerk law to emphasize the fallacies of anti-discrimination laws. At their core, both the fabricated example of the Anti-Jerk law and current discrimination laws suffer from numerous flaws. Instances of discrimination are not clear-cut, much like how your boss is a jerk is subject to interpretation. But if juries are predisposed to sympathize with instances of discrimination or the censure of a mean boss, this may “… lower the de facto burden of proof…” in ligation cases. More importantly, firms might be less apt to hire individuals that can make discrimination claims. Resulting in more indirect discrimination, creating a cobra effect. Laws and policies; designed to reduce discrimination, increasing discrimination.

Effectively, anti-discrimination laws are prone to create Prisoner’s Dilemmas. Why? Employers and Employees(ethnic minorities, religious minorities, transgender people, homosexuals, women) are predisposed to work against one another. Firms are ligation adverse and seek to avoid lawsuits costs and bad publicity. On the other hand, minority employees (emboldened by anti-discrimination regulations) have laws incentivizing them to pursue maximum damages for any perceived incident of discrimination. It is evident that both incentive structures are at odds and will cause both parties to choose to defect (using the vernacular of game theory) rather than cooperate.

The Calculations:

The above scenario is a zero-sum game; due to neither party wanting to compromise and the perception of winner-take-all dynamics. To numerically determine that this scenario is a Prisoner’s Dilemma, we must validate that the situation satisfies the two conditions expressed by Nordstrom; 1.) T>R>P>S and 2.) (T+S)/2<R.

Defining The Variable:

· Reward For Mutual Cooperation: R =.5

The value of .5 has been assigned for the gains of cooperation because the values expressed are predicated on a significant potential stance of discrimination ligation. The firm could take a chance on a risky employee and an employee could tolerate mild forms of discrimination (insensitive jokes, run-of-the-mill micro-aggressions) and not sue. Functioning as an archetypal compromise, neither party is pleased with the arrangement but still better than non-cooperation. 

· Punishment for Defection: P =0

There is little to no proper punishment for defection. For the hiring company, it is difficult/ nearly impossible to prove that they choose the 20-something, recent college graduate, male over a riskier job application (from an anti-discrimination standpoint). There is virtually no actual punishment despite the formal parameters of discrimination laws. For the employee, since the social norms are aligned with anti-discrimination legislation, the social costs for suing are low (but there might be monetary costs associated with legal action which are difficult to quantify. 

· Temptation to Defection: T=1

The firm has a lot to lose by hiring an employee with a high probability of suing them; the employee has a lot to gain in situations of discrimination.

· Sucker’s Payoff: S=-1

Both parties can lose a lot if the other does not compromise. 

Condition 1:

· T>R>P>S

· 1> .5> 0 > -1

Condition 2:

· (T+S)/2<R

· (1+-1)/2 <.5

· (0)/2 <.5

· 0 < .5

Prima facie, it does seem as if numerically and qualitatively that anti-discrimination laws are inclined to create Prisoner’s Dilemmas.

Focal Points V: Popular Culture

Photo by Donald Tong on Pexels.com

Futurist and businessman Peter Schwartz in his book The Art of the Long View (1991,1996) suggests that firms should attempt to navigate uncertainty by constructing possible scenarios depicting the best- and worst-case scenarios for the business. Schwartz’s proactive and unorthodox approach to business suggests that we accumulate market information from an array of various sources to formulate a model that has the greatest degree of acuity possible.

One unlikely taproot for market information and patterns per Schwartz is popular culture. From Long View:

“… You may think popular music affects only kids. But those kids are all over the planet, and the effects last their entire lives. I once went to a Paul McCarthy concert that was, in effect, one big Beatles sing-along with people in their forties. The psychedelic mindset of “Lucy in the Sky with Diamonds”, and the delicious view of the world in “Here Comes the Sun” deeply affected the culture.

Today, I pay attention to rap music and world music –­ the fusion of ethnic threads from all over the equatorial world. I don’t think that business people will have to start putting “rap-speak” into their employment applications, but rap music will dramatically affect business nevertheless. These are not love songs; they are songs of anger. That rage begins to surface, with some still unknown racial event as the final trigger. ( This book was written several years before the Rodney King riots in L.A. that gave expression to that anger)….”

It seems as if Schwartz may have inadvertently stumbled upon a focal point or Schelling Point when he justifies utilizing contemporary culture as a potential bridge for the information asymmetries in consumer markets. Pop culture is a point of convergence for us all, whether for productive uses or purely entertainment. Being ignorant of pop culture can impact your social life; celebrity culture, sports, current music, and obscure references from popular movies; dominates topical conversations among Americans. It even has a hand in shaping circumstances in domestic politics. This statement is substantiated by the shrewd observation made by Andrew Breitbart: “Politics is downstream from culture”. It might be worthwhile to be aware of the newest pop culture trends.

Prisoner’s Dilemmas XXI: (Part B): The Fiasco on the Vineyard

Photo by Ahmed akacha on Pexels.com

Part A

As mentioned in Part A, the lack of foresight and economic ignorance of Massachusetts voters are a notable feature of the Fiasco on the Vineyard saga. However, Governor DeSantis is far from innocent in this debacle. He essentially used tax dollars to make an existing problem worse. All in the name of political gamesmanship. Yes, DeSantis is correct that Massachusetts does not fully bare the cost of liberal immigration policies. Many immigrants avoid Massachusetts because the state is financially inhospitable due to the high cost of living. It is tempting to give a political actors a dose of their own medicine when they have virtually no skin in the game.

DeSantis marooned these people in a jurisdiction where they do not have much hope for economic mobility, only stressing the island’s meager resources. Massachusetts voters defected first, by favoring immigration policies that will not impact their communities. The governor of Florida (DeSantis) chose to punch back and flew fifty migrants to an affluent tourist town in the Bay State. Not only was this tactless and passive-aggressive, but it was also lazy. It is easier to make a political spectacle out of the immigration debate than to advocate and implement reforms. The suboptimal result is; a group of impoverished immigrants stranded on a prohibitively expensive island. It is reasonable to argue that this situation is the second layer (and most salient) layer of this Prisoner’s Dilemma Dynamic.

The model for Validating the DeSantis vs. Martha Vineyard PD

Condition 1:  T>R>P>S

  • 1> .5>0>-1

This expression is typical in political Prisoner’s Dilemma centered on a single issue. 1= represents a single victory, .5= a compromise, 0= the lack of direct political blowback for refusing to compromise, and -1 = political defeat. If two political adversaries are competing over multiple policies that are being implemented independently of each other then the Temptation to defect would surpass the value of 1. 

  • Considering the current political animosity between Democrats and Republics; this situation numerically and quantitively fits this condition. 

Condition 2:   (T+S)/2<R

· (1+-1)/2 < .5

· (0)/2 <.5

· 0<.5

Prisoner’s Dilemmas XXI: (Part A): The Fiasco on the Vineyard

Photo by PhotoMIX Company on Pexels.com

The Martha’s Vineyard Immigrant debacle encapsulates the hideous nature of contemporary politics. It is a saga that depicts partisanship, hypocrisy, and lack of concern for effective policy. Both conservatives and the quixotic-minded and progressive residents of Martha’s Vineyard are responsible for this situation.

The controversy began when Republican Governor Ron DeSantis (using tax dollarsflew 50 migrants to the left-leaning tourist island of Martha’s Vineyard. The coordinator of the island’s homeless shelter has publicly expressed that their facility does not have the resources to provide services for the new arrivals. Even stating that the influx of migrants will exacerbate the current housing crisis. Economist Tyler Cowen addresses the scarcity of affordable housing on the island in his latest OP-ED piece:

“…Real estate is very expensive. And the island is strictly zoned, making it hard to build a lot of dense, low-cost housing…

Wages there are below the Massachusetts average, and living expenses are prohibitively expensive. Those realities stem from decisions about land use made by the island’s population. (I am OK with such community-supported zoning restrictions when they apply to very limited local areas, such as Martha’s Vineyard, and there are many options to look elsewhere. The problem arises when they start infesting a larger part of the U.S., as they have.)..”

Stringent zoning ordinances and below-average wages are a recipe for a housing crisis. In 2012, the average home was valued at “..$535,000 but average Islander could afford only $310,000..”.The cost of housing is prohibitive even for U.S. citizens residing on the island, never mind impoverished immigrants looking for better opportunities.

It is difficult to refute that this situation fits within the definition of a Prisoner’s Dilemma because two defecting coalitions made the scenario worse by not compromising. If anything, this occurrence might be a multifaceted Prisoner’s Dilemma; DeSantis owning the Libs isn’t the only game contributing to Martha’s Vineyard fiasco. The progressive islanders have conflicting desires politically, they effectively have had an intra-temporal Prisoner’s Dilemma with themselves. This is where Tyler Cowen’s observation, but the community’s hypocrisy regarding income inequality, comes into play. Because the island’s residents vocally support progressive policies in the name of economic justice. But concurrently, favor zoning ordinances that restrict the supply of homes and artificially inflate the cost of housing.

The model for Validating the Intra-institutional Prisoner’s Dilemma

Applying the model used by Nordstrom to validate Prisoner’s Dilemmas:

Condition 1:

The temptation to Defect (2= Signifies implementing both favorable zoning and left-wing economic policies)> Reward for Cooperation (1= The island recognizes the opportunity cost and amends its zoning laws; only one of the preferred policies is implemented)> Punishment For Defection (0= The majority of residents do not see that both policies cancel each other out)> Sucker’s Payoff (-1= The costs of creating political division by not favoring both varieties of policies).

T(2)> R(1)> P(0)> S(-1).

Condition 2:

(T+S)/2<R

(2+-1)/2 <1 ; (1)/2<1; .5 < 1

Even though the Fiasco on The Vineyard does numerically match the two conditions for a prisoner’s dilemma, this application of the PD incentives dynamic was creative. Game Theory purists might claim that it is erroneous to apply this lens so abstractly. However, the attributes of this intra-coalitional game do look like a cooperative game superficially. But the fact that local government and the constituents are attempting to balance conflicting interests. This situation may even validate Peter Clark’s Paradox of Implicit Logrolling (2021); however, there may be other factors at play. Per the public choice literature on rational ignorance, voters still select policies and elected officials even though they face severe information asymmetries. 

The DeSantis versus Martha’s Vineyard game will be reviewed in part B.

Prisoner’s Dilemmas- I: Gun Control in Arizona- The Calculations

Photo by Alex Andrews on Pexels.com

Prisoner’s Dilemmas- I: Gun Control in Arizona

Below are the conditions and calculations for the Prisoner’s Dilemma in the tug-of-war between the Arizona state government and the municipality of Tucson over HB 2111 (2021).

·        Reward for Mutual Cooperation: R= .5

Both the state government and the city of Tucson compromised on the terms or enforcement of the statute. It is valued at .5 because it would not be a complete victory but a split that results in a more moderate policy.

·        Punishment for Defecting: P=0

Since the gun control debate has become zero-sum due to the current political culture, the cost of deepening the partisan divide is minuscule. If anything, sympathetic constituencies and the party leadership will drive elected officials in disagreement or on the fence to side with their party. Plus, there is little to lose in the current hyper-partisan climate. Shoot for the moon, providing you are towing the party line. The penalty for defection is valued at 0.

·        Temptation to Defect: T=1

In the arena of political gamesmanship, a win is a win. A victory in passing legislation or overruling/ circumventing policies that are not congenial to one’s political proclivities is high. Considering the current state of American politics the incentive structure for political actors is to go for a win rather than a halfway measure. The value of one 1 represents a complete political victory. To be formally ironed out; would most likely require a ruling from the high court.

·        Sucker’s Payoff: S=-1

The current tautology of a win is a win has veracity, then the inverse should also be true in political disputes. Because of the current political incentives, you cannot trust that an opposing faction will come to the bargaining table in good faith. -1 represents a political loss. 

Per Jennifer Firkins Nordstrom two conditions must be met for a game to qualify as a Prisoner’s Dilemma.

                1. Temptation to Defect> Reward for Cooperation> Punishment For Defection> Sucker’s Payoff.

  • Simplified as T>R>P>S. A Criterion met by this game: 1>.5>0>-1.

2. (Temptation to Defect +Sucker’s Payoff)/2 < Reward Cooperation.

  • Simplified as (T+S)/2 <R. (1+-1)/2=0 <.5.

Per the above tabulations, it would appear as if the HB 2111 turmoil constitutes a Prisoner’s Dilemma.

The Pragmatic Solution to Gender Pronouns

Photo by Tim Mossholder on Pexels.com

The convergence of gender and politics has been an enduring fixture in public discourse, pre-dating (the women’s suffrage movement). the modern feminist movement. The politics of gender are more opaque than merely debating the gender wage gap. Since the mainstream acceptance of transgender people, the bifurcated distinction between males and females has become murky. This makes social issues related to gender much more complex. In this gust of normative creative destruction, it is possible that feminism in itself is an anachronism that clings onto an outmoded perception of gender.

One issue that has made gender politics more bewildering has been the focus on using the proper gender pronouns. Many American corporations recognize non-binary gender pronouns and encourage their employees to indicate their preferred pronouns in their email signatures. Not everyone has the time (the list is long), interest, or congenial worldview of non-binary people to learn or use the correct pronoun. However, are our social interactions (such as work) doomed to become a prisoner’s dilemma between transgender people and Conservatives? Will the grammar aficionados forever wince at referring to a single person with plural pronouns (they/them)? There is a positive-sum compromise between non-binary individuals and those predisposed to accept the binary model of gender identity; that is, use proper nouns only.

No need to remember a litany of confusing pronouns, use their first name. For example, Jim. Even if Jim looks like a sultry female model in a bikini, still refer to this individual by “Jim”. It doesn’t matter if their name was Tiffany last week, just proceed by calling them “Jim”. This individual cannot take issue with you addressing them by their preferred first name. It enables Canadian residents to circumvent the hideous assault on free speech that is Bill C-16; by not forcing people to use gender pronouns they disagree with for political or social reasons, but concurrently adhering to Canadian law. This suggestion should be considered a pragmatic compromise, not a commentary on non-binary gender identification.

Prisoner’s Dilemmas- XX: City Council Cartels

Photo by Adrien Olichon on Pexels.com

Anyone who has observed the chaos of local politics has seen the Machiavellian dynamics of a municipal committee elected by the town. The best example is seated on the town council. The incentive structure of the council members; is driven by the fact that their position is secured or eliminated by the will of the people. Setting up the classical variables for any Public Choice analysis, as the council members tailor their platforms and rhetoric to the voter preferences. If the same council members are either reelected or run unopposed, there is the incentive to form a coalition with the other recurring council men, formulating an informal agreement to have each other’s back. Effectively creating a cartelization since the other sitting council members have consented to support your policy prescriptions and justify your controversies. Per Katz and Mair (2018):

“…The mainstream parties, and most minor parties as well, have effectively formed a cartel, through which they protect their interests in ways that sap the capacity of their erstwhile principal—the electorate—actually to control the parties that are supposed to be the agents of the electorate. While the appearance of competition is preserved, in terms of political substance it has become spectacle (p.7)…”

By forming tight bonds and backing the rest of the elected officials on the council, each works to consolidate the power within this single unit of governance. Forming an impermeable oligarchy that the voters cannot vote out office due to a lack of policy competition. Analogous to an economic cartel, where consenting producers all fix prices in unison, all politicians “fix policy” to conform to the rest of the representatives on the council. This keeps external influences out of the fold, enabling all to retain their seats if they play ball. Much like all participants in an economic cartel enjoy larger profit margins, if no one reneges.

Hypothetically, let’s say there are four council members; one of the incumbents decides to resign mid-term. The replacement candidate is an insurgent candidate, breaking the unanimity among the colluding council members. This loosens the relational foundation among the incumbents; we start to see instances of defection among them. What was once complete accord among the old boys club quickly devolves into a prisoner’s dilemma. It is important to remember that cartels seldom are sustainable indefinitely. Eventually, the temptation of one party to undercut the rest of the colluding companies will cause them to defect (Tullock, 1985, p. 1076). For example, one particularly narcissistic council member may claim responsibility for policy reforms that his other cohorts co-sponsored. This type of behavior only undercuts the contributions of the others, leading them to undermine this arrogant council member. The cadre of incumbents suffer from the eroded trust. The newer member with innovative policy prescriptions; only proceeds to dimmish the creditability of the old boys club.

Prisoner’s Dilemmas-XIX: Labor Negotiations & Strikes

Photo by Kateryna Babaieva on Pexels.com

For now, President Biden was able to pump the breaks on the railroad strikes. Biden appointed arbitrators to negotiate mutually agreeable recommended revisions to the current labor contracts. This action kept “..115,000 rail workers on the job..” and narrowly side-stepped work stoppages from occurring on Monday (July 18th). In a time of preexisting supply-chain constraints, labor disputes would only exacerbate matters (the best real example would be the situation in the UK).

The dynamics of organized labor have a long history of being contentious, and striking is their secret weapon in gaining leverage at the collective bargaining table. If a policy does not contour to union interests, the relationship between the government and the labor movement devolves into a standoff. Since both factions have competing goals, this negotiation process is a Prisoner’s Dilemma. Lawmakers tailored policies to the preferences of the majority (union members only make up 13% of the US labor force). Also, in the anti-union camp, management possesses a fiduciary responsibility to enforce policies that are advantageous for the firm. 

These sets of incentives are opposed to the interests of the unions. Organized labor aims for higher wages, better benefits, more safety measures, and other generous forms of compensating differential. These new desired measures may be more costly for the firm or adversely impact consumers with higher prices or a lower grade of customer service (inefficiency). The demands of the labor unions tend to concentrate the benefits and impose costs on the rest of the economy. Even in sectors that are only tangentially connected to the industry where the workers are on the brink of striking. When their proposals are ignored or rules they dislike come into play, they defect by halting production and picketing. 

How neither party can reach a consensus generates Pareto-inefficient outcomes; should be self-evident. Because employers and policymakers might not want to cooperate or even meet the unions in the middle, they are defecting. In turn, the unions initiate strikes which create product scarcity, production bottlenecks, and higher prices. The ripple effects of the lack of agreement will hurt every economic actor in the market.

Prisoner’s Dilemma-XVIII- Mises Caucus (LibertarianParty)

Photo by Mikhail Nilov on Pexels.com

The libertarian party is arguably the most disorganized political party in the United States. 

For years, debates have waged over the gulf between the actual political philosophy and the official party’s platform. Many hardcore libertarians feel the party has long since lost its way. For many disillusioned lovers of liberty; the remedy came in the form of the  Mises Caucus founded in 2017. The emergence of this faction within the LP has been met with controversy. As more members of the caucus assume leadership roles within the national party, concerns arise regarding the tendinous social views of this strain of libertarianism. Accusations of racism and transphobia have surfaced and put the Mises Caucus in the crosshairs of LP party leadership.

To the casual observer, this tension in the LP may seem like a new development; but the political in-fighting has been a fixture of the party’s institutional dynamics since its inception in the 1970s. The antipathy sowed between the libertarian establishment and Austro-libertarianism dates back to the founding of the Cato Institute. The intellectual father of the political movement sweeping the structure of the LP was none other than economist Murray Rothbard. Rothbard co-founded the institute with the vision of it being an academic nexus between libertarian thought and Austrian economics. Rothbard’s unwillingness to compromise on Cato’s messaging, he was ousted from the institute. He then moved on to establish the Mises Institute in the early 1980s. It is reasonable to this one event as a manifestation of a major schism within libertarianism. A rivalry formed between the moderate libertarian political philosophy and the convictions of full-on anarcho-capitalism. A system of beliefs exalting ideological purity, articulating rhetoric steeped in social conservatism and the mechanism of Austrian economics.

The competing philosophies of Cato and the Mises Institute are the lines between academic establishment and the populist tendencies of the liberty movement[1]. Cato has the ear of the academy, while the Mises orbit has the ear of the people. However, this is not to say there isn’t a deep tradition of scholarly work within the Austro-libertarian tradition; the cadre of academics advancing this political philosophy has to produce voluminous amounts of literature. Cato has not had the same effect on the advancement of libertarianism on the ground level. Aside from the popularity of Rothbard’s polemical pamphlets in the 1970s and 1980s; the movement gained new life in the 2000s with the Presidential campaign of Ron Paul. The Cato Institute attempted to distance itself from Ron Paul for his reluctance to condemn political extremism. Former Senator Paul was an instrumental figure in founding the Mises Institute. He has also had longstanding professional relationships with figures such as Lew Rockwell and Rothbard.

The variety of libertarianism with a hint of social conservatism advocated for by Ron Paul and the Mises Institute cannot disavow extremism as it is part of their political strategy. In contrast to the libertarian establishment, Austro-libertarians have formed alliances with paleo-conservatives, injecting planks of Old Right sensibilities into their platform. Libertarians favoring this hard-right strategy perceive the virtues of multiculturalism and cosmopolitanism to be treasonous to individual liberty. Many Rothbardians/Hoppeans believe that policies such as open immigration will erode cultural identity, and private property rights and expand the welfare state.

This is not to insinuate that the Mises Institute nor Ron Paul’s campaign was managed by Klansmen. That would be a bad faith assessment of the political dynamics of Austro-libertarianism, there is not enough evidence to make such a claim. The attempts to annex populous conservatives and the far-right were more pragmatism on Rothbard’s part. The run-of-the-mill country club Reaganite Republican will not have any appetite to “end the fed”; naturally this individual would be a lackluster bedfellow in such an endeavor. On the other hand, a gentleman living in the rural south, raised in an environment of culturally entrenched conservatism and a distaste for centralization, would be a more likely partner in crime.

 Rothbard could foresee the logical instability in the Reaganite brand of “fusionism”. The political progeny of National Review editor Frank Meyer; a doctrine suggesting that libertarians and conservatives should make minor compromises and join forces to gain more ground in American politics. Realistically, this approach is shortsighted in a climate of winner-take-all politics. Disagreements on core wedge issues will eventually create fault lines that cannot be repaired. Rothbard’s vision of liberty was immoderate and immune from the debasing effects of implicit logrolling.

The strife between the two warring factions of libertarianism is nothing short of a textbook example of a prisoner’s dilemma. Frank Meyer was not off base with such a suggestion of political compromise, but neither party agrees to make any concessions. The very stance of the Mises Caucus and other Austro-libertarian organizations is nothing more than an automatic defection. Their hard-nosed commitment to ideological integrity has already taken the possibility of bargaining off the table. Developing a libertarian with the rigidity of Aristotle’s ethical virtue of “right reason”; which is utterly inflexible. The libertarian insiders in the Washington D.C. belt away may garner more appeal to establishments and academics outside of the movement; due to their ideological moderation. These movers and shakers at the think tanks have made no effort to reach out to the populous wing of the libertarian party[2]. If anything, they have either ignored or condemned Ron Paul supporters as hopeless racists or conspiracy-mongering dingbats. None of this is productive when it comes to advancing a political philosophy. It is as much of defection as the resolute principles of the droves of lay libertarians regularly reading the Mises Wire.

The suboptimal results engendered by this mutual defection should be conspicuous; we have yet to have had a true Libertarian in the oval office since the establishment of the official party. The overall lack of consensus has stymied libertarianism’s influence on American politics. There are always several groups arguing over what libertarianism truly is; instead of working together to make an impact. This gives outsiders the impression that libertarians are politically disorganized. It is not that they are a bunch of lazy hippies, bearded mountain men, or a gaggle of goofy naked men kvetching about drivers’ licenses. The party has been sidetracked by years of internal conflict, making this turmoil the ultimate collective action problem.

Footnotes:

  1. The Mises Caucus might be the “Trump moment” for the LP, a populous takeover of the formal structure of the political organization.

2. This is not a defense of the Mises Caucus nor a jab at the libertarian establishment. Rather, it is an expression of how neither subset of the LP is willing to compromise with the other.

Prisoner’s Dilemmas- XVII- Media Coverage of Mass Shootings (Columbine to Uvalde) 

Photo by Brett Sayles on Pexels.com

 In the immediate aftermath of any tragedy, we often struggle to make sense of the situation. The senseless loss of life following a mass shooting is no exception. Various experts and media talking heads list all the potential antecedents that pushed a mentally unstable person to commit such an atrocity. The frequently cited causes of domestic mass murder include bellicose political rhetoricviolent song lyricspsychiatric drugsvideo games, disenfranchisement, mental health issues, and access to firearms (although the effect of gun control on preventing such events is inconclusive).

It would be rash to assume that any one of these purported preconditions for molding a mass murder is the sole reason for these tragedies. It is more likely that various environmental, genetic, and social factors drive a person to perpetrate such heinous acts. One potential cause of violence that often gets overlooked; is media coverage of such incidents [1].

Even when we take a cursory view of the incentives of media outlets, they are not going to take any responsibility for inspiring new school shooters and other varieties of a deranged shooter. After all, they are the mouthpiece for all the experts touting the evils of Marilyn Manson (I apologize for the dated reference), political extremism, and guns. Fixating on these gruesome stories and participating in conspiratorial conjecture about the impetus was for a demented young man to kill innocent people. Sadly, negativity sells, making it lucrative for business. Human beings are plagued by what is known as the negativity bias; we are more apt to engage with articles or news programming that has a negative tone. News outlets lay into this bias by exaggerating the severity of negative news. Validated by the fact that fifty percent (p.5) of news coverage features stories on crime. Media companies have a lot to gain from obsessively presenting all the gory updates on the Uvalde massacre. Business is good when you have audience captivity by the horror and depravity of a madman.

At its core, the dynamics of how media outlets cover mass shootings is a Prisoner’s Dilemma. The media companies act in their self-interest by bombarding us with all the horrific details of these mass killing events. This is done so with little consideration for the ethical consequence of how the story is framed. Typically, there is more coverage of the perpetrator than on the heroes who intervened and stopped the killing spree or even the victims (p.22). The tight focus on the gunman aggrandizes the image of the killer. In the mind of narcissistic (p.16) or otherwise mentally unstable people, they become the protagonist in the story of a folk anti-hero. The previous mass shooter serves as a template for how to quickly gain notoriety. In the canonical literature, there is a model known as the contagion effect, where essentially publicized shootings beget more publicized shootings. We begin to see copycat shooters. A 1999 study found that “.. of 83 would-be mass killers or assassins, who noted that evidence in their belongings or writings indicated that 38% of them emulated previous killers…”(p.24). A 2013 study, found a positive correlation between tweets about mass shootings and the likelihood of another one occurring (p.27). The shooters end up “defecting” by orchestrating and executing a shooting event, believing they are acting in their self-interest by indulging their angst and narcissism.

The suboptimal results in this situation would be the victims of the shooting. They are merely collateral damage in the pursuits of media outlets and mass shooters. Truly this mutual defection is the story of excesses. Whether it be improperly channeled rage, vanity, and narcissism or profit and callous political opportunism [2], innocent people had to die to achieve these ends.  

Footnotes

1.) The suggestion that the media companies bare some responsibility for mass shootings is not an indictment of capitalism or freedom of the press. This presents an ironic fact; news outlets blame many distal factors for shootings; it never occurs to them to look in the mirror. Especially considering that most mass murders have proclivities towards narcissism. 

2.) The incentives structure of media outlets may extend beyond the profit-loss mechanism, as they are generally ideologically driven. Many of the news channels and publications of esteem are politically left-wing, meaning they may also have anti-gun agenda. In effect; driving the obsessive coverage of gun violence.

Prisoner’s Dilemmas: XVII- Privacy Paradox

Photo by Markus Winkler on Pexels.com

tension between privacy and the interests of law enforcement has eroded the Fourth Amendment. Our weathering privacy rights surfaces only continue to crumble every time Americans face a choice between convenience and anonymity. When we install software we encounter this dilemma known as the privacy paradox. Most people are not inclined to read the fine print when we install new software applications on their electronic devices (computers, cell phones, and tablets); it is a bunch of legalese mumbo-jumbo acting as a temporary barrier to the products and services you desire to use. This inconvenient bulwark is penetrated by agreeing to all the terms and services detailed in the previous fifteen paragraphs. Few, if any, consumers read nor understand what they have consented to. The Privacy Paradox is defined as :

“… the dichotomy of information privacy attitude and actual behavior has been coined the term privacy paradox(Brown, 2001; Norberg et al., 2007)”.

Essentially, most people profess to care about privacy but are willing to give it up in the short term to gain access to various digital products and services. The logic of this paradox seems oxymoronic until you realize that people lack patience and an extensive attention span. This contradiction validates the observations of Thomas Schelling’s theory of Egonomics. Individuals often grapple with the competition of present wants and future concerns when making decisions. When the details of the terms and conditions of using a product or service are articulated in opaque language and presented as bottom page afterthought, no wonder people are so readily agreeing to policies that may jeopardize their privacy. This dynamic only fertilizes the substrate for a Prisoner’s Dilemma. The firm producing the product or service acts in their self-interest by wording the terms and conditions in complex language, virtually impermeable to lay readers. If users understood what they agreed to, they would be less apt to use these products. Concurrently, these customers believe they are acting in their self-interest by choosing not to read the terms and conditions page and simply consenting to these requirements.

Neither party (customer or service provider) creates an ideal climate for transparency. It is all too easy for the customer to witlessly use the product without knowing how the service provider is collecting, storing, or even selling their information to third-party companies. The severity of this information asymmetry intensifies when specific forms of data are subject to collection and surveillance by government agencies. As stated in United States v. Miller (1976) banking services carry no reasonable expectation of privacy. The courts could apply this similar logic to data collected by other varieties of service providers, especially when presented under the guise of exigent circumstances. Essentially this contraction exists due to the laziness of consumers and the perverse incentives of service providers. 

Prisoner’s Dilemmas: XVI – Coinbase’s Bankruptcy Policy

Photo by Alesia Kozik on Pexels.com

Trust is one of the guiding principles of any business relationship. It is the proverbial glue that has spurred the interest in decentralized digital currency over the past decade. Most people lack the technical literacy to mine Bitcoin or navigate the complexities of blockchain transactions without a middleman, a cryptocurrency exchange. Hence the surge in the popularity of  FTXCrypto.comKraken, etc. One of the earliest entrances to the crypto exchange market, Coinbase, revealed in its first-quarter earnings report that it could hold on to user assets in the event of bankruptcy. Per Fortune:

Coinbase said in its earnings report Tuesday that it holds $256 billion in both fiat currencies and cryptocurrencies on behalf of its customers. Yet the exchange noted that in the event it ever declared bankruptcy, “the crypto assets we hold in custody on behalf of our customers could be subject to bankruptcy proceedings.” Coinbase users would become “general unsecured creditors,” meaning they have no right to claim any specific property from the exchange in proceedings. Their funds would become inaccessible.

https://fortune.com/2022/05/11/coinbase-bankruptcy-crypto-assets-safe-private-key-earnings-stock/

Only subverting the property rights of the investors utilizing the exchange, but it also sullies the image of one of the pioneers of this nascent investment market. In the absence of trust and reliability, there is no reason for patrons to continue doing business with Coinbase. With no guarantee that their investments are secure with the exchange, customers will seek alternative service providers. In effect, Coinbase’s own internal bankruptcy policy has created a Prisoner’s Dilemma. By implementing a policy that would not allow the user to claim their assets in the event of the firm’s financial demise, Coinbase is veering away from the interests of its customers. A foolish decision, but a defection. Patrons will reciprocate this defection by transferring their assets to either cold storage or other reputable crypto exchanges. The unfortunate consequence is that trust in the crypto community will be eroded. Cryptocurrency was founded on the principles of permissionless, immutable, and decentralized transactions and this culture will lose traction due to the infidelity of unscrupulous service providers. Especially considering the absence of trustworthy exchanges, the technical literacy required to participate in the crypto sphere is far too high for anyone without a programming or financial background. Effectively puts the whole claim of cryptocurrency being a path to financial inclusion into question. 

Prisoner’s Dilemmas-XV: Sugar Tariffs

Photo by Artem Beliaikin on Pexels.com

“..Look at the United States. There is no country in the world where the law is kept more within its proper domain—which is, to secure to everyone his liberty and his property. Therefore, there is no country in the world where social order appears to rest upon a more solid basis. Nevertheless, even in the United States, there are two questions, and only two, that from the beginning have endangered political order. And what are these two questions? That of slavery and that of tariffs; that is, precisely the only two questions in which, contrary to the general spirit of this republic, law has taken the character of a plunderer…” Frédéric Bastiat- The Law (1850).

The tendency for people to favor protectionist policies is an understandable fallacy, but a fallacy, nevertheless. Some Americans are under the erroneous assumption that they have a moral duty to keep domestic jobs from being outsourced. Much of this sentiment; was fostered by campaigns waged by organized labor throughout American history. It is difficult to tell if the buy American fallacy is the byproduct of union propaganda or an intrinsic sense of nationalism and economic jingoism. Regardless of whether the American public is receptive to their pithy buy domestic slogans, the union interests frequently get their way. The best example is the enduring specter of import tariffs that have plagued American economic policy for centuries. The earliest example is the Tariff Act of 1789, which was strongly favored by none other than Alexander Hamilton.

Arguably one of the most notable tariffs on the books is related to the importation of sugar. The tariffs placed on foreign sugar have been upheld through various laws over the years, starting from the nascent period of the republic.

“…On brown sugars, per pound, one cent. 

On loaf sugars, per pound, three cents. 

On all other sugars, per pound, one and a half cents

(Tariff Act of 1789, P. 25)..”

From a game-theoretical standpoint, consumers are the first ones to defect. If imported sugar is cheaper American consumers gravitate toward buying the less expensive Caribbean sugar. The lobbyists for the sugar industry work to pressure lawmakers into keeping import taxes on foreign sugar. The collective pressure placed on Congress to place and uphold tariffs can be considered a defection by the domestic sugar producers. Many economists and political scientists assume that the marginal increase in the cost of sugar would be negligible to an individual customer. In turn, fulfilling the enduring axiom of Public Choice theory; concentrated benefits and dispersed costs. Few households consume enough sugar to desire to change their baking and coffee flavoring habits. Although, these costs are salient to commercial confectionary producers who purchase mass quantities of sugar for domestic and international retail goods. It has led to firms relocating production facilities to countries without sugar tariffs (Life Savers plant moving to Canada, p. 4). Technically, this could be a defection, but the irony is that it undermines the moral initiative of keeping domestic jobs within the bounds of the United States. But not every company opts to move their factories abroad, another substitute for cheaper inputs. Hence, the rise of soft drink producers using high fructose corn syrup instead of cane sugar. One noteworthy example would be when Coke and Pepsi switched to using corn syrup in their sodas for the US market in the 1980s (p.5) (Mexican cola still uses real sugar). There has been much debate over whether high fructose corn syrup is more unhealthy than sugar. If it is more injurious to one’s health, then a Prisoner’s Dilemma is afoot, the suboptimal result being the American people doing unnecessary damage to their bodies merely to appease a small subset of the overall constituency.

Prisoner’s Dilemmas: XIV- Synthetic Marijuana

Photo by Pavel Danilyuk on Pexels.com

The decades-long War on Drugs initiated by the Nixon administration could be a Prisoner’s Dilemma itself. Naturally, drug dealers and users will not stop their illicit activities merely because the government is cracking down on controlled substance sales. This fruitless and seemingly perpetual public health intuitive has generated a litany of negative externalities. Beyond fueling profligate government spending, it is also a quagmire that has flooded our prisons and tied up our courts (think of the US court system as commons) with individuals guilty of victimless crimes. However, one detrimental consequence that no one could have foreseen over fifty years ago was the development of gray market drugs, intoxicating compounds that are molecularly altered variants of banned illegal drugs. One particularly infamous example is synthetic cannabinoids. The active chemical of THC; is prohibited under federal law, but a slightly different derivative technically would be legal.

The attempts of eager drug users and innovative chemists to skirt US drug laws have resulted in its own Prisoner’s Dilemma. The government is the original defector by making drugs such as marijuana illegal. Individuals who enjoy the effects of cannabis do not want to stop using it just because it is Schedule I inebriant. Drug users, producers, and vendors defect by finding and creating similar substitutes for their illegal drugs of choice. In most instances, synthetic marijuana may only be a few molecules off from the real thing, but chemists have unwittingly created a more destructive recreational drug. The ingestion of synthetic cannabinoids is associated with serious physical and psychological complications never reported with the consumption of naturally occurring THC. There would have been no appetite for developing fake marijuana if state governments had started legalization and decriminalization efforts years before the “research chemical’ craze of the 2010s; this attempt to exploit legal loopholes only exacerbated the public health issues related to drug use. Fortunately, this was more problematic a decade ago; more states have legalized marijuana.