Calculating Appropriate Wealth Disparity

CSGnet Archive CSG2010
1

From: Richard Marken rsmarken@gmail.com
Date: November 12, 2010 10:04:21 AM PST
Cc: Richard Marken rsmarken@gmail.com
Subject: Calculating Appropriate Wealth Disparity

[From Rick Marken (2010.11.12.1000)]

Let’s start by looking at the individual as an economy unto himself.
This was pretty much the case for the first humans. Nearly all

controlling was done individually; each person was the producer and
consumer of his own “wealth”. So each individual had the skill to
produce the food, water, shelter, defense, clothing, etc. that he (or

she) consumed (controlled for). There was probably some specialization
from the very beginning (child care vs hunting) but to a first
approximation the first people – the first controllers – had to be

able to be able to produce nearly everything they needed for
themselves, individually.

In this world, where each individual is an economy unto themselves,
there was surely a range of skill levels; there were individual

differences in how well people could produce what they needed (and
wanted) to consume. In order to get an idea of what the skill range
might have been I looked at the skill range in some modern examples of

skillful controlling: running marathons, doing crossword puzzles and
playing tennis. I measured the skill range for these activities in
terms of the ratio of best to worst performance scores for the NY

marathon, a crossword puzzle contest (a cognitive skill) and the ATP
tennis tour. I measured marathon and crossword skill in terms of
time; tennis skill in terms of won/loss percentage.

For the NY marathon the ratio of the slowest (9hr 15 min) to fastest
(2 hs 8 min) time was 4.3; the best marathon runner was 4.3 times
better (at controlling for running the marathon) than the worst

runner. For a crossword tournament, the ratio of the the best score
(6710) to the worst (1540) was 4.35 (crossword points are given based
on time; the faster the player controls for completion the few points

are deducted form the total). For tennis the ratio of the best
won/loss record (Nadel, 88%) to the worstt (Kuznetsoz, 18%) is 4.88.

So there is a surprisingly consistent ratio of best to worst among

expert controllers of marathons, crossword puzzles and tennis play;
about 4.5. The best controller is about 4.5 times better than the
worst.

Since the first people were all presumably skilled at controlling for

what they needed and wanted (or they – or more appropriately their
progeny-- are no longer around), I estimate that the ratio of the best
to the worst controller (individual economic unit) was ~4.5. Since

skill at controlling should determine how much wealth (consumables)
one has my estimate is that the wealth range for the first people was
about 4.5 to 1. The best controllers were able to get 4.5 times more

wealth (food, clothes, shelter, etc) than the worst. But even the
worst controllers had enough wealth to survive (just as the worst
marathoners, crossword puzzlers and tennis players are able to produce

good enough results to have completed the marathon, solved the
crossword or stay on the tennis tour).

If you’re still with me, let’s now go to modern economic man. Unlike

our “primitive” predecessors, no one individual today can control for
virtually everything they want and need on their own. Everything we
control for is a product of specialized skills and efforts of many

individuals combined. But lets ignore the complex process by which
all the goods and services that we use everyday came into existence.
Let’s assume that modern economic man is equivalent to the first man

and has the skill, time, and ability to be an economy unto himself. In
other words, let’s imagine that, like the first man, each individual
modern person can produce everything he wants to consume. Modern

economic man produces his car, his house, his electricity, he
extracts, smelts and casts the raw materials that these things are
made of. He can produce everything that he needs to consume; he is an

amazingly skilled producer, producing all the complex goods and
services that he wants to consume.

I assume that the range of control skills in a population of modern

economic individuals is the same as the range of control skills in any
skilled control task, like marathon running, crossword solving or
tennis playing. The best modern economic controller, then, should be

about 4.5 times better than the worst one (this excludes people who
can’t control yet, like children, who can no longer control, like the
elderly, and who are unable to control, like those with health

problems).

In a modern economy, income is considered a measure of one’s
competence or skill. If this is the case, then the highest income
should be about 4.5 times the lowest income. In the US, the ratio of

the highest incomes to the average income is now 260. Assuming the
lowest income is about $20,000 (the lowest income for a person who can
be considered “in the race” of economic control) the ratio of highest

to lowest incomes is 580. So if income is a reflection of economic
skill level, and if the ratio of the highest to lowest economic skill
is about what it is for other skills (4.5) then the ratio of highest

to lowest incomes in the US (580) is way out of wack.

Of course, the wealth disparity in every country, even the good ones
like Norway and Sweden, is far greater than 4.5, my estimate of the

ratio of best to worst control skill in a population of skilled
controllers. So what’s going on?

One thing that seems to be going on is that wealth measured in terms

of money is probably not a linear measure of control skill measured in
terms of actual performance. This may be a function of the way we
perceive money itself. The perceived value of money has been proposed

to be a log function of the numerical value of money, so the
difference in perceived value of $100 and $200 is a lot bigger than
that between $1,000,100 and $1,000,200. One bit of evidence for this

is that there is a negative exponential relationship between
performance level and winnings. This results in the ratio of winnings
for the best and worst performers being much larger than the ratio of

their performance measures. For example, in tennis, where the
performance ratio of best to worst is 4.88, the winnings ratio for the
same pair is 1200. In the PGA, where the performance ratio for those

who make the cut is 3.7, the winnings ratio is 717.

So one possible reason for the wealth disparity in modern economies
may be an artifact of the way we perceive money. I’m sure there are

other factors involved. But whatever the cause of wealth disparity (in
terms of money), I think my analysis suggests that differences in
competence have very little to do with it.

Best

Rick

Richard S. Marken PhD
rsmarken@gmail.com
www.mindreadings.com

···

Sent from my iPhone
Begin forwarded message:

2

[Martin Taylor 10.11.12.16.25]

···

On 2010/11/12 1:26 PM, Richard Marken wrote:

Sent from my iPhone

[From Rick Marken (2010.11.12.1000)]

If you wrote all that on your iPhone, my hat is off to you!

Martin

3

(Gavin Ritz 2010.11.13.10.39NZT)

···

[From Rick Marken (2010.11.12.1000)]

So one possible reason for the wealth disparity in modern economies
may be an artifact of the way we perceive money. I’m sure there are
other factors involved. But whatever the cause of wealth disparity (in
terms of money), I think my analysis suggests that differences in
competence have very little to do with
it.

This was a very well structured argument Rick. The final assumption about money is interesting. Money has been around for many thousands of years and so has barter. I don’t think that is the issue. Its both a structural and process issue.

My proposition about this issue has purely to do with the fact that our systems are more ordered than we are. Hence we see huge amounts of so-called de-motivation. Spontaneity and entropy production go hand in hand. The reason why some are rich and others are not is really simply that there are some who are able to control the flows of the more ordered system (social, political and economic) better. That is they have through often luck and chance with their capability found the bottlenecks and large flows within the system. Some are money other are less obvious like abstracted information requirements. I’m thinking of Bill Gates here re abstracted information requirements.

Imagine this,
being nested (as an individual) in a PCT giant control system.

I have done this myself. In New Zealand years ago the banking system allowed those who are risk takers to buy large numbers of residential properties and still get tax breaks. I managed in a 10 year period to collect many properties using this system. Its now all gone of course. However thousands of people were into buying and investing in residential properties. Making big capital gains and paying no taxes. It created a situation where individuals on the lower end of the socio-economic scale couldn’t get in to the market as prices where being pushed up by tons of investors clamouring to buy property. Many properties where hugely over priced, one could tell this by the yields. A fall was waiting in the wings. It came as no surprise.

Regards
Gavin

4

[From Rick Marken (2010.11.12.1450)]

[Martin Taylor 10.11.12.16.25]

Sent from my iPhone

Rick Marken (2010.11.12.1000)--

If you wrote all that on your iPhone, my hat is off to you!

I agree. I wrote it on my computer and then mistakenly sent it to
myself rather than to CSGNet. I discovered this error while out in the
world. So I forwarded it using my iPhone. Hope it was readable.

Best

Rick

···

On 2010/11/12 1:26 PM, Richard Marken wrote:

--
Richard S. Marken PhD
rsmarken@gmail.com
www.mindreadings.com

5

[Martin Lewitt Nov 13, 2010 0552 MST]

    Sent from my iPhone

From: Richard Marken rsmarken@gmail.com
Date: November 12, 2010 10:04:21 AM PST
Cc: Richard Marken rsmarken@gmail.com
Subject: Calculating Appropriate Wealth Disparity

[From Rick Marken (2010.11.12.1000)]

                  Let's start by looking at the individual as an economy

unto himself.

                  This was pretty much the case for the first humans.

Nearly all

                  controlling was done individually; each person was the

producer and

                  consumer of his own "wealth". So each individual had the

skill to

                  produce the food, water, shelter, defense, clothing,

etc. that he (or

                  she) consumed (controlled for). There was probably some

specialization

                  from the very beginning (child care vs hunting) but to a

first

                  approximation the first people -- the first controllers

– had to be

                  able to be able to produce nearly everything they needed

for

      themselves, individually.



                  In this world, where each individual is an economy unto

themselves,

                  there was surely a range of skill levels; there were

individual

                  differences in how well people could produce what they

needed (and

                  wanted) to consume. In order to get an idea of what the

skill range

                  might have been I looked at the skill range in some

modern examples of

                  skillful controlling: running marathons, doing crossword

puzzles and

                  playing tennis. I measured the skill range for these

activities in

                  terms of the ratio of best to worst performance scores

for the NY

                  marathon, a crossword puzzle contest (a cognitive skill)

and the ATP

                  tennis tour.  I measured marathon and crossword skill in

terms of

      time; tennis skill in terms of won/loss percentage.



                  For the NY marathon the ratio of the slowest (9hr 15

min) to fastest

                  (2 hs 8 min) time was 4.3; the best marathon runner was

4.3 times

                  better (at controlling for running the marathon) than

the worst

                  runner.  For a crossword tournament, the ratio of the

the best score

                  (6710) to the worst (1540) was 4.35 (crossword points

are given based

                  on time; the faster the player controls for completion

the few points

                  are deducted form the total). For tennis the ratio of

the best

                  won/loss record (Nadel, 88%) to the worstt (Kuznetsoz,

18%) is 4.88.

This reads like a just so story based upon selective facts,

dismissal of the significance of the differences. NBA differences
in free throw shooting percentage is only about a factor of two.
MLB batting averages are about a factor of 3, home runs a factor 20
or more. The linear scale we put on things often don’t capture the
significances of the differences. A factor of two difference in
chess rating above a certain level probably means that the lower
rating could never defeat the higher rating. The difference
between a 2hr 40 minute marathoner and a 2 hr 10 minute marathoner
is not a shade over 20%, but arguably 100%.

                  So there is a surprisingly consistent ratio of best to

worst among

                  expert controllers of marathons, crossword puzzles and

tennis play;

                  about 4.5. The best controller is about 4.5 times better

than the

      worst.

Perhaps the sample should have been larger than 4.

                  Since the first people were all presumably skilled at

controlling for

                  what they needed and wanted (or they -- or more

appropriately their

                  progeny-- are no longer around), I estimate that the

ratio of the best

                  to the worst controller (individual economic unit) was

~4.5. Since

                  skill at controlling should determine how much wealth

(consumables)

                  one has my estimate is that the wealth range for the

first people was

                  about 4.5 to 1. The best controllers were able to get

4.5 times more

                  wealth (food, clothes, shelter, etc)  than the worst.

But even the

                  worst controllers had enough wealth to survive (just as

the worst

                  marathoners, crossword puzzlers and tennis players are

able to produce

                  good enough results to have completed the marathon,

solved the

      crossword or stay on the tennis tour).

We are not descended from the worst controllers, they didn't make

it. There is strong evidence of group extinctions and population
bottlenecks within homo sapiens. Leaders of pacific northwest
tribes, competing in their shows of gift giving and banquet throwing
were definitely more than 4 or 5 times wealthier that Utes or Pima
living at the margin.

                  If you're still with me, let's now go to modern economic

man. Unlike

                  our "primitive" predecessors, no one individual today

can control for

                  virtually everything they want and need on their own.

Everything we

                  control for is a product of specialized skills and

efforts of many

                  individuals combined.  But lets ignore the complex

process by which

                  all the goods and services that we use everyday came

into existence.

                  Let's assume that modern economic man is equivalent to

the first man

                  and has the skill, time, and ability to be an economy

unto himself. In

                  other words, let's imagine that, like the first man,

each individual

                  modern person can produce everything he wants to

consume. Modern

                  economic man produces his car, his house, his

electricity, he

                  extracts, smelts and casts the raw materials that these

things are

                  made of. He can produce everything that he needs to

consume; he is an

                  amazingly skilled producer, producing all the complex

goods and

      services that he wants to consume.



                  I assume that the range of control skills in a

population of modern

                  economic individuals is the same as the range of control

skills in any

                  skilled control task, like marathon running, crossword

solving or

                  tennis playing. The best modern economic controller,

then, should be

                  about 4.5 times better than the worst one (this excludes

people who

                  can't control yet, like children, who can no longer

control, like the

                  elderly, and who are unable to control, like those with

health

      problems).



                  In a modern economy, income is considered a measure of

one’s

                  competence or skill.  If this is the case, then the

highest income

                  should be about 4.5 times the lowest income. In the US,

the ratio of

                  the highest incomes to the average income is now 260.

Assuming the

                  lowest income is about $20,000 (the lowest income for a

person who can

                  be considered "in the race" of economic control) the

ratio of highest

                  to lowest incomes is 580. So if income is a reflection

of economic

                  skill level, and if the ratio of the highest to lowest

economic skill

                  is about what it is for other skills (4.5) then the

ratio of highest

      to lowest incomes in the US (580) is _way_ out of wack.

There are nonlinear amplifiers that increase the significance of

these differences. Humans are tool users, some skills can have
negative value. The worst singers may have negative value. We might
almost universally prefer the best singer to the good singer at the
90th percentile. The somali may actually be producing the 100 times
less than the american that is indicated by ratios of per capita
GDP.

                  Of course, the wealth disparity in every country, even

the good ones

                  like Norway and Sweden, is far greater than 4.5, my

estimate of the

                  ratio of best to worst control skill in a population of

skilled

      controllers. So what's going on?



                  One thing that seems to be going on is that wealth

measured in terms

                  of money is probably not a linear measure of control

skill measured in

                  terms of actual performance. This may be a function of

the way we

                  perceive money itself. The perceived value of money has

been proposed

                  to be a log function of the numerical value of money, so

the

                  difference in perceived value of $100 and $200 is a lot

bigger than

                  that between $1,000,100 and $1,000,200. One bit of

evidence for this

                  is that there is a negative exponential relationship

between

                  performance level and winnings. This results in the

ratio of winnings

                  for the best and worst performers being much larger than

the ratio of

                  their performance measures. For example, in tennis,

where the

                  performance ratio of best to worst is 4.88, the winnings

ratio for the

                  same pair is 1200.  In the PGA, where the performance

ratio for those

      who make the cut is 3.7, the winnings ratio is 717.



                  So one possible reason for the wealth disparity in

modern economies

                  may be an artifact of the way we perceive money. I'm

sure there are

                  other factors involved. But whatever the cause of wealth

disparity (in

                  terms of money), I think my analysis suggests that

differences in

      competence have very little to do with it.

Small differences in competence may be more than linearly

significant. Wealth differences may not relate to differences in
productivity. The supply chain manager and the ski instructor may
be equally competent at both supply chain management and ski
instructing, but the former might have to be compensated more
because he’d rather be a ski instructor and having some supply
chain managers is a matter of necessity for higher levels of
production.

regards,

   Martin L
···

On 11/12/2010 11:26 AM, Richard Marken wrote:

    Begin forwarded message:

      Best



      Rick

      --

      Richard S. Marken PhD

      rsmarken@gmail.com

      [www.mindreadings.com](http://www.mindreadings.com)
6

[From Rick Marken (2010.11.13.1945)

Martin Lewitt (Nov 13, 2010 0552 MST)--

Rick Marken (2010.11.12.1000)--

RM: In order to get an idea of what the skill range
might have been I looked at the skill range in some modern examples of
skillful controlling: running marathons, doing crossword puzzles and
playing tennis.

ML: This reads like a just so story based upon selective facts, dismissal of the
significance of the differences.

NBA differences in free throw shooting� percentage is only about a factor
of two.� MLB batting averages are about a factor of 3, home runs a factor
20 or more.

Thanks for the extra data. Note that these skill ratios -- even for
HRs-- are all much lower then the current compensation ratio (~510),
which is still a considerable underestimation of the wealth ratio
(which is something like 1,500,000). If I include your numbers along
with mine the average skill ratio goes from 4.3 (based on my sample)
to 6. Because of the small sample size (7) the upper and lower limits
of a 95% confidence interval around the "true" skill ratio are 10.7
and 1.3. If we could get some more skill ratios we could get a better
estimate of the true skill ratio. But it looks to me like the true
skill ratio is probably closer to 5 than to 1,500,000.

The linear scale we put on
things often don't capture the significances of the differences.�� A factor
of two difference in chess rating above a certain level probably means that
the lower rating could never defeat the higher rating.�� The difference
between a 2hr 40 minute marathoner and a 2 hr 10 minute marathoner is not a
shade over 20%, but arguably 100%.

I think this is not quite relevant to my point. I'm try to get a
measure of the range of control skil f or people who _can_ control
some variable. This has nothing to do with who will win in a fight
over the controlled variable.

So there is a surprisingly consistent ratio of best to worst among
expert controllers of marathons, crossword puzzles and tennis play;
about 4.5. The best controller is about 4.5 times better than the
worst.

Perhaps the sample should have been larger than 4.

You bet it should! But I just wanted to get a quick and dirty
estimate. But I think it is highly unlikely that getting a larger
sample of skill ratios would get the average skill ratio up anywhere
near the income ratio (510) or the wealth ratio (1,500,000).

We are not descended from the worst controllers, they didn't make it.

I meant the worst controller who _can_ control. The people we are not
descended from are the people who couldn't control at all.That's why I
looked at the data for skills where everyone was able to perform the
skill. In the marathon the best and worst times are for people who
actually completed it. I bet we would find the same skill ratio for
people doing a tracking task; everyone might be able to do it but the
worst (after becoming skilled at it) might never be able to do better
than an rms error of 25 while the best are able to do it with an rms
error of 5, a skill ratio of 5.

There are nonlinear amplifiers that increase the significance of these
differences.� Humans are tool users, some skills can have negative value.
The worst singers may have negative value. We might almost universally
prefer the best singer to the good singer at the 90th percentile. The somali
may actually be producing the 100 times less than the american that is
indicated by� ratios of per capita GDP.

My analysis has nothing to do with preferences for who does something
better than someone else. I am assuming that people control for what
they want and, to the extent that they are skilled, they get it. The
more skilled controller will consume an amount closer to their
reference, so it will appear that that controller is getting "more"
than the less skillful controller. But in my analysis, that difference
in "wealth" obtained by the skilled and less skilled controller
depends only on their skill at controlling. It doesn't result from the
more skilled controller defeating the less skilled one. For both
controllers, their only "competitor" is disturbances to their
controlled variables. The more skilled controller deals with these
disturbances, like fleeing antelopes, better than the less skilled
one; but they both deal with them. The more skilled controller just
ends up with more antelopes than the unskilled one.

Small differences in competence may be more than linearly significant.

I don't see how this applies to my analysis, which treats each
individual as an economic control system unto itself. There is nothing
for one system's competence to be significant to other than itself (in
terms of how well it controls). Maybe what you are talking about is
the actual economy where there is specialization of production (and
the money paid for this production, as wages or profits, is used to
consume all the things the individual wants). So I think you are
saying that significance, presumably indicated by compensation, is not
linearly related to competence. And this is obviously true. This is
what I found for the prize money as a function of win percentage in
tennis. Winnings are exponentially related to competence. I think this
is probably also true in the economy, since I have ego enough to
believe that, though Bill Gates is probably a lot more competent than
I am, I don't think he is 200,000 times more competent.

Best

Rick

···

--
Richard S. Marken PhD
rsmarken@gmail.com
www.mindreadings.com

7

(Gavin Ritz 2010.11.15.11.37)

[From Rick Marken
(2010.11.13.1945)

Martin Lewitt (Nov 13, 2010 0552 MST)–

Rick Marken
(2010.11.12.1000)–

though Bill Gates is probably
a lot more competent than

I am, I don’t think he is 200,000 times more competent.

The 200 000 has everything
to do with what the human race wanted to control, and he was there with luck,
chance and brains to deliver it right to their doorstep. This is positive
feedback in the abstracted world. A Perceptual Controlled Variable.

···
8

[Martin Lewitt Nov 21, 2010 0610 MST]

[From Rick Marken (2010.11.13.1945)

Martin Lewitt (Nov 13, 2010 0552 MST)--

Rick Marken (2010.11.12.1000)--
RM: In order to get an idea of what the skill range
might have been I looked at the skill range in some modern examples of
skillful controlling: running marathons, doing crossword puzzles and
playing tennis.

ML: This reads like a just so story based upon selective facts, dismissal of the
significance of the differences.
NBA differences in free throw shooting percentage is only about a factor
of two. MLB batting averages are about a factor of 3, home runs a factor
20 or more.

Thanks for the extra data. Note that these skill ratios -- even for
HRs-- are all much lower then the current compensation ratio (~510),
which is still a considerable underestimation of the wealth ratio
(which is something like 1,500,000). If I include your numbers along
with mine the average skill ratio goes from 4.3 (based on my sample)
to 6. Because of the small sample size (7) the upper and lower limits
of a 95% confidence interval around the "true" skill ratio are 10.7
and 1.3. If we could get some more skill ratios we could get a better
estimate of the true skill ratio. But it looks to me like the true
skill ratio is probably closer to 5 than to 1,500,000.

The linear scale we put on
things often don't capture the significances of the differences. A factor
of two difference in chess rating above a certain level probably means that
the lower rating could never defeat the higher rating. The difference
between a 2hr 40 minute marathoner and a 2 hr 10 minute marathoner is not a
shade over 20%, but arguably 100%.

I think this is not quite relevant to my point. I'm try to get a
measure of the range of control skil f or people who _can_ control
some variable. This has nothing to do with who will win in a fight
over the controlled variable.

You are arguing that distribution of wealth should be more proportionate to range of control, that seems to be assuming that range of control is important, while it can be argued that relative advantage in control is a more significant factor. See below.

So there is a surprisingly consistent ratio of best to worst among
expert controllers of marathons, crossword puzzles and tennis play;
about 4.5. The best controller is about 4.5 times better than the
worst.

Perhaps the sample should have been larger than 4.

You bet it should! But I just wanted to get a quick and dirty
estimate. But I think it is highly unlikely that getting a larger
sample of skill ratios would get the average skill ratio up anywhere
near the income ratio (510) or the wealth ratio (1,500,000).

We are not descended from the worst controllers, they didn't make it.

I meant the worst controller who _can_ control. The people we are not
descended from are the people who couldn't control at all.That's why I
looked at the data for skills where everyone was able to perform the
skill. In the marathon the best and worst times are for people who
actually completed it. I bet we would find the same skill ratio for
people doing a tracking task; everyone might be able to do it but the
worst (after becoming skilled at it) might never be able to do better
than an rms error of 25 while the best are able to do it with an rms
error of 5, a skill ratio of 5.

Perhaps it was just exaggeration to the extreme of being wrong on your part, but those humans who we are not descended from were quite good a controlling and perhaps suffered from only a relative disadvantage. Lot's of human groups have probably gone extinct along the way, and the anthropological community is realizing that both neanderthal in Europe and west Asia and homo erectus all the way to Indonesia were arguably human also although contributing little to our genome. They were out of Africa and controlling quite well in their environment for hundreds of thousands of years before getting exterminated or losing out in the competition for resources to a new wave of humans from Africa. Not only is range of control relative to others relevant, but there are probably threshold effects. On a scale of 1 to 5 in accuracy with a projectile weapon, maybe only the 4s and 5s avoid starvation. If everyone in a community can pick berries, but only two can hunt successfully, and being above that threshold means they can make the major contribution of quality protein to the whole community, who are you to say it is wrong for the community's value system to recognize the contribution of a 4 or 5 out of all proportion to the below threshold 3s. Being a 4 might require several times the practice and study, not just 33% more. The assumption that linear proportionality in wealth distribution is "fair" is unjustified.

Martin L

···

On 11/13/2010 8:45 PM, Richard Marken wrote:

There are nonlinear amplifiers that increase the significance of these
differences. Humans are tool users, some skills can have negative value.
The worst singers may have negative value. We might almost universally
prefer the best singer to the good singer at the 90th percentile. The somali
may actually be producing the 100 times less than the american that is
indicated by ratios of per capita GDP.

My analysis has nothing to do with preferences for who does something
better than someone else. I am assuming that people control for what
they want and, to the extent that they are skilled, they get it. The
more skilled controller will consume an amount closer to their
reference, so it will appear that that controller is getting "more"
than the less skillful controller. But in my analysis, that difference
in "wealth" obtained by the skilled and less skilled controller
depends only on their skill at controlling. It doesn't result from the
more skilled controller defeating the less skilled one. For both
controllers, their only "competitor" is disturbances to their
controlled variables. The more skilled controller deals with these
disturbances, like fleeing antelopes, better than the less skilled
one; but they both deal with them. The more skilled controller just
ends up with more antelopes than the unskilled one.

Small differences in competence may be more than linearly significant.

I don't see how this applies to my analysis, which treats each
individual as an economic control system unto itself. There is nothing
for one system's competence to be significant to other than itself (in
terms of how well it controls). Maybe what you are talking about is
the actual economy where there is specialization of production (and
the money paid for this production, as wages or profits, is used to
consume all the things the individual wants). So I think you are
saying that significance, presumably indicated by compensation, is not
linearly related to competence. And this is obviously true. This is
what I found for the prize money as a function of win percentage in
tennis. Winnings are exponentially related to competence. I think this
is probably also true in the economy, since I have ego enough to
believe that, though Bill Gates is probably a lot more competent than
I am, I don't think he is 200,000 times more competent.

Best

Rick

9

[From Rick Marken (2010.11.21.1140)]

�Martin Lewitt (Nov 21, 2010 0610 MST)--

Rick Marken (2010.11.13.1945)

You are arguing that distribution of wealth should be more proportionate to
range of control, that seems to be assuming that range of control is
important, while it can be argued that relative advantage in control is a
more significant factor.

I'm proposing (as a hypothesis, or perhaps an assumption) that before
there was any specialization of production (and no money, of course),
where what wealth an individual had depended on their individual
ability to produce this wealth for themselves (to control) the
distribution of wealth across individuals in this population would be
proportional to their control skill.

Nowadays, each individual's wealth (which can be measured by their
monetary worth since money is just a claim on real wealth) depends on
the coordinated, specialized controlling done my many individuals. For
some reason, in this new economy where we produce enormously greater
wealth through specialized production, the distribution of that wealth
across individuals is far more skewed than I assume it was when every
individual was controlling for their wealth on their own. When
individuals controlled for their wealth individually I expect their
would have been a wealth ratio, from most to least skilled
controllers, of about 5 to 1. In our present specialized economy we
are seeing wealth ratios in the range of 100,000 to 1.

I haven't speculated on why that is but I imagine that it does have to
do with conflict. My guess is that as the production of goods and
services in a society became more specialized and could thus create
more wealth the stronger/ cleverer/ greedier individuals within the
society would figure out ways to control disproportionate amounts of
that wealth. So you had kings, dukes and all that hierarchy. You also
had one society trying to grab the wealth of another by force. So the
first inequalities probably resulted from greedy people taking a
disproportionate share of the larger GNP that could not be produced by
specialization.

Nowadays these same greedy people can take their disproportionate
share of GNP without using any obvious force, though their greed is
now backed by the protective force of the law; indeed, they can do it
using corporate and financial laws. But it's the same thing that used
to be done with physical force; conflict between the greedy (those
ruthless enough to do anything to have more) and the cooperative (the
sheep who are easily shorn).

Best

Rick

···

So there is a surprisingly consistent ratio of best to worst among
expert controllers of marathons, crossword puzzles and tennis play;
about 4.5. The best controller is about 4.5 times better than the
worst.

Perhaps the sample should have been larger than 4.

You bet it should! But I just wanted to get a quick and dirty
estimate. But I think it is highly unlikely that getting a larger
sample of skill ratios would get the average skill ratio up anywhere
near the income ratio (510) or the wealth ratio (1,500,000).

We are not descended from the worst controllers, they didn't make it.

I meant the worst controller who _can_ control. The people we are not
descended from are the people who couldn't control at all.That's why I
looked at the data for skills where everyone was able to perform the
skill. In the marathon the best and worst times are for people who
actually completed it. I bet we would find the same skill ratio for
people doing a tracking task; everyone might be able to do it but the
worst (after becoming skilled at it) might never be able to do better
than an rms error of 25 while the best are able to do it with an rms
error of 5, a skill ratio of 5.

Perhaps it was just exaggeration to the extreme of being wrong on your part,
but those humans who we are not descended from were quite good a controlling
and perhaps suffered from only a relative disadvantage. � Lot's of human
groups have probably gone extinct along the way, and the anthropological
community is realizing that both neanderthal in Europe and west Asia and
homo erectus all the way to Indonesia were arguably human also although
contributing little to our genome. �They were out of Africa and controlling
quite well in their environment for hundreds of thousands of years before
getting exterminated or losing out in the competition for resources to a new
wave of humans from Africa. �Not only is range of �control relative to
others relevant, but there are probably threshold effects. �On a scale of 1
to 5 in accuracy with a projectile weapon, maybe only the 4s and 5s avoid
starvation. � If everyone in a community can pick berries, but only two can
hunt successfully, and being above that threshold means they can make the
major contribution of quality protein to the whole community, who are �you
to say it is wrong for the community's value system to recognize the
contribution of a 4 or 5 out of all proportion to the below threshold 3s.
Being a 4 might require several times the practice and study, not just 33%
more. � The assumption that linear proportionality in wealth distribution
�is "fair" is unjustified.

Martin L

There are nonlinear amplifiers that increase the significance of these
differences. �Humans are tool users, some skills can have negative value.
The worst singers may have negative value. We might almost universally
prefer the best singer to the good singer at the 90th percentile. The
somali
may actually be producing the 100 times less than the american that is
indicated by �ratios of per capita GDP.

My analysis has nothing to do with preferences for who does something
better than someone else. I am assuming that people control for what
they want and, to the extent that they are skilled, they get it. The
more skilled controller will consume an amount closer to their
reference, so it will appear that that controller is getting "more"
than the less skillful controller. But in my analysis, that difference
in "wealth" obtained by the skilled and less skilled controller
depends only on their skill at controlling. It doesn't result from the
more skilled controller defeating the less skilled one. For both
controllers, their only "competitor" is disturbances to their
controlled variables. The more skilled controller deals with these
disturbances, like fleeing antelopes, better than the less skilled
one; but they both deal with them. The more skilled controller just
ends up with more antelopes than the unskilled one.

Small differences in competence may be more than linearly significant.

I don't see how this applies to my analysis, which treats each
individual as an economic control system unto itself. There is nothing
for one system's competence to be significant to other than itself (in
terms of how well it controls). Maybe what you are talking about is
the actual economy where there is specialization of production (and
the money paid for this production, as wages or profits, is used to
consume all the things the individual wants). So I think you are
saying that significance, presumably indicated by compensation, is not
linearly related to competence. �And this is obviously true. This is
what I found for the prize money as a function of win percentage in
tennis. Winnings are exponentially related to competence. I think this
is probably also true in the economy, since I have ego enough to
believe that, though Bill Gates is probably a lot more competent than
I am, I don't think he is 200,000 times more competent.

Best

Rick

--
Richard S. Marken PhD
rsmarken@gmail.com
www.mindreadings.com

10

[From Rick Marken (2010.11.21.1150)]

Correction: I [Rick Marken (2010.11.21.1140)] said:

So the
first inequalities probably resulted from greedy people taking a
disproportionate share of the larger GNP that could not be produced by
specialization.

That should say:

So the
first inequalities probably resulted from greedy people taking a
disproportionate share of the larger GNP that could NOW be produced by
specialization.

Big difference;-)

Best

Rick

···

--
Richard S. Marken PhD
rsmarken@gmail.com
www.mindreadings.com

11

[From Bill Powers (2010.11.21.1245 MDT)]

Rick Marken (2010.11.21.1140) --

I'm proposing (as a hypothesis, or perhaps an assumption) that before
there was any specialization of production (and no money, of course),
where what wealth an individual had depended on their individual
ability to produce this wealth for themselves (to control) the
distribution of wealth across individuals in this population would be
proportional to their control skill.

So wives and children and the infirm or handicapped would have no control and no wealth, is that the idea? Actually, I used to turn my paychecks over to Mary, so she had control of most of the wealth in our family. I guess that makes me pretty much of a failure.

I haven't speculated on why that is but I imagine that it does have to
do with conflict. My guess is that as the production of goods and
services in a society became more specialized and could thus create
more wealth the stronger/ cleverer/ greedier individuals within the
society would figure out ways to control disproportionate amounts of
that wealth. So you had kings, dukes and all that hierarchy. You also
had one society trying to grab the wealth of another by force. So the
first inequalities probably resulted from greedy people taking a
disproportionate share of the larger GNP that could not be produced by
specialization.

Yes. My experience with pointy-haired bosses agrees very closely with Dilbert's experiences, except that mine weren't imaginary. The biggest instability in economic systems is the ability of some people to make the rules that others have to live under. They tilt the playing field so all the goodies slide their way, and if someone tries to level it, they holler "TILT!"

Nowadays these same greedy people can take their disproportionate
share of GNP without using any obvious force, though their greed is
now backed by the protective force of the law; indeed, they can do it
using corporate and financial laws. But it's the same thing that used
to be done with physical force; conflict between the greedy (those
ruthless enough to do anything to have more) and the cooperative (the
sheep who are easily shorn).

That's what the discussion is really about: system concepts. What kind of world do you want to live in? When you read economist's descriptions of human nature, you get the impression that people are pretty disgusting messes, concerned only for themselves and willing to do whatever they can get away with to be the ones in control of the rest of us. Makes you wonder just who the economists are describing -- us, or the one they see in the mirror?

Best,

Bill P.

12

[From Rick Marken (2010.11.21.1220)]

Bill Powers (2010.11.21.1245 MDT)--

Rick Marken (2010.11.21.1140) --

I'm proposing (as a hypothesis, or perhaps an assumption) that before
there was any specialization of production (and no money, of course),
where what wealth an individual had depended on their individual
ability to produce this wealth for themselves (to control) the
distribution of wealth across individuals in this population would be
proportional to their control skill.

So wives and children and the infirm or handicapped would have no control
and no wealth, is that the idea?

No, of course not. I'm talking about an imaginary situation, which
might have been approximated in the earliest humanoid tribes, where
each individual was, for all intents and purposes, the producer of all
of his/her own wealth (food and shelter mainly). I'm imagining
everyone is Ishi (remember him?). Of course, in reality there was
surely some specialization and cooperation in the very first human
groups. I'm just proposing an idealized situation where every
individual produces (controls for) only his/her own wealth (something
I know is impossible) in order to get an idea of what the expected
range of wealth might be if amount of wealth were proportional only to
relative control skill.

Best

Rick

···

--
Richard S. Marken PhD
rsmarken@gmail.com
www.mindreadings.com

13

[From Rick Marken (2010.11.21.1520)]

Bill Powers (2010.11.21.1245 MDT)--

Rick Marken (2010.11.21.1140) --

Nowadays these same greedy people can take their disproportionate
share of GNP without using any obvious force, though their greed is
now backed by the protective force of the law; indeed, they can do it
using corporate and financial laws. But it's the same thing that used
to be done with physical force; conflict between the greedy (those
ruthless enough to do anything to have more) and the cooperative (the
sheep who are easily shorn).

That's what the discussion is really about: system concepts. What kind of
world do you want to live in?

Yes. And it looks like a conflict that we'll have to live with forever
unless we can find the level above system concepts to which we can go
"up a level". Any suggestions?

Best

Rick

···

--
Richard S. Marken PhD
rsmarken@gmail.com
www.mindreadings.com

14

[From Fred Nickols (2010.11.21.1628 MST)]

···

-----Original Message-----
From: Control Systems Group Network (CSGnet)
[mailto:CSGNET@LISTSERV.ILLINOIS.EDU] On Behalf Of Richard Marken
Sent: Sunday, November 21, 2010 4:22 PM
To: CSGNET@LISTSERV.ILLINOIS.EDU
Subject: Re: Fwd: Calculating Appropriate Wealth Disparity

[From Rick Marken (2010.11.21.1520)]

Yes. And it looks like a conflict that we'll have to live with forever
unless we can find the level above system concepts to which we can go
"up a level". Any suggestions?

Where do "values" come into play? It seems to me that our preferences
(i.e., the reference conditions we establish) have some kind of connection
to what are typically talked about under the heading of values. On my part,
I think "values" are usually inferences made based on observations of
(verbal and non-verbal) behavior. Maybe; maybe not.

Fred Nickols

15

(Gavin Ritz
2010.11.22.12.52NZT)

[From Rick Marken
(2010.11.21.1520)]

Bill Powers
(2010.11.21.1245 MDT)–

Rick Marken
(2010.11.21.1140) –

Nowadays these same greedy

Rick didn’t
you tell me that there was no such things as the concept greed (in both HPCT
and PCV terms) according to PCT.

Are you saying all greedy
people are wealthy or wealthy people are greedy or if and only if you are wealthy
then you are greedy? Or If greed then wealth or if wealth then greed.

people can take their disproportionate

share of GNP without using any obvious force,
though their greed is

now backed by the protective force of the
law; indeed, they can do it

using corporate and financial laws. But it’s
the same thing that used

to be done with physical force; conflict
between the greedy (those

ruthless enough to do anything to have more)
and the cooperative (the

sheep who are easily shorn).

That’s what the discussion is really about:
system concepts. What kind of

world do you want to live in?

Yes. And it looks like a conflict that we’ll have to
live with forever

unless we can find the level above system concepts to
which we can go

“up a level”. Any suggestions?

I don’t think we have
to go too far to look at this and not as the lofty as above systems concepts
(into the zone of the gods). Back to the concept of trust and honesty.

···
16

[From Bill Powers (2010.11.21.1650 MDT)]

Rick Marken (2010.11.21.1220) --

>> RM: I'm proposing (as a hypothesis, or perhaps an assumption) that before
>> there was any specialization of production (and no money, of course),
>> where what wealth an individual had depended on their individual
>> ability to produce this wealth for themselves (to control) the
>> distribution of wealth across individuals in this population would be
>> proportional to their control skill.
>
>BP: So wives and children and the infirm or handicapped would have no >control and no wealth, is that the idea?

RM: No, of course not.

But if they have no control and no wealth, how can they eat?

RM: I'm talking about an imaginary situation, which
might have been approximated in the earliest humanoid tribes, where
each individual was, for all intents and purposes, the producer of all
of his/her own wealth (food and shelter mainly).

That's what I mean. What about those who can't produce any wealth? They just get Darwined out? I guess that would work.

So in this imaginary humanoid tribe, "individuals" who happen to be children and old people have to fend for themselves? If people get sick and can't work, they starve? There is no one anyone wants to help, or support, or wants to make happy? Everyone would enjoy being better off than other people are? The strong enjoy competing with the weak, because they're so easy to defeat? It doesn't matter to anyone if others are in pain, or in despair, or depressed, or without self-confidence or self-respect, or if some people have such low intelligence that they don't know how to do anything?

Now that I think about it, this does sound pretty realistic. It's the sort of society economists believe in and promote as the ideal way to live. How can you know what the value of anything is unless you know how much the highest bidder would pay for it (for example, your 12-year-old daughter)? If you have an advantage over someone else, why not exercise it, preferably at the least cost to you? What's wrong with making a profit off a cripple?

RM: I'm imagining
everyone is Ishi (remember him?). Of course, in reality there was
surely some specialization and cooperation in the very first human
groups. I'm just proposing an idealized situation where every
individual produces (controls for) only his/her own wealth (something
I know is impossible) in order to get an idea of what the expected
range of wealth might be if amount of wealth were proportional only to
relative control skill.

BP: I have a feeling that this model, while it might be exactly what economists are talking about, will turn out to look a lot like that guy with the electrodes sticking out of his neck.

I'd like to see a model in which people have a sort of idealistic view of life, where they get pleasure out of seeing others succeed, where they're a little embarrassed when they get more than their share of the birthday cake, where it bothers them to see others suffering, especially if they think something they did helped to cause it, and where their ideal society is one in which everyone can have first what they need, and a close second, what they want, to the greatest extent possible. But I guess nobody would really want a society like that. Just ask any economic theoretician: there are no people like that left alive. Nature red in tooth and claw, and all that.

Best,

Bill P.

17

[From Rick Marken (2010.11.21.2120)]

Bill Powers (2010.11.21.1650 MDT)

Rick Marken (2010.11.21.1220) --

>BP: �So wives and children and the infirm or handicapped would have no
> >control and no wealth, is that the idea?

RM: No, of course not.

But if they have no control and no wealth, how can they eat?

They don't exist. Or they exist as aspects of my imaginary generic
controller. In my imaginary scenario there is only one kind of entity,
the super controller. No specialties like wives, children, infirm, or
handicapped. The super controller does it all itself (yes, it even has
sex with itself, is it's own child, treats itself when it is infirm
and helps itself when it is handicapped).

RM: I'm talking about an imaginary situation, which
might have been approximated in the earliest humanoid tribes, where
each individual was, for all intents and purposes, the producer of all
of his/her own wealth (food and shelter mainly).

BP: That's what I mean. What about those who can't produce any wealth?
They just get Darwined out? I guess that would work.

There is no society. There is no competition or cooperation. There are
no people who can't produce. This is the anti-Donne society; every man
is an island.

So in this imaginary humanoid tribe, "individuals" who happen to be children
and old people have to fend for themselves?

No, because they don't exist as separate individuals.

If people get sick and can't work, they starve?

No, they doctor themselves and pay themselves generous unemployment.
They even entertain themselves. They control for everything
themselves.

There is no one anyone wants to help, or support, or
wants to make happy?

Just themselves.

Everyone would enjoy being better off than other people are?

No, there ain't no envy in that land.

The strong enjoy competing with the weak, because they're so easy to
defeat?

Ain't no competition in that land. (No need; each individual produces
everything for itself)..

It doesn't matter to anyone if others are in pain, or in despair, or
depressed, or without self-confidence or self-respect, or if some people
have such low intelligence that they don't know how to do anything?

The pain, despair, and depression of others is their own, in this land.

Now that I think about it, this does sound pretty realistic.

Well that's pretty scary. The controller I am imagining is not meant
to be realistic.

It's the sort of society economists believe in and promote as the ideal way to
live.

That can't be. I'm not describing a society but, rather an individual
that controls for everything that a society might control for.

BP: I have a feeling that this model, while it might be exactly what
economists are talking about, will turn out to look a lot like that guy with
the electrodes sticking out of his neck.

I am not proposing a model of society but a baseline against which to
evaluate the relative skill of controllers in a more complex society.
Maybe I should have just gone straight to a real society and noted
that the relative skill of controllers averages about 5-1 so if one
believes that wealth should accrue to people in proportion to their
relative skill then the relative wealth of individuals in an economy
should be no more than 5 to 1.

I'd like to see a model in which people have a sort of idealistic view of
life, where they get pleasure out of seeing others succeed, where they're a
little embarrassed when they get more than their share of the birthday cake,
where it bothers them to see others suffering, especially if they think
something they did helped to cause it, and where their ideal society is one
in which everyone can have first what they need, and a close second, what
they want, to the greatest extent possible. But I guess nobody would really
want a society like that. Just ask any economic theoretician: there are no
people like that left alive. Nature red in tooth and claw, and all that.

I would like to see a real society like that, not just a model. And,
indeed, the society I live in is mostly like that; I mean the society
of people who are our good friends and loved ones (including you, of
course).

Best

Rick

···

--
Richard S. Marken PhD
rsmarken@gmail.com
www.mindreadings.com

18

[From Rick Marken (2010.11.21.2145)]

Gavin Ritz (2010.11.22.12.52NZT)--

Rick Marken (2010.11.21.1520)--

Nowadays these same greedy people can take their disproportionate
share of GNP without using any obvious force

Rick didn�t you tell me that there was no such things as the concept greed
(in both HPCT and PCV terms) according to PCT.

I don't remember telling you that. But if I did then I was right.

"Greed" is just description of behavior, and a value laden one at
that. The behavior itself is seen when someone takes some proportion
of a resource for themselves. The value laden part comes from the
observer's (in this case my) reference specification for what is an
appropriate amount of the resource to take.

When I see (or imagine) a person taking more of a resource than my
reference for the appropriate amount to take, then I call that
behavior "greed", indicating that I think they are taking too much. So
the term "greed" just describes a perception of taking more of a
resource than I think is appropriate.

It is me -- my reference signal -- and not the amount of resource
taken that determines whether the amount taken represents "greed" or
not. I am well aware of the fact that a behavior I see as "greed" will
not necessarily be seen as "greed" by someone (anyone?") else.

Best

Rick

···

--
Richard S. Marken PhD
rsmarken@gmail.com
www.mindreadings.com

19

[From Bill Powers (2010.11.21.1130 MDT)]

Rick Marken (2010.11.21.2145) --

> Rick didn't you tell me that there was no such things as the concept greed
> (in both HPCT and PCV terms) according to PCT.

I don't remember telling you that. But if I did then I was right.

"Greed" is just description of behavior, and a value laden one at
that.

I think we can get a little more PCTish than that. I suggest that the people we think of as greedy are suffering from a condition in which no matter how much they get of anything, they can never have enough. It's similar in principle to people with anorexia: no matter how much weight they lose, they still see themselves as too fat. Are greedy people those who always see themselves as deprived, as having less than other people do? Is something wrong with their comparators at some level, so the error signal never gets all the way to zero? Or is it a perceptual defect, with the perceptual signal hitting a limit before it can get to the same level as even a moderate reference signal's value? When you finally get something you want, it's never as good as you thought it was going to be. The pleasure of possession fades quickly and the error signal returns, giving no rest or peace. I can't get no/ Satisfaction.

I've noticed in economic writings a sort of contempt for the idea that people can have enough of a good or service. There is always a shortage of everything. This is why the economy must always be growing, not just enough to keep up with the population but much faster than that, so there are always more goods, more services, better everything, more of everything. And it's never enough. Grow or die! In medicine this condition is called cancer. Maybe that's what it is in an economic system, too.

I don't think everyone is this way. It doesn't really take a lot of possession-obsessed people with their never-ending drive for more and more to make a society look pretty frantic. For one thing, this hyperambition leads to acquisition not just of an abnormal level of consumption, but to abnormal wealth and power. People with an abnormal amount of wealth aren't all that common, according to what you've been saying -- a few percent of the population. But look at the fury with which they seek to defend what they have and the endless energy they pump out trying to get more! Look at the way they flash their riches around so everyone is sure to notice. Look at how they try to corrupt governments and the judicial system to protect themselves from the jealous poor. Look at how they congratulate themselves on the superiority that explains their fortunes, and their divine right to do as they please to anyone who has something they want, or who dares to try to take something away. Look how they compete with each other to be the richest, the best-dressed, the most cultured, the first, the most powerful, the victorious, best in the world, in the universe!

It's clearly a sickness, this inability to be satisfied. Perhaps it should be added to DMS-IV as one of the more pernicious disorders. Whatever the case, I think it's pretty clear that there is a condition that could be called greed in the common-language sense. Greed is the sign of a large unreducible error signal. An unreducible error signal is a sign of something wrong with a control system.

Best,

Bill P.

20

[Martin Lewitt Nov 22, 2010 0347 MST]

[From Bill Powers (2010.11.21.1130 MDT)]

Rick Marken (2010.11.21.2145) --

> Rick didn't you tell me that there was no such things as the concept greed
> (in both HPCT and PCV terms) according to PCT.

I don't remember telling you that. But if I did then I was right.

"Greed" is just description of behavior, and a value laden one at
that.

I think we can get a little more PCTish than that. I suggest that the people we think of as greedy are suffering from a condition in which no matter how much they get of anything, they can never have enough. It's similar in principle to people with anorexia: no matter how much weight they lose, they still see themselves as too fat. Are greedy people those who always see themselves as deprived, as having less than other people do? Is something wrong with their comparators at some level, so the error signal never gets all the way to zero? Or is it a perceptual defect, with the perceptual signal hitting a limit before it can get to the same level as even a moderate reference signal's value? When you finally get something you want, it's never as good as you thought it was going to be. The pleasure of possession fades quickly and the error signal returns, giving no rest or peace. I can't get no/ Satisfaction.

"Greed" appears to be applied far more broadly than that, to the behavior of large corporations for instance. The profits of these corporations are most often reinvested in a capacity to provide more of the goods and services they supply to others. They reason they don't get satiated is that they aren't consuming to meet a need, they are supplying to meet a demand. They may reach a state where little further investment is justified because of reduction in demand or prices have been driven down by competition to levels that are barely sustainable.

I've noticed in economic writings a sort of contempt for the idea that people can have enough of a good or service. There is always a shortage of everything. This is why the economy must always be growing, not just enough to keep up with the population but much faster than that, so there are always more goods, more services, better everything, more of everything. And it's never enough. Grow or die! In medicine this condition is called cancer. Maybe that's what it is in an economic system, too.

You misunderstand economics. There is not always a shortage of everything, but the things which there is not a shortage of, don't have allocation and production issues which are the subject of economics. People can have enough of a good or service as evidenced by their responses to changes in prices. Some commodities are substitutable for each other, and if the price of a preferred commodity is perceived to be too high they will switch to the substitute. When beef prices rise, people substitute chicken or pork. Manufacturers routinely use steel for purposes for which titanium or carbon fiber would be the better performer. Aluminum is substituted in pots and pans when the prices of copper and gold are too high. There are limits to what people can consume, even the extremely wealthy limit their Calorie intake, some may indulge more expensive or pretentious tastes without increasing Calorie intake. Some may start giving their money away. Economists explicitly acknowledge limitations to demand in the concept of decreasing marginal utility. The value to you of the third big screen TV in your bedroom is lower than the value of the first, the 1000th chicken doesn't look as good after you've consumed the first 3.

I don't think everyone is this way. It doesn't really take a lot of possession-obsessed people with their never-ending drive for more and more to make a society look pretty frantic. For one thing, this hyperambition leads to acquisition not just of an abnormal level of consumption, but to abnormal wealth and power. People with an abnormal amount of wealth aren't all that common, according to what you've been saying -- a few percent of the population. But look at the fury with which they seek to defend what they have and the endless energy they pump out trying to get more! Look at the way they flash their riches around so everyone is sure to notice.

Hey, not all of us are displaying with penis cars or prius'es, I still drive a minivan.

Look at how they try to corrupt governments and the judicial system to protect themselves from the jealous poor. Look at how they congratulate themselves on the superiority that explains their fortunes, and their divine right to do as they please to anyone who has something they want, or who dares to try to take something away. Look how they compete with each other to be the richest, the best-dressed, the most cultured, the first, the most powerful, the victorious, best in the world, in the universe!

Don't forget the most green or the most generous, or the most unchanged by their wealth or the most humble or folksy. There are many wealthy who don't engage in ostentatious displays of consumption or material accumulation. Risks probably justify Gates luxurious secure compound, but it is an infinitesimal fraction of his wealth, Warren Buffet is not an ostentatious consumer, there are many wealthy whose consumption is so inconspicuous we are unaware of them. It is the exceptions like a Ted Turner or a Donald Trump or a Paris Hilton that get the press.

It's clearly a sickness, this inability to be satisfied. Perhaps it should be added to DMS-IV as one of the more pernicious disorders. Whatever the case, I think it's pretty clear that there is a condition that could be called greed in the common-language sense. Greed is the sign of a large unreducible error signal. An unreducible error signal is a sign of something wrong with a control system.

I doubt that is common, and the mere desire for more far from a guarantee that one will get more. I suspect those who end up wealthy are more likely those with a skill that they enjoy employing for its own sake, perhaps because they enjoy the feeling of competence, of being good at something. Their particular skills may be the ones that society values. Many people enjoy playing games. The wealthy may just have enjoyed playing games that require money to play such as construction, research or manufacturing, or other games where the "score" is kept in terms of money.

What you call "greed" explains very little of this complexity. The enjoyment of playing games, of ever refinement of skill of the feeling of control and competence, may be a form of greed that had survival value, but it is hardly the type you are demonizing. In that generalizable sense, even non-material utopias have their "greeds" whether it is for group sex or spiritual communion.

Martin L

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On 11/22/2010 12:12 AM, Bill Powers wrote:

Best,

Bill P.