[From Norman Hovda (2000.05.26.0800 MST)]
[Martin Taylor 2000.05.25 09:39]
>[From Norman Hovda (2000.05.24.1000 MST)] to Rick Marken
>A wants to buy from B and B wants to sell to A. C adds criteria re: the
>transaction which if neither A or B wish to risk penalty they must factor
>into their transaction price. I'm not commenting on the value of such,
>only that it is the way it is - as I see it. Depending on C's
>interventionist criteria, price tends, or is skewed, toward a particular
>bias one way or the other; sometimes slight, sometimes gross, mostly very
>murky. It is not easy to read the skew.
You were the only one to respond to the posting [Martin Taylor
2000.04.13] in which I presented a PCT analysis of why "governments"
(C) should be expected to "interfere" in contracts between A and B
(which include buyer-to-seller-contracts). You said it gave you a lot
to think about. What was the result of this thinking?
General agreement. I doubt I'm capable of finding any holes and FWIW
nothing stands out as problematic with respect to my elementary
layman understanding of PCT.
As I recall, your analysis gave me pause as I was attempting to
understand why on CSG there seemed to be support for coercive
remedy given that my reading of Chap 17, B:CP that speaks so
eloquently about the futility and ineffectiveness of even attempting to
control other living control systems.
From the above comment, I would guess that the result of your "lots
of thought" is a complete rejection of my argument.
from the comment above starting with "A wants to buy from B and B
wants to sell to A. C adds criteria re: the..." Other than my possibly
very flawed understanding, not at all. How do you get that?
Please would you
tell me wherein the flaw lies that invalidates my analysis?
Haven't ID'd any flaw.
Maybe you
have done so already, in which case could you point me to the message
in which you destroyed the analysis? I haven't yet read all the
backlog that arrived during my month away.
Never happened.
If my analysis is correct, any "skew" in contract prices is normally
a side-effect of C's attempt to counter the disturbances that would
be induced by the side-effects of the performance of the contract
between A and B. Here follows an expansion of the earlier analyses.
Yes. I'm ok with that. Perhaps what I have a problem with is the notion
that ALL side-effects, intended or not, are automatically actionable or
that those that imagine themselves impacted will automatically make an
effort to reduce error. The conflict / competitive mix of controlled
variables and disturbances from side effects is tough enough to figure,
adjust and adapt to without further interference from third party busy
bodies and know-it-alls meddling in other people's business "for their
own good." Regardless, we humans are an unruly lot and living control
systems will do what can be done as your PCT analysis makes quite
clear.
----------Continuing the analysis----
for further background refer to [Martin Taylor 2000.04.13] and
[Martin Taylor 2000.05.23 8:58 EST]. A start at a more abstract
background presentation may be found at
<http://www.mmtaylor.net/PCT/Mutuality/index.html>
-------------------------------------
When A and B propose to enter a contract, that contract normally is
part of control processes in both, whereby the execution of the
contract reduces error in each. A contract freely entered has no
winner and loser. It has two winners.
Correct.
In principle, the controlled perceptions of A and B do not include
perceptions of disturbances to controlled perceptions in C, D,...X,
Y, Z. The execution of the contract is therefore likely to have side
effects that do disturb perceptions in other people.
eeeh... nothing happens in a vacuum and I take slight issue with the
implications of "likely". I would prefer "may". Would potential v. actual
side effects and any deliberate consideration given not depend entirely
on the magnitude and scope of the contract / transaction? The _private-
sex lives of gays may very much disturb the moral bound perceptions of
the homophobic religionist and once disturbed who knows what specific
efforts will follow to reduce error but controlling their perceptions will
follow whether or not I find the outcome disturbing.
(Parenthetically, however, where money is concerned, a contract
between A and B may enable both to obtain money (power) from C,
D,...X, Y, Z, better than either could do alone, in which case the
controlled perceptions in A and B do include an intention to perceive
a diminution in the controlling ability of other people--a
disturbance to the other people.)
If A = gov, B = big business, and C...Z = taxpayers it has a different
spin but yes, I agree.
C, D, ... X, Y, Z, perceiving the effect of a contract on their
controlled perceptions--whether deliberate or by side-effect--, are
likely to contract together to oppose the execution of such contracts.
As well as non-action or withdrawal from that specific context?
Reorganize?
It is not possible, in general, for C, D,...X, Y, Z to perceive the
effects of each individual proposed contract between A and B. But it
is possible for them to perceive (in imagination, of course) the
likely side effects of contracts of given types. If C, D, ...X, Y, Z
have the power to do so, they are likely then to act to inhibit the
execution of contracts of specific types (i.e. to promulgate laws and
regulations about permissible contracts).
And if by cooperating with D...Z a favorable outcome is unlikely I, as C,
may _individually_ disengage and seek to avoid entanglement with said
AB contractual fallout. e.g. Social Security... restructure income so that
FICA is not required.
They may also act to
enhance the likelihood of other contracts (e.g. offer subsidies to
industries to locate in depressed areas). These inhibitions and
facilitations by C, D, ...X, Y, Z are the regulations and subsidies
that "skew" the free market prices.
To the extent that a contract between A and B represent perceptions by
C...Z that are detrimental to their interests, yes, I agree. A and B may
represent competition to C...Z or AB are competition to just C, and C
persuades or buys D...Z to gang up on AB.
I realize my value preferences are outside the purview of PCT, but what
seems missing to me from that old gov-coercion-is-ok thread is the
distinction between civil and political, economic power v. gov power,
voluntary v. coercion, especially in light of Chap 17.
If the PCT analysis is correct, one must ALWAYS expect an initially
"free" market situation to evolve into a regulated market.
I suppose for more public "situations" (although I am very cautious
around absoluting <g>) but what about more private "situations"? I think
you've just addressed the conflict I found so thought provoking (and
mostly personally disturbing <g>) re: your analysis.
As comfortable as I am embracing a value neutral PCT, there seems to
be a program running in my background that resists the what-is-ness
regarding disturbances and/or side effects. They are what they are - my
grandios infantile preferences be damned.
IOW, I evaluate unintended disturbances and side effects resulting from
coerced "good" intentions against the trade offs of unintended
disturbances and side effects from voluntary free exchange; let the
perceptions fall where they may. I end up with smaller error when I allow
markets to work over time. Others reduce their error by intervening,
thinking they know what's best for others. Vive le differance. (sic)
It
happened among the bootlegger families in Prohibition, when it was
not the "government" who set the regulations (though the "government"
regulations did affect the price of good quality alcohol). It happens
now omong drug dealing organizations.
Voluntary consent with contextual standards v. coercion to one size fits
all.
Someone always sets the
regulations that are enforceable, even in the presence of
unenforceable regulations that are intended to affect the same
contracts (as was and is the case with alcohol and drug
prohibitions).
"Honor among thieves". <g>
It happened in the evolution of stock markets two or
three hundred years ago, and is still happening within stock markets,
quite independently of "government" regulation.
Stock mkts "independently" of gov? If I had to put a % on the amount of
effort involved doing business v. gov regs it hardly feels independent to
me. Then again I think I understand that you refer to the self-organizing
aspects of doing business?
Bottom line: a "free market", like anarchy, is PCT-unstable.
Ack... to the contrary I see "free markets", like *leader-less* structure,
as self-correcting and coordinated price control systems; oscillating
from inefficient to efficient through time, supported by voluntary self-
governing consent.
Maybe, probably, I'm not understanding "PCT-unstable"? Positive
feedback loops?
Perceptual Control Theory says that any free market will evolve into
a regulated market in which prices for specific contracts differ from
the prices that would prevail in the absence of regulation.
Yes, this fits my experience.
It is
merely a question of labelling whether the "authority" that issues
and enforces the regulations is called "government."
Martin
Ack... to me "it" is more than just a question of labelling. "It" is a
function of free, voluntary or consensual human action v. coerced,
manipulated and enslaved obedience; of choosing, developing,
embracing my own emerging reference levels; of "cumulative blind
variation and selection" (Cziko) or having them forced down my throat.
Best,
nth