States Sting Status

We usually take control as a strong marker of status; those who give orders have higher status than those who take orders.  So, for example, bosses are reluctant to oversee better paid subordinates, and teens chafe under the control of their parents and teachers, even when their lives are otherwise comfortable.
People care about the form of government they live under not only because different forms of government have different chances of leading to peace, prosperity, etc.  People also care about how governments more directly influences their status.  For example, in addition to or setting aside our beliefs about which forms of government lead to which other outcomes, I suspect most of us prefer:
democracy to autarchy, as it gives us more illusion of control.
proportional representation, as gives more control over the person we pick
equal votes per person, as otherwise others have more votes than you
the state to be controlled by a group we identify with, so we seem in control
stigma be attached to welfare given to groups we don’t identify with
more regulation of competing high status, to bring them down to us
more support of affiliated high status, to bring us up with as they rise
laws not treat us like children or fools, as that degrades us
I suspect such status issues drive our actual choice of government forms more often than we like to admit.
Thinking along these lines, I was wondering about the status effects of something like futarchy — what if every time the government considered a policy, you had the option to bet for or against that policy, and such bets influenced policy?
Yes, you might still have to suffer the status-reducing indignity of being ruled by foolish policies chosen by clueless folks who in a just world would be considered your inferiors.  But you would always know that you had the option to have a large influence, via bets, on those policies, an influence far out of proportion to your fraction of the population.  You would also know that you could, via bets, arrange to be paid lots of money when those policies went badly, just as you had predicted.  Would this raise your status, relative to only influencing policy via your tiny fractional vote, and then just having to live with the consequences?
Setting aside whether this betting system would actually choose good policies producing peace, prosperity, etc., the question I’m asking in this post is if this betting system might substantially shrink the status sting of the state.  Yes this would not fully assuage a libertarian’s outrage at being subject to policies he did not (recently) choose, but would it be a substantial step in that direction?

We usually see control as a marker of status; those who give orders have higher status than those who take orders.  So, for example, bosses are reluctant to oversee better-paid subordinates, and teens chafe under the control of parents and teachers, even when their lives are otherwise comfortable.  People also hate or love their governments in part because how it makes them feel controlled by others, or in control of others.

More generally, people care about the governments they live under not only because different types of government have different chances of leading to peace, prosperity, etc. People also care about how governments more directly influence their status. For example, in addition to wanting governments that induce other outcomes like peace or prosperity, I suspect most of us prefer:

  1. governments with forms like those of recent high status regimes,
  2. to be part of large rich powerful empires, since those are high status,
  3. democracy over autarchy, as it gives us more illusion of control,
  4. proportional representation, as we then more control who represents us,
  5. equal votes per person, as otherwise others have more votes than us,
  6. states controlled by groups we identify with, so we seem in control,
  7. stigma attached to assistance given groups we don’t identify with,
  8. more regulation of competing high status folks, to bring them down to us,
  9. more support of affiliated high status folks, to lift us as they rise, and
  10. laws that treat them but not us like children, as that degrades folks.

Such status issues may drive our choice of government forms more often than we like to admit.  So when trying to design good government, we need to take such status affects into account, so that our designs can be attractive and stable.  Thinking along these lines, I was wondering about the status effects of something like futarchy — what if every time the government considered a policy, you had the option to bet for or against that policy, and such bets influenced policy?

Yes, you might still have to suffer the status-reducing indignity of being ruled by foolish policies chosen by dimwits who in a just world would be considered your inferiors. But you would always know that, via bets, you had the option of a large influence on those policies, far out of proportion to your fraction of the population.  You would also know that you could, via bets, arrange to be paid lots when those policies went badly, just as you had predicted.  Would this raise your status, relative to only influencing policy via your tiny fractional vote, and then just having to live with the consequences?

Setting aside whether this betting system would actually choose good policies producing peace, prosperity, etc., the question I’m asking in this post is if this betting system might substantially shrink the status sting of the state.  Yes this would not fully assuage a libertarian’s outrage at being subject to policies he did not (recently) choose, but would it be a substantial step in that direction?

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  • Jeffrey Soreff

    You would also know that you could, via bets, arrange to be paid lots when those policies went badly, just as you had predicted.

    In my view, the payout from the bets would have to be truly gigantic to compensate for being the victim of insane policies. Typically, the victims of, for instance, victimless crime laws are incarcerated, often for years, sometimes with concurrent rape or other injuries. This is a life changing event, typically depriving them not just of time served but damaging their future prospects as well. To my mind, to compensate, a payment would have to be on the order of their lifetime earnings, enough to let them leave the country in comfort.

  • Jeffrey Soreff

    We usually see control as a strong marker of status; those who give orders have higher status than those who take orders.

    Why is your list of government preferences almost entirely about status and not about real control? I, for one, prefer a government which controls (more speciffically, overrides) fewer rather than more of my choices. There is some overlap with item 10 on your list, but not much. I’m not taking a precisely libertarian position here: If the government is totalitarian, and it issues many orders, but it has happened to issue orders that match what I would have chosen anyway, then it has done no substantive damage to me.

  • Bryan Caplan

    I’m afraid it’s the opposite, Robin. Futarchy snubs everyone with policy views who won’t put up or shut up – i.e., almost everyone.

    • ERIC

      Bryan, I agree that you identify the current situation correctly, but what alternative options do people currently have? P2P bets aren’t really all that efficient or as status raising as it is to play in the financial markets and have your results published in the league tables, etc. Isn’t that where the “best” usually end up and isn’t that who you’d really want participating in a market?

      You don’t think that people would dabble in policy markets similar to stock markets if there was a better/easier way to do so?

      Maybe people would be passive policy market investors so we could let the “smart money” decide things!

    • http://hanson.gmu.edu Robin Hanson

      If a city council allots a weekly time period for open comments by citizens of the city, does that snub everyone who didn’t want to show up to make comments? Would citizen status be higher if we sent out tickets to a hundred random citizens each week, and only allowed them to comment in that time period?

      • ERIC

        Q1: If I could care less to show up, I’m snubbing the council. If I’m at work or can’t attend for some reason, I think “snub” is the wrong word to use though. Isn’t

        Q2: Citizen status in general would be lower for those not selected, higher for the lucky winners. Random selection should leave status unchanged, unless it’s falsely believed to be the result of some “skill” or if comments hold some type of authority.

        With democracy, everything hinges on fairness and equality. How does fairness relate to status in futarchy? Status assumes equality among equals within homogeneous groups and inequality of some kind among competing groups. Is the status element more straightforward than fairness in furarchy?

    • Matthew Hammer

      More than simply snubbing people who won’t put up, it would force people to pay money in order to have any policy input in the government.

      Futarchy is designed to take money from those who cannot predict policy effects and give it to those who can. I’d expect that like every other market, only a small fraction of participants could reasonably expect to make money. Thus the majority of the citizens would go from being nominally courted voters to having to pay people to “listen” to their views.A significant status decline.

      If you have to fight this out on the battlefield of citizen status, I would suggest ignoring the mechanics of selecting policies (in the same way we ignore the back-room dealings in a normal democracy) and focus on the fact that the citizens would still voting, in fact would be able to vote their values rather than simply mark their allegiance to the grubby political parties of today, and that they will then be citizens of a forward looking nation that would soon be globally recognized as the world leader in effective governance.

    • Patri Friedman

      Put slightly differently, futarchy taxes self-deception, and it’s hard to see how that can reduce sting, given that self-deception is a major mechanism by which we feel good about ourselves.

      • http://hanson.gmu.edu Robin Hanson

        There are a great many kinds of self-deception, and this would at most tax only a few. The net effect on status isn’t obviously negative to me.

  • ERIC

    Re shrink “sting”: I see that betting would allow for more direct and real control as opposed to the illusions or downfalls of democracy (my take) as you mention. Obviously a major improvement is that it would provide feedback quicker. Still, people with less money would complain about fairness, but how different would that really be from how things work today? If it could be viewed as fair (given how that really does seem the point of most of your post — that people want to be equal or better, never worse, than others) then I think it would help move in the direction of where libertarians want to go, which I think is more “control” coming from a lower, decentralized level.

    In any case, it is tough to see how this is not an improvement.

    Re status “betting”: How many times have you heard rich people say that after attaining a certain level of wealth all that matters is: golf handicap, philanthropy, art, etc … all of which are status games. So would profiting from correctly identifying policies raise status? Via my reasoning above, I think so. I think that no matter how much or little money you can bet or stand to really gain, it is quite enjoyable for most to brag and raise their status.

    Seems like the underlying lure of the stock market: getting rich by being right which can then be used to objectively measure your status.

  • jorge

    But how important empirically is the status component? So would someone give up 5%, 10% or 50% of their real income to live in a large empire vs a small Switzerland with identical local living standards and (important) identical future income prospects for yourself and your offspring? The latter issue is hard to correct for. Moreover, it is hard to observe the counterfactuals since it’s actually easier to become a citizen of the US than to move to Switzerland or even Japan.

    Same issue for all the remaining observations. The issue is not the significance of the sign but the magnitudes of the coefficients. Robin likes to imply that positive signs (themselves unproven) imply large coefficients. I see no evidence for that implication anywhere.

    • Someone from the other side

      I’m Swiss and you’d have to pay me really significant amounts of money to get me to live in the US permanently. So anecdotally, the opposite is true.

      And I know the same holds for most of my peers. Most would work in the US for a year or two, but could not imagine being there their entire life.

      It even goes so far that several explicitly rule out top US business schools (personally, I’m looking to get into LBS or Insead, even though I might actually have reasonable chance to get into one of the top three) because their network would be very US biased…

  • Psychohistorian

    “proportional representation, as gives more control over the person we pick”

    How can you say this is important, when the US has unbelievably disproportional representation, (Hello, Senate?) and very few people seem to care?

  • http://hanson.gmu.edu Robin Hanson

    Jeffrey, I said my list is about status, not about control.

    Jorge, you define a fraction but give no estimate, you quote no estimate of mine, yet you complain that I “imply” overly large coefficients?

    Psycho, follow the link to see what “proportional representation” means.

    • Psychohistorian

      The same question arises; we clearly don’t have proportional representation in the US, either in the sense of electing parties based on proportionate support, or on the basis of “A Californian’s vote counts as much as an Iowan’ss or Wyomingite’s.” (Spellcheck says Wyomingite is the preferred nomenclature.) Our elected government is disproportionately affected by a very small population in certain states – 41 senators, representing slightly over 10% of the US population, can block bills. As a Californian, I have basically no status in federal government, and yet there doesn’t appear to be any kind of popular outcry related to this.

      I suppose the issue, therefore, is: Who is we, and if we is people in general, why does the US not have a government that is proportionately representative in either sense of the term?

      • Jess Riedel

        My understanding is that proportional representation (of parties) does little to fix the majoritarian problem; two or more parties will simply band together to form a coalition government. All proportional representation does is move the winner-take-all aspect from the election vote to the legislative vote. Either way, 51% of the electorate can pass anything it wants.

  • jonathan

    Government bonds in an attenuated fashion do this: government does x and price of bond goes up or down.

    In any event, I can say one thing: I’d always vote against whatever the government of Haiti decides.

  • http://torontopm.wordpress.com Paul Hewitt

    “You would also know that you could, via bets, arrange to be paid lots when those policies went badly, just as you had predicted. Would this raise your status, relative to only influencing policy via your tiny fractional vote, and then just having to live with the consequences?”

    No one likes the person who says, “I told you so”, and they will detest the one that makes “lots” from bad policies.

    Futarchy would have to work, as you think it might, for there to be any significant influencing of policy. I just don’t think it would work very well. No one expects futarchy (if it were to be implemented) to be perfect, but shouldn’t there be a lot fewer bad policies enacted, given the remarkable powers of decision markets? One would expect there to be few opportunities to make “lots” from bad policies. Consequently, there should not be very many opportunities to raise one’s “status”.

    • ad

      No one likes the person who says, “I told you so”, and they will detest the one that makes “lots” from bad policies.

      Well, the traders who bet against that person might not like him. But most other people would probably just remember that they agreed with the sucessful trader all along.

      People have a bad memory of the times when they got it wrong.

  • http://torontopm.wordpress.com Paul Hewitt

    Any status derived from betting in futarchy will be swamped by the status provided by wealth from personal earnings and real market investments.

    • Michael Turner

      Science perennially ranks very high among esteemed professions. Scientists don’t make a lot of money, and don’t do it for a lot of money.

      Much the same might be said for the judiciary — they are, after all, basically just government employees.

      A good “futarch” might settle somewhere in that range of social esteem (and income range, maybe), if only because he/she will probably require similar diligence and cognitive skills for success. No doubt, many of them would be seen as just lucky gamblers for a while. But that’s true of many of those who are now “wealthy from personal earnings and real market investments.”

      Recursion step/repeated play: I believe any reasonably effective futarchical system would evolve tax policies that more effectively filter the mostly-lucky from the mostly-able, and tax the latter significantly less. A good futarchy might increase the esteem in which futarchs are held (for surely, we already have some in our midst, in disguise), while also increasing the esteem in which we hold those who become at least moderately wealthy through other pursuits. If futarchy would make society more closely approach meritocratic ideals, how would it not also, in the process, confer more perception of merit on successful futarchs?

  • nazgulnarsil

    libertarians are mostly low status high IQ males that desire a system that gives them higher status for their higher intelligence.

  • Aaron

    Robin,

    I haven’t read as in-depth in the futarchy idea as I’d like to have. But from what I’ve read, the focus has been on monetary gain from correct decisions. Have you or others discussed about increased power in making future decisions, such as increased votes, vetoes, etc.? It seems like, in regards to Mr. Soreff’s point, political power carries negative externalities that aren’t adequately compensated by financial gains. Votes and money might provide more adequate compensation than money alone.

    Aaron

  • http://entitledtoanopinion.wordpress.com TGGP

    You previously made the point about the status effects of democracy here.

    equal votes per person, as otherwise others have more votes than us
    Isn’t that only the case if you are not already one of the “others”?

  • Michael Turner

    Being, or being associated with, a successful policy entrepreneur will probably initially confer more status than being, or being associated with, a successful policy arbitrageur. That said, the question arises: how do social perceptions evolve in repeated play? Success in policy arbitrage would depend considerably more on the cognitive skills typically seen in science generally than those seen in entrepreneurship generally, and science routinely tops the rankings of highly esteemed professions. I’m not sure how you get from here to futarchy, but getting there might, after some difficult bootstrap stage, enjoy a positive feedback loop from successful “futarchs” breeding more of the same, through mentoring and imitation, and not least because the field is gaining in status.

  • m34

    Ironic how we try to take control of ourselves from status-seeking impulses by trying to understand them… when the feelings of wanting control are products of status-seeking impulses themselves!

  • Stuart Armstrong

    Sigh… This post continues the trend of stripping ‘status’ of all meaning by having it gobble up everything else. This time it’s control that is reduced to an appendage of status, as well as desire for independence. And a list of ten points, which are generally one plausible observation followed by an unjustified assignement of status as the explanation.

    If status explains everything, it explains nothing. Don’t let status go the way of freudian psychoanalysis.

    As for the issue discussed, probably the best way of giving people the illusion of control, is to give them some local control. Not local as in the local council’s garbage collecting, which no-one cares about, but local as in the arenas and communities they choose to participate in. Maybe an acceptable situation would be any decently democratic overall system, a level of privacy and independence available to all, and a whole slew of voting communities with voluntary participation and actual powers, maybe some sort of fusion between local councils, facebook, and voting TV shows.

  • mjgeddes

    When you have a hammer everything looks like a nail. Prediction markets have their place but not in politics. It’s pushing a love of Probability, Bayes and The Free Market to a reductio ad absurdum. The flaw in Futarchy is the exact analogy to the flaw in Bayes.

    I base my ideas on Alan Fiske and his relational models theory (given the nod by Stven Pinker in ‘The Stuff of Thought’).

    Fiske-Relational Models

    Fiske initially found 4 different types of human social relationships, which were later reduced to 3: (1) Communal Sharing, (2) Authority Ranking, (3) Equality Matching and Market Pricing

    Communal Sharing is based on a socialistic model, Authority Ranking is based on a conservative model and Equality matching/market pricing is the market model. The idea is that each of these types of relationship has a valid place, and it is a mistake to elevate one above all others.

    I think is Fiske is correct. Seems to me that Futarchy is an attempt to try to elevate (3) the market above the other types of relationship (1) and (2). But according to Fiske’s theory, people should find it offensive to mix the market with politics, because there’s a clash between the 3 different types of relationship. And in fact people do indeed find it offensive, just as predicted.

    Sorry but the market will always be subsumed by democracy, in exact analogy to how Bayes will always be beaten by analogical inference 😉

    • Michael Turner

      Communal sharing can hardy be based on socialism, since it shows up in all cultures, including those that aren’t socialist. Authority ranking need not be conservative, since even a radical organization usually has an authority structure. (In fact, some of them have little else.) Finally, equality matching seems to predate markets in the same way that communal sharing long predates actual socialism — equality matching is pretty much just the idea that everybody should be subject to the same rules. (Thus, civil rights legislation evolved that says that that market pricing and a authority-redefined communal sharing overrides the “authority” of the property holder.)

      There might be specific incompatibilities in specific cases between the three different kinds of relations, but as Fiske himself points out, most relationships and social arrangements involve a mix of the types to some degree. (In some cases, the maintenance of one requires the other — e.g., the legitimacy of the authority of judges is in a mutual reinforcement relation with the notion of equality under the law.) Fiske doesn’t say that it’s necessarily offensive to mix market pricing and other relations. Indeed, regulation of markets is popular and that clearly requires both market pricing and authority. It’s just that some cultures — non-Western ones are mentioned — value market pricing less than other relations. They probably put a lower value on equality matching in general, though. Is that a good thing?

      “Bayes will always be beaten by analogical inference”? Well, somebody forgot to tell these people:

      http://www.nbu.bg/cogs/analogy09/proceedings/32-T20.pdf

      I think you’re seeing a lot of conflict and dichotomy where it need not necessarily exist. At one time, for example, it was thought that independent central bankers controlling “fiat money” was an inappropriate mixing of authority hierarcy with market pricing. Now, though, the gold bugs are on the margins. I expect futarchy to be taken up more or less in the order Robin suggests, starting with corporations — and perhaps it’s no suprise that prediction markets have found a footing in hotbeds of anti-authoritarian/pro-market sentiment in the corporate world, such as the info-tech sector. Bellwhether or faddism? Only time will tell.

      • mjgeddes

        What I meant to say is that it’s plausible that the cognitive drives behind Communal Sharing, Authority Ranking and Equality Matching are what motivated the development of Socialism, Conservatism and Capitalism, respectively.

        I agree that there’s a lot of mixing in practice, but should there be? People hate corporations that are vey authoritarian etc, see Pinker (‘The Stuff of Thought’) for discussion suggesting that many social conflicts in everyday life are indeed caused by attempted mixing of the different types of relationship.

        I think it’s a good bet Futarchy will never work because of the status conflict between Equality Matching (the cognitive basis for prediction markets) and Authority Ranking (the cognitive basis for government arms such as the military).

        The link you give to integration of Bayes and analogical inference is a link I myself posted in Open Thread 27, it supports my theory. I postulated that Bayes is a special case of analogical inference (i.e. Analogy is more powerful, but it includes Bayes as a special case). If I’m right, some kinds of analogy making should be found to give the same result as Bayesian inference. And that’s exactly what the paper shows.

        Nice to see LW folks supporting my view. In the thread ‘In Defense Of the Outside View’, one poster states:

        “This whole debate looks like a red herring to me. The entire distinction makes no sense– all views are outside views. Our only knowledge of the future comes from knowledge of regularities. So all arguments are arguments from typicality. Some of that knowledge comes from surveys of how long it takes someone to finish a project. Some comes from experimental science. Some of that knowledge comes from repeated personal experience– say completing lots of projects on time. Some of it is innate, driven into us though generations of evolution. But all of it is outside view. The so-called “inside view” arguments are just a lot harder to express by pointing to a single reference class.”

        I couldn’t have said it better myself. If the addition assumption is made that analogical inference is in fact identical to categorization and the outside view (which seems a very reasonable assumption), then the quoted poster above is in effect saying exactly what I’m saying, Bayes is just a special case of analogy.

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  • Philo

    “Jeffrey, I said my list is about status, not about control.” But you don’t consistently observe the distinction. Admittedly, it’s not sharp; but ignoring it–failing to distinguish between power and influence–threatens to make your notion of “status” too broad to be useful.

  • Philo

    I just read Stuart Armstrong’s comment; I’ll second that.

  • ad

    I suspect most of us prefer:

    2.to be part of large rich powerful empires, since those are high status,

    Hmm. There have been an awful lot of nationalist/ independence movements in recent decades. Those people were not trying to become part of a bigger empire.

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