The following is a rough transcript which has not been revised by The Jim Rutt Show or Ashley Hodgson. Please check with us before using any quotations from this transcript. Thank you.
Jim: Today’s guest is Ashley Hodgson. Ashley is an associate professor of economics, and she teaches interesting things like blockchain economics, healthcare economics, behavioral economics, one of my favorites, microeconomic theory, game theory and principles of economics. She’s also an associate of Heterodox Academy. Welcome, Ashley.
Ashley: Thank you.
Jim: I stumbled across Ashley in kind of a curious way, unusual for my sourcing of guests. The Game B group on Facebook was suddenly all aflutter about Ashley’s videos. And regular listeners know I hate videos. I hardly ever watch videos. In fact, I’ll often send off a video to be transcribed rather than have to watch the damn thing. But these people all swore they were good. So I went and looked at one and said, “Whoa, these are good.” So I reached out to Ashley and she was very kind to agree to come on the show. And I then did what I said I’d do, which is I watched 11 of her videos, or maybe it was 12, about six and a half hours worth of videos. Of course, I always watch them at 1.25 speed, so I think it was about four and a half hours, and sure enough, they were really good. So that’s what we’re going to talk about today. As always, the list of videos and links to them will be on the episode page at jimruttshow.com. And I should also note that Ashley has two series on YouTube. The one we’re going to talk about today is called The New Enlightenment – very interesting, very heterodox, very interwoven, good stuff. And she also has another series called Economics Explained, which is more or less sophomore level economics chopped up into little pieces with nice little visuals and such – makes the spoonful of sugar help the medicine go down. So if you need a refresher in sophomore level economics, check out Economics Explained. But today we’re going to talk about The New Enlightenment. Before we hop into it, I noticed that you quoted from one of my favorites, Iain McGilchrist, lots of times. I couldn’t even count how many times he came up in these things, but it’s got to be at least 25.
Ashley: Oh, yeah.
Jim: And he referenced The Matter with Things, which is his magnum opus. That’s like 1,100 pages, something like that. I had him on the show for two episodes where we went into the book in great detail. And I can tell you actually read the book. And as far as I know, there may be three of us on earth that actually read it cover to cover. Think probably more than that. And it is quite an amazing book. And it was kind of surprising that you had taken that as one of your organizing principles.
Ashley: Absolutely. Yeah, no, I think he’s absolutely in touch with the paradigm shift we need in our thinking. And when I read that book, suddenly I could explain things about economics I could not explain before. It really made me realize a lot of our thinking is sort of trapped in these structures in the back of our minds that we can’t explain, that words can’t express. And part of the reason for that is there’s some biases in our thinking that have just been built over thousands of years. And so it was just so freeing to read his work.
Jim: Cool. Yeah, it’s my two-episode arc with him, which was EP 154 and EP 155, where we went into great depth in his book, “The Matter with Things” and his theories. And it was a lot of fun. If you want to go check it out, it’s one of my most popular set of episodes.
So let’s get down to it. This is gonna be an interesting challenge because there is so much in the videos that, as I was telling Ashley in the pregame, I could do a ninety-minute episode on each one of those videos. They were just so interesting. So I’ve created some notes and we’ll hop around a little bit and give people at least a flavor. But if you really wanna get the thing itself, you better go watch the videos.
I think we’ll start off with what I think is kind of an interesting framing video for the rest of the series – the one called “The Battleground of Our Era is the Economic Mythology.” And that resonates very strongly with my own thinking that an awful lot of what’s wrong with the world is the shit we believe that just ain’t so, right? So let’s hop into it. What do you mean when you say economic mythology? Actually go into some considerable detail defining what you mean there.
Ashley: For me, economic mythology is not necessarily false. You can’t have a system that’s not upheld by some economic mythology, but it’s basically the sort of concepts and ideas and examples and anecdotes and stories that we tell ourselves over and over to sustain how we think about our system, how we understand the way it works, how we understand what’s legitimate and illegitimate, what’s valid and invalid, moral and immoral. And the system is upheld through an economic mythology.
And our current system is, I mean, as your audience knows, it’s in a really bad spot. So the question is how do we get to a healthier system that doesn’t have this power-to-the-powerful dynamic? And I think the only way is going to involve a massive shift in how we think about our economic system, our governance system and our knowledge system. And those three things are just so intertwined. You can’t fully separate them.
Jim: When I do book-based things, I often do some fun by doing some searches on the content to count the number of times words appear and authors are often surprised. What do you mean I used blah, blah, 172 times? I go, you did. You use the word “manipulate” a lot, right? Why don’t you frame that word in the context of our economic mythologies?
Ashley: I teach behavioral economics and that video is part of the series I’m doing on the Surveillance Capitalism book and sort of the thoughts that go along with that. So if you look at the way our system operates, so much and an increasing share of our economic system is oriented around manipulating people’s perception of what’s valid and invalid. And if you look at any one given idea in an economic mythology, one principle I think we’re going to have to understand better is that an idea is oftentimes sometimes used in a really valid and important way to understand how reality works. But then other times the same idea is used to justify bad behavior or to misdirect or to adjust people’s salience so something is too big in their salience frame, their understanding of how important that is. And so there’s these distortions in terms of how we understand the world. And a lot of those distortions are baked into the system in a way that is manipulative.
Jim: I call the epoch we live in the Bernays era after Bernays, who was Freud’s nephew and who wrote the first books on how to manipulate the public in the twenties, I believe it was. People don’t really see and understand, I think, deeply enough to understand that market capitalism underwent a phase change when it started to understand it could program its own consumers. Not just our values in terms of status symbols, you know, who I am, right, as a person. Do I have a shiny car? Am I wearing the right fast fashion? You know, do I listen to the right music even? These are not natural ways that we would come into being. These are whether they’re actually conscious. So you talk about that elsewhere, that these conspiracies or these actions can be innocent, people following local gradients. But the result is the machine of money-on-money return has developed exquisite ability to craft who we are.
Ashley: Absolutely. And I think one of the distortions we have when we think about advertising and propaganda is that we imagine it’s this little moment, it’s this isolated moment when you see the advertisement and people are like, “Ah, it’s not really a big deal.” But the more massive shift in how we think about things is sort of the, it’s all of the examples put together. It’s sort of all of the impressions that come from many different places that you wouldn’t connect with each other, but strategically they are serving the system, they’re upholding the system.
Jim: And we’re like the fish in the water that doesn’t notice the water. Just think how many signs or little flippy social media or online ads you see in a week. It’s probably 10,000, right? And each one of them is making a subtle little drop of something into your brain that helps define who you are. And it takes a tremendous amount of will to break loose from that system.
Ashley: Yeah, I don’t even think it can be like broken loose from exactly. It’s sort of like, you have to have a system and it’s more like, wait a second, I’m gonna pull apart some of these ideas that are super connected in everybody’s mind one at a time to try to figure out what’s the distortion in the connection between these ideas.
Jim: Indeed. And then you lay out five tasks that you ask people to undertake as they interact with the mythology. Do you want to run through those or maybe give an overall summary of how you think it would be good if how people would react to the economic myths in which we are saturated?
Ashley: Yeah, I mean, I think just recognizing what are the economic myths – and it’s so many – that’s a really big task. But taking each one, critically evaluating it, thinking about what role is this serving? When is it valid and when is it invalid? Because yeah, like I said, one of the main problems I see when people undertake this task is they try to figure out how is that invalid without also figuring out when is that valid, what context is that valid. And if you just have one without the other, you sort of magnify the distortions in how you’re thinking about the system.
And yeah, so we need to look at them, critically evaluate them, make them salient so that people are like, “Wait a second, yeah, we have this way of thinking that actually doesn’t make sense once you look at its role in the system.” The next step would be agency. We need to reestablish that we actually do have agency. The economic pathology is collectively determined by the population. It’s not something that’s top down, although there are certainly levers of power that people can use. If you control social media algorithms, that’s a pretty strong lever of power. But the power still does rest with us and we need to resurrect our sense of agency in that process.
And then the hardest part is how do we come up with new economic mythologies that could lead us to a new system, to a healthier system, when that system is not going to arrive in anyone’s brain fully formed. It’s going to be also collectively arrived at in an evolutionary process.
Jim: Yeah, well said, well said. Well, let’s go on to perhaps the greatest of the economic myths: GDP growth is wonderful.
Ashley: Yeah, this distortion I think appears not just in GDP, appears other places, but I think it’s most clear in GDP, which is there’s sort of three parts to this that I set up. There’s definitely things that feed GDP and increase GDP that are incredibly destructive. And the example I used was if you expand diabetes, if you somehow increase the percentage of the population with diabetes, GDP goes up massively because of the structure of our system. So that’s like this horrible thing that will be connected with higher GDP.
Another thing about GDP that’s a little bit more subtle is that it’s trying to capture collective value. And this is why I think it’s important to think what is the part of this that it’s not that with GDP, I don’t think this is valid, but it’s trying to do something that actually does need to be done. It just needs to be done in a way that’s not this. So when we’re adding up collective value in the population, we kind of would want everybody’s value to be weighted equally or at least not massively distortedly. Like maybe if you’re like, okay, rich people, maybe their value, some people might say if their value weighs in five times more heavily than poor people, people would be fine with that. And we could argue about what the appropriate weights are. I would say it needs to be much closer to equal.
But the problem is our minds are stuck in thinking of this as rich people versus poor people. And that’s as far as we get. Whereas the actual influence on GDP is massively outweighed by people who make decisions inside large-scale institutions. That something that is of value to those people will weigh more heavily because if you think about the banker, the banker is making decisions about what do I invest in, what will get a return, and who do they need to be paying attention to or tuning themselves to? They don’t need to spend much time at all attuning themselves to the value experienced by people in the bottom half of the income distribution. That’s just not going to play in with the success of banking endeavors. And they might attune themselves much more to somebody in the top 1% of the income distribution. But really, if a banker wants to be successful, they need to be attuning themselves to the people who are making decisions inside large corporations, inside government agencies that dole out a lot of money inside, sometimes not-for-profits, those people’s value is going to get the attention from the bankers in directing our economy. And that means they have massively higher weight in this sort of voting system that we have to determine GDP, to determine value, to determine which endeavors get funded or not funded.
Jim: Yeah, I’d go one step further and say the people, even the richest people don’t matter at all. That the machine has lost track of the people and it’s all driven only by money on money return and relatively short-term money on money return at that, right? You know, for bankers three to five years, for VCs maybe seven to ten, for typical operating corporate executives ninety days, right? And there are people still an overlay, but the thing that actually turns the crank is the money on money return, which is pretty crazy. And some of that results in what you described as destructive growth value.
Ashley: Destructive growth value is basically if you can figure out how to create destruction, which the example I use, I think in the video, is pesticides. So pesticides, if you have a pesticide that might increase your immediate yield, but it causes diabetes – the first impact on GDP is whatever you get from the higher yield of the crop. But the second “benefit” of that in GDP is that it causes diabetes, or it could cause diabetes, at least in my example. And that’s going to massively increase GDP through the mechanism of what happens in the healthcare sector. So by doing the destructive thing, by adding the destructive thing on top of the original bad thing, it has a double positive as an increasing GDP impact. And our system is going to seek out that kind of thing.
Jim: Because it returns money on money return, right? There’s no ethics, there’s no decision. It just says, “Ugh, gradient, money gradient, more, more, more.” And so that’s what happens. I liked your diabetes example – it’s actually richer in some ways, but the one I always like to say is ain’t nothing better for the GDP than a good cancer diagnosis, right? Now, I was pleased to see that you had not dogmatically adopted anti-growth or degrowth as a buzzword. I actually find that off-putting, and I think it is unsellable, and it’s also just wrong. You did a nice job in one of your videos of showing the relationship between growth on one side and resource extraction – extend that to damage to the ecosystem on the other. You can have growth without imposition on the ecosystem or resources. The example I like to give is, one could have a whole closet full of fast fashion, or I could have five well-made garments, and I could have my friendly embroidery lady embroider a little bit of the story of my life on my favorite item each week. And I pay her for that, right? A fair amount for her work. And I have actually grown value in the creation of the story of my life in the form of embroidery on my shirt in a way that other than a trivial amount of thread is not an imposition on the ecosystem, but the actual value may be way larger in any kind of reasonable sense than having 80 garments that I bought from some Chinese fast fashion outfit just because I wanted to be trendy.
Ashley: Exactly, exactly. Yeah, and I think the fact that GDP growth and resource extraction is so connected in people’s minds is one of these things that needs to be disconnected for us to move to a healthier system.
Jim: Yeah, absolutely. Now let’s dip a little bit into – I did not know about this book, even though I read some of his others – Galbraith’s book, “The Economics of Innocent Fraud.” That was quite fun, particularly for a guy like me, former public company CEO, right, known for my very entertaining quarterly investor calls. Tell us a little bit about what Galbraith had to say about the economics of innocent fraud. And then I’ll come back and say, maybe not quite as innocent, right?
Ashley: Well, yeah. And I think this is also one of those examples where if you approach it with a debunking mindset, which I think is part of the problem in terms of people’s current approach, what you end up doing is debunking too much. So I don’t think what he’s saying is true in all cases. I think it’s probably true in some cases based on his experience.
And for me, the book by Galbraith that really changed my thinking – I didn’t give that video to you – but it’s “The New Industrial State.” And I think that’s just capturing really deep truths about how the structure of the system works. But in this particular book, “The Innocent Fraud,” he basically says, okay, if you look at the structure of how we think we hold firms accountable, people think that it’s held accountable to the shareholder through this voting mechanism. And then there’s this information environment that’s surrounding that, that shareholders have an incentive to find accurate information about the company and hold the company accountable through voting. It’s sort of this structure that you learn in finance courses and in some econ courses, probably not Econ 101 courses.
But basically he says there’s a few things wrong with that. And he sees this as being more of a ceremonial role where the board of directors oftentimes doesn’t really hold the management of the firm accountable. Oftentimes it’s subservient to the will of the management. And my intuition here is I think that’s probably true in some circumstances. I think in other circumstances it may be accountable to some other group or some other force. Other times it really is shareholders the way it’s taught in econ courses.
But I think one of the most important things that he says in that book relates to the information environment where the people who are putting out information that would hold the firms accountable – those people are inside this ecosystem of Wall Street where they depend on the firm itself for information. So if there’s information that disfavors the firm in some way, the firm doesn’t want that out. The people know if they offend too much the people inside the firm, they’re not going to get the information they rely on as a journalist or as a researcher in the field. So the information environment around what the firm is doing and how it’s operating and its future success is deeply shaped by the incentive structure where there’s a huge self-fulfilling prophecy role to firm success. If people believe it’s successful, it gets more funding and that actually leads to it being more successful. So the information distortion around holding firms accountable is just a feature of the environment. Not that it plays out the same way for every firm.
Jim: I will say that Galbraith’s perspective has a fair bit to do with his age, right? What he described was absolutely the way it was in the ’60s and ’70s. But with the activist investor revolution and private equity and leveraged buyouts and hostile takeovers, the game got a little sharper in the eighties and going forward, which actually made the whole problem worse in some ways.
You know, the managers weren’t actually paid all that much. I still recall as a kid seeing an announcement in the newspaper, probably 1963 or something, that the CEO of GM made $100,000 a year. My dad, who was a cop, I think made about $5,000 a year at the time. So the CEO of General Motors made 20 times what a Washington DC sergeant in the police department made. Okay, that’s not that unreasonable, but they were mostly looking for status and a good life, being well received at the country club, not working that hard, lots of golf. Yeah, they were abusing the shareholders in some theoretical sense. But when you then went to, you know, call it post-Galbraithian finance-driven management, now we have 300-to-1 ratios between line workers, etc. So curiously, to the degree that Galbraith’s diagnosis is a little old school and that some of it’s been fixed by predatory finance, essentially, results are worse, at least in terms of people’s well-being and equality, etc. Now we’ll save money on money return went up, but that’s exactly what one would predict.
Ashley: That definitely fits with my intuition that the parts of the system that are sort of driving this have gotten worse.
Jim: One of his myths in the book is the myth of consumer sovereignty.
Ashley: Yes. The language he uses to describe this is the reverse sequence where we tend to think of the way the economy works is people have needs and firms attune themselves to those needs and come in to meet the needs. And that’s how we think about the structure of the economy. Whereas he says, no, wait a second, the technostructure – and what he calls the technostructure is corporate bureaucracies, government bureaucracies, all of these large bureaucracies – basically have this relationship and kind of work together as big blob. And those organizations have their needs, which are oftentimes the need is to make your organization bigger, increase your status. And they use basically the manipulative sector, the persuasive sector, which includes advertising and propaganda. But really more than that, it’s really how we shape our understanding of our needs and our whole economic system. They use that to initiate desires in the population. And then those desires are met by the firm, but the need for those desires exist started in the firm itself, did not start as a response to people’s actual needs. Think it’s one of the more important things to understand about our economy.
Jim: Yeah. There was no actual demand from the world for 250 varieties of shampoo at Walgreens, right?
Ashley: Exactly.
Jim: It’s sort of the micro-manipulation of an army of product managers at Procter & Gamble, all elbowing each other, trying to increase their bonuses by 5% and the emergent effects – 250 varieties of shampoo. What the hell do we need 250 varieties of shampoo for? But that’s the result of the world.
And it was also interesting that you didn’t call it out by name, but Parkinson’s Law, one of the great drivers of the world, which is the tendency of bureaucracies to just grow, right? And why do they grow? Because the more people you have working for you, the higher your rank, the more you’re paid, right? So for relatively small gradient reasons, bureaucracies grow.
Which is why the idea behind DOGE is not necessarily bad. The execution so far has been, shall we say, piss poor to be generous, but I guarantee the federal government could be downsized by 30% and work just fine. But it would take years to do so carefully and equitably and fairly – not just with an adolescent boy on drugs with a chainsaw. That’s not how I would do it. I’ve done two turnarounds. I can tell you I did not do it that way. But the point is nonetheless valid that bureaucracies, if not aggressively managed, will just grow and cover everything over with poison ivy basically.
All right, let’s move on to the next podcast. It very much resonated with me. And that was a discussion about Graeber’s book, “Debt: The First 5,000 Years.” If Atlas Shrugged is the gateway to kind of mindless libertarianism, I think Graeber’s “Debt: The First 5,000 Years” is a great entry point into heterodox thinking about what’s wrong with the world. And you both like Graeber and you criticized him considerably, which I actually think is a pretty good point there.
So why don’t you… Oh, by the way, people should read that book. This is one of those 10 books that if you want to know what the hell is going on in the world, you need to read. It’s pretty long, but it’s charmingly written. You know, Graeber is quite an eloquent crank and the combination of both the eloquence and the crankery make the book quite an enjoyable read. So with that preamble, Ashley, tell us what you think about Graeber’s “Debt: The First 5,000 Years.”
Ashley: Well, I think it’s a really important book in terms of getting us unstuck from the way we’re thinking. Because the biggest problem with our thinking right now is it’s so stuck in twentieth century thinking about economics. And he’s recognizing, wait a second, if we want to get out of this rut, we need to zoom back and look at history from a much broader perspective. And so he’s looking at what are our assumptions about what’s valid and invalid? Well, debt, who has to pay back their debt? Whose debt is harshly enforced and whose debt is forgiven? That’s going to really influence just the way our system evolves.
So he says, okay, how does debt and money work in the past? And he spends a whole lot of time on the Axial Age, which has importance for us today because it was this age of transition where there was money during that time. And he’s calling it the military-coinage-slavery complex, where he’s basically saying before that you had these small communities that each had their own system, which tended to involve debt. He said debt comes before money because it’s these relationships. He uses the term communism where people are just in a community of 150, you help each other when needed, you require each other to contribute when needed and you just kind of make it work. Maybe sometimes there’s some debts that the local baker writes down on a page or keeps track of in their head or whatever.
And with all of those communities, you can’t really govern them from a centralized standpoint. So he’s saying, okay, governments come along and recognize if we want power over many communities, we need to standardize across those communities using money. So money allowed for this centralized administrative role to enter into play. And he’s basically saying one of the problems we have in the way we think is it’s markets, it’s money versus government. And he says, no, these two things go together.
And the money ultimately in his story – I mean his story is long and complex – but it does end up promoting this military beast that’s able to hire more soldiers because you can pay them the spoils in some unit of money that’s useful in their home community. And it promotes the debt cycle we’re kind of in right now where people get farther and farther behind based on compound interest. And that escalates so that most people end up below the line and there’s this rebellion and that repeated itself over and over.
He basically says, what ended the Axial Age horror that went along with the money-slavery-coinage complex? And it was these religions, the major world religions came on the scene at that time. And all of them had something in their mythology that put a stop on the economic stuff. Both Christianity and Islam were very against usury, very against charging interest, and Buddhism was against the use of coins in this way. So he’s basically saying the movement into the Dark Ages was actually this horrible thing dying so that the communities were no longer keeping track of coins and stuff that’s visible to us today. It’s dark to us today, but it was actually a reprieve from some really bad forces of the time.
Jim: You know, it is interesting the trade-offs here, right? The quality of life, at least for the citizens in the major metropolis of the Roman Empire, were far higher than in the Dark Ages. Like to give the example that archaeologists, anthropologists have determined that let’s say in Gaul – France approximately – about 60% of the people in the urban centers were literate during the late Roman Empire. Two hundred years after the fall, the king of France was illiterate. Yes, Rome was the last of the money-sword empires in the West, right? But it came with higher social material and artistic works. I mean, there was nothing like Lucretius for fifteen hundred years, right? Trade-offs, trade-offs, right?
Ashley: Absolutely, yeah. And I don’t think he really goes into that. He’s sort of showing one side of that trade-off in the book.
Jim: Yeah, he was a dedicated anarchist, right? Which is an interesting perspective, but you know. All right, let’s go on and talk about what I thought was an extraordinarily interesting and very Game B – for our Game B fans out there – episode called “The Paradigm Shift and Economic Growth.” Forests grow forever. I love that episode.
Ashley: Forests do grow forever. And the thing is, what you mean by growth is not the square footage of the forest or the volume of the forest. If you have a forest that’s bound on four sides by a rock quarry, the square footage stays the same, but the growth is made up of trees growing, plants growing, animals growing. And that growth never stops. There’s never a moment in the forest where trees aren’t growing. But what enables that is actually this balance with death. And the recognition that a system has to involve balancing forces and that the style of the bounds on a forest actually do determine the style of growth.
So we are in this habit of thinking of growth and bounds as being opposites. But they’re only opposites if you force them into the same dimension. If you force the forest into “we’re only thinking about square footage,” then yes, bounds on the square footage of the forest stops growth in square footage. But the problem is, if we’re thinking about our economic system and sort of the creation of value between human beings, that is not inherently opposed to bounds on planetary usage or bounds on other things, bounds on exploitation, bounds on the way that persuasive sector, the advertising and propaganda is used. Bounds can coexist with growth.
Jim: Yeah, and I’m a farmer and our farm is a mountain Appalachian farm, mixture of crops and fields, but also a lot of woods and a lot of transition, and we’ve done some logging, etc. And it’s very interesting to see the succession and then to interpolate and extrapolate the succession over time.
Let’s say you do one thing we did about fifteen years ago – a clear cut on a stand of relatively mature pine. The downside of a relatively mature monoculture pine stand is there’s almost no complexity in it. It’s just the pines. The pine needles suppress all the undergrowth. It’s too dark. Very few animals live in there other than a few squirrels, including flying squirrels that like that habitat, but there’s very little complexity.
But then as you open it up, first weeds start growing and then little trees and then tangly blackberry bushes, it gets real dense and the complexity starts going up. Then the animals start coming in and the animals, through niche construction, start modifying the area. Deer eat the hell out of green briar, for instance. Bears tear up the blackberries and open big holes in the middle of them and stuff gets more and more impenetrable. Rabbits move in and complexity grows and the trees then start growing bigger.
And then you roll the thing forward a hundred years and you start having tall deciduous trees, but then you also have understory and then you have under-understory and then you have ground growth. And each one of those is its own habitat for life, all the way from the fungal up to our largest animals – bear and deer where we are. We also have coyotes and raccoons and all that stuff. And so that could all happen in a bounded space with the same solar flux, and adding no fertilizer. This is the amazing ability for a system far from equilibrium to use some complexity science terminology to work itself up into higher and higher states of complexity if allowed to do so.
I almost thought that was an extremely hopeful way of thinking about humanity going forward, like my embroidery story or people writing new poems or enacting new plays. We had the dinner party last night. We had some theater people over. We were talking about both Greek theater – one of the people was an expert in Greek theater, but also contemporary theater, contemporary musical theater. And each of those creations is adding richness to our human ecosystem, but it doesn’t require any resources or very little. So, I think that your story of the bound forest that grows forever is something really worth people getting their heads around.
Ashley: Yeah. And I think we need those analogies to sort of move into new ways of thinking.
Jim: Indeed, indeed. And then talking about new ways of thinking, you had a quite interesting discourse on conspiracy and non-conspiracy thinking.
Ashley: Yeah, and this comes from another McGilchrist insight, which is a lot of times when you move to a different level of the system, its dynamics change completely. So his analogy is an anthill. It looks really different from a distance – it just looks like a pile of soil. You zoom in and you see the ants having relationships. So that’s a very different perspective on what’s going on when you’re zoomed into the anthill. And then you can zoom in further inside an ant into a cell of an ant, what’s going on in the ant’s cell. And those three levels of looking at the same thing are going to give you completely different insights and different perspectives on what it is.
So when we think about how our system’s working, if we look at the system from a whole-level perspective, there might seem to be dynamics that are driven by conspiracy, driven by say people at the top protecting their interests. They might seem strategic looking at the whole system and its behavior. And they are strategic, but not by the definition people usually think of as strategic. If you zoom into these actual communities of people in elite positions and see the dynamics of what they’re doing, what’s driving them, what they’re trying to accomplish, it no longer looks like them trying to protect their power, protect their interests. It’s much more about the relationships, the social goals they’re pursuing. And both of those perspectives are actually needed to understand what’s going on in the system. So something that seems conspiratorial from one vantage point in the system can actually be not driven by intentional actors once you zoom in. And thinking about the system in a way that allows for movement in and out of perspectives is the only way to actually understand what’s going on.
Jim: These are so many interesting lenses in these things. That’s why I love this series so much – why cynicism and gullibility go together and why society is drifting towards both.
Ashley: Yeah. So we think of these things as being opposites. We think of the cynic as being the person who sees through all of these problems. And the person who’s gullible is the person who just falls for the BS. And McGilchrist gets at this with the left brain and right brain thinking where left brain thinking is sort of what’s taken over our society and it’s where people mistake their maps of the world for the world. So mistaking the map for the territory, that’s the left brain behavior.
If we get in our minds too much that sort of everyone is out to get us, we’re constantly looking for that. Our orientation toward everything is we’re looking for somebody trying to get us, which is the cynical viewpoint. Then we end up projecting that where it is not. Whereas the right hemisphere mode of thought according to McGilchrist is being able to perceive reality even where it differs from our preconceived notions. And the cynic is really attached to their view that everyone’s out to get them because they’re afraid. They’re kind of fearful about being taken advantage of. So they project that onto everybody in a way that is not actually perceiving reality.
Whereas to perceive reality, you have to be open to the possibility that somebody could have nefarious motives, the possibility that they could have generous motives. And you kind of have to be able to hold both possibilities without necessarily landing on one view of the world. We end up in our culture right now, people lean into this over-attachment to their maps. And because of that, somebody can look at their map and say, “Oh, this is how they’re thinking about people and about how the world works.” We can use that map to create distortions in their perception that will be to our advantage. So they become more manipulatable by getting too attached to that map that’s cynical.
Jim: Yeah, you actually have another called “Ideologies and Religions are Maps.” Let’s hop over, that’s a couple ahead in my notes, but “Why Fights Over Maps Fail?” That was really another good episode. It was closely related to our other conversation we just had.
Ashley: So a lot of the arguments we have between people, it’s one group is attached to a particular map. A map is essentially a mythology that’s specific to a certain group. So it can be religion, it can be the woke map, it can be an environmentalist map, it can be the economics map. And there’s of course like sub-maps under the religious maps like Christianity versus Islam or different versions.
But a lot of times when a map sort of gains legitimacy in any way inside our system, it gets sucked into power and gets used by power to accomplish power’s goals. And so within that map, you have people who are using the map to try to understand something true about the world, something they could not see without a map. So maps have a lot of value. They allow you to see things you would otherwise not notice. But they can also create distortions. A map is both a lens to see the world through and it’s also a projector. It’s projecting something onto the world that may not be there.
And so a lot of these fights like between woke and anti-woke, for example, the woke people see the way the woke set of concepts and ideas can open their eyes to relational dynamics that are otherwise invisible relating to racism and systemic injustice and whatnot. And then the anti-map people, the anti-woke here, they see the way that that map is being abused by power and used for power ends essentially. And they’re in an argument about the map. And the thing is both groups are right. The map can help you to see things that are real. It can be over-projected onto situations where that projection is seeing something that’s not there, but it can also be used negatively for power. And you need both perspectives to actually sift through the problems in our society. And the fact that they’re at odds with each other sort of forces people through polarization into one camp or another, and that blinds all of society.
Jim: Yeah, and of course, I think, you know, I’ve talked a fair bit about woke one way or the other, both sides, mostly anti on this show, but my own view is more of a Hegelian dialectic, right? That there, as you say, there’s absolutely useful insights that come from the woke lens. And there’s also absolutely large amounts of abuse of the tooling, just in the way Parkinson would predict to build bureaucracies. Right. You know, how did universities get full of DEI departments that don’t do jack shit, except annoy people right through Parkinson’s law. But you know, the VP of DEI gets great status by having 120 minions. Right. But the reality is there ought to be some way to synthesize these, to achieve the noble ends of making people aware of implicit bias, for instance, which is a thing, right? To understand that, you know, even if active first-class discrimination today is rare, it’s not zero, but it’s rarer than it used to be. The impact of historical discrimination is still huge, right? You can have one without the other, the structures of our society work against that kind of synthesis unless we grab control of it. It’s really hard to do.
Jim: Yep. All right, let’s move on to the next one. This is a story that you weave through two or three, maybe more of your episodes. And that’s the story of the dragon. Tell us a story about the dragon political economy.
Ashley: The dragon is the language I’m using to describe the economic system, the governance system, all of that, and the way it’s operating, there’s strategic behavior, which might not necessarily be driven by strategic actors. Although of course there are strategic actors within it. So it’s what’s driving sort of GDP growth towards something that’s destructive. It’s what’s driving the racket, all of that.
Jim: One of them was called “How Can Money Shift the Moral Frame of Community? A Story of the Dragon Political Economy,” which is I think where you frame it. And then the second one was “Atomic Collaboration: How to Redirect the Energy Feeding the Dragon.”
Ashley: Okay, yeah. Those are getting at two concepts. So the “how does money shift the moral frame?” – that’s getting at a couple of different things. One of them is this vantage point thing. The fact that one group of people might describe something as “what’s going on is people are just trying to maximize profits.” And that frame works from one vantage point. But if you zoom into the inside of the group, they’re not actually oriented toward profits. They’re oriented toward expanding their religious community. They have these values where money is just an instrument for them to live out what they perceive to be their good values.
And so moving perspectives inside the system can cause different models to break down or appear depending on how you look at it. And the other principle I was trying to get across with that story was the notion of congealing, which I think is a really important game theory principle to understand the dynamics of our system. When you have a community of people who are oriented around a set of values or mythology – a university community in that case – their orientation is not about money, it’s about the values that they compete and cooperate to uphold. But if money sources come in and threaten the entire community, like if you say “we are going to withdraw funding from your university if you don’t support” – in that story it was the anti-free speech legislation – the community will come together and congeal to support the free speech legislation to do what they need to do to protect their game.
Their game, of course, is meaningful and important to them. And a lot of times this dynamic can happen even if the people in the community don’t realize what’s going on. So in that case, the leaders in the community who are sort of in negotiation with their funders understood, “Oh, if this community doesn’t support the anti-free speech legislation, we’ll have to cut departments, we’re going to have to downsize.” And they use sort of the persuasive sector within that university to get people on board with something according to that community’s values.
And then the “Atomic Collaboration” video was trying to get at the idea that from the highest level of this system, one of the dynamics essentially expands or contracts communities depending on how well they’re serving the dragon’s goals – where the dragon’s goals are aligned with sort of the GDP growth, which has this destructive force. Every community that’s religious or ideological, they have these values. Some of those values might actually serve the dragon’s interests and some don’t. So the communities that are willing to upregulate the part of their community mythology that serves the dragon’s interests get empowered, expanded, and invested in. The ones that don’t do that get contracted. Yet oftentimes the adversarial energy between these different groups – woke versus anti-woke, different ideologies – that adversarial energy is used strategically by the dragon. Keeping in mind the dragon isn’t an individual or a person, but it’s got a strategic force, this polarization between the groups where going after your enemy, you accurately perceive the bad things that group is doing for the dragon can be used to disempower that group when it goes up against the dragon.
Jim: Yeah, you might look into the literature in the liminal space on egregores, which is the idea David Chapman, I think, originally came up with – the idea of kind of meme-space entities that aren’t real in a physical sense, but they’re real at the level of emergence. You can’t go out and touch it, right? I’ll just give that as a pointer to you as something that you might find useful for tuning your story and might actually be cleaner than the dragon. The dragon strikes with the right arm and the left arm and the other arm, you’re like, what the fuck? Right? Interesting, somewhat of an aside, but related particularly to this idea of manipulation. You did a pretty good dive into Zuboff’s Age of Surveillance Capitalism. Let’s talk about that topic. I’ve never had her on my podcast. I don’t know why. I should probably reach out to her.
Ashley: Yeah, I think she’s tapped into a lot of the important aspects of what’s going on here. She spent years interviewing people inside these companies, these big tech firms, to try to outline what’s the strategic force, what’s the economic system going on. And essentially, the way I describe it is the companies are being strategic about shifting and bending the economic mythology in their favor. She doesn’t use the term “economic mythology” – she’s kind of playing around with language trying to find how to describe what’s going on. But one thing, for example, she says is they shift privacy rights from the individual to the firm. So that part of the economic mythology is upheld through the legal system. And will the legal system protect people’s rights, individuals’ rights versus the company’s right to keep private what it’s doing with our data, who it’s selling to, for what purposes? The companies have made it such that our legal system very much protects their privacy to use our data as they want. And of course her analogy here is that these companies are coming in and taking our data and our motivational forces, the information about how to push our buttons and how to manipulate our behavior. She’s saying it’s not that we are the product, it’s that that stuff is the raw materials that go into the product that they sell to their real customer.
Jim: You know, the current manifestation of this manipulation game, and again, does not require conspiracy for this to happen. Just follow the money on money return gradient. You know, Zuckerberg invented Facebook to get laid basically, right? And then money on money return found that if we throw more computing power than what powered Deep Blue to beat Kasparov in the first computer chess game, we can know you better than, you know, and micro-manipulate you to make sure we keep you angry and hanging around on Facebook so that we can sell you ads for cheeseburgers and things of that sort. I don’t know what the hell they advertise on Facebook these days.
And what’s interesting about it is that the pace is also very, very rapid. You know, cars, for instance, opened up a whole series of questions about liability, licensing, training, but it unfolded over a period of about twenty-some years since society passed laws and they established standard street signs. You know, the stop sign was an innovation in 1915 or something. But the rise of algorithmic hypnotism for people who were online constantly happened extremely rapidly between about 2002-2009 and 2013 or ’14, something like that, and society just did not respond. They just let it happen, right?
And I think what she was trying to point at in that book, which I did read when it came out, is that regulation of this kind of product is not illegitimate in the same way we regulated automobiles when it became this pervasive thing that ended up totally changing our society – how neighborhoods are built, where people live, the nature of houses, everything changed under the influence of automobiles, but it was with a relatively large amount of regulation.
These damn things have just followed the money gradient to their logical destination, which is TikTok. Regular listeners know that I believe that parents should march to Dallas, pull the executives out of the TikTok tower and kill them in the street. This is like the worst thing imaginable. It’s worse for your kids than cigarettes because what it is is the most advanced modeling of your behavior and unbelievably quick ability to suck you into the vortex. And no laws have been passed about it. I got trivial. Oh, you’re supposed to be 13 to get a TikTok account. Right? Yeah. “How old are you?” “13,” says the nine-year-old. Right? With no verification at all.
This should be a wake-up call to people, but it’ll be very difficult to get them to wake up from the hypnotism that they’re under. Remember even Trump was anti-TikTok. Why? Because it initially was a hotbed of progressive people. But as we’d also expect, the Trumpians quickly figured out how to use that ecosystem for their own purposes. So now it’s also quite Trumpy as well as quite progressive. It’s got everybody hypnotized. So now Trump is very protective of TikTok. It’s amazing how these things could co-opt the powers that be, even the ones that were totally opposed to them. And again, not by conspiracy, but by the power of money and the power of acculturation. And it’s just very interesting. Again, quite a bit scary.
Ashley: Absolutely. And I think she points to some of this as a strategic move where a lot of these things, there was some pushback initially, both legal pushback and a little bit of public outcry. But these companies have this strategy for waiting that out, resisting some of that while people get used to the new applications. I mean, she uses the example of advertising that was right on Gmail where it was a little bit creepy.
Jim: Yeah. People yelled about that one, right?
Ashley: Yeah, but they just sort of held it off for a while and moved it to where it was less obvious and sort of got people used to it. And that was how they slowly shifted what people consider to be normal.
Jim: And then the other thing – Chris Anderson, who’s a very interesting character, he’s the founder of TED. He also started one of the early drone companies, very interesting guy. He wrote a book called “Free” back somewhere along the line, which is basically if something can be free (i.e., advertising supported), then it will be free. We just love free stuff.
And so I strongly believe that part of the seduction to these tar pits of attention are driven by the fact that they’re free. It’s kind of like fishing. People love fishing because, “Oh, I get free fish!” right? Even though they spent $9,000 on their tackle and their boat, right? But they get free fish.
And so why these things get established so quickly is it seems like a free lunch, right? Something like Facebook is an amazing piece of technology and they give it to me for free. You know, Google, holy shit. What would Socrates have paid for Google? Google Scholar at least, right? Probably 10 percent of his earnings, but we get it for free by opening ourselves up to the dopamine drip.
And you know, if one really wanted to be radical, I think the single best change would be to ban advertising in online media, period, and force them to be subscription based. I’m old enough that I was actually involved in the very earliest days of building out the online world at a company called The Source. I went to work for them in 1980, and they were the very first consumer online service. We actually had mail and chat and shopping, stock prices, forums, all – even a very early precursor of social media called Participate. We had a precursor of blogs all in 1980, ’81 and ’82.
But in those days, there was no advertising. You had to charge and we charged quite a lot. It was about 8 or $10 an hour. And that was in 1980s dollars – would be worth about $25 an hour now. So there was a very strong incentive to get the customer on and get the customer off because if they ran their bill up too much, they’d cancel. And so the incentive of the system designer, and I was basically a product person who designed some of the main products, was to be as efficient as possible to provide the people the most value for their time.
And once you move to a paradigm of ad support, it’s the exact opposite. The last thing I want to do is fulfill your need as efficiently and as fully as possible in the shortest possible time. I want to hypnotize you to spend forty-five minutes a day or an hour a day on this platform. And the signals that that then sends to the product people are exactly stands on its head what they should be. And that all it will take is one rule, one thing: no advertising online. And while I’m sure they’d find the money-on-money return would find a way to game that system too, but the specifics of free and being turned into an exploitable resource to mine your brain kind of go together.
A little off topic, but one of my favorite things – sort of related to the things we’re talking about. Let’s get back on track here a little bit. And one of the videos I did accidentally skip as we were walking through this is, “Do economists really think that everyone is selfish and fully rational?” The homo economicus debate. Actually, you did a quite subtle job of dissecting that. Do the economists really think that that’s who we are?
Ashley: It’s one of these things where sitting in between groups and hearing them sort of talk past each other and realizing there’s actually a lot of diversity within any given group. So no, that’s not the way mature economists think. Which is not to say that there are no economists that think like that. And this is one of those things that actually I was able to explain having read McGilchrist’s book that I could not explain before that. And I very explicitly could not explain it before that.
So the deal is motivation, the motivational force is usually and oftentimes both selfish and not selfish at once. And there’s different ways that this can be the case. One is you’re selfish on behalf of your in-group, but altruistic and self-sacrificing toward your in-group. So you can think of that as bounds. However you define your in-group in a particular moment, whether it’s your family or your religious sect or your company, your department in the company, most actions sort of have both elements where it’s very few actions are just “okay, me for myself” without considering the social context of people I care about. So the question is what is the boundary for a particular action around which you’re being altruistic on behalf of the in-group against the out-group. That’s one way it can show up.
Another need for this level of ambiguity in your thought is when you’re thinking about systems, need to recognize that the economist does not have access to the full motivation of everybody inside the system. So if you use financial incentives, if you’re analyzing at the level of financial incentives, financial incentives are a secondary motivator. People care about money because it buys them something they care about. And that can be something, it can be a social cause they care about that’s very altruistic. It can be a personal ambition like buying a new car. It can be either selfish or unselfish. But the economist needs to be neutral about that while still being able to think about the fact that they may be responding to financial incentives.
So when you spend a lot of time trying to think through different problems, you recognize the need for this to be ambiguous, for it to be selfish and not selfish and deliberative and not deliberative. Because there isn’t always a clear distinction there. A lot of times we’re driven by our gut intuition and sometimes we deliberatively think through our gut intuition. Sometimes we adopt our gut intuition from people around us, but those people have deliberately thought it through. So you need to be able to think about the toolset with this ambiguity in how you think about the concepts.
And the problem is when I hear economists trying to explain how this works to somebody who thinks, “Oh, economists think everybody’s selfish and fully rational in the sense of deliberative,” those conversations almost always make the misunderstanding bigger. So before I had read McGilchrist, I was a wise economist who said, “Okay, I’m not going to explain this. Explanations do more damage than good.” The appropriate approach is to be like, “Okay, just give it more time.” This is not the kind of thing that is gotten through explanation. It’s the kind of thing that’s gotten through experience and through discovery.
That’s how you come to understand this. But of course, in the polarized environment, if you can’t explain something, then it’s not real. It’s not really there. And McGilchrist’s frame has given me greater ability to explain it. Although there’s definitely still things when I encountered it in McGilchrist, was like, “Yes, this applies to economics, but I still can’t explain it.” And I think our culture is too – we’re replacing things that are hard to explain with things that are easy to explain and it’s causing this blindness.
And I mean, last week I was having a conversation with friends and they brought up a Seinfeld episode where it was an episode about man hands. One of the characters had gone on a date and after the date they asked, “Why didn’t you like this woman? What was wrong with the woman you dated?” And it was because she had man hands, her hands were too big. And the whole thing was, “Okay, what’s wrong with him for rejecting her because she has man hands?” But the problem there is when this happens, and it happens a lot, that’s not why he didn’t want to date the woman. The reason he didn’t want to date the woman was about the chemistry, it was about the sort of interaction between them, and it was about something that was actually really difficult for people to describe and explain, but they know they have to explain to their friend what was wrong with the person you dated. So they replace the actual reason they didn’t want to date them with this thing, the man hands. And the whole understanding of the situation, understanding of the dating is focused completely on the wrong thing. And I think that phenomenon, our attachment to that which can be explained is just one of the forces making our culture blind.
Jim: Interesting and very interesting. And some of that has to do with the history of the field of economics, right? I actually considered becoming an economist at one point. I actually took a sophomore level macro course from Samuelson himself in a small group, 15 students, right? And I had loved micro, which I’d taken the semester before, but my conclusion was macro was utter horseshit, right? And I said, “Fuck those people.” This is the most famous economist in the world, and this is just utter witchcraft. I have no interest in putting my life into that.
Today, I think I would have found economics to be a very interesting and fertile field where there are attempts to bring micro and macro together and explain it holistically and things like that. But anyway, from around that time, and a lot of it under the influence of Samuelson, economics in general became, to my mind, overly polarized around systems of differential equations, right? And that is one way to model things, but it’s a fairly rigid way to model things.
In such case, it produced a very strong tendency to oversimplify and turning the agents in the system into homo economicus turns out to be far more tractable to solutions of systems of differential equations than having these unpredictable and quirky little agents that are interacting with each other, and particularly to try to roll things up to aggregations like Samuelson’s macroeconomics. You just can’t do it at all.
And then later, we started to evolve out of that. Still there’s still, as you know, plenty of professional economists who live and die by their differential equations. You probably solve an integral better than most people, but we started getting people like Vernon Smith who brought us behavioral economics where we started to understand that we could do laboratory experiments on how people really react to things and then try to build those into our models. And then we find shit that’s hard to do in systems of differential equations.
And so then we start developing agent-based modeling approaches to economics where we can create little agents that have all kinds of quirky behaviors and random behaviors and stupid behaviors and smart behaviors and throw 100,000 of them into an arena and see what happens. And I think those have been very interesting in the evolution of economics into a more realistic and viable field. At least that’s my view from just outside the field. I know a lot of economists, I’m engaged with the people at George Mason that do agent-based economics, things like that. Now, how does that resonate for you?
Ashley: Well, so you said a lot there. Some of it resonates, some of it doesn’t. What you said at the end – I think the frame of making economics more realistic – I think that’s the wrong frame. I think we need multiple frames, and this is one of these where we try to go after this particular frame saying, “Okay, that frame is wrong, this frame is right, or this frame is better.” And for me, it’s like, wait a second – no, we need to be able to move back and forth between lenses that are mutually excludable.
Last year I co-taught a course on healthcare challenges with an anthropology professor. I really like this interdisciplinary perspective. But one thing I ran up against is this thing I was talking about in that video where it’s sort of like “economists think everybody is rational and selfish.” The conclusion I came to is when you’re thinking through ideas, you sort of have the option: do you think about it in the stupid and immoral way, or do you think about it in the deepest way you can?
With the toolset, you don’t want to mistake the map for the territory with economics. And a lot of the misunderstanding is mistaking the map for the territory. I do think there are many economists who don’t understand this, who actually do take what is closer to the immoral perspective on it. Yet there are many economists who don’t.
The first assignment in that course, the students were trying to debunk game theory, trying to go at what I was teaching as if I was having the stupid and immoral perspective. That is so degrading for me to be like, “Okay, you are going to project the stupid and immoral thing onto what I say? Can I communicate to you at all?”
This is part of how I’m thinking about the game theory of in-groups and out-groups. The out-group, you’re sort of taking what is the maximally left-brain mistake – the map for the territory, only oriented toward power. You have an intuition that that group of people is involved in some of the destructive things in our society. I would say economists are first and foremost in terms of upholding an economic mythology that is absolutely destructive. But that also does not mean that projecting the stupid and immoral thing onto what economists are saying is the right approach to taking down capitalism or whatnot.
You need to be able to hold both of those things – both economists are upholding, as a group on average, different economic mythologies in different spaces. I realize I cannot get somebody to understand a more right-brained perspective on the toolset if they don’t want to understand that.
Jim: Very well said. This is good. How many of say economists, professional academic economists of your vintage, how many of them do you think have this wider view?
Ashley: Okay, so this is interesting because I’m on sabbatical and I’m putting out this stuff and I just co-taught the course with the anthropology professor. And at one point, I’d been on my own without talking to people, just writing my book and doing this for so long, I was like, wait a second, am I way too far in my own brain? Am I not understanding how economists think? How other people think?
So I just freaked out one day and I emailed a bunch of economist friends and I’m like, “Okay, I want you to please watch this video that I sent you.” And I wanted to hear – do others think the way I think? And basically I got three categories of responses from these seven economists that I talked to. Now, of course, these are my friends. This is not a representative sample.
Three of them were sort of like, yeah, this is basically more or less on target. The thing that resonated the most was not in that video, it was the way I define rationality. If you want to understand rationality by taking like the best possible perspective, the definition is pursuing enlightened self-interest where pursuing is not necessarily deliberative. A lion pursues a gazelle. So not deliberative. Enlightened does not mean all-knowing. What it means is that the agent in the model that you’re modeling has information available to them that is not available to the economist. And then self-interest does not mean selfish. It means from a particular vantage point.
And that tends to resonate really well with economists because it doesn’t explicitly go up against this thing McGilchrist has where you have selfishness and altruism overlapping at the same time. That’s a little bit in your face. And I think McGilchrist is right about it, but I think some people would need to read his whole book to be like, “Yes, that’s what’s going on with us.”
So three of the seven were sort of in my camp. Two of the seven said, “Yeah, I agree with the premise that economists don’t think people are deliberative and rational and selfish. That’s not how it works. But I don’t have to go into all of that to do what I do.” That was their reaction to it. And then two of them said, “What you’re saying, I’ve never heard anything like that in the discourse.” And those two, I think, spend more time more closely interacting with the discourse. And they were like, “Here’s a bunch of things that are sort of in the vein.” And in my opinion, the things they brought up are not in the vein of what I’m doing.
I don’t think that’s a representative sample, but I do think I don’t represent all economists. It’s a really wide and diverse group. And I would not even say someone who doesn’t understand this paradox is a bad thinker because actually I think Richard Thaler, I don’t think he understands the stuff I’m talking about. And all it takes to not understand is an inability to handle, or it takes an attachment to the law of non-contradiction, which is so deeply ingrained in how our culture thinks.
So if you approach the world really attached to that specific thing, I don’t think you’re going to arrive at this even after years of studying it. And I don’t think it’s bad for somebody to think like Richard Thaler thinks, even though he doesn’t understand this part. Obviously David Graeber doesn’t understand this and I very much appreciate it. And I would even say his own thinking, would it have gone the way it has if he understood this? It might not have. So it’s valuable to have people who understand the world differently. It’s just the inability of these groups – like I think the sociology anthropology group versus economists, there is such a force field between these groups and they cannot understand each other. And I’m not sure we get through this moment in history unless there’s greater penetration of that force field.
Jim: Interesting. Yeah, that’s one of the things we have been able to do at the Santa Fe Institute. We have both economists and anthropologists. They often work together and throw some physicists in to make them both more rigorous, right? Quite interesting to see that fusion occur. But as you say, it’s relatively rare. Alright, let’s kind of turn in for the home here on our time clock. One of the things I was very interested in and pleased to see is that more than once you mentioned the meta crisis. This is something we talk about a lot in the Game B world and then the broader Game B adjacent liminal web world and not something you see pop up in academic literature too often. Tell the audience what you mean when you say meta crisis and how you think it provides a necessary or at least useful lens to think about the things we’ve just been talking about.
Ashley: Yeah, absolutely. Well, for me, healthcare economics was sort of where I got my start. And I found the problems in healthcare economics are so deep that every time you wrestle enough with one of those problems, you have to zoom back in the system and be like, “I can’t solve it from this place in the system. I need to zoom back to a wider perspective.” And you keep zooming back and zooming back and finally you’re sort of looking at the whole system. And when you do that, what you recognize is, wait a second, some of the problems in healthcare, they’re really paralleled by the problems in the environmental space, paralleled by the problems with corporate capture and things like that in other spaces. There’s so many parallels across different parts of the system in terms of the type of dilemmas and the game theory structure they take. And they’re also just very interconnected. So I think having that perspective that, I guess for me, the meta crisis is the whole landscape that from a zoomed back perspective recognizes that, recognizes the interconnection, recognizes the parallels across these different domains.
Jim: That’s certainly a significant part of it. And to some degree they, there’s a combinatoric explosion going on where, you know, A makes B, and B together makes C worse. For instance, the things like social media produced, or they seem to be a combination of crazed, unbound, financialized economics, plus the learnings around social media and how to manipulate people equal, you know, Jonathan Haidt mental health crisis, right? So these things are combinatoric at some level and they reinforce each other and produce downstream outcomes that we can’t even predict in many ways.
Ashley: Yep, absolutely.
Jim: And as I took some notes on what I thought you were pointing at, one obviously system, systemic integration and interconnection. And also, you called out a couple of times in relation to meta crisis, you know, flawed foundational logics and myths to our earlier discussion that he who writes the myths controls the world currently. And the engines of myth creation right now are pretty seriously broken. Obviously a need for paradigm shifts and what exactly a paradigm shift is we’ll get to in a minute and then one of my favorite sense making and cognitive issues, right? How do we do particularly collective sense making? Then also you called out the need for agency and more conscious action. And again, I’d say hooray to that. I’d also say easier said than done. Definitely. We talk a lot about the meta crisis on the show here and so that will certainly I think land pretty well with the audience. In the pregame, you said you wanted us to reserve a little bit of time to talk about the intersection between your work and Game B. And I actually did produce a few notes on that.
Ashley: Yes. I’d love to hear those.
Jim: I think, you know, the biggest difference is while you focused on the very important behavioral aspects, the logic aspects, the mythological aspects, I think the one core learning in Game B over the last twelve years has been, that’s not enough. That in reality, there are two things that have to happen simultaneously. And the framing we’re now using is that there is an inherent spiral between personal capacity and attributes and institutional structures. And the two work intimately together and you can’t untangle them.
And specifically, we came to this initially just inductively by seeing things that were happening in the world. People go off, you know, five-day hippie retreat or even a forty-two day psychic cleanse, right? And they come back improved in some sense, but then they go back to work processing insurance forms in their cubicle, living in their, you know, and inevitably, regress to the mean, right? Or if they ended up better, it was only a tiny bit. And the insight we had was there needs to be social scaffolding for positive social change to be stabilized.
If you lived in a community where nobody cared about Porsches and laughed at people that drove up in fancy cars, you wouldn’t be trying to save your money to buy a fancy car. Or if you lived in a world where people thought you were a total ass clown if you posted a selfie of yourself in Machu Picchu or something, you wouldn’t do it, right? But if you’re embedded in a world where those things are status-making, then you will do them, right? Even if you think they’re bad, right? Because we are a memetic mimesis, in the Girardian sense animal, we tend to imitate – what do they call it, aping, right? And who are we? We’re the fifth ape, right, basically.
And so when you’re involved, you’re intimately intertangled and haven’t separated yourself from the crowd, then you will be inevitably sucked into the values of the crowd. And we would argue that for the last God knows how long we’ve been involved in a negative spiral, where the institutions have made us worse, which allows us to build worse institutions, which makes us worse, and we create even worse institutions.
To think about, you know, just something as simple as politics – is not really simple. But, you know, I’m old enough to recall that in the ’60s, our politics, while fairly turbulent, were not insane, right? And this was in a day when less than half of adults had a high school education – nine percent of adults 25 and over in 1964 had a four-year college degree. Today ninety-two percent have a high school degree or the equivalent, and thirty-five, thirty-six percent have four-year college degrees. Vastly better educated, but our politics is a vastly worse shit show than it was before.
And our analysis would say this is the downward personal-institutional spiral that’s been corrupted by the money-on-money return machine and many things that you talked about. And so the Game B synthesis says to turn the spiral around the other way, we have to start building institutions from day one, and these institutions have to have membranes around them to separate them from Game A, and we call them semi-permeable membranes, right? Because we’re not North Korea, you know, we’re not going to build our own computer chips and shit. In fact, on day one, we probably don’t do that much different. But we can say that inside this membrane, these are the values, virtues and norms that we hold.
And these can be small micro-membranes. This could be at the Dunbar level – 140 people, or they could be 20 people who started a babysitting co-op, but they explicitly say what their virtues, values and norms are. And they don’t let bad virtues, values and norms through. Right. And if you come through, you have to say, I agree with our social system here and building those institutions, we think is absolutely simultaneously with the personal change. And we think that most social change people make one mistake or the other. They either start with institutions first or they start with personal change first. And without both together, it won’t work.
Ashley: Yes, absolutely. I completely agree with that. I think there’s multiple layers of institutions. There’s sort of meta institutions, sub institutions. I found doing videos on institutions is one of the harder things I do. I have one video on institutions. I need to create one on boundaries because in a lot of ways, part of the problem is every institution we have is not able to maintain its boundaries. Sort of the stuff from social media from the highest level meta institutions come seeping in and people who are running those institutions spend all of their time fighting the bad stuff that comes in through that highest level. And so in a lot of ways, I think that’s one of the game theory questions: why is cooperation easier at the higher levels? And why is the maintenance of those boundaries for lower level institutions or at mid-level institutions, why is that so difficult?
Jim: Yeah, classic example is the battle to keep phones out of schools, right? Every educator knows that it’s unbelievably disruptive to have the kids looking at their phone when they’re supposed to be listening to the teacher and, you know, developing cliques and fighting each other based on bullshit on Instagram. Right. And they want to get it the fuck out of school, but it’s really hard for that to happen for all kinds of weird reasons. Right. And if you took a Game B perspective, you’d say, alright. The school’s a membrane. We have the right to define our virtues, values, and norms. We have the right to decide what comes through the membrane, both in and out, and we hereby say for this school, in this community, at this time, no goddamn phones, period. Right? And that’s just the way it is. You don’t want to be in our membrane, leave. Right? But very hard to do in the context of a public institution that’s operating under the state board of education rules, due process and all this sort of stuff. So that’s the trap of trying to change the already existing institutions versus building new institutions. And so we think in general, at least today, we should start with building new institutions and build them in ways that do work and that are accountable to their own virtues, values and norms. Yeah, we’ll see.
Ashley: Yeah, and I’m absolutely, that’s absolutely in line with how I’m thinking about this as well. I think one of the problems is there’s sort of official institutions and institutions of the heart, which are the stuff that’s enforced socially in ways that it’s not explicitly written down. I think one of the problems is to develop really strong institutions of the heart, you need a lot of time sort of internal to that community without the stuff from the outside. But if people in that community are on their phones in their outside time, you can’t properly form the institutions of the heart. Yeah, there’s so many forces that stop those boundaries, those membranes from being functional.
Jim: Indeed, indeed. And the art is to think through how to build these things, right? And what does it mean? And one of the things I love is to think about institutions in an abstract sense, the way a theoretical economist would. It doesn’t necessarily mean a granite building with, you know, second bank of Cincinnati engraved on it. It could be anything. It could be, you know, a group of friends who get together regularly and go out and drink. Right? That’s an institution in a theoretical economist sense. And being more aware of the fact that it is a membrane and be proactive to define your membrane and protect it is kind of an awareness that the Game B perspective is trying to provide for people at every level, you know, from the informal group of friends all the way up to the bank. And it’s a very strong perspective change. You know, people at first are, what the hell? Right? But once we explain it, some people at least are able to say, yeah, that’s exactly what we need.
Ashley: Absolutely.
Jim: And so you said you had some questions for me. I’m happy to engage in our last ten minutes or so that we have.
Ashley: Yeah, I had one question. It’s kind of a big one. And it relates to what you just said, and it relates to a video I’m working on right now on the creepy utopia problem – where we need visions, positive visions of different systems, different futures to move into. But so many utopian visions are really creepy.
I feel like part of that is sort of this enforced helplessness syndrome. Part of that is just, okay, this just needs to be overcome. We just need to generate these ideas. But part of that creepiness is, I think, tapping into like a gut wisdom about what I’m hearing from some of the utopian thinkers.
What I’ve come to realize bothers me most – I just finished B.F. Skinner’s utopian vision where the behavioral engineers are just nudging people. All of this experimentation and behavioral engineering basically leads people to be spiritually enlightened so that they’re super cooperative, they’re never selfish, etcetera, etcetera, etcetera. They never lie. He’s just behaviorally engineered this.
And what’s so creepy about that is you need both people with spiritually enlightened traits with the honesty, the courage, the integrity, the willingness, the flexibility, the willingness to stand up for good values. You need the spiritual enlightened aspect. But so many of these utopian visions get there by assuming the structural forces can lead to that. And yet it’s not that there’s no relationship between these, there is a relationship, it’s just so many utopian visions, it’s really easy to go too far and assume that.
So you have said about Game B that there was a split in the community at some point where it split between people who were thinking in more of the spiritual direction and people who were thinking more in the systemic direction. So my question for you is what do you see as the relationship between those two things?
Jim: Yeah, just, and the synthesis came from that experience of the personal institutional spiral. And essentially the personal can include the spiritual, and the systemic is both the institutions and the dynamics that arise from that. Let me address also this utopian creepiness, because I absolutely agree. I fucking hate worse than people playing the guru game. Right? And way too many social change people think there’s one answer.
The answer is there’s lots of answers and the term we use is coherent pluralism, which is that we expect that when Game B is officially launched one of these days, it’ll have a relatively small list of axioms – maybe six, something like that. And then if you want to play Game B, agree to these six things, right? And they’re not super binding – one of them is pretty binding, but the rest of them are almost procedural. Then some membranes can be produced, and they are absolutely free to do whatever they want so long as they don’t violate the six top-level accord.
So I often say, I can imagine two Game B Dunbar-level communities side by side, one of which forbids abortion and the other which makes abortion mandatory – no live births allowed, you know? Both could be Game B. Right? And there could be everything from pretty straightforward capitalism, though with some constraints on consumption, or total hippie single-purse communism. Anything in between – all those things can be ways that humans can find ways to have high-value human well-being.
I think one of the things we learned from anthropology is the amazing number of ways people have learned to live together over the last forty thousand years, and the attempt to say there’s one way to live together, one right way to live together – wrong. That is the fundamental failure mode that leads to things like Stalinism, Maoism, Pol Potism, and any other -ism you can think of that says, “this is the answer, people.”
The Game B synthesis is a high-dimensional search of design space for how to live well as humans, which means tremendous variety, but we also will build in horizontal communications so we can share learning. Right? This is where humans are faster than Darwinian evolution. Because with Darwin, you just got to die out before the other one takes over. With humans – oh, we just discovered that this way to manage governance in a group of 150 really works quite well. And here’s what we did, here’s the video, here’s actually even the rules of order that we created, and then share those horizontally. Anybody else that wants them could just replicate them and vary them locally and move from there. So that’s how we’re thinking about addressing this utopian creepiness problem. I certainly 100% agree. And I have just a visceral hatred for gurus and one-answer type organizations, and the world is full of them as you know, right?
Ashley: Yeah. What you’re just describing, it seems like that is the solution space. It’s also the solution space I’m working in. And it seems like one of the issues in figuring out like how does this space work is sort of how much are people trapped inside a community? Because too much fluidity, as soon as conflict comes along, people just leave and go to a different community and it creates this instability. But too much, like too rigid you can’t leave the community is also stifling. Figuring out how to enforce the right sort of flow and the right balance between freedom and contractual obligations or stickiness in the system – that’s a hard thing to do.
Jim: Yeah, and it’s not at all clear there’s one answer. I suspect there’s many answers. And if you think about it in our design language, it’s defining what is the permeability of your membranes, right? We have to put a flag down at the top level, voice and exit, that any Game B membrane must provide the ability to exit on fair terms. So if it’s the equivalent of a member-owned co-op, then you have the right to take your capital account with you, maybe paid out over 5 years, but it has to be written down what the rules are for exit. As a businessman, the first thing I look at in any contract is what’s the termination clause. And so you always have to have exit, but you also have to have voice. And, by the way, voice might include “we’re an elective monarchy.”
Ashley: Right, that’s okay.
Jim: Right? As long as everybody gets to vote on the monarch. And he might be a total asshole, in which case, then you use your right of exit. And in terms of then, to your question, which is a very viable one, you can even model this in like chemistry – diffusion versus concentration essentially. I would argue that I would not want to see rules that compel people to stay within an organization. Rather, they should be seduced to stay within the membrane. The reason you stay within the membrane is because the quality of life for you and your particular values as a unique human entity are better than the alternatives, discounted by the transaction cost of moving. And so that provides a gradient such that each membrane must pay attention to making sure it’s a good place to be or people will leave. That’s the way it should be.
Ashley: Okay. I think I want to push back against that, but I also just started the book “Voice and Exit” from like the seventies. If you have other recommendations that I should read on this, because yeah, I think this is essential.
Jim: I’ll find you some stuff. I’ll look into the works of Max Borders. He is a tad more libertarian than, I would say, your average Game B-er, but he certainly considers himself Game B-er and participates in our communities and things of that sort. I think he thinks a lot of us are a bunch of hippies, but, oh well, that’s life. But we do actually, I do at least, rely upon him to help articulate what voice and exit actually are.
Ashley: That’s perfect. Okay, I wanted to say something about what you just said. It seems to me like one of the problems we have right now in society is that people do not persist through conflict. That’s when they want to leave a community, and people who organize small groups or startup efforts, it seems like oftentimes there’s a rush to get things started. It’s got a lot of potential at the beginning, but as soon as conflict hits, the whole thing dissipates because people haven’t built up an ability to handle conflict, the skillset to handle conflict. So if you don’t have something that requires people to persist through conflict, it’s not going to actually work. And that kind of goes against this like perfectly free exit. Not that you ever want to trap anybody completely in, and it’s to some degree the same deal with marriage and divorce and family commitments. What is the glue that causes people to persist through conflict? And I feel like this whole space needs solutions to that problem.
Jim: Yeah, I think you’ve hit on the problem, but I think you’ve got the wrong solution. The problem is that we don’t have good skills or processes for resolving conflict, right? Because I don’t believe that Skinner was at all right. Humans are always gonna fight and argue and disagree and have different values and things like that. And, by the way, in the classic Dunbar 150-level community, which existed all over the world for tens of thousands of years, people did leave sometimes, but not that often because there were plenty of customary ways to resolve conflicts. If it was a conflict about family things, it would often be the grand matriarch – you know, the oldest grandmother would decide. If it was about hunting, it would be the best hunter, young or old.
So there were customary ways of governance. And I think that one of the areas of serious social R&D for Game B is how do we develop a substantial set of alternative governance and resolution and conflict management mechanisms for our membranes. And again, I expect there to be many of them, and people who put together a membrane will choose the one that they believe to be correct for them. That’s the correct way to do it, which is to have better conflict management resolution rather than to try to trap people inside the membrane. Just like marriage these days – you can get out of it pretty easily. And that’s probably right, and it forces people to build a relationship that adds value for both parties. It’s not as exploitive as the old style marriage was where people were stuck basically. That’s at least my inclination. If you got some pushback, love to hear it.
Ashley: If I think about the sort of ancestral environment, it seems like the thing that kept people in those communities was less perfect mechanisms for resolving conflict. I mean, it definitely was the skill set that’s built up over time, but there wasn’t really an alternative community – you would be losing their entire social world. To leave one of those communities, you leave behind everything. And that was a force that kept them in that was perhaps somewhat oppressive. Giving up your social community is – that’s a huge penalty for leaving. And when I’m envisioning some of these, I would want definitely more fluidity than that. I would want people to be able to be part of three or five or however many communities where they’re deeply involved, where leaving it would not require giving up your entire social identity. But still, when I’m talking about the thing that keeps you trapped, it’s not like rules that keep you trapped. It’s more like something that’s social. And I probably differ slightly from you in terms of mechanism, in terms of voting and mechanism for resolving versus like inherent interpersonal skillset.
Jim: And I believe that’s huge too, right? And this is where the institutional and personal capacity part work together. If you’re a much less triggered person, conflict doesn’t go away, but there’s much less of it, and it doesn’t tend to flare into, you know, the equivalent of people yelling at each other on Twitter. Right? Well, occasionally, but much less.
And it is interesting, the anthropologists now know, contrary to what they might have thought in the past, there actually was a lot of intergroup movement, even in the forager epoch. People regularly would leave, either by themselves to join another band or a small group of them would split off and start a new band. And Graeber in his last book with Wengrow, I think his name was, covers some of that territory. You know, this pristine world was not true. There was a lot more variety, a lot more pluralism than we think.
I think you are right when I talk about the seduction. I think I may have been talking very similarly to the fact that your social network is valuable and very valuable, right? And so that is glue of a legitimate sort. And we do envision in Game B that people will be members of multiple membranes of different sorts. You may have your on-the-ground membrane, that’s your main home, but you’re also a weaver. So you’re a member of the Weaver’s Guild, which is another membrane that interpenetrates. And, oh, by the way, I’m also a member of a vacation membrane that allows me to move from one to the other of all the communities that are a member of this vacation membrane, etcetera, and would strongly encourage people to have polyvalent interests essentially. Like, you make a good point – I don’t know if I really focused on that too much – is so that you don’t feel stuck because it’s the only thing you have. Because this is what the religious cults do. They make you cut off your connections to everybody you’ve ever known, etcetera. And if some Game B group wants to do that, I suppose, but I’ll tell you what, that would be a violation of our ethos in a pretty major way. And if I could write the rules of voice and exit to make that unlikely, I would do so.
Ashley: Absolutely.
Jim: Anyway, it has been a hellaciously good conversation. I gotta tell you, extremely impressed by the work that you’re doing. And I’m just very glad to see it.
Ashley: Thank you. Thank you so much. I very much enjoyed this. Game B is so important. I love it.
Jim: Looking forward to getting the book out here. Not till next year sometime, but doing a lot of thinking on this.