Is there a paradox in the continued existence of prediction markets? Recently I’ve been wondering this. Let me start with a little background for those that are unfamiliar with the concept of prediction markets.
Prediction markets are markets that allow you to bet on the outcomes of real-life events. This gives financial incentives to predict accurately, and as such the market price of a given bet reflects a kind of aggregate credence for that event occurring. There’s a whole bunch of results, theoretical and applied, that indicate that prediction markets serve to give robustly accurate probability estimates for real-world events.
Here’s a great paper by Robin Hanson about a political system based on prediction markets, named futarchy. Essentially, the idea is that voters determine a nation’s values, so as to generate some average national welfare metric, and then betting markets are used to decide policy. Some quotes:
On info-failures as a primary problem for democracy
According to many experts in economics and development, governments often choose policies that are “inefficient” in the sense that most everyone could expect to gain from other feasible policies. Many other kinds of experts also see existing policies as often clearly inferior to known alternatives.
If inferior policies would not have been adopted had most everyone known they are inferior, and if someone somewhere knew or could have learned that they are inferior, then we can blame inferior policies on a failure of our “info” institutions. By “info” here I just mean clues and analysis that should change our beliefs. Our info institutions are those within which we induce, express, and evaluate the acquiring and sharing of info. They include public relations teams, organized interest groups, news media, conversation forums, think tanks, universities, journals, elite committees, and state agencies. Inferior policies happen because our info institutions fail to induce people to acquire and share relevant info with properly-motivated decision makers.
Where might we find better info institutions? According to most experts in economics and finance, speculative markets are exemplary info institutions. That is, active speculative markets do very well at inducing people to acquire info, share it via trades, and collect that info into consensus prices that persuade wider audiences. This great success suggests that we should consider augmenting our political info institutions with speculative market institutions. That is, perhaps we should encourage people to create, trade in, and heed policy-relevant speculative markets, instead of discouraging such markets as we do today via anti-gambling laws.
Laying out the proposal
In futarchy, democracy would continue to say what we want, but betting markets would now say how to get it. That is, elected representatives would formally define and manage an after-the-fact measurement of national welfare, while market speculators would say which policies they expect to raise national welfare. The basic rule of government would be:
When a betting market clearly estimates that a proposed policy would increase expected national welfare, that proposal becomes law.
Futarchy is intended to be ideologically neutral; it could result in anything from an extreme socialism to an extreme minarchy, depending on what voters say they want, and on what speculators think would get it for them.
Futarchy seems promising if we accept the following three assumptions:
Democracies fail largely by not aggregating available information.
It is not that hard to tell rich happy nations from poor miserable ones.
Betting markets are our best known institution for aggregating information.
On the success of prediction markets
Betting markets, and speculative markets more generally, seem to do very well at aggregating information. To have a say in a speculative market, you have to “put your money where your mouth is.” Those who know they are not relevant experts shut up, and those who do not know this eventually lose their money, and then shut up. Speculative markets in essence offer to pay anyone who sees a bias in current market prices to come and correct that bias.
Speculative market estimates are not perfect. There seems to be a long-shot bias when there are high transaction costs, and perhaps also excess volatility in long term aggregate price movements. But such markets seem to do very well when compared to other institutions. For example, racetrack market odds improve on the predictions of racetrack experts, Florida orange juice commodity futures improve on government weather forecasts, betting markets beat opinion polls at predicting U.S. election results, and betting markets consistently beat Hewlett Packard official forecasts at predicting Hewlett Packard printer sales. In general, it is hard to find information that is not embodied in market prices.
On the possibility of manipulation of prediction markets
We want policy-related info institutions to resist manipulation, that is, to resist attempts to influence policy via distorted participation. Speculative markets do well here because they deal well with “noise trading,” that is, trading for reasons other than info about common asset values. When other traders can’t predict noise trading exactly, they compensate for its expected average by an opposite average trade, and compensate for its expected variation by trading more, and by working harder to find relevant info. Theory says that if trader risk-aversion is mild, and if more effort gives more info, then increased noise trading increases price accuracy. And in fact, the most accurate real speculative markets tend to be those with the most noise trading.
What do noise traders have to do with manipulators? Manipulators, who trade hoping to distort prices, are noise traders, since they trade for reasons other than asset value info. Thus adding manipulators to speculative markets doesn’t reduce average price accuracy. This has been verified in theory, in laboratory experiments, and in the field.
Futarchy remains for me one of the coolest and most exciting ideas I’ve heard in political philosophy, and prediction markets fascinate me. But for today, I have the following question about their feasibility:
If the only individuals that are able to consistently profit off the prediction market are the best predictors, then why wouldn’t the bottom 50% of predictors continuously drop out as they lose money on the market? If so, then as the population of market participants dwindles you would end up with a small fraction of really good predictors, each of whom sometimes gets lucky and makes money and sometimes is unlucky and loses some. On average, these people won’t be able to make money any more (as the ability to make money relies on the participation of inferior predictors in the market), so they’ll drop out as well.
If this line of reasoning is right, then it seems like prediction markets should inevitably collapse as their user base drops out. Why, then, do sites like PredictIt keep functioning?
One possibility is that there’s something wrong with the argument. This is honestly where most of my credence lies; tons of smart people endorse the idea, and this seems like a fairly obviously central flaw in the concept for them all to miss. If this argument isn’t wrong, though, then we have an interesting phenomenon to explain.
One explanation that came to my mind is that the continued survival of prediction markets is only possible because of a bug in human psychology, namely, a lack of epistemic humility. People are on average overly confident in their beliefs, and so uninformed people will continue confidently betting on propositions, even when they are generally betting against individuals with greater expertise.
Is this really what’s going on? I’m not sure. I would be surprised if humans were actually overconfident enough to continue betting on a market that they are consistently losing money on. Maybe they’d find some way to rationalize dropping out of the market that doesn’t amount to them admitting “My opinion is not worth as much as I thought it was”, but surely they would eventually stop betting after enough losses (putting aside whatever impulses drive people to gamble on guaranteed negative-expected-value games until they lose all their money.) On the other hand, it could be that the traffic of less-informed individuals does not consist of the same individuals betting over and over, and instead a constant crowd of new sheep coming in to be exploited by those more knowledgeable. What do you think? How do you explain this?
IQ is an increasingly controversial topic these days. I find that when it comes up, different people seem to be extremely confident in wildly different beliefs about the nature of IQ as a measure of intelligence.
Part of this has to do with education. This paper analyzed the top 29 most used introductory psychology textbooks and “found that 79.3% of textbooks contained inaccurate statements and 79.3% had logical fallacies in their sections about intelligence.” 
This is pretty insane, and sounds kinda like something you’d hear from an Alex Jones-style conspiracy theorist. But if you look at what the world’s experts on human intelligence say about public opinion on intelligence, they’re all in agreement: misinformation about IQ is everywhere. It’s gotten to the point where world-famous respected psychologists like Steven Pinker are being blasted as racists in articles in mainstream news outlets for citing basic points of consensus in the scientific literature.
The reasons for this are pretty clear… people are worried about nasty social and political implications of true facts about IQ. There are worthwhile points to be made about morally hazardous beliefs and the possibility that some truths should not be publicly known. At the same time, the quantification and study of human intelligence is absurdly important. The difference between us and the rest of the animal world, the types of possible futures that are open to us as a civilization, the ability to understand the structure of the universe and manipulate it to our ends; these are the types of things that the subject of human intelligence touches on. In short, intelligence is how we accomplish anything as a civilization, and the prospect of missing out on ways to reliably intervene and enhance it because we avoided or covered up research that revealed some inconvenient truths seems really bad to me.
Overall, I lean towards thinking that the misinformation is so great, and the truth so important, that it’s worthwhile to attempt to clear things up. So! The purpose of this post is just to sort through some of the mess and come up with a concise and referenced list of some of the most important things we know about IQ and intelligence.
The most replicated finding in all of psychology is that good performance on virtually all cognitively demanding tasks is positively correlated. The name for whatever cognitive faculty causes this correlation is “general intelligence”, or g.
A definition of intelligence from 52 prominent intelligence researchers: 
Intelligence is a very general capability that, among other things, involves the ability to reason, plan, solve problems, think abstractly, comprehend complex ideas, learn quickly and learn from experience. It is not merely book learning, a narrow academic skill, or test‑taking smarts. Rather, it reflects a broader and deeper capability for comprehending our surroundings—‘catching on’, ‘making sense’ of things, or ‘figuring out’ what to do. Intelligence, so defined, can be measured, and intelligence tests measure it well.
IQ tests are among the most reliable and valid of all psychological tests and assessments. 
They are designed to test general intelligence, and not character or personality.
Modern IQ tests have a standard error of measurement of about 3 points.
The distribution of IQs in a population nicely fits a Bell curve.
IQ is defined in such a way as to make the population mean exactly 100, and the standard deviation 15.
People with high IQs tend to be healthier, wealthier, live longer, and have more successful careers. 
IQ is highly predictive of educational aptitude and job performance. 
Longitudinal studies have shown that IQ “is a causal influence on future achievement measures whereas achievement measures do not substantially influence future IQ scores.” 
Average adult combined IQs associated with real-life accomplishments by various tests
MDs, JDs, and PhDs
1–3 years of college
Clerical and sales workers
High school graduates, skilled workers (e.g., electricians, cabinetmakers)
1–3 years of high school (completed 9–11 years of school)
This doesn’t mean that 30-year-old you is no smarter than 10-year-old you. It means that if you test the IQ of a bunch of children, and then later test them as adults, the rank order will remain roughly the same. A smarter-than-average 10 year old becomes a smarter-than-average 30 year old.
After your mid-20s, crystallized intelligence plateaus and fluid intelligence starts declining. Obligatory terrifying graph: (source)
High IQ is correlated with more gray matter in the brain, larger frontal lobes, and a thicker cortex. 
“There is a constant cascade of information being processed in the entire brain, but intelligence seems related to an efficient use of relatively few structures, where the more gray matter the better.” 
“Estimates of how much of the total variance in general intelligence can be attributed to genetic influences range from 30 to 80%.” 
Twin studies show the same results; there are substantial genetic influences on human intelligence. 
The genetic component of IQ is highly polygenic, and no specific genes have been robustly associated with human intelligence. The best we’ve found so far is a single gene that accounts for 0.1% of the variance in IQ. 
Many genes have been weakly associated with IQ. “40% of the variation in crystallized-type intelligence and 51% of the variation in fluid-type intelligence between individuals” is accounted for by genetic differences. 
Scientists can predict your IQ by looking only at your genes (not perfectly, but significantly better than random). 
This study analyzed 549,692 base pairs and found a R = .11 mean correlation between their predictions and the actual fluid intelligence of over 3500 unrelated adults. 
You might be wondering at this point what all the controversy regarding IQ is about. Why are so many people eager to dismiss IQ as a valid measure of intelligence? Well, we now dive straight into the heart of the controversy: intergroup variation in IQ.
It’s worth noting that, as Scott Alexander puts it: society is fixed, while biology is mutable. This fear we have that if biology factors into the underperformance of some groups, then such difference are intrinsically unalterable, makes little sense. We can do things to modify biology just as we can do things to modify society, and in fact the first is often mucheasier to do and more effective than the easier.
Anyway, prelude aside, we dive into the controversy.
Group differences in IQ
Yes, there are racial differences in IQ, both globally and within the United States. This has been studied to death, and is a universal consensus; you won’t find a single paper in a reputable psychology journal denying the numerical differences. 
Within the United States, there is a long-standing 1 SD (15 to 18 point) IQ difference between African Americans and White Americans. 
The tests in which these differences are most pronounced are those that most closely correspond to g, like Raven’s Progressive Matrices.  This test also is free of culturally-loaded knowledge, and only requires being able to solve visual pattern-recognition puzzles like these ones:
Controlling for the way the tests are formulated and administered does not affect this difference. 
IQ scores predict success equally accurately regardless of race or social class. This provides some evidence that the test is not culturally biased as a predictor.  
Internationally, the lowest average IQs are found in sub-Saharan Africa and the highest average IQs are found in East Asia. The variations span a range of three standard deviations (45 IQ points). 
Malawi has an estimated average IQ of 60.
Singapore and Hong Kong have estimated IQs around 108.
A large survey published in one of the top psychology journals polled over 250 experts on IQ and international intelligence differences. 
On possible causes of cross-national differences in cognitive ability: “Genes were rated as the most important cause (17%), followed by educational quality (11.44%), health (10.88%), and educational quantity (10.20%).”
“Around 90% of experts believed that genes had at least some influence on cross-national differences in cognitive ability.”
Men and women have equal average IQs.
But: “most IQ tests are constructed so that there are no overall score differences between females and males.” 
They do this by removing items that show significant sex differences. So, for instance, men have a 1 SD (15 point) advantage on visual-spatial tasks over women. Thus mental rotation tests have been removed, in order to reduce the perception of bias. 
Males also do better on proportional and mechanical reasoning and mathematics, while females do better on verbal tests. 
Hormones are thought to play a role in sex differences in cognitive abilities. 
Females that are exposed to male hormones in utero have higher spatiotemporal reasoning scores than females that are not. 
The same thing is seen with men that have higher testosterone levels, and older males given testosterone. 
There is also some evidence of men having a higher IQ variance than women, but this seems to be disputed. If true, it would indicate more men at the very bottom and the very top of the IQ scale (helping to explain sex disparities in high-IQ professions). 
In the developed world, average IQ has been increasing by 2 to 3 points per decade since 1930. This is called the Flynn effect.
The average IQ in the US in 1932, as measured by a 1997 IQ test, would be around 80. People with IQ 80 and below correspond to the bottom 9% of the 1997 population. 
Some studies have found that the Flynn effect seems to be waning in the developing world, and beginning in the developing world. 
A large survey of experts found that most attribute the Flynn effect to “better health and nutrition, more and better education and rising standards of living.” 
The Flynn effect is not limited to IQ tests, but is also found in memory tests, object naming, and other commonly used neuropsychological tests. 
Many studies indicate that the black-white IQ gap in the United States is closing. 
Can IQ be increased?
There are not any known interventions to reliably cause long term increases (although decreasing it is easy).
Essentially, you can do a handful of things to ensure that your child’s IQ is not low (give them access to education, provide them good nutrition, prevent iodine deficiency, etc), but you can’t do much beyond these.
Educational intervention programs have fairly unanimously failed to show long-term increases in IQ in the developed world. 
The best prekindergarten programs have a substantial short-term effect on IQ, but this effect fades by late elementary school.
Several large-scale longitudinal studies have found that children with higher IQ are more likely to have used illegal drugs by middle age. This association is stronger for women than men. 
This actually makes some sense, given that IQ is positively correlated with Openness (in the Big Five personality traits breakdown).
The average intelligence of Marines has been significantly declining since 1980. 
“The US military has minimum enlistment standards at about the IQ 85 level. There have been two experiments with lowering this to 80 but in both cases these men could not master soldiering well enough to justify their costs.” (from Wiki)
This is fairly terrifying when you consider that 10% of the US population has an IQ of 80 or below; evidently, this enormous segment of humanity has an extremely limited capacity to do useful work for society.
Researchers used to think that IQ declined significantly starting around age 20. Subsequently this was found to be mostly a product of the Flynn effect: as average IQ increases, the normed IQ value inflates, so a constant IQ looks like it decreases. (from Wiki)
The popular idea that listening to classical music increases IQ has not been borne out by research. (Wiki)
There’s evidence that intelligence is part of the explanation for differential health outcomes across socioeconomic class.
“…Health workers can diagnose and treat incubating problems, such as high blood pressure or diabetes, but only when people seek preventive screening and follow treatment regimens. Many do not. In fact, perhaps a third of all prescription medications are taken in a manner that jeopardizes the patient’s health. Non-adherence to prescribed treatment regimens doubles the risk of death among heart patients (Gallagher, Viscoli, & Horwitz, 1993). For better or worse, people are substantially their own primary health care providers.” “For instance, one study (Williams et al., 1995) found that, overall, 26% of the outpatients at two urban hospitals were unable to determine from an appointment slip when their next appointment was scheduled, and 42% did not understand directions for taking medicine on an empty stomach. The percentages specifically among outpatients with inadequate literacy were worse: 40% and 65%, respectively. In comparison, the percentages were 5% and 24% among outpatients with adequate literacy. In another study (Williams, Baker, Parker, & Nurss, 1998), many insulin-dependent diabetics did not understand fundamental facts for maintaining daily control of their disease: Among those classified as having inadequate literacy, about half did not know the signs of very low or very high blood sugar, and 60% did not know the corrective actions they needed to take if their blood sugar was too low or too high. Among diabetics, intelligence at time of diagnosis correlates significantly (.36) with diabetes knowledge measured 1 year later (Taylor, Frier, et al., 2003).” 
IQ differences might be able to account for a significant portion of global income inequality.
“… in a conventional Ramsey model, between one-fourth and one-half of income differences across countries can be explained by a single factor: The steady-state effect of large, persistent differences in national average IQ on worker productivity. These differences in cognitive ability – which are well-supported in the psychology literature – are likely to be malleable through better nutrition, better education, and better health care in the world’s poorest countries. A simple calibration exercise in the spirit of Bils and Klenow (AER, 2000) and Castro (Rev. Ec. Dyn., 2005) is conducted. According to the model, a move from the bottom decile of the global IQ distribution to the top decile will cause steady-state living standards to rise by between 75 and 350 percent. I provide evidence that little of IQ-productivity relationship is likely to be due to reverse causality.” 
Exposure to lead hampers cognitive development and lowers IQ. You can calculate the economic boost the US received as a result of the dramatic reduction in children’s exposure to lead since the 1970s and the resulting increase in IQs.
“The base-case estimate of $213 billion in economic benefit for each cohort is based on conservative assumptions about both the effect of IQ on earnings and the effect of lead on IQ.” 
Yes. $213 billion.
In a 113-country analysis, IQ has been found to positively affect all main measures of institutional quality.
“The results show that average IQ positively affects all the measures of institutional quality considered in our study, namely government efficiency, regulatory quality, rule of law, political stability and voice and accountability. The positive effect of intelligence is robust to controlling for other determinants of institutional quality.” 
High IQ people cooperate more in repeated prisoner’s experiments; 5% to 8% more cooperation per 100 point increase in SAT score (7 pt IQ increase). 
The second paper also shows more patience and higher savings rates for higher IQ. 
Embryo selection is a possible way to enhance the IQ of future generations, and is already technologically feasible.
“Biomedical research into human stem cell-derived gametes may enable iterated embryo selection (IES) in vitro, compressing multiple generations of selection into a few years or less.” 
Average IQ gain
1 in 2
1 in 10
1 in 100
1 in 1000
There is a ridiculous amount of research out there on IQ, and you can easily reach any conclusion you want by just finding some studies that agree with you. I’ve tried to stick to relying on large meta-analyses, papers of historical significance, large surveys of experts, and summaries by experts of consensus views.
I recently saw that a friend of a friend of mine was writing in a blog about her experience as a mixed race woman in America, and all of the ways in which she feels that she suffers from explicit and implicit discrimination. The impression she conveyed was that she walked around intensely aware of her skin color, and felt that others were equally aware. In her world, people looked at her as primarily a brown woman, a strange and exotic other. She talked about the emotional shock she has to go through when returning to the United States after visiting her family in Thailand, in dealing with the fact that Thai culture is so underrepresented here. There was a lot of anger, a feeling of not being accepted by the majority culture around her, and most of all, a sense of being disrespected and harmed on the basis of her ethnicity.
Whenever I hear people like her talking like this, I get really confused. I am a mixed-race person, living in the same city as her, surrounded by probably very similar people, and yet we seem to live in completely different worlds. I know that the idea of color-blindness is not in vogue, but I walk around literally entirely unaware of my skin color and feel fairly confident that almost everybody else I run into is similarly unaware of it.
I’m somebody that’s fairly attuned to social signals – I feel like if I was being slighted on the basis of my ethnicity, I would notice it – and I’m also not somebody that could remotely pass for white. So I’m left wondering… what’s going on here? How can two people have suchradically different experiences of living with their ethnicities, when it seems like so many of the variables are the same?
One answer is that some of the variables that appear to be the same actually aren’t. For instance, while we’re both mixed race, we are different mixes of races. While I could pass (and have passed) for Black, Hispanic, Middle Eastern, or Indian, I’ve never been identified as Southeast Asian. So perhaps while Black/Hispanic/Middle Eastern/Indian people face very little racism in my town, Southeast Asians are relentlessly oppressed. Hmm, somehow that seems wrong…
Maybe a relevant difference is the social circles we surround ourselves with. From what I know of this person, she surrounds herself with people that are very concerned with social justice issues. It seems fairly plausible to me that the types of people that are very concerned with social justice are also going to be very sensitive to racial and ethnic identities, and will be much more likely to see somebody as a mixed-race person (and treat this as an important aspect of their identity). Incidentally, the few people who I’ve actually felt conscious of my skin color or ethnicity around have been exactly those people who are most vocal and passionate about their anti-racism and social justice concerns. Also, anecdotally, the people I know who most strongly emphasize feelings of personal oppression happen to surround themselves with social justice types. Of course, this doesn’t indicate the direction of causation – it could be that those that feel oppressed seek out social justice types that will affirm their feelings of being wronged.
Another possibility to explain the difference in perceptions is that one of us is just wrong. Maybe the oppression and constant discrimination and other-ing is actually in my Southeast Asian friend-of-friend’s head. Or maybe I’m actually being horribly oppressed and discriminated against and just don’t know it. Maybe I’m just extremely lucky and have by chance avoided all the nasty racists in my town. (If one of us is wrong, I’m betting it’s her.)
But this isn’t the only time I’ve noticed this disconnect in experiences. I’m reminded of a debate I watched a while back about sexual harassment. The actual debate itself wasn’t too interesting, but I found the Q&A period fascinating. Many different women stood up and spoke about their personal experiences of sexual harassment in their daily life, and what they said completely contradicted each other. Some women claimed that they felt sexually harassed or at risk of sexual harassment virtually always, like, walking in the middle of the day in a public area or shopping for groceries. Other women claimed that they had never been catcalled, nor sexually harassed or discriminated against because of their sex.
Keep in mind; this was a live debate, with a local audience. All of these women lived in the same area. There weren’t obvious differences in their appearances, or ages, or mannerisms, although there were significant differences in their views on sexual harassment (for obvious reasons). Also keep in mind that some of the claims being made were literally just objectively verifiable factual statements. It’s not like the disagreement was over whether others had objectifying thoughts about them because of their sex. The differences were about things like whether or not they are verbally catcalled while walking downtown. There’s got to be an actual fact about how likely the average woman is to be catcalled on a given street.
This is pretty hard to make sense of, and seems like the exact same phenomenon as what’s going on with my friend’s friend and I. People that should be living in similar worlds mentally feel like they are living in completely different worlds.
One last example: I’ve had similar experiences with my sister. She is the same race as me (shocking, I know), with basically the same amount of exposure to the non-American side of our cultural heritage, has lived in the same city as me for most of our lives, and is not too different in age from me. But she talks about a strong sense of feeling discriminated against as a brown woman, and has described experiences of oppression that seem totally foreign to me.
Perhaps a component of all of this can be explained by incentives to exaggerate. This aligns with my sense that those that think they are oppressed hang around with social justice types. A lot of social justice culture seems to be devoted to jockeying for oppression points and finding ways to appear as unprivileged as possible. In a social circle in which one can gain social brownie points by being discriminated against, you would expect a general upwards pressure on the level of exaggeration that the average person uses in describing said discrimination.
I feel like I should stop here to emphasize that I’m not suggesting that there isn’t racial and sexual discrimination in the world. There obviously is. What I’m specifically wondering about is how it is that people in little liberal college towns like mine with fairly similar racial backgrounds can have such radically different perspectives on the factual matter of the actual oppression they face. It’s especially puzzling to me given that I’m a brown person who has, as far as I can tell, never faced significant drawbacks on the basis of it, and is most of the time unaware of my skin color.
I think that this unawareness of my skin color provides a hint for explaining what might be actually going on here. Not only am I generally not aware of my skin color, but I have always felt this way. I think that there is a spectrum of natural self-identification tendencies, and a bias towards attributing perceived affronts to the most salient aspects of your identity. Let me unpack this.
It’s not exactly that I’m unaware that I’m brown (I wouldn’t be surprised if somebody showed me a picture of myself and pointed out my skin color). It’s that my brownness is a nonexistent component of the way I think about myself. As far back as I can remember, the salient features of my sense of self have been things like my way of thinking and my personality. I’ve always identified myself as mostly a mind, not a body. I even remember a few bizarre experiences where I looked in a mirror and was momentarily struck by a surreal sense of disconnect, that I happen to exist within this body that seems so obviously distinct from me.
It is also the case that when I perceive that others dislike me and don’t have any sense of why this may be, I naturally tend to assume that their dislike relates to some aspect of my mental characteristics; maybe they don’t like my style of reasoning, or my sense of humor, or some other aspect of my personality. I will almost never attribute their dislike to some physical characteristics of mine.
I perceive myself as primarily a thinker occupying a body that I don’t strongly identify with. But other people identify much more closely with their physicality (skin color, facial features, body type, sex, et cetera). It seems plausible to me that just as I perceive affronts as having to do with properties of my mind, those for whom race is a salient component of their personal identity will perceive affronts as having to do with racism, those who identify with their sex will be more likely to see them as sexism, and so on.
This idea of a spectrum of self-identification tendencies is fairly satisfying to me as an explanation of this phenomenon of radically different perceptions of the world. Two people that appear to exist in very similar social environments can have radically different perceptions of their social environments, because of differences in how they conceive of themselves and the way that this affects their framing of their interactions with others. These differing tendencies are not restricted to body-versus-mind. Some people strongly identify themselves with a profession, a cultural heritage, or a nation. Others identify with an ideology or a religion. And in general, the parts of your identity that feel most salient to you are those that will prickle most readily at perceived affronts.
This relates to the notion in psychology of internal vs external loci of control. When you fail a job interview, you blame the traffic in the morning, or the interviewer’s bias. If you had gotten the job, you would have happily praised your interviewee skills and charming smile. When your neighbor fails a job interview, you attribute it to their poor interviewee skills. That is, you place the locus of control over the outcome wherever it is convenient.
This is called the fundamental attribution error. With respect to themselves, people attribute positive outcomes to features of their own identity, and negative outcomes to features of the external world. With respect to others, they attribute positive outcomes to the external world and negative outcomes to the person’s character.
If you strongly identify as a mixed person, then you will see events in your world as being all about your mixed race. And if you identify as a mind floating about in a body, then things like your race or sex or attractiveness will seem mostly irrelevant to explaining the events in your life. This suggests a sort of self-perpetuating cycle whereby those that identify as X will perceive the world as centered around X, further entrenching the self-identification as X.
The general problem solved by Civilization is how to get a bunch of people with different goals, each partial to themselves, to live together in peace and build a happy society instead of all just killing each other. It’s easy to forget justhow incredibly hard of a problem this is. The lesson of game theory is that even two people whose interests don’t align can end up in shitty suboptimal Nash equilibria where they’re both worse off, by each behaving apparently perfectly rationally. Generalize this to twenty people, or a thousand people, or 300 million people, and you start to get a sense of how surprising it is that civilization exists on the scale that it does at all.
Yes, history tells many thousands of tales about large-scale defecting (civil wars, corruption, oppressive treatment of minority populations, outbreaks of violence and lawlessness, disputes over the line of succession) and the anarchic chaos that results, but it’s easy to imagine it being way, way worse. People are complex things with complex desires, and when you put that many people together, you should expect some serious failures. Hell, even a world of selfless altruists with shared goals would still have a tough time solving coordination problems of this size. Nobody thinks that the average person is better than this, so what gives?
Part of the explanation comes from psychologists like Jonathan Haidt and Joshua Greene, who detail the process by which humans evolved a moral sense that involved things like tit-for-tat emotional responses and tribalistic impulses. This baseline level of desire to form cooperative equilibria with friends helps push the balance away from chaos towards civilization, but it can’t be the whole explanation. After all, history does not reveal a constant base-rate of cooperative capacity between different humans, but instead tells a story of increasingly large-scale and complex civilizations. We went from thousands of small tribes scattered across Africa and Asia, to chiefdoms of tens of thousands individuals all working together, to vast empires that were home to millions of humans, and to today’s complex balance of global forces that make up a cooperative web that we are all part of. And we did this in the space of some ten thousand years.
This is not the type of timescale over which we can reasonably expect that evolution drastically reshaped our brains. Our moral instincts (love of kin, loyalty to friends, deference to authority, altruistic tendencies) can help us explain the cooperation we saw in 6000 B.C.E. in a tribe of a few hundred individuals. But they aren’t as helpful when we’re talking about the global network of cooperation, in which lawfulness is ensured by groups of individuals thousands of miles away, in which virtually every product that we rely on in our day-to-day life is the result of a global supply chain that brings together thousands of individuals that have never even seen each other, and in which a large and growing proportion of the world have safe access to hospitals and schools and other fruits of cooperation.
The explanation for this immense growth of humanity’s cooperative capacity is the development of institutions. As time passed, different bands of humans tried out different ways of structuring their social order. Some ways of structuring society worked better and lived on to the next generations of humans, who made further experiments in civilizational engineering. I think there is a lot to be learned by looking at the products of this thousand-year-long selection process for designing stable cooperative structures and seeing what happened to work best. In a previous post I described the TIMN theory of social evolution, which can be thought of as a categorization of the most successful organizational strategies that we’ve invented across throughout history. The following categorization is inspired by this framing, but different in many places.
The State: Cooperation is enforced by a central authority who can punish defectors. This central authority employs vast networks of hierarchically descending authority and systems of bureaucracy to be able to reach out across huge populations and keep individuals from defecting, even if they are nowhere near the actual people in charge. “State” is technically too narrow of a term, as these types of structures are not limited to governments, but can include corporate governance by CEOs, religious organizations, and criminal organizations like the Medellin Cartel. Ronfeldt uses the term Institution for this instead, but that sounds too broad to me.
The Market: Cooperation is not enforced by anybody, but instead arises as a natural result of the self-interested behaviors of individuals that each stand to gain through an exchange of goods. Markets have some really nice properties that a structure like the State doesn’t have, such as natural tendencies for exchange rates to equilibrate towards those that maximize efficiency. They also are fantastically good at dealing with huge amounts of complex information that a single central authority would be unable to parse (for instance, a weather event occurs on one coast of the United States, affecting suppliers of certain products, who then adjust their prices to re-equilibrate, which then results in a cascade of changes in consumer behavior across other markets, which also then react, and eventually the “news” of the weather event has traveled to the other coast, adjusting prices so that the products are allocated efficiently). A beautiful feature of the Market structure is that you can get HUGE amounts of people to cooperate in order to produce incredibly innovative and valuable stuff, without this cooperation being explicitly enforced by threats of punishment for defecting. Of course, Markets also have numerous failings, and the nice properties I discussed only apply for certain types of goods (those that are excludable and rival). When the Market structure extends outside of this realm, you see catastrophic failures of organization, the scale of which pose genuine threats to the continued existence of human civilization.
The Tribe: Cooperation is achieved not through a central authority or through mutually beneficial exchange, but through strong kinship and friendship relations. Tribe-type structures spring up naturally all the time in extended families, groups of friends, or shared living situations. Strong loyalty intuitions and communitarian instincts can serve to functionally punish defectors through social exclusion from their tribe, giving it some immunity to invading defector strategies. But the primary mechanism through which cooperation is enforced is the part of our psychology that keeps us from lying to our friends or stealing from our partners, even when we think we can get away with it. The problem with this structure is that it scales really poorly. Our brains can only handle a few dozen real friendships at a time, and typically these relationships require regular contact to be maintained. Historically, this has meant that tribes can only survive for fairly small groups of people that are geographically close to each other, and this is pretty much the range of their effectiveness.
The Cult: The primary idea of this category is that cooperation does not arise from self-interested exchange or from punishment for defectors, but from shared sacred beliefs or values. These beliefs often shape their holders’ entire world-views and relate to intense feelings of meaning, purpose, reverence, and awe. They can be about political ideology, metaphysics, aesthetics, or anything else that carries with it sufficient value as to penetrate into and reshape a whole worldview. The world’s major religions are the most striking examples of this, having been one of the biggest shapers of human behavior throughout history. Different members of the same religion can pour countless hours into dedicated cooperative work, not because of any sense of kinship with one another, but because of a sense of shared purpose.
The Pope won’t throw you in jail if you stop going to church, and you don’t go to make an exchange of goods with your priest (except in some very metaphorical sense that I don’t find interesting). You go because youbelieve deeply in the importance of going. There are aspects of Science that remind me of the Cult structure, like the hours of unpaid and anonymous work that senior scientists put into reviewing the papers of their colleagues in the field in order to give guidance to journals, grant-funders, or the researchers themselves on the quality of the material. When I’ve asked why spend so much time on doing this when they are not getting paid or recognized for their work, the responses I’ve gotten make reference to the value of the peer-review process and the joy and importance of advancing the frontier of knowledge. This type of response clearly indicates the sense of Science as a Sacred Value that serves as a driving force in the behavior of many scientists.
A Cult is like a Tribe in many ways, but one that is not limited to small sizes. Cults can grow and become global behemoths, inspiring feelings of camaraderie between total strangers that have nothing in common besides shared worldview. While the term ‘Cult’ is typically derogatory, I don’t mean to use it in this sense here. Cults are incredibly powerful ways to get huge numbers of people to work together, despite there being no obvious reason why they should do so to anybody on the outside of their worldview. And not only do they inspire large-scale cooperative behavior, but they are powerful sources of meaning and purpose in our lives. This seems tremendously valuable and loaded with potential for developing a better future society. Think about the strength of something like Judaism, and how it persevered through thousands of years of repeated extermination attempts, diasporas, and religious factioning, all the while maintaining a strong sense of Jewish identity and fervent religious belief. Taking the perspective of an alien visiting the planet, it might be baffling to try to understand why this set of beliefs didn’t die out long ago, and what constituted the glue holding the Jewish people together.
I think that the Cult structure is really undervalued in the circles I hang out in, which tend to focus on the irrationality that is often associated with a Cult. This irrationality seems natural enough; a Cult forms around a deeply held belief or set of beliefs, and strong identification with beliefs leads to dogmatism and denial of evidence. I wonder if you could have a “Cult of Rationality”, in which the “sacred beliefs” include explicit dedication to open-mindedness and non-dogmatic thinking, or if this would be in some sense self-defeating. There’s also the memetic aspect of this, which is that not just any idea is apt to become a sacred belief. It might be that the type of person that is deeply invested in rationality is exactly the type that would typically scoff at the idea of a Cult of Rationality, for instance.
Broad strokes: Tribes play on our loyalty and kinship intuitions. States play on our respect for authority. Markets play on our self-interest. And Cults play on our sense of reverence, awe, and sacredness.
(Mostly interested in this for two reasons: (1) the research in cognitive science about default effects and other unintuitive cognitive biases and (2) the adequacy implications of the lack of implementation of this policy)
In the United States, around 95% of the population approves of organ donation, while only 54% have granted permission for their organs to be used after death. Surveys in the UK indicate that the percentage that approve organ donation is around 90%, but only 25% of the population is registered on the Organ Donation Registry. Many other countries have similar patterns.
When polled, the reasons given for not explicitly registering for organ donation are things like laziness, confusion about the process and unwillingness to think about death.
And it’s actually worse than this – many countries have ‘soft’ organ-donation policies, meaning that family members can override the wishes of the deceased. Families are more likely to veto the decision to donate than the decision to not donate, further decreasing the number of organs available for transplant.
And this number really really matters. There are over 100,000 people in need of a life saving organ transplant in the United States, and over seven thousand people died last year while waiting. This amounts to 20 people every day. And in the UK and the US, the gap between available organs and patients awaiting transplantation is only growing.
Psychologists have studied the effects of default options on expressed preferences. One experiment told subjects to imagine that they had just moved to a new state, and that they had to decide whether or not to be organ donors. Some subjects were told that the default was to be an organ donor, and their choice was to confirm or change that status. Others were told the opposite – that the default was to not be an organ donor. The results were dramatic: about two times more people became donors when this was the default than when it was not. The simple framing effect of “confirm the default or change?” had the power to cut organ donations in half.
The real-world equivalent of this is whether a country has an opt-in or opt-out organ donation system. The UK and the US have an opt-in system, which means that the default choice is to not be an organ donor. Other countries, like Austria, Belgium, Spain and Sweden, have an opt-out system.
This difference in policy has huge differences in the percentage of the population that consents to organ donation. When Austria and Belgium changed from an opt-in to an opt-out system, donation rates more than doubled. When Singapore changed to opt-out, their donation rates more than sextupled. And comparisons between countries that have different policies are similarly impressive. Germany and Austria, similar countries in many ways except for their donation policy showed an almost 88% difference in effective consent rates.
Consider for a moment how strange this is. In the United States, all it requires to become an organ donor is to check a box when registering for a driver’s license at the DMV. Can it really be that a simple difference in whether the box means “become an organ donor” or “stop being an organ donor” is preventing millions of people from becoming organ donors? Classical economics would certainly not predict this – it is presumed that if somebody has a preference about whether or not to be an organ donor, a tiny difference in framing should not have such huge effects on their behavior.
But apparently the answer is that yes, these tiny differences do matter. And our strange little human quirks can be hugely important in deciding on how to make effective policy.
Ultimately, we are left with an adequacy question. Opt-out organ donation policies seem to me like low-hanging policy fruit. If policy-makers care to eliminate thousands of needless deaths, and are aware of these policies, then why aren’t they already implemented in the US and the UK?