You must be shapeless, formless, like water. When you pour water in a cup, it becomes the cup. When you pour water in a bottle, it becomes the bottle. When you pour water in a teapot, it becomes the teapot. Water can drip and it can crash. Become like water my friend. — Bruce Lee
When I was a little kid growing up in Los Angeles, I spent lots of time sitting in bumper to bumper traffic…
Of course I thought it was entirely unfair, and ridiculous, that traffic on the freeway was so unequal. I was pretty darn sure that the center divider should adjust accordingly. The freeway should adapt to its demand like water adapts to its cup.
A few months ago on Medium I read this really great interview with Patrik Schumacher. It was the first time that I had ever heard of him. I was super impressed! He is a prominent architect with a really great grasp of economics.
It’s unfortunately rare for an academic to have a great grasp of economics… but it was definitely the first time that I had heard of a builder (broadly speaking) having a great grasp of economics. Wow!
Schumacher is a big fan of the anarcho-capitalist Murray Rothbard. So am I! Rothbard perfectly grasped the fundamental problem with government… the near complete absence of individual valuation. In order to facilitate individual valuation, Rothbard’s solution was to eliminate the government. This is where I really part ways with Rothbard.
Let’s think laterally and consider Netflix. Subscribers pay a monthly fee and they can consume a very large bundle of content. If a subscriber happens to really like the Korean romantic comedy Mr Hedgehog And Miss Panda, then they can give it 5 stars. This certainly helps to provide some feedback. But is this feedback individual valuation? Nope. Just like voting for a bike-share expansion really isn’t individual valuation. Individual valuation is where you’re given the wonderful opportunity to put your own money where your mouth is.
So what should Netflix do in order to facilitate individual valuation? Should it switch to the iTunes model where consumers pay a fixed price for specific content? Not necessarily. In order to facilitate individual valuation, Netflix should simply give its subscribers the freedom to use their limited fees to communicate their valuation of their favorite content. This would reveal the demand for content, and the supply would follow accordingly.
For all intents and purposes, taxes are fees and taxpayers are subscribers. So the government could facilitate individual valuation simply by giving taxpayers the freedom to choose where their taxes go. There would be absolutely no need to abolish the government.
With Rothbard and Schumacher it’s the government OR the market. Not only is this a false dichotomy, but it’s quite counterproductive. Most people appreciate the government far more than they appreciate the market. So the idea of abolishing the government nearly entirely overshadows the extra excellent economic educational efforts of Rothbard and Schumacher.
Here’s an example of Schumacher’s extra excellent economic educational efforts in a recent interview…
The market process itself is an inherently rational process that builds on the productive power of expansive social cooperation on the basis of the division of labour and exchange. The freedom of exchange ensures that only locally and individually available knowledge about local conditions and preferences feed into the economic process. The capitalist market using money, the price-system and profit/loss signals is a momentous evolutionary achievement and evolutionary accelerator.
A truly ingenious marvel — designed by nobody like most break through evolutionary achievements — the market using monetary prices allows for the an otherwise unimaginable expansion of social cooperation, encompassing millions of people, unknown to each other, without the presupposition of shared purposes and without the need for collective, binding decisions. The price system equilibrates the myriads of local, dispersed and often only tacit knowledge that feed into the myriad of choices and bidding processes affecting the ubiquitous interplay of supply and demand that shapes all prices within an interconnected network of prices.
This price system is a powerful and parsimonious tele-communication and information processing system that gives (and takes from) all participants just the amount of relevant information that allows each to fit their divergent plans into an overall, coherent pattern of resource allocation. The many dispersed knowledges integrated by the market process can never be centralized, not only because there is far too much information but because much of the underlying knowledge is not explicit and can therefore not be conveyed at all. This is why liberalism had to re-emerge as neo-liberalism when the new complexities and dynamics of globalisation and the post-fordist, computationally empowered production technologies made socialist and social-democratic planning less and less viable.
Wow!!! It’s so good!
There are a few things that the Bible gets really right. One such thing is… don’t hide your light under a bushel. This comes to mind because I really perceive that anarcho-capitalism is the bushel that hides Schumacher’s super bright economic light.
On his twitter profile, here’s what Schumacher has in his description, “architect promoting parametricism”.
“Parametricism” is a term coined by Schumacher. The word itself is based on the word “parameter”. But to be perfectly honest, I’m not quite exactly sure what the parameters are in Schumacher’s architectural work. Perhaps I’ll share my general thoughts on parameters and Schumacher can help fill in the blanks.
Here’s the link to Mr Hedgehog And Miss Panda on Netflix…
The number at the end of the URL…”80126419"… is the parameter. In this case, the parameter is the unique identification number for the show Mr Hedgehog And Miss Panda. So when you click on the link, Netflix will grab the parameter from the URL and use it to retrieve the associated show from its database. Then, if you’re already a subscriber and signed in, Netflix will start playing the show. If not, then Netflix will display the show’s basic information and encourage you to either sign up or sign in so that you can watch the show.
Basically, the parameter allows Netflix to know what you want. When Netflix learns what you want, then it automatically adapts to your preferences. As a result of knowing your preferences, what Netflix does is relevant to your unique reality.
If you decide to watch the first episode of Mr Hedgehog And Miss Panda, then you’d see this scene…
A young guy is putting a sheet around an old guy who is sleeping on the floor. Sleeping on the floor is a concept that’s foreign to most Westerners. I sleep on a bed, unless I mess up… then I sleep on the couch.
In this example, the parameter is the demand for sleep. In the scene above, we can imagine that the old guy was getting tired, so he got out his sleeping mat, put it on the floor and slept on it. When he wakes up in the morning, his demand for sleep will be gone, so he’ll get up and put his sleeping mat away.
The space itself adapts, albeit manually, to changes in the parameter. The space conforms to the parameter. So when the parameter changes, so does the space. In Western culture, on the other hand, the parameter is still the same… and it changes just as frequently… but the space does not adapt to the changes. With a few notable exceptions such as murphy beds, trundle beds and sofa beds.
In the example of the Los Angeles freeway… the parameter is the demand to drive in a certain direction. This parameter changes each day but the freeway does not adapt to changes in the parameter. The freeway is static rather than dynamic. With a few exceptions such as lane closures.
Back in the olden days people used to drive around in horse drawn carriages. Then cars were invented and the parameter (the demand for transportation) changed accordingly. As a result, the people who worked in factories producing buggy whips lost their jobs. These workers had no choice but to adapt to the change in society’s parameter.
Last year a dress was created that adapted to changes in people’s tweets…
The LED lights attached to the dress’ embroidered flowers are connected to Watson’s Tone Analyzer API, which is able to interpret the emotional content of tweets tagged #MetGala and #CognitiveDress. As the tone of the tweets change, Watson is able to pull from the color palettes it generated and change the hue of the dress in real time. If tweets have a high “joy” value, for example, the dress would light up with a bright rose color; while tweets with a more “excited” tone will turn the flowers a shade of aqua. Even the fabric — a lightweight tulle — was chosen through a cognitive process. — Liz Stinson, IBM’s Watson Helped Design Karolina Kurkova’s Light-Up Dress for the Met Gala
In this case, the parameter wasn’t individual valuation, it was stated preference (tweets).
So what, exactly, are the parameters in Schumacher’s parametricism? What should they be? From my perspective, they should be everybody’s valuations. Admittedly, in some areas the technology hasn’t quite evolved to that point yet. But in all cases the evolution of technology should be guided by the parameter of people’s valuations.
For the sake of comparison, here’s what the economist Paul Romer wrote a couple years ago…
There is great wisdom in the general advice that economists give: let the market guide most decisions. The important exception is that only a government can establish the division between urban public space and urban private land. The difficulty arises because the only affordable way to get this allocation right is to do it before urban development takes place. It is economically expensive to try to do what Haussmann did in Paris under Napoleon III, destroy many buildings and create new public space. Politically, I suspect that this kind of reallocation will never again be feasible. If a city gets the allocation of public and private space right, then the market can guide the development of urban floor-space for housing, industrial, and commercial use. In the beginning the process may look messy. Manhattan had shantytowns and informal development as it grew. But over time, the buildings can change. What won’t change is the quantity of public space.
Ouch, this is so incoherent! He starts by saying that there’s wisdom in allowing the market to guide decisions. But then he immediately argues that city planning is an important exception to the rule. The question is, if we can truly trust the decisions of city planners, then why in the world would we need the market in the first place? What’s the point of millions and millions of people making countless spending decisions if the Visible Hand does an entirely adequate job of allocating countless resources?
So Alex Tabarrok is still my favorite living economist and now Schumacher is definitely my favorite architect. Well…. I definitely do appreciate the aesthetic of Schumacher’s designs but he’s primarily my favorite architect because he has such a great grasp of economics. If he endorsed, or even significantly engaged with, the idea of subscribers choosing where their fees go, then he’d also dethrone Tabarrok and become my favorite living economist.
“Pragmatarianism” is the term that I coined for what I’m promoting. “Parametricism” is the term that Schumacher coined for what he’s promoting. I don’t think that pragmatarianism and parametricism are mutually exclusive. Pragmatarianism certainly has a parameter (people’s fees) so perhaps pragmatarianism is a type of parametricism?
Originally published at pragmatarianism.blogspot.com on January 27, 2017.