November 16, 2005

The System makes the man

As much as I am a champion of the individual, and of communities in free association (as opposed to government-determined communities), I do think that to a very large extent, the "system" determines our behavior. A large bureaucracy, for example, will promote laziness and indifference in even among the most hard-working and caring. Similarly, one of the underappreciated strengths of the US is not just its democracy, but its particular system of democracy, especially separation of powers, that makes it simultaneously flexible, democratic, and strong. The Israeli system, in contrast, encourages venality and fractiousness - it's a wonder that it functions so well.

All this is a big problem because most people are not systems thinkers. They don't understand its insidious nature, and tend to favor direct solutions to problems - solutions which usually have the effect of entrenching failed systems yet further. An example from Thomas Sowell (via John Ray):

Many people are blaming the riots in France on the high unemployment rate among young Muslim men living in the ghettoes around Paris and elsewhere. Some are blaming both the unemployment and the ghettoization on discrimination by the French.

Plausible as these explanations may sound, they ignore economics, among other things.

Let us go back a few generations in the United States. We need not speculate about racial discrimination because it was openly spelled out in laws in the Southern states, where most blacks lived, and was not unknown in the North.

Yet in the late 1940s, the unemployment rate among young black men was not only far lower than it is today but was not very different from unemployment rates among young whites the same ages. Every census from 1890 through 1930 showed labor force participation rates for blacks to be as high as, or higher than, labor force participation rates among whites.

Why are things so different today in the United States -- and so different among Muslim young men in France? That is where economics comes in.

If I had the energy, I would start a blog called "Breaking Paradigms" which did nothing more than point to facts such as this one - "in the late 1940s, the unemployment rate among young black men was not only far lower than it is today but was not very different from unemployment rates among young whites the same ages" - facts which should make people reconsider their long-held assumptions.

The problem with that, of course, is that most people don't let facts get in the way of their opinions. I understand that most people don't have energy to do otherwise, and I respect that - there are a lot of areas where I haven't made the effort to reconcile my opinions with the facts. Just please don't pontificate to me on a subject unless you are willing to do so!

Posted by David Boxenhorn at November 16, 2005 11:41 AM | TrackBacks
Comments & Trackbacks

It seems to me so completely obvious that things that make job creation more expensive (in particular minimum wage laws) will tend to increase unemployment that I find myself questioning the sanity of those who dispute this.

But technology makes a difference also. Higher wages increase the incentive to automate jobs away, but I think that in general the less skilled/lower paid jobs are easier to automate. I suspect we are quickly approaching the point where a substaintial portion of the population will be unable to do anything that a mchine couldn't do better and cheaper.

Posted by: George Weinberg at November 16, 2005 10:21 PM Permalink

Hello, David

An small remark: The System makes the man & the man makes the system. That is the point with methodological indiviudualism.

As a general rule, a social (Nash) equilibrium is a situation where people behaves to maximize their utility given the structural constraints and the structural constraints are the result of peopleĀ“s maximizing behaviour.

For example, corporativist societies (as France) are the result of strong lobbies, and strong lobbies are the result of corporativist societies. This stable feedback between individuals and social structure is a "social equilibrium"

Posted by: Kantor at November 20, 2005 07:07 PM Permalink

Kantor: Yes, I agree with that - and I think it's part of the problem.

Posted by: David Boxenhorn at November 20, 2005 10:50 PM Permalink

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