Capitalistic Competition as a Communicative Community - Why Politics Is Less “Deliberative” than Markets

Discourse theorists such as Habermas tend to disregard the communicative character and discoursive power of market processes and at the same time overrate the ability of political deliberation to discover and implement social problem solutions. Mainstream economists have little to contribute to this debate since they regard both economic and political “markets” as simple instruments for the aggregation of given preferences. Hayek and other “Austrian” market process theorists, however, provide a rich theory that highlights the role of competition as a process of discovery, persuasion, experimentation and opinion formation. I use this analytical framework in order to show first that real market processes in many respects correspond to most ambitious claims of ideal deliberation such as “domination-free discourse” or “the unforced force of the better argument”. Next, I confront the deliberative ideal with predicaments of real political discourse, stressing opportunity costs (rational ignorance, shortage of attention, decision costs), asymmetric incompetence and the interventionist bias of political deliberation, and problems of “cheap talk” (preference falsification, opinion cascades, enclave deliberation). In order to make political discourse most effective within the limits described above, I argue in favour of privatisation, decentralisation and constitutionalisation as policy conclusions. I end with a summary comparison of economic and political competition as means to discover and disseminate local knowledge in society.discourse theory; market process theory; deliberative democracy; preference falsification; opinion formation; interventionism

Social Machinery and Intelligence

Social machines are systems formed by technical and human elements interacting in a structured manner. The use of digital platforms as mediators allows large numbers of human participants to join such mechanisms, creating systems where interconnected digital and human components operate as a single machine capable of highly sophisticated behaviour. Under certain conditions, such systems can be described as autonomous and goal-driven agents. Many examples of modern Artificial Intelligence (AI) can be regarded as instances of this class of mechanisms. We argue that this type of autonomous social machines has provided a new paradigm for the design of intelligent systems marking a new phase in the field of AI. The consequences of this observation range from methodological, philosophical to ethical. On the one side, it emphasises the role of Human-Computer Interaction in the design of intelligent systems, while on the other side it draws attention to both the risks for a human being and those for a society relying on mechanisms that are not necessarily controllable. The difficulty by companies in regulating the spread of misinformation, as well as those by authorities to protect task-workers managed by a software infrastructure, could be just some of the effects of this technological paradigm

Options for organization and operation of space applications transfer centers

The benefits of developing regional facilities for transfer of NASA developed technology are discussed. These centers are designed to inform, persuade, and serve users. Included will be equipment for applications and demonstrations of the processes, a library, training facilities, and meeting rooms. The staff will include experts in the various techniques, as well as personnel involved in finding and persuading potential users

Information Design for Congested Social Services: Optimal Need-Based Persuasion

We study the effectiveness of information design in reducing congestion in social services catering to users with varied levels of need. In the absence of price discrimination and centralized admission, the provider relies on sharing information about wait times to improve welfare. We consider a stylized model with heterogeneous users who differ in their private outside options: low-need users have an acceptable outside option to the social service, whereas high-need users have no viable outside option. Upon arrival, a user decides to wait for the service by joining an unobservable first-come-first-serve queue, or leave and seek her outside option. To reduce congestion and improve social outcomes, the service provider seeks to persuade more low-need users to avail their outside option, and thus better serve high-need users. We characterize the Pareto-optimal signaling mechanisms and compare their welfare outcomes against several benchmarks. We show that if either type is the overwhelming majority of the population, information design does not provide improvement over sharing full information or no information. On the other hand, when the population is a mixture of the two types, information design not only Pareto dominates full-information and no-information mechanisms, in some regimes it also achieves the same welfare as the "first-best", i.e., the Pareto-optimal centralized admission policy with knowledge of users' types.Comment: Accepted for publication in the 21st ACM Conference on Economics and Computation (EC'20). 40 pages, 6 figure

Trust, Reciprocity and Institutional Design: Lessons from Behavioural Economics

Trust and reciprocity are the bond of society (Locke), but economic agents are both self-interested and intrinsically untrustworthy. These assumptions impair severely economists' accounts of social relationships. The paper examines strategies to escape this paradox by enlarging our conception of rationality: the assumptions of self-interest and consequentialism are critically discussed as well as relational behavioural principles (e.g. trust and reciprocity). The implications of this enlarged kind of rationality are particularly important for agency theory. The paper analyses, within this framework, the working of two different kinds of incentive mechanisms, namely intra-personal and interpersonal, and discusses experimental results that emphasise the empirical relevance of the latter. Besides providing a more descriptively adequate picture of agency, such mechanisms have important normative implications. In this respect some of the conditions that affect the process of accumulation and erosion of trust and social capital are explored. The tension between rules and trust turns out to be not inescapable, though it calls for a changing in the designing logic of institutions and contracts. I shall discuss what are the changes needed in order to implement a trust-enhancing activity of institutional design.Incentives; reciprocity; trust; crowding-out; institutional design

A formal approach to argumentation in group decision scenarios

Time and space consuming are disadvantages in group meetings but are easily faced in computer systems. Agent based group decision support systems reduce the loss usually associated to group work, turning more relevant the benefits that emerge from group meetings. Better decisions are taken after negotiation through choice and convincement. In this paper, a formal logic programming based system is proposed to represent agent knowledge and reasoning in order to be used in argumentation for decision group taking, supporting meetings where agents participate and communicate

The Communicative Character of Capitalistic Competition: A Hayekian response to the Habermasian challenge

"Ideal speech situations", "domination-free discourse" or "deliberative communities" describe political ideals proudly cherished by many sociologists. The sometimes explicit, sometimes implicit, motivation is to mobilise political discourse as an instrument to tame or transform the capitalistic "system" according to alleged needs of "society". Most economists and defenders of capitalistic competition, in return, don?t care about communicative communities. The individual market actor is assumed or demanded to be free to choose among given alternatives satisfying given preferences subject to given constraints. Why, then, should homo oeconomicus argue (van Aaken 2003)? There is no "communicative action" among the individuals that populate economic textbooks, there is only "commutative action". Only a few, mostly "Austrian", economists realised that the exchange of goods and services within the spontaneous order of "catallaxy" involves an exchange of knowledge, ideas, opinions, expectations, and arguments – that markets are indeed communicative networks (e.g. Hayek 1946/48; Lavoie, ed. 1991; Horwitz 1992). In fact, and this will be my major claim, market competition is more "deliberative" than politics in the sense that more information about available social problem solutions and their comparative performance, about people's preferences, ideas and expectations is spontaneously created, disseminated and tested. This very idea is anathema for followers of Habermasian discourse ethics. The intellectual thrust and political clout of their vindication of deliberative politics critically seems to depend on a mostly tacit assumption that markets fail to address social needs and regulate social conflicts. Political discourse therefore ?steps in to fill the functional gaps when other mechanisms of social integration are overburdened? (Habermas 1996: 318). I will claim that the argument should be very much the other way around: politics and public deliberations are overburdened mechanisms – unable to deal with an increasingly complex and dynamic society. Moreover, the requisites of ideal speech communities are so enormous that functional gaps are inevitable. Partly, these gaps can be closed if market competition steps in. Partly, reorganisations of the political system are needed. Hence, I am not arguing that Habermas is wrong by stressing the need for open discourse in order to reach informed agreement among citizens who seek to realise mutual gains from joint commitment by contributing to common (public) goods and submitting to common rules of conduct (s.a. Vanberg 2003). I am challenging his neglect of capitalistic competition as a communicative device and his disdain for the classical liberal conception of bounded democracy that respects individual property rights (e.g. Habermas 1975; 1998). --