The concept “free rider” comes from economics. Free-riding occurs when an actor has no incentive to perform an activity, but benefits from other actors doing the activity.
It is really a problem of incentives and lack of negative feedback. The international system is not controlled – so how does one go about creating proper incentives and feedback systems when there isn’t much in the way of compliance enforcement?
Hey, now this sound like the prisoner’s dilemma. If both sides take benevolent actions, both sides get a reward. But if one sides cheats ( takes a non-benevolent action), the cheating side gets an over-sized reward relative to the other side. So, to get the over-sized reward, both sides cheat thinking that is the best choice. The dilemma, when both sides cheat there is a small under-sized reward.
The international system could be thought of as a series of over-lapping parallel prisoner dilemma games. If large numbers of actors can be convinced to be benevolent (buy into a global rules set of incentives, feedback systems, compliance, and enforcement), then there will be large rewards.
Anyways, I think there is rich untapped material in the concepts of microeconomics and behavioral economics that can applied to any emerging 5GW theory.
I am interested in 5GW theory (among other things) as another means of creating global actors who act in mutually beneficial ways (global rule-sets) leading to economic growth, human capital maximization, security, liberty, opportunity, enrichment, and peace for all.
Oh crap, am I an idealist?
From StrategyUnit: a description of a Global Actor he calls “Total Social Movement Organizations” or TSMO – which is also another possible successor /competitor to the dominant state form the nation-state:
Hamas and Hezbollah function as a network of charities, religious movement, social movement, political movement and military force. Only such an organization can easily enlist the people as human shields at the face of death. I doubt Hamas was using much if any coercisve force to encourage the Human Shields – faith in Hamas and what it represented was enough.
An organization that combines the full spectrum of human activities – from religious to social justice to military force – will be a resilient force compared to the secular (Post?) Nation-State system that exists in the Wetern countries. They will not replace Western style Nation-States, but will be adapt challengers in the world stage.
I have been kicking around ideas along these lines for awhile. I read Bobbit’s gigantic and impressive book on the evolution of state forms a while back. My thoughts are forthcoming on the possibilities, evolution, and forms of the Post-Nationalism State (Postnat-State) and the Global Actors it will compete and cooperate.
Update: I have updated the links.
While we can differ on details, I am more or less in agreement with Fabius that America’s elite, both Left and Right, have failed the people and the soldiers in Iraq with their uncertainty, fecklessness, paralysis and addiction to self-absorbed partisanship. America needs a new elite, the old one has lost heart, nerve and to a certain extent -their head. They lack the will to prosecute the war on terror and the skill to execute it well. I’m not sure we’ll see great improvement in statesmanship either until the Boomers start yielding their place to GenX’ers.
Zenpundit is onto something.
I am not impressed with the National Leadership presented by the boomers.
Honestly, I am not impressed with the “Boomer” managers and executives I have interacted with my entire career (I am on the old end of the GenXers).
Greatness for America comes from a diverse set of human capital where merit should be king. That seems to be in decline.
Perhaps it should be the mission of GenXers and GenYers to minimize the damage being caused by action and inaction of the Boomers.
Edmund Phelps writes in the opinion Journal on “Dynamic Capitalism:
There are two economic systems in
the West. Several nations–including the U.S., Canada and the
U.K.–have a private-ownership system marked by great openness to the
implementation of new commercial ideas coming from entrepreneurs, and
by a pluralism of views among the financiers who select the ideas to
nurture by providing the capital and incentives necessary for their
The other system–in Western
Continental Europe–though also based on private ownership, has been
modified by the introduction of institutions aimed at protecting the
interests of “stakeholders” and “social partners.”
Let me use the word “dynamism” to
mean the fertility of the economy in coming up with innovative ideas
believed to be technologically feasible and profitable–in short, the
economy’s talent at commercially successful innovating. In this
terminology, the free enterprise system is structured in such a way
that it facilitates and stimulates dynamism while the Continental
system impedes and discourages it.
When building the massive
structures of corporatism in interwar Italy, theoreticians explained
that their new system would be more dynamic than capitalism–maybe not
more fertile in little ideas, such as might come to petit-bourgeois
entrepreneurs, but certainly in big ideas.
Friedrich Hayek, in the late 1930s and early ’40s, began the modern theory of how a capitalist
system, if pure enough, would possess the greatest dynamism–not
socialism and not corporatism. First, virtually everyone right down to
the humblest employees has “know-how,” some of what Michael Polanyi
called “personal knowledge” and some merely private knowledge, and out
of that an idea may come that few others would have. In its openness to
the ideas of all or most participants, the capitalist economy tends to
generate a plethora of new ideas.
Second, the pluralism of
experience that the financiers bring to bear in their decisions gives a
wide range of entrepreneurial ideas a chance of insightful evaluation.
And, importantly, the financier and the entrepreneur do not need the
approval of the state or of social partners. Nor are they accountable
later on to such social bodies if the project goes badly, not even to
the financier’s investors. So projects can be undertaken that would be
too opaque and uncertain for the state or social partners to endorse.
Lastly, the pluralism of knowledge and experience that managers and
consumers bring to bear in deciding which innovations to try, and which
to adopt, is crucial in giving a good chance to the most promising
innovations launched. Where the Continental system convenes experts to
set a product standard before any version is launched, capitalism gives
market access to all versions.
Globalization has diminished the importance of scale as well as distance.
Instituting a high level of
dynamism, so that the economy is fired by the new ideas of
entrepreneurs, serves to transform the workplace–in the firms
developing an innovation and also in the firms dealing with the
innovations. The challenges that arise in developing a new idea and in
gaining its acceptance in the marketplace provide the workforce with
high levels of mental stimulation, problem-solving, employee-engagement
and, thus, personal growth.
Dynamism does have its downside.
The same capitalist dynamism that adds to the desirability of jobs also
adds to their precariousness. The strong possibility of a general slump
can cause anxiety.
Why, then, if the “downside” is so
exaggerated, is capitalism so reviled in Western Continental Europe? It
may be that elements of capitalism are seen by some in Europe as
morally wrong in the same way that birth control or nuclear power or
sweatshops are seen by some as simply wrong in spite of the
consequences of barring them. And it appears that the recent street
protesters associate business with established wealth; in their
minds, giving greater latitude to businesses would increase the
privileges of old wealth. By an “entrepreneur” they appear to mean a
rich owner of a bank or factory, while for Schumpeter and Knight it
meant a newcomer, a parvenu who is an outsider. A tremendous
confusion is created by associating “capitalism” with entrenched wealth
and power. The textbook capitalism of Schumpeter and Hayek means
opening up the economy to new industries, opening industries to
start-up companies, and opening existing companies to new owners and
new managers. It is inseparable from an adequate degree of competition.
Monopolies like Microsoft are a deviation from the model.
I have been meaning to write an article on this, but I am backed up with stuff. So I am trying to clear my backlog (tossing stuff, or doing short posts for future reference).
Here are some thoughts:
- “good” globalization (based on dynamic capitalism) vs “bad” or so-so globalization (based on stake-holder capitalism). What does this mean for PNM theory which relies partially on unfettered support for globalization to shrink the gap?
- Entrepreneurial Capitalism = Dynamic Capitalism. “Good Globalization” = Entrepreneurial Peace Theory?
- Reference Postal’s The Dynamist blog and book
- Bobitt’s successor state forms need more work. His “market-state” is a post-nationalism dynamic-capitalism state. Another competing form could be the stakeholder-state (post-nationalism, stakeholder-capitalism). The other forms are…[heh for long simmering post.]
Naw… you all don’t get it….
Liberals become conservative by backing into it…. because they are backing away from the Nuts out there on the far left…. and keep backing… and backing… until they look around and realize that they have become conservative…
That is what did it for me.
Should the major parties fail to generate some new, creative and relevant ideas in a short time horizon – something that is not likely to happen in my view – it means that 2008 is wide open for somebody “outside” the system who can bring both vision and financial wherewithal to the table as an independent candidate. And of the two, the former is far more important because via the internet the vision will attract the financial muscle.
I left a long comment which I am now also using as my own post:
A visionary could organize around something like:
–> Future Oriented
Security –> from bad guys: transnational, national and local
Liberty –> free to organize and associate etc as one wants (includes religion, contracts, etc)
Opportunity –> all humans should have lots of opportunities to achieve there potential (opportunity creating stuff = good stuff)
Enrichment –> of wealth, knowledge, experience etc, for all members of ones community (local, national, global). All humans should be uplifted by the exercise of liberty and opportunity maximization
Future Oriented –> No status Quo! I want 200 year life spans, cheap limitless energy, asteroid mining, orbital communities and mars settlements – a better future of all humanity!
I will give a listen to any pundit with ideas for a SLOE/Future.
Update: This older post of mine should also be checked.