Knowledge And Decisions

Those social processes which rely on emotional ties — the family, friendship, churches, and various voluntary associations — facilitate mutual accommodation among those directly involved and between them and the larger society, without the use of force. The advantages of this lie not only in avoiding the unpleasantness of force, but also avoiding its inefficiencies as a social mechanism. Formal force through government, especially constitutional government, requires explicitly articulated rules (laws or regulations), which necessarily contain loopholes, since language is not perfect. This means that some transgressors against the spirit of the law are exempted from the consequences, and other persons not actually transgressing the real purpose of the law may nevertheless get punished for technical violations of the words. Informal rules are often unarticulated, and so are applied without regard to these rigidities of language. Flirtation with someone’s spouse does not have to be in a particular form spelled out in advance in order to be detected and socially (or personally) punished.

Because the scope and effectiveness of informal social controls depends upon the strength of the emotional ties involved, specific laws and policies affecting the emotional strength of these social processes cannot be considered solely in terms of the immediate issues without regard to how they affect the long-run effectiveness of families, churches, philanthropy, etc. The number of decisions taken out of the family by compulsory school attendance laws, child labor laws, and other direct institution-to-child programs all reduce the degree of responsibility of the family for its members, both objectively and — ultimately — subjectively. Whatever the merits of such institutional programs in principle or in practice, the external costs of weakening informal institutions must also be considered for a socially optimal result. However, the tendency is for such programs to be discussed seriatim in terms of their isolated merits. Complex informal social trade-offs do not easily lend themselves to categorical political decisions.

The effectiveness with which knowledge is transmitted and coordinated depends not only on the institutional mechanisms at work but also on the nature of the decisions involved — for example, the extent to which the law of diminishing returns applies, whether the decision is sequential or a once-and-for-all decision, whether its consequences are restricted to one lifetime or spread well beyond the human life span and so have muted feedback. Systems can be compared not only in terms of how well they make current decisions with current impact, but how well they bridge the barrier of time — especially time that exceeds the human life span — through such devices as “present values” reflecting future benefits or emotional ties to a family as an on-going unit over the generations.

The consideration of causation in systemic rather than intentional terms does not wholly exclude the individual factor. However, particular kinds of systems tend to offer certain kinds of individuals more scope. If, for example, certain businesses or occupations (used-car dealers, various repair services) offer unusual opportunities for dishonest dealing, dishonest individuals will have a competitive advantage in such fields. A discovery that this field has more than the usual share of unscrupulous persons does not therefore imply that that is why there is more dishonest behavior in that field. On the contrary, especially if this is a long-run phenomenon, persisting through several complete turnovers of people, the more likely explanation is in terms of systemic incentives and constraints.

The general principles sketched here in Part I provide a background for considering the changes under way in social, economic, and political processes in the United States and internationally — and for considering what their future consequences are likely to be.

Part II TRENDS AND ISSUES

Chapter 7 Historical Trends

Part I analyzed some more or less enduring features of various social processes, and their implications for the coordination of fragmented individual knowledge. Part II will analyze some of the historic changes which have occurred, and are occurring, in such processes — and the long-run implications of such changes. The next three chapters will deal with historic trends in specific economic, legal, and political processes. They will center on the American experience, for purposes of keeping the discussion specific and manageable, but many of these trends have been common in Western civilization and beyond, and some have in fact gone further in various other countries than in the United States. This chapter will briefly sketch a broader background picture of trends in social institutions and processes over the past century.