I think your causal options are missing an important one—“the invisible hand”.
Many people independently value the nice thing, and they altruistically decide to put their own efforts toward creating/maintaining the nice thing?
The first half is fine, but replace “altruistically” with “selfishly”. Someone wants the thing, and thinks many others want the thing. They figure out how to make a living by providing the thing to everyone. For non-exclusionary things (lighthouses being the classic example, although most of them were actually privately funded), the providers figure out how to get taxpayers or civic organizations to pay them.
I like your 0-3 framework, and my answer for the decline is primarily about the following in #1:
breakdown in long-term rewards. The larger cultural institutions of stability and consumer expectations have shifted to short-term evaluations. Institutions that seek long-term rewards, at the expense of short-term survival, don’t get either one.
One can certainly argue that traditional values are biased and unpleasant, and encouraging radical change is the right thing to do. But it remains true that this harms institutions which had optimized for long-term value in the previous environment. And to the extent that there’s uncertainty in the stability of the future (cultural) environment, it’s hard to see how new institutions can correctly optimize for the long-term.
The first half is fine, but replace “altruistically” with “selfishly”.… They figure out how to make a living… [emphasis mine]
At first glance, if we’re talking about a thing that requires cooperative effort from many people across time, this seems like a heck of a principal agent problem. What keeps everybody’s incentives aligned? Why does each of us trying selfishly to make a living result in a working fire fighting group (or whatever) instead of a tug-of-war? I understand the “invisible hand” when many different individuals are individually putting up goods/services for sale; I do not understand it as an explanation for how hundreds of people get coordinated into working institutions.
My 0-3 is an attempt to understand how something-like-selfishness (or something-like-altruism, or whatever) could stitch the people together into a thingy that could produce good stuff despite the principal agent problem / coordination difficulty.
At first glance, if we’re talking about a thing that requires cooperative effort from many people across time, this seems like a heck of a principal agent problem.
It turns out a whole lot of cooperation is achievable without explicit control. It’s not so much principal-agent, where a principal knows what they want and the agent has different goals. It’s more like agent-agent (or really, principal-principal), where all participants want compatible things, and small individual trades (I’ll let you keep 10% if you mill my grain) add up over time to fairly long chains of behaviors that build bridges and convenience stores and websites where we can discuss the puzzle of cooperation-without-coordination.
I’d argue that this is what “institution” means. A common understanding of what kinds of exchanges and behaviors will be rewarded. They’re bottom-up evolved human mutual expectations, not top-down designed structures. Though, of course, human intent can influence what kinds of culture are prevalent in any given subgroup.
I do not understand it as an explanation for how hundreds of people get coordinated into working institutions.
Something on my mind as I read this post is “evolution somehow creates pretty complicated things, with relatively low amounts of agency.”
There are clear limits on what evolution can build, especially in a given timeframe. I don’t have a clear model of how this relates back to your question, but “what sort of processes and feedback loops are involved when evolution invented multicellular organisms, etc” might be a useful pointer here.
I think your causal options are missing an important one—“the invisible hand”.
The first half is fine, but replace “altruistically” with “selfishly”. Someone wants the thing, and thinks many others want the thing. They figure out how to make a living by providing the thing to everyone. For non-exclusionary things (lighthouses being the classic example, although most of them were actually privately funded), the providers figure out how to get taxpayers or civic organizations to pay them.
I like your 0-3 framework, and my answer for the decline is primarily about the following in #1:
breakdown in long-term rewards. The larger cultural institutions of stability and consumer expectations have shifted to short-term evaluations. Institutions that seek long-term rewards, at the expense of short-term survival, don’t get either one.
One can certainly argue that traditional values are biased and unpleasant, and encouraging radical change is the right thing to do. But it remains true that this harms institutions which had optimized for long-term value in the previous environment. And to the extent that there’s uncertainty in the stability of the future (cultural) environment, it’s hard to see how new institutions can correctly optimize for the long-term.
At first glance, if we’re talking about a thing that requires cooperative effort from many people across time, this seems like a heck of a principal agent problem. What keeps everybody’s incentives aligned? Why does each of us trying selfishly to make a living result in a working fire fighting group (or whatever) instead of a tug-of-war? I understand the “invisible hand” when many different individuals are individually putting up goods/services for sale; I do not understand it as an explanation for how hundreds of people get coordinated into working institutions.
My 0-3 is an attempt to understand how something-like-selfishness (or something-like-altruism, or whatever) could stitch the people together into a thingy that could produce good stuff despite the principal agent problem / coordination difficulty.
It turns out a whole lot of cooperation is achievable without explicit control. It’s not so much principal-agent, where a principal knows what they want and the agent has different goals. It’s more like agent-agent (or really, principal-principal), where all participants want compatible things, and small individual trades (I’ll let you keep 10% if you mill my grain) add up over time to fairly long chains of behaviors that build bridges and convenience stores and websites where we can discuss the puzzle of cooperation-without-coordination.
I’d argue that this is what “institution” means. A common understanding of what kinds of exchanges and behaviors will be rewarded. They’re bottom-up evolved human mutual expectations, not top-down designed structures. Though, of course, human intent can influence what kinds of culture are prevalent in any given subgroup.
Something on my mind as I read this post is “evolution somehow creates pretty complicated things, with relatively low amounts of agency.”
There are clear limits on what evolution can build, especially in a given timeframe. I don’t have a clear model of how this relates back to your question, but “what sort of processes and feedback loops are involved when evolution invented multicellular organisms, etc” might be a useful pointer here.