Wednesday, February 20, 2008

The Greatest Happiness Principle

60 Minutes: Happiness

We could learn a lot from the Danes (and all Scandinavians for that matter). A new study shows that they are the happiest people in the world.

I consider myself a Utilitarian in this sense: we should strive to create the greatest happiness for the greatest number of people. I am not a purist, mind you. There obviously are values that would more important (where it would conflict with Justice, for instance), but in a broad sense I find this principle to be the correct one.

1 comment:

Thai said...

I didn’t want to be any more of a Troll on Sudden Debt than I already have been so I thought I would put this on your blog directly as I do not have your email address? mine is

If we never agree, I still want to say 'thanks very much' for the exchange.

I have never pulled all my thoughts together on these subjects before and I am really enjoying the opportunity (I think this is why I have been such a Troll on Sudden Debt, I just want to get my thoughts coherent on this subject as it has really been bugging me).

Again, I thanks for the opportunity to do so!

All the best wishes!



To some degree this is a difficult discussion since I am trying to explain a subject I have spent most of my adult life studying and still have an infinite number of questions on, to someone who MAY have learned most of this thru non-scientific channels. It means I MAY have to be dealing with a lot of emotional riders I am unaware of or at least insensitive towards. I have moved so far into this subject I have long forgotten what is most controversial at first blush.

Please accept my sincerest ‘yes’ regarding the 60 min piece on happiness and the Danes. Everything in the video is entirely consistent with both evolutionary psychology and econophysics. Even the moral interpretation I think the author was trying to convey is consistent—wealth is an illusion.

Econophysicists understand/truly believe wealth as most people see it (money and ‘stuff’), is an illusion/bubble (I don’t want to get into it but in evolutionary system EVERYTHING is prone to bubbles—just like the financial bubbles we saw with the NASDQ, housing, debt, etc…). Ideas just like money are prone to bubbles, even happiness—but this is a different topic all together.

Anyway, wealth certainly does not buy any more ‘security’, which is the real reason most people seem to seek wealth in the first place. To Econophysicists, the source of wealth is cooperation, knowledge, and using that knowledge to create more complex information structures.

As for you political views (which seem to merge with a form of compassionate Christianity) it is a little less clear whether we agree (though there is certainly a lot of agreement between us). I would need to know more. I am not religious, but I often agree with people of faith.

If we have a disagreement, it would likely arise in at where you and I define the boundaries of our systems/morals.

Okie said… “My main concern regarding evolutionary psychology and the Pareto principle is that it attempts to explain wealth distributions in societies by claiming that is somehow mathematical -- even scientific -- which I reject.”

First of all I may not be totally sure what you mean by the Pareto principle—you may have attached emotional significance to ‘The Pareto Principle’ I know nothing about. What I mean by Pareto is wealth distributions follow scalability and power laws (the term Pareto does have other uses in mathematics).

Question… Do you reject this because your morality tells you to reject it, or do you have some other evidence to reject it by?

My point: The Atomic bomb exists. I do not like its existence but nevertheless in my universe I accept its existence. In fact, I would rather the world not have the A-bomb, but it does exist. The same science that gives us the atomic bomb AND the conservation of energy AND the theory of evolution AND lots and lots of other theories THAT SEEM TO HOLD TRUE gives us the observation that wealth follows power law distributions in social networks and that models which look at this issue show this seems to be invariant.

Okie said… “No concern seems to be given as to whether such a distribution is a just one”. Not true at all! But it is what it is. When this was discovered, it was initially rejected by the scientific community as being impossible (most conventional economists still reject it). Yet the truth is that most ‘difficult’ scientific theories usually are rejected initially (though this is a more of an observation than a theory). It usually takes people a while to accept scientific ideas and ultimately realize they are not so threatening after all.

Question: Does one reject something as untrue or unchangeable just because they don’t like it? Do you reject evolution exists?

Okie said… “It assumes (as you have said before many times, I believe) that such distributions are unchangeable in any political or economic system.”

Absolutely true-- Remember power laws (what you call Pareto) do not just apply to wealth in social networks; they are fundamental to most networks. Look at the genetic network: human/animal DNA clearly follows Pareto distributions. Genetics and the fossil record clearly agree with Pareto.

Haven’t you ever read we are all cousins? Haven’t you read we all descended from a single common mitochondrial ‘eve’ in Ethiopia about 140,000 years ago? Haven’t you read 25% of Mongol men are direct descendants from one man: Genghis Khan’s father? Or that 1 in 12 Irishmen descend directly from one man— Niall of the Nine Hostages in 1423?( )
Or that 40% of Ashkenazi Jewish women descend from 4 women who lived only a few hundred years ago? It is clear that in genetics, only a very few leave ANY genetic legacy.

Look this up for yourself from any source you trust to see whether genetic networks follow Pareto distributions. You will see I am telling the truth.

What do you think wealth is? That you have $1,000,000,000 but die and leave it to no one as a genetic dead end legacy? Or that you survive and your ofspring also survive and reproduce?

However I THINK PERHAPS (?) you may be reading more into this statement than you should. Players within a social network will constantly change places, even though the underlying Pareto distribution remains fixed. Just because someone is at the top of a Pareto distribution does not mean he/she or his/her kin will remain there.

Over the long term, people in ‘upper rungs’ of social networks are at just as much risk as people in lower rungs (they are all subject to fat tail probabilities). People do not remain ‘at the top’ of a network for any significant period of time (though I realize this can last many lifetimes)—to think one is at the top because ‘they belong there’ or that they will ‘remain there’ IS THE ULTIMATE ILLUSION. Okie, risk is infinitely scalable. The wealthy are at just as much risk as everyone else. In fact, this is the key reason science has ’proven’ Social Darwinism is such a lie. No matter where you are on the information food chain, your risk is the same as everyone else’s, it never goes away. Social Darwinists are absolutely delusional. One doesn’t need morality to disprove their theories.

Okie said… “I’m not saying that the Pareto principle does not have some application. I just think you are taking too far.” This statement really does confuse me. Where do you think I am taking it?

Okie said… “I can assure you that Obama does not support a flat-rate income tax.” I am aware of this. I like his message of cooperation. However, of late, I have been very uncomfortable with the videos I watched of his pastor—I am undecided now.

Okie said… “The problem with the flat tax is that it is unfair because the lower income earners in society have to expend more of their resources for basic necessities such as food, shelter, energy”.

True. But even if you have a much more progressive taxation system, the same Pareto distribution will reappear over time. I will not get into why you do not see it in the Danish national wealth numbers AS BADLY as you do in the US, but trust me Pareto is there (I have many Danish friends).

Anyway, make taxes even more progressive, and if there is not social cooperation, the same Pareto problem we have today will reaper (just look anywhere in Latin America where taxes are very progressive, but no one pays them because there is no trust in the system). You will not change this distribution by playing with tax policy over anything other than a very short time. You might change the distribution from something you can measure to something you cannot, but it will reappear over time.

So keep progressive taxes—but what you may not see is how this impoverishes the poor by reducing cooperation. I am not ‘blaming the victim’, but look back to your Danish example. The real reason they are so rich is because they cooperate. They cooperate because they all see each other as peers/equals. You may think they cooperate because taxes are very progressive, but I think you are confusing the cart with the horse.

Okie said… “Wealth gets hoarded and needed capital for business formation is unavailable for new, innovative and improving technologies, which prevents products that would improve everyone's quality of life from reaching the market.”

True. This will happen no matter what you do. It will happen no matter what kind of political system or tax system you live under. The only thing that changes it are good decisions and cooperation.

Okie said… “Even if such capital is invested, the person with the concentrated wealth has a finite and limited understanding of the world. As such, the capital gets misallocated to endeavors which are less productive...or even useless. Therefore the wealth becomes wasted. Even if we extend this to the person's family, the amount of knowledge garnered is still quite finite.”

True. This will happen no matter what you do. The only thing that changes it are good decisions and cooperation.

Okie said… “To the extent that such wealth is invested in new technologies that are invented by new players, the contracts are often bought for far less than their "market value" due to the disparity of bargaining power of the wealthy participant and the non-wealthy participant.”

True. This will happen not matter what you do. The only thing that changes it are good decisions and cooperation.

Again thanks for the dialog Okie