This will be fairly unstructured and informal, but hopefully (thankfully, for my readers lol) my last on the Johns (Nash and Rawls) for a bit.
John Rawls wrote, "There is no reason to suppose ahead of time that the principles satisfactory for the basic structure hold for all cases," highlighting an important aspect of his theory of justice; it pertains to the criticism of (John) Nash-style rational choice by emphasizing the contextual nature of principles and the need to consider specific cases separately– critiques of this nature originate with its applicability to, for example, its first and only real test, which was the Cold War, and as historians such as myself have pointed out, so to did anti-war voices contemporaneous with the implementation of Nash-style games in war planning (i.e. Noam Chomsky, but also fellow RAND analyst decades later, Daniel Ellsberg) that there were deep problems with the ability to reach an equilibrium point (where the position of the players cannot be improved, with both satisfied by their strategy given the other players' strategy, meaning they can move cooperatively for a potentially suboptimal but nonetheless adequate compromise) if the premise of the terms of the players, or the framing of their motives, were dishonest, or otherwise not as rational as the framing would suggest (meaning that that the utility gain of the outcome would be meant to favor one party in material reality, but not inside the renegotiated metaphysical reality of the game; is the US involved for the reasons it says it is, is the USSR behaving in the manner the DoD says it is, these are examples contrary to the facts that factor heavily into war planning by the US)– it's meant to manufacture an outcome and ascribe motive and strategy after the fact to fit it (by war planners providing this data to theorists, not Nash setting up a bad game, just a limited and deeply flawed one outside of economics).
Rawls argues that the principles governing the basic structure of society, which include fundamental political, economic, and social institutions, may not necessarily be directly applicable to every individual situation or specific policy choice– this calls for, rather than neoliberal force of resolution at the expense of procedural correctness in assessing material reality and the root cause of a social problem, resolution of the manifested symptom. The principles that work well for the overall structure of society may not necessarily hold true in all circumstances or when addressing particular issues, as a result, as it is inherently limited by manipulating the metaphysical reality around the problem to make exclusion inherent as a byproduct– an example of such policy is means testing, which tends to exclude some of the most likely to need it for the purpose of claiming to exclude the tiny theorhetical minority of those who do not who may pursue a benefit anyway, which even if it were an overage the richest nation in the world could not afford, is objectively an unjust resolution and an irrational response to using policy to solve a social problem, as it needlessly deprives as a function of its use.
In the context of Chomsky's criticism of Nash-style rational choice, this quote aligns with the notion that rational choice theory's assumptions and simplifications may not universally apply to complex real-world situations; it emphasizes the limitations of rational choice theory in capturing the intricacies of social, political, and historical contexts.
Such a critique supports that a Rawlsian perspective would reject a view that would govern the overall structure of society, such as those based on rational choice theory, as potentially not adequately capable of addressing the specific complexities and nuances of different cases, and that we need to carefully consider specific context regarding the broader principles of justice while recognizing that the application of principles may require adaptation and consideration of situational factors underscoring the importance of contextualizing principles and acknowledges that what works well for the basic structure of society may not be universally applicable.
This is, to be clear, not a criticism of Nash's work, but of its misappropriation outside of appropriate context, and when applied outside of good faith; in geopolitics, in this instance, it was used as a propaganda tool to game out nuclear brinksmanship, but using the flawed premise of goodies and baddies with distinct motives, and ones that did not find evidence outside of media narrative to support it. Chomsky's critique revolves around the assumptions and limitations of rational choice theory when applied to real-world geopolitical circumstances such as this applied example, arguing that rational choice theory, which assumes individuals make decisions based on rational calculations to maximize their self-interest, overlooks crucial factors and simplifies complex real-world dynamics, instead prefering the assumption of perfect knowledge, the exclusion of external influences (some, as I've said, acting in bad faith, and have utility gain from said malfeasance), and the narrow focus on individual decision-making divorced from social, political, and historical contexts, and this bears some implications for its application in such a flawed and specific way as instructive in the execution of foreign policy:
- Real-world geopolitical interactions involve complex power dynamics, asymmetries, and historical cascades of the same that go beyond the scope of rational choice theory which while valuable in analyzing strategic interactions, does not find itself capable of critical analysis of multifaceted nature of power and influence in geopolitical scenarios because of the above assumptions required for the use of Nash's theories in this manner (something Nash often, himself, did not emphasize about the use of his work, prefering to use implementations where these assumptions were a given, like economics, which we'll discuss in a moment).
- The importance of sociopolitical and cultural factors that shape decision-making and behavior are rejected by rational choice theory which tends to overlook these contextual aspects, leading to a partial understanding of real-world circumstances, which game theory more broadly again cannot account for without using the above unknown contextual assumptions which rarely, if ever, exist in a way that is useful for a Nash equilibria to occur in geopolitics without an actor like media or state actors defining them, in which case, the entire exercise is tainted as a quasi-scientific process.
We can, as I said, consider the Cold War as an example where it can be said that rational choice theory, if strictly applied, might analyze the conflict purely as a strategic game between two rational actors seeking to maximize their self-interest, but this reductive and simplistic angle overlooks deeper historical, ideological, and geopolitical factors that influenced decision-making, not to mention denied, in practice, the material reality of how the actors had behaved– the US was often the aggressor, and the Soviet Union often acting to de-escalate without capitulating to the subordinate position as was the case in the Cuban Missle Crisis, in which case, compromise was met when, in correspondances between President Kennedy and Nikita Khruschev spoke frankly about, if not the admitted material conditions, the metaphysics that limited peace in that situation, and from there, not the stated media narrative of unprompted and unilateral aggression on the part of the Soviets directly threaning the US, a suboptimal (as in conflict continued more broadly) outcome was achieved (the removal of missles from Cuba with Cuba at least in the near term maintaining defenses by retaining tactical nuke capability, and the reciprocal removal of missles in Turkey). Consider the line being pushed about the nuclear capability of the parties involved before that point, however, by state actors and a cooperative media; the 1960 election hinged on Kennedy as a bigger Cold Warrior than Richard Nixon, who could not speak to the real conditions of nuclear armament and got bounced by Kennedy over his "weak" position on communism and armament gaps because Kennedy had no such restriction on his voicing of plans for, among other things, the forthcoming Bay of Pigs invasion which had been underway since the late 1950's, and both of these men knew, but the media was a secured vehicle for promoting an alternative metaphysical reality and thus different set of knowledge from which outcomes could be gamed from the reality that there was no gap, and that the communists had not aggressed in the way that had been asserted to the public.
But at this point, let's turn toward where this Nash-type theorization is most useful, in analyzing economics, and further in, questions of if, and how, decentralization can serve the broader interests of justice in the ways these theories have proven most useful. Rawls wrote, "While the distribution of wealth and income need not be equal, it must be to everyone's advantage, and at the same time, positions of authority and offices of command must be accessible to all. Injustice, then, is simply inequalities that are not to the benefit of all."– The concept of Nash equilibrium deals with strategic decision-making in situations involving multiple players, while Nash's proposed solutions to questions of economic justice such as his perfect money proposal relates to the field of economics and monetary systems' role in forging just societies as a whole. Nash's perfect money proposal, often referred to as "ideal money," was put forward in a paper he published in 1995, long after his initial work on game theory, and reflected a certain amount of acceptance of game theory's applied benefits in terms of existing policy, rather than strategic outcomes of proposed policy. His proposal aimed to create a stable and globally recognized currency system that could help mitigate issues related to inflation, fluctuating exchange rates, and government interference; the currency would have a stable value and be widely accepted, and would be based on a fixed mathematical formula to determine the money supply, thus avoiding discretionary control by central banks.
As far back as his time at RAND, Nash was concerned with the limitations of his work and it is likely that the documents like "Parallel Control" memorandum explores some aspect of control theory, a field that deals with systems and processes that can be influenced or regulated, that perhaps signals even then that his work would have oriented in that direction if not for his mental illness derailing his career for nearly 40 years. One example of control theory that could have been relevant to Nash's work is the concept of feedback control systems; a design that, consistent with the memorandum's overall objective of using computation for optimization of systems under guidance, and the design of such computers for this purpose. We see similar cybernetically-assisted centralized planned economies like the Soviet Union, or more decentralized models like Cybersyn a few decades in the future from Nash's work, operating in a different realm than feedback loops, but using computation in an optimization capacity for planned economics rather; in the context of economics or game theory, control theory can be applied to understand how individuals or organizations adjust their behavior based on the outcomes or feedback they receive. For instance, in an economic market, the prices of goods or services can be considered as control variables that are adjusted based on the feedback from supply and demand dynamics.
Nash's contributions to game theory, particularly the concept of Nash equilibrium, can be seen as a form of control theory in the sense that it examines how individuals or players adjust their strategies based on the feedback they receive from the choices made by others, even if the theory itself would not play a big role in his own proposed solutions by the time of his return to active work in the 1990's, thoroughly attempt to articulate and beginning with understanding these dynamics are crucial for analyzing and predicting outcomes in complex systems, including economic markets, where the actions of multiple agents are interdependent.
A contemporary validating axis for the rigor of Nash's work in this area, distinct from the work he is best known for, is that there's a theory that, despite his advanced age and not being notable for the requisite computer science involved, John Nash is the creator of Bitcoin, the pseudononymous Satoshi Nakamoto, and part of the argument for Nash being this figure is their belief that the Bitcoin paper shares similarities with Nash's ideal money, despite the similiarities ending very shallowly and quickly as a result: Regarding the potential overlap between Nash's ideal money proposal and the Bitcoin paper, it's important to note that there are some conceptual similarities, but these do not provide substantial non-speculative evidence; for example, noth proposals aim to address issues related to currency stability and the role of central authorities, but the similiarities, again, really end there.
Nash's ideal money proposal, as mentioned earlier, suggests a stable and globally recognized currency system based on a fixed mathematical formula to determine the money supply, reducing discretionary control by central banks. Bitcoin, on the other hand, is a decentralized digital currency system that operates on a peer-to-peer network without the need for intermediaries or central authorities (Nash's conception of decentralization still being rooted in intermediary dependence as an ethical regulator, to borrow a phrase from cybernetic governance). It incorporates cryptographic principles to ensure security and enables transparent and efficient transactions.
Despite sharing concepts of stability and reducing centralized control (into non-existence, in the case of Bitcoin; a vision that has largely fallen completely by the wayside), it's important to note that the underlying technological ethos, mechanisms of operation logically, and implementation of Nash's ideal money and Bitcoin are fundamentally different. This, however, still validates the basic design of the logic of a Nash-type proposal in addressing a complex circumstance where perfect knowledge (observing economic conditions and probabilsitic market behavior) is possible, and (from the perspective of the designer) more just (depending on what that means to the designer) economics are possible, gamable, and can be assisted by technology, for better or worse.
We can compare, here, the role of varying levels of centralization where computer-assisted governance can be applied for control flow of economic factors: we can evaluate the technical distinctions between centralized examples such as the Soviet Union and the People's Republic of China, partially decentralized proposals like Cybersyn in Chile, which utilized technology to automate control measures, and the thoroughly decentralization-oriented Nash-type theories:
The emphasis was on stability, reducing discretionary control by central authorities, and addressing issues such as inflation.The Soviet Union and the People's Republic of China represent examples of centralized cybernetic governance attempts. These systems aimed to employ technological and computational tools to gather data, analyze economic indicators, and make decisions at a central level. In these examples, decision-making and control were concentrated at a central authority. Data was collected from various sources (and the real-time set of data is called in cybernetics "the variety set"), and the central authority used it to make decisions regarding resource allocation, production targets, and economic planning. The implementation of control measures and policies in centralized systems was carried out in a top-down manner, with directives flowing from the central authority to lower levels of the economic hierarchy. Centralized cybernetic governance often lacked market mechanisms and relied heavily on centralized planning and resource allocation. Cybersyn, proposed in Chile during Salvador Allende's presidency, aimed to combine cybernetics and decentralized decision-making. It aimed to create a networked system that would enable real-time information flow and participatory decision-making. Cybersyn aimed to distribute decision-making authority and enable participation at various levels of the economic system. It emphasized the importance of feedback loops and timely information exchange between different entities. Cybersyn utilized telex machines and a networked system to gather and transmit data between different entities, enabling quick decision-making and information sharing. The Cybersyn proposal incorporated market mechanisms to a certain extent, allowing for price signals and market forces to influence decision-making.
Nash's ideal currency proposal and his economic theories primarily focused on stability and reducing centralized control, while cybernetically-assisted governance systems sought to utilize technology for decision-making and control measures. Centralized cybernetic governance examples exhibited a top-down approach, centralized planning, and limited market mechanisms. In contrast, decentralized proposals like Cybersyn aimed to distribute decision-making authority and incorporate market mechanisms. Nash's ideal currency proposal did not specifically address cybernetic governance but concentrated on stability and reducing discretionary control, which could have implications for both centralized and decentralized systems.
Returning to the question of whether or not justice is served by this, a possible Rawlsian critique of Nash's ideal money and decentralization would likely focus on the principles of justice and fairness as defined by a system that maximizes the well-being of the least advantaged members of society: From a Rawlsian perspective, the concept of ideal money would be evaluated based on its potential impact on socioeconomic inequalities and the distribution of resources. Rawls emphasizes the need for economic arrangements that benefit the least advantaged members of society. A Rawlsian critique might question whether Nash's ideal money sufficiently addresses the concerns of wealth disparities and whether it adequately redistributes resources to benefit those in need. With regard to decentralization as a whole, Rawlsian principles of justice also call for a fair distribution of resources and opportunities, while decentralization, in its various forms, can potentially impact the distribution of power and resources within a society and such a critique would examine whether decentralization, as proposed by Nash or in general, promotes or hinders fairness and equality. It would consider whether decentralized systems adequately protect the rights and well-being of the most vulnerable members of society. This can likewise be analyzed posing further questions from Rawls: One key concept in Rawls' theory is the "veil of ignorance," which suggests that decisions about societal arrangements should be made without knowledge of one's own position or advantages in society, and we might begin with the question of whether Nash's ideal money or decentralized systems adequately account for the principles of justice behind the veil of ignorance. It would assess whether these proposals would be deemed fair and just if decided upon from an unbiased, impartial perspective, which Nash argues it does to an extent, or at least one intending to be stable and thereforce less volatile, that taken using existing market knowledge, could have positive influences on securities that are impacted by market volatility as a measure of its value, but fails to address the myriad issues of social justice with such an economy in the first place.
Rawls emphasizes that while the distribution of wealth and income does not necessarily need to be equal, it must be to everyone's advantage. From a Rawlsian perspective, the focus is on ensuring that inequalities in the distribution of wealth and income are structured in a way that benefits the least advantaged members of society. In the context of Nash's ideal money, it would be crucial to examine how it addresses the distribution of wealth and income and whether it aligns with Rawls' principle of benefiting all members of society, which much make central as well the importance of accessible positions of authority and offices of command; a just society would secure that individuals have equal opportunities to hold positions of authority and exercise decision-making power. When assessing Nash's ideal money, it would be essential to consider whether it provides equal access to positions of authority and whether it promotes a fair distribution of power and influence in the objectives of such policy more broadly in developing said control system and to what end its regulation (ethical, from a cybernetic perspective, but also from the perspective of systems design) would be derived.
Injustice arises when inequalities are not to the benefit of all. Inequalities can be deemed justifiable if they contribute to the well-being of the least advantaged members of society, and we're left asking if such a system is capable of doing that when regarding currency as modular as a reform measure in today's economy, rather than the basis of a new economy, necessitating what is arguably (demonstrably) the needful outcome of any challenge to the prevailing order.