Positive sum principles increase the opportunity set
/By Duncan Anderson. To see all blogs click here.
Reading time: 4 mins
Summary:
Good (positive sum) principles increase the opportunity set
Bad (negative sum) principles decrease the opportunity set
No principles is anarchy and therefore a very small opportunity set.
Rearticulation delectation (i think I’m going to try and include more of these): often the 1st order outcome of a principle is to restrict something, but done well this rectriction has 2nd order benefits of increasing the opportunity set way more than the 1st order restrictions.
Rule vs Principle:
Rule = no interpretation, follow to the letter
Principle = interpretation required, figure out how to apply for a positive sum outcome
All successful societies they know of have had rules / principles.
So it’s not a question of whether or not to have rules / principles.
It’s a question of what they should be and how to regulate them.
A few examples of rules / principles:
That you need to pay taxes
That you discuss with your manager your plan for the week
There are speeding laws
That you make every effort to attend company all-hands
People often see first that a principle is ‘stopping’ something from happening. People often miss that what is stopped hopefully allows much more to occur than what is being stopped (ie is positive sum).
As with almost everything, there is a 1st order outcome that is immediately visible to a principle. Zooming out and looking beyond, there is often a 2nd order outcome, sometimes even a 3rd or 4th etc. Our aim is to think of more than just the 1st order outcome and optimise for the greater good ie. positive sum.
We have FAR more rules / principles for society today than we had 200 years ago. Now lawyers end up specialising in just one part of the law (eg mergers and acquisition, employment law, litigation, etc).
200 years ago in western europe there were 400 jobs, there are now 500,000+ and growing in a first world country. There are many more laws (restrictions) than there were 200 years ago… but there are also now many more things one can do than 200 years ago!
There is almost nothing I want to do that I can’t do in Australia! And there is way more to do than there was 10 years ago! THIS IS AWESOME!!!!
In my opinion things are improving… however I feel the overall sentiment is that society is regressing :(.
At a company you normally need to speak with your manager about your plan for the week.
This means you can’t just do whatever you want whenever you want. But done well it means:
that you have a second opinion on where to best spend your time and thereby spend your time better, and
that you can coordinate better across the company than if no one speaks to anyone about their plans.
In other words, done well speaking with your manager about your plan for the week is a better outcome than not doing so.
An analogy: a football team has a coach. Done well having a coach means the team performs better than not having a coach.
Or… doing so done well improves the outcome for the ‘common good’ and is therefore in your interest.
You have to pay taxes.
But doing so allows the government to fund healthcare, welfare, police, education etc.
If we didn’t have this we’d have much more unrest in society. Unrest does not allow for progress!
Having free education (vs not) allows many more people to reach their potential. Doing this grows the economy and helps with stability. This means everyone wins.
So done well your taxes:
allow you to earn more in the future than if you didn’t pay them. Wait what, so me paying taxes = me earn more? IMO yes if your taxes are spent well.
AND it helps others contribute more (eg through your taxes funding healthcare, education, etc) so they then pay more taxes, so the economy grows, so you can earn more! Wait what, so me paying taxes => others reach more of their potential => earn more => economy grows more => I earn more. IMO yes if your taxes are spent well.
“Democracy without education is mobocracy.” Churchill.
‘Mob rule is anarchy.’ Plato.
Taxes done well = improves the common good and is therefore in your interest… but you might just see the government taking part of your salary!
Comment:
Explain why the 1st order outcome of a principle which can be viewed as restrictive ideally has a 2nd order outcome of increasing the possibility set way more than the 1st order decrease!
If you don’t do this, often people will just see what is being ‘stopped’ and will likely not be supportive of the ‘1st order restrictive principle’!
IMO we don't live in a nanny state. We live in the best state humanity has ever been in!
IMO overall society seems to be moving forward and upgrading principles.
Don’t hate principles that stop you from doing things. Hate principles that decrease the opportunity set, and love principles that increase it!
Haters gonna hate, players gonna play… in a system with good (positive sum) principles!