Saturday, November 14, 2015

The economics of violence

Organizations – religions, countries and country clubs, operate on a simple idea. Individuals in a system have a put option with a limited exercise horizon and if the system can coax an individual to exercise it prematurely for the presumed benefit of the system, then the managers of the system could effectively do anything they want. Since the objective function of the system itself is fuzzy and ill defined, managers do not need to show optimality and they can use anecdotes and unproven hypotheses, to elicit premature and suboptimal exercise from a small number of individuals. The act of violence, perpetuated by closed systems, autocratic and strategic, with benefits accruing to a small percentage of the members, require the ones on top convincing a few to engage in irrational acts by demonstrating the asset they hold is wasting and a premature extinguishing of their own lives is optimal, if not for themselves but the system itself.

For hundred thousand years, humans killed and mutilated their way to glory, aided and abetted by clan leaders, fully aware of what they were doing. If the value of an individual demonstrably improves, then it will diminish the ability of clan leaders to force premature exercise of put options held by the individual. Education, the only tool, that could improve asset values in closed systems, may be the last hope for humans, slipping away to oblivion at the height of their ascendancy. Education and knowledge have been stagnating, however, with a few drinking from fire hydrants and others infinitely seeking the illusive mirage. While some in the valley sleep dreaming about the singularity and the cure for death, there are seven billion elsewhere, without a clue what tomorrow is going to bring.

The foundations, sitting on billions still debating whether to provide white or pink nets to cure malaria, may have to rethink their strategy. If they really want to cure the ills of the world, they have to improve the knowledge content of humans.