Sunday, 6 January 2013

Dealing with demons

Blogfriend ZenPundit points out this rather superb piece, entitled Schumpeter's Demon on RibbonFarm. It sets up a novel thought experiment and plays it through to it's rather troubling (largely because of how close they are to real life) issues:
Imagine a town of a thousand people, with some mix of rich, middle-class and poor people.  The town has been ravaged by uncertain economic times.  The people live and work in a few hundred buildings: homes and workplaces. There is a general gloomy consensus that the town can only hold out for another year before nameless, inchoate horrors descend. But nobody is quite sure what those horrors are.

On this gloomy scene, a schizoid malevolent-benevolent demon appears.

The demon declares that after exactly one week, he will destroy half the buildings and kill half the people. The townsfolk can decide which buildings and people to sacrifice by marking doors and foreheads with red X’s. If they fail to do so, he will choose randomly.

But the demon also promises to leave behind a huge treasure as compensation, once he’s had his fun. He does not specify the nature of the treasure, beyond dropping a few hints about where he’s hidden it. But he promises that it will be enough to rebuild the town and its economy thrice over, put it back on the path to increasing prosperity, and raise more than enough children to replace the adults lost.
To make things more confusing, the demon throws in an exchange clause: the townsfolk can choose to trade three lives for one building, in either direction.

And to build in time pressure, he offers to trade time for either people or homes, at the exchange rate of an extra day for every additional home or every additional three people marked for sacrifice.
Most real life choices have positive and negative outcomes, as well as unforeseen elements which cannot be accounted for, so the metaphor is a strong one, and valid since it explores the mental model most of us have when it comes to decision making. That is to say react (a spectrum of activity) or defer, with each having it's own unique consequences.

In this case the consequences are as one might expect:
A town meeting is convened. The rich generously supply cheap beer. Three basic conversations get underway.
  • The Futurists: One group ignores the immediate situation and furiously sets about debating what to do with the treasure, based on the little that is known about it through the demon’s hints, and the priorities suggested by the town’s woes.
  • The Situationists: The second group ignores the promise of treasure and furiously debates the question of which buildings and lives to sacrifice, based entirely on notions of fairness, values, rights and responsibilities as understood within the existing social order.
  • The Pragmatists: And the third group, the smallest, frantically tries to merge the conversations and talk about how to distribute the impending destruction in order to leave behind the social order best able to exploit the promised treasure.
Id-superego-ego in short.
While deliberations are in progress, a few start to despair of the the debate getting anywhere.
Some of them simply sneak off and camp outside the town limits. They pray that the demon’s random malevolence will not cross those limits, but that its promised benevolence eventually will. 

These are the wannabe freeloaders looking for a heads-I-win-tails-you-lose solution.

Others bravely decide to go seek the treasure itself, based on the demon’s tantalizing hints, and steal enough for themselves outside of the bargain with the town. They meet with some success, but can never be quite sure whether they’ve found a piece of the promised treasure, or something else. Some return to town with what they’ve found, and rejoin the deliberations.

The ones who return are the entrepreneurs. The ones who never return are the anarchists.

And still others assume that the townsfolk who choose to stay will be unable to engineer anything other than a worst-case outcome. They leave, and make plans to return and rebuild after the demon is done. They find themselves waiting a lot longer than they expected to.

These are survivalists of various sorts, permanently waiting for an apocalypse that seems to be taking its time.

No conclusion is reached by the end of the week, so the townsfolk hurriedly use the time extension clause, and buy another day by sacrificing the three most drunk people, who are too drunk to notice the X being painted on their heads. When they sober up and look in the mirror, despair descends.
The cycle repeats itself, a few days at a time, depending on the number of clueless drunks around. Occasionally if there are enough drunks from the same part of town, the more sober ones mark both the drunks and their buildings with X’s, buying a lot more time at once.

And all the while, people are also being born or dying in the natural course of events. Buildings are falling down and new ones being built, implicitly changing the terms of the deal with the demon.
We see this type of behaviour in all aspects of our lives, but no more so than in politics, where decisions often carry high levels of consequence. I'm reminded of a scene from Zero Dark Thirty, where a final decision is asked as to whether a particular house in Pakistan contains Osama Bin Laden. 4 characters give their assessment, ranging from 40% - 60%, until it gets to the hero of the piece, who boldly declares (and I paraphrase) "It's 100%, well, it's 95% because I know certainty freaks you guys out". The character knows that deferral is a required option, and providing a 100% certainty means action is required.

John Stewart characterised the fiscal cliff in the following way (again, I paraphrase), "The fiscal cliff is like an asteroid, which we built ourselves, and fired at ourselves, to convince ourselves we really had to build defences against asteroids". Again, he's right, and the outcomes of the fiscal cliff deal have in the main been deferrals (although some action has been taken it is neither complete nor comprehensive).

One might look at the scenario above as a type or organisational stasis, however in reality that is illusionary, since the organisation is changing, as is the deal over time. The change however is as a natural consequence of time passing, rather than being a guided process. Indeed the longer the townspeople wait the more unknowable the outcome of whatever deal they end up making as the environment will have shifted so far that it bears no relationship to the original reality. Perhaps the terminology could be "active organisation stasis" in the active decision making ability has been shut down in favour of passive change over time.

The only way to break the demon's power is to make a final decision. This means that regardless of the outcome (worst case, the demon lied and the townspeople get nothing) the opportunity will exist to react to the situation left in the aftermath. However, that replaces the immediate gain (an unchanging and manageable situation) with the risks of an uncertain future, something decision makers are fundamentally uncomfortable with.

So, do you make a deal with the demon? Or try and live with his constant threat?
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