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The jab at the financial industry is unnecessary, but the actual point is very interesting. I first heard of this as the 'Santa Claus' argument on a forum thre

The jab at the financial industry is unnecessary, but the actual point is very interesting. I first heard of this as the 'Santa Claus' argument on a forum thread. Short version: just because you can't point at a single person and say 'he is Santa', doesn't mean that Santa doesn't exist. Despite living solely as a meme in people's heads, he has desires (make kids happy on Christmas, make kids behave), and can act on them (put presents under the tree). Those who supported this position used Microsoft as an example. 'Microsoft', like every company, is at its core an idea or a meme that everyone just accepts exists. Parts of it get written down, of course, and various people hold different parts of it in their head. Nevertheless, the company is its own entity, with its own goals and means of achieving them, yet exists only in people's heads.

pdonis 13y ago
But since Santa only exists as a meme in people's heads, Santa can't do anything without the people in whose heads the meme exists doing something. Similarly, corporations can't do anything without the people that own them and work for them doing something. So viewing corporations as quasi-autonomous agents is misleading; they can be viewed as collective agents in some respects, but in the end everything they do has to come down to some human or humans taking some actions. Basically, the author of this article is punting: he's saying the problem is corporations being "effectively independent of human control", instead of actually looking at the actual humans whose decisions and actions constitute what the corporations do.
- sutterbomb 13y ago
  I don't think he's punting. He's saying that actually looking at the actual humans is misguided, because they can and will be replaced or exchanged with no effect on the system as a whole. At the micro level, a department or even a company may change course in a noticeable way with one person being replaced. But industry wide, and society-wide, the "actual people" are mostly irrelevant to the mechanics of the system.
  - pdonis 13y ago
    they can and will be replaced or exchanged with no effect on the system as a whole Which just punts on the next question: why? Who set up the corporate structure that way? Answer: other humans. Corporations and othe large organizations don't come into existence by magic, and they don't develop structures that make people, even at the CEO level, into replaceable parts, by magic. Human beings have to make choices for those things to happen. Human beings can also make choices to change those structures, if that is what needs to be done. But to do that you have to stop ignoring the fact that it is human agency, not some amorphous "corporate" agency, that is causing the problems in the first place.
    - JoeAltmaier 13y ago
      BUt corporations don't behave like human beings; they are not run by moral human motives. You keep your job at a corporation by promoting the corporate interest. That means profits, efficiency, etc. If you fail to make your numbers, you'll be replaced by someone who will. So corporations are definitely NOT run by humans behaving sensibly, but instead by a strange machinery specific to the corporate ecosystem.
      - pdonis 13y ago
        But corporations don't behave like human beings Corporations don't "behave" at all. What you really mean is that human beings behave differently when they work for corporations: You keep your job at a corporation by promoting the corporate interest. That's true, but that by itself doesn't make the behavior immoral. If the corporate interest is best served by making products that people actually want or need, and selling them at a fair price, then keeping your job by promoting the corporate interest is perfectly moral. If, on the other hand, the corporate interest is best served by something else, then we, as humans, need to revisit the whole issue of corporate governance: what is it that puts corporate interests out of alignment with our interests as human beings and members of society? And you can't just say "get rid of corporations" because corporations are necessary: without them we wouldn't have enough food, wouldn't have houses, wouldn't have cars, wouldn't have computers or the Internet, etc., etc. None of us can survive purely by our own efforts; we need to be able to specialize and trade, and we need to engage in collective projects that required the coordinated efforts of many people. Corporations are a necessary part of doing that. The fact that the legal powers we give corporations have been abused does not mean all corporations abuse them. And the abuse doesn't happen because corporations magically do things without humans doing things; the abuse happens because some humans use corporations as tools to prey on other humans instead of providing value.
- denom 13y ago
  Imagine a solitary actor in a large corporation who is make a choice between x and y. She is presented with the precise set of inputs like emails, voice calls, water cooler discussions which lead her to choose y. She is not forced to make the decision, but it comes naturally, quickly. Now imagine the result of that decision y being fed back into the corporate decision making structure. Thousands of people all "naturally" coming to their respective conclusions y', y'', y''', ... etc. This is corporate culture and history. Now imagine some external driver of change appears on the horizon. How will the company respond? How will individuals within that company respond? I don't think it is so clear how or why people make the choices that they do. In terms of right and wrong, the law identifies the act, but justice identifies with larger patterns; it is elusive yet tangible.
  - pdonis 13y ago
    I don't think it is so clear how or why people make the choices that they do. That's often true; but that doesn't mean people aren't making choices. It just means they're making uninformed, and often bad, choices. And to fix the problem, they need to make better choices. Pretending that it's not human choice at all, but some "corporate agency", that is causing the problems is not the way to fix them.
negativity 13y ago
With regard to The Santa Clause Argument, see also: Masamune Shirow's fictionalized premise of what he termed as a "Stand Alone Complex." https://en.wikipedia.org/wiki/Philosophy_of_Ghost_in_the_Shell#Stand_Alone_Complex https://en.wikipedia.org/wiki/Philosophy_of_Ghost_in_the_She... Long story short: People hear about an event or idea, which did not happen or does not exist, and aspects of that thing become a part of reality, purely as an extension of the collective psychological reaction of those who become aware of the rumor or myth.
fiatmoney 13y ago
I'd say the financial industry is a perfect example. There's a nifty result that maintaining market efficiency is an NP-complete problem, and the standard assumption is that markets are solving this continuously and more or less autonomously in a way that don't depend on any particular actor. Krugman's model of currency crises for instance ends up with "markets" as a kind of Cthulu-esque omnipotent, amoral, and inscrutable actor.
- another 13y ago
  ... with "assumption" used in its "spherical cow" sense, of course [1][2][3]. [1] http://en.wikipedia.org/wiki/NP-hard http://en.wikipedia.org/wiki/NP-hard [2] http://en.wikipedia.org/wiki/Local_optimum http://en.wikipedia.org/wiki/Local_optimum [3] Making this point in the service of Internet Clarity. I don't think we disagree (unless I've misread).
mortenjorck 13y ago
The author is certainly misguided in imagining that finance produces no value, but the difference is that McDonalds can't grow itself and broaden its influence by eating its own Quarter Pounders, while Goldman Sachs can do that by leveraging its assets through its own financial instruments.
- dnautics 13y ago
  Goldman Sachs also aggressively leverages connections to government. eg http://www.huffingtonpost.com/2009/06/02/government-sachs-goldmans_n_210561.html http://www.huffingtonpost.com/2009/06/02/government-sachs-go...

pdonis 13y ago

But since Santa only exists as a meme in people's heads, Santa can't do anything without the people in whose heads the meme exists doing something. Similarly, corporations can't do anything without the people that own them and work for them doing something. So viewing corporations as quasi-autonomous agents is misleading; they can be viewed as collective agents in some respects, but in the end everything they do has to come down to some human or humans taking some actions. Basically, the author of this article is punting: he's saying the problem is corporations being "effectively independent of human control", instead of actually looking at the actual humans whose decisions and actions constitute what the corporations do.

sutterbomb 13y ago
I don't think he's punting. He's saying that actually looking at the actual humans is misguided, because they can and will be replaced or exchanged with no effect on the system as a whole. At the micro level, a department or even a company may change course in a noticeable way with one person being replaced. But industry wide, and society-wide, the "actual people" are mostly irrelevant to the mechanics of the system.
- pdonis 13y ago
  they can and will be replaced or exchanged with no effect on the system as a whole Which just punts on the next question: why? Who set up the corporate structure that way? Answer: other humans. Corporations and othe large organizations don't come into existence by magic, and they don't develop structures that make people, even at the CEO level, into replaceable parts, by magic. Human beings have to make choices for those things to happen. Human beings can also make choices to change those structures, if that is what needs to be done. But to do that you have to stop ignoring the fact that it is human agency, not some amorphous "corporate" agency, that is causing the problems in the first place.
  - JoeAltmaier 13y ago
    BUt corporations don't behave like human beings; they are not run by moral human motives. You keep your job at a corporation by promoting the corporate interest. That means profits, efficiency, etc. If you fail to make your numbers, you'll be replaced by someone who will. So corporations are definitely NOT run by humans behaving sensibly, but instead by a strange machinery specific to the corporate ecosystem.
    - pdonis 13y ago
      But corporations don't behave like human beings Corporations don't "behave" at all. What you really mean is that human beings behave differently when they work for corporations: You keep your job at a corporation by promoting the corporate interest. That's true, but that by itself doesn't make the behavior immoral. If the corporate interest is best served by making products that people actually want or need, and selling them at a fair price, then keeping your job by promoting the corporate interest is perfectly moral. If, on the other hand, the corporate interest is best served by something else, then we, as humans, need to revisit the whole issue of corporate governance: what is it that puts corporate interests out of alignment with our interests as human beings and members of society? And you can't just say "get rid of corporations" because corporations are necessary: without them we wouldn't have enough food, wouldn't have houses, wouldn't have cars, wouldn't have computers or the Internet, etc., etc. None of us can survive purely by our own efforts; we need to be able to specialize and trade, and we need to engage in collective projects that required the coordinated efforts of many people. Corporations are a necessary part of doing that. The fact that the legal powers we give corporations have been abused does not mean all corporations abuse them. And the abuse doesn't happen because corporations magically do things without humans doing things; the abuse happens because some humans use corporations as tools to prey on other humans instead of providing value.
denom 13y ago
Imagine a solitary actor in a large corporation who is make a choice between x and y. She is presented with the precise set of inputs like emails, voice calls, water cooler discussions which lead her to choose y. She is not forced to make the decision, but it comes naturally, quickly. Now imagine the result of that decision y being fed back into the corporate decision making structure. Thousands of people all "naturally" coming to their respective conclusions y', y'', y''', ... etc. This is corporate culture and history. Now imagine some external driver of change appears on the horizon. How will the company respond? How will individuals within that company respond? I don't think it is so clear how or why people make the choices that they do. In terms of right and wrong, the law identifies the act, but justice identifies with larger patterns; it is elusive yet tangible.
- pdonis 13y ago
  I don't think it is so clear how or why people make the choices that they do. That's often true; but that doesn't mean people aren't making choices. It just means they're making uninformed, and often bad, choices. And to fix the problem, they need to make better choices. Pretending that it's not human choice at all, but some "corporate agency", that is causing the problems is not the way to fix them.

negativity 13y ago

With regard to The Santa Clause Argument, see also: Masamune Shirow's fictionalized premise of what he termed as a "Stand Alone Complex." https://en.wikipedia.org/wiki/Philosophy_of_Ghost_in_the_Shell#Stand_Alone_Complex https://en.wikipedia.org/wiki/Philosophy_of_Ghost_in_the_She... Long story short: People hear about an event or idea, which did not happen or does not exist, and aspects of that thing become a part of reality, purely as an extension of the collective psychological reaction of those who become aware of the rumor or myth.

fiatmoney 13y ago

I'd say the financial industry is a perfect example. There's a nifty result that maintaining market efficiency is an NP-complete problem, and the standard assumption is that markets are solving this continuously and more or less autonomously in a way that don't depend on any particular actor. Krugman's model of currency crises for instance ends up with "markets" as a kind of Cthulu-esque omnipotent, amoral, and inscrutable actor.

another 13y ago
... with "assumption" used in its "spherical cow" sense, of course [1][2][3]. [1] http://en.wikipedia.org/wiki/NP-hard http://en.wikipedia.org/wiki/NP-hard [2] http://en.wikipedia.org/wiki/Local_optimum http://en.wikipedia.org/wiki/Local_optimum [3] Making this point in the service of Internet Clarity. I don't think we disagree (unless I've misread).

mortenjorck 13y ago

The author is certainly misguided in imagining that finance produces no value, but the difference is that McDonalds can't grow itself and broaden its influence by eating its own Quarter Pounders, while Goldman Sachs can do that by leveraging its assets through its own financial instruments.

dnautics 13y ago
Goldman Sachs also aggressively leverages connections to government. eg http://www.huffingtonpost.com/2009/06/02/government-sachs-goldmans_n_210561.html http://www.huffingtonpost.com/2009/06/02/government-sachs-go...