Occam's Machete Blogs

On the theory that few people will be interested in both Machine Learning and Cosmology I’ve split the blog in two.

There is much to admire about Ayn Rand’s philosophy but I find one of her ideas particularly dangerous and I mention it here because it has something to do with the Mathematics of group opinion. It is one of her central pillars–the idea that private companies can be trusted with virtually all social services. This is an idea that some political conservatives like a lot. They want to see corporations in charge of providing education, roads, police, and about any other service we expect for an integrated society with the effect of making government smaller by orders of magnitude. Here again I don’t see a problem with this in general, the real question is about control and who makes decisions that have wide effect.

I think of India when imagining the extremes of this idea. There you can find a skyscraper built in the middle of a slum. The building is clean and modern. It is built by a corporation who has filled it with important infrastructure like water (storage or wells privately maintained), electricity (generators), stores for worker needs, even sleeping quarters in some cases. Basically most of what you need as an employee is there. Nothing wrong with this I suppose, Ayn would say–if you don’t like it get a job elsewhere–and there is some truth in that.

What I find disturbing about this vision of corporations as a model for providing citizens with virtually all services is that corporations are ruled by the principal of one-dollar-one-vote. In corporate governance the number of shares you have determines your voting power in policy maters. This results in the richest controlling the corporations. She might point out that the major shareholders are in some way better able to govern the corporation. Even though she can make a good argument for successful business people creating successful businesses, she cannot apply that argument to their descendants. The subsequent generations of the wealthy who inherited large blocks of shares haven’t demonstrated anything by survival–they just own things.

Another problem with her vision is that in a world where every available service is provided by these corporations is that it leads to a permanent advantage handed to the top few percent since they control the policies of their (often inherited) corporations. It seems obvious that this accumulation of power in the hands of the few needs to be countered by something.

Why?

I’m not going to argue that the wealthy don’t deserve their wealth, which seems nonsense to me. I think that too much power in the hands of corporations is a problem because only a small number of people control their policies and the control is usually passed down by birth right, involving no demonstration of merit. This leads, in Rand’s perfect world, to an oligarchy where only a few people control policy and usually pass this control to their offspring. It’s starting to sound like other experiments with oligarchies, like Soviet and Chinese style Communism, the late Roman Republic, Feudal Monarchies, etc. The problem with all of these systems is that too few people are making all the big important decisions and are in control of virtually all services.

The central problem here is that the number of people is too small to make good decisions and the people not lucky enough to be born into this minority have large disadvantages in social mobility. It doesn’t matter that dimwits are born rich as long as smart, hard working people can achieve and influence policy equally with the dimwits.

Why?

It may be a good first policy to be taken on “faith”. But I don’t like reliance on faith as an answer to important questions because it’s basically an admission of ignorance. There is another reason that control of the few is bad. A fair amount of evidence points to the fact that group decisions are better in average than individual decisions. If you ask every person at a mall to guess how many beans are in a container almost every person will be wrong. But ask enough and the average of their guesses will get really close to the right answer–every time. This is because guesses like all human opinions follow a normal distribution, the famous bell-shaped-curve. Group derived opinions are the safest bet. This is the central pillar of democracy.

To put it succinctly: One-man-one-vote leads to better social policies than one-dollar-one-vote. Wealth has nothing to do with it though. It’s an issue of how many people get to weigh in on decisions that affect society. I’m not saying that we should vote for all decisions, this is an idiotic extreme that doesn’t deserve a reply. I am saying that decisions that affect society as a whole should be made or be vetoable by the society they affect. And so Ayn Rand is wrong.