European Tribune - Community, Politics & Progress.

Ecology Economics, Environmental Economics and Free Market Environmentalism. Kuznets Curves.

by Ronald Rutherford
Tue Mar 9th, 2010 at 06:21:50 PM EST

Recently I had an interesting conversation on Ecology Economics, Environmental Economics and Free Market Environmentalism but like a lot of good things it came to a crashing end. I find the people at ET to be much more open minded as well as informed which I hope can lead to some fruitful discussions here.
Let me start with a link to The Prize in Economics 2009 - Press Release for the award given to Elinor Ostrom.

Elinor Ostrom has challenged the conventional wisdom that common property is poorly managed and should be either regulated by central authorities or privatized. Based on numerous studies of user-managed fish stocks, pastures, woods, lakes, and groundwater basins, Ostrom concludes that the outcomes are, more often than not, better than predicted by standard theories. She observes that resource users frequently develop sophisticated mechanisms for decision-making and rule enforcement to handle conflicts of interest, and she characterizes the rules that promote successful outcomes.

One broad category that Ostrum studies under is called common goods. I could not find any stand alone papers by Ostrom but did find an introductory chapter in a book entitled Understanding Knowledge as a Commons; From Theory to Practice, Edited by Charlotte Hess and Elinor Ostrom. Starting on page 4 under the section "Study of Traditional Commons" seems to be the best overview of her theories as I have seen so far. {Please add more if you can find or know of any other source.} This is an excerpt of that section.

Commons analysts have often found it necessary to differentiate between a commons as a resource or resource system and a commons as a property-rights regime. Shared resource systems--called common-pool resources--are types of economic goods, independent of particular property rights. Common property on the other hand is a legal regime--a jointly owned legal set of rights (Bromley 1986; Ciriacy-Wantrup and Bishop 1975). Throughout this book, the more general term commons is preferred in order to describe the complexity and variability of knowledge and information as resources. Knowledge commons can consist of multiple types of goods and regimes and still have many characteristics of a commons.
Potential problems in the use, governance, and sustainability of a commons can be caused by some characteristic human behaviors that lead to social dilemmas such as competition for use, free riding, and overharvesting. Typical threats to knowledge commons are commodification or enclosure, pollution and degradation, and nonsustainability.
<Snip>
Self-organized commons require strong collective-action and selfgoverning mechanisms, as well as a high degree of social capital on the part of the stakeholders. Collective action arises "when the efforts of two or more individuals are needed to accomplish an outcome" (Sandler 1992, 1). Another important aspect of collective action is that it is voluntary on the part of each individual (Meinzen-Dick, Di Gregorio, and McCarthy 2004). Self-governance requires collective action combined with "knowledge and will on the one hand, and supporting and consistent institutional arrangements on the other hand."3 Social capital refers to the aggregate value of social networks (i.e., who people know), and the inclinations that arise from these networks for people to do things for each other (i.e., the norms of reciprocity) (Putnam 2000). Throughout this book we will see these three elements--collective action, selfgovernance, and social capital--frequently in play.
<Snip>
One of the truly important findings in the traditional commons research was the identification of design principles of robust, long-enduring, common-pool resource institutions (Ostrom 1990, 90-102).
These principles are

Clearly defined boundaries should be in place.

Rules in use are well matched to local needs and conditions.

Individuals affected by these rules can usually participate in modifying the rules.

The right of community members to devise their own rules is respected by external authorities.

A system for self-monitoring members' behavior has been established.

A graduated system of sanctions is available.

Community members have access to low-cost conflict-resolution mechanisms.

Nested enterprises--that is, appropriation, provision, monitoring and sanctioning, conflict resolution, and other governance activities--are organized in a nested structure with multiple layers of activities.

I think from that I get a good idea what Ostrom's models are based upon. The ISEE {The International Society for Ecological Economics} also had a press release regarding Ostrom's Noble Prize at The 2009 Nobel Prize and the Coming of age of Ecological Economics.

Ecological economists long have cherished Elinor Ostrom's powerful intellect and constructive camaraderie. She serves on the editorial board of Ecological Economics, and has published in Ecological Economics, participated in many ecological economics meetings, and co-authored with Daniel Bromley, Robert Costanza, Carl Folke, Marco Jannsen, Richard Norgaard, Stephen Schneider, and surely many others who contribute to our broad field. This is a Nobel Prize we can be proud of.

I present that portion to present her credentials in regards to ecological economics. My studying has mostly been along of "environmental economics" or more specifically "free-market environmentalism" where property rights is strongly emphasized. From that perspective then looking Ostrom's list of design principles for common-pool resource institutions, I see a lot of elements that enforce or protect "property rights" of the owners and in this case the collective. For more thoughts on "free-market environmentalism" let me include a few links:
Free-Market Environmentalism: The Concise Encyclopedia of Economics | Library of Economics and Liberty
Free-Market Environmentalism
I also strongly recommend the book "Free Market Environmentalism" by Terry Anderson and Donald Leal.

Maybe this is getting off the main subjects here in this diary, but since I brought up ISEE earlier in this diary I wanted to include a link to its useful library at: ISEE - Encyclopedia. Lots of interesting subjects there. I found the piece on Environmental Kuznets Curve http://www.ecoeco.org/education_encyclopedia.php quite interesting and I read it along with a couple of other papers. I studied about the first Kuznets curve in development economics and the theories about the environment and development were developed as an afterthought, so I was intrigued by the these new developments of the Kuznets curves. Econometrically speaking they {the first Kuznets curves that refer to inequality of earnings and stages of development and there are more than one model developed through the ages} tend to be very weak but a subject well worth studying. Yes my opinion on the need to study something that is not universal but it helps develop economics by even building models that are not necessarily robust. It does appear that China and India are both experiencing a Kuznet curve in both equality and the environment.

Is there any other paper at ISEE that might be of interest to the group?
PS: Only a few brain cells were damaged in the making of this diary...
Cross post at: Ecology Economics, Environmental Economics and Free Market Environmentalism.

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Ecology Economics, Environmental Economics and Free Market Environmentalism. Kuznets Curves. | 28 comments (28 topical, 0 editorial, 0 hidden)

Re: Ecology Economics, Environmental (none / 0)

I forgot to include a small portion of notes on the original Kuznets curve:
Kuznets and the Historical Record Let us first turn to the experience of the now-developed countries in that early phase of their development that might be seen as comparable with what is happening in contemporary poor countries. This will provide us with some historical perspective on the problem of income distribution. The classic pioneering work here is that of Simon Kuznets (1955). His careful and systematic analysis of somewhat fragmentary data for a number of now advanced capitalist countries (the USA, UK and Germany), in an attempt to compare historical trends and establish the general record, has been very influential among development economists.

From his analysis, Kuznets offers the cautious hypothesis that one might assume a long swing in the inequality characterising the secular income structure:

widening in the early phases of economic growth when the transition from the pre-industrial phase is most rapid
a temporary stabilisation of the possibly substantial widening in income inequality of the early period
and then a narrowing of income inequality in the later phases.

It is the early phase that interests us. And we need to focus on the question of whether the pattern shown by the older developed countries is likely to be repeated in the sense that, in the early phases of industrialisation in the underdeveloped countries, income inequalities will tend to widen before various levelling forces become strong enough, first to stabilise, and then reduce income inequalities.
Kuznets places the early phase in which income inequality might have been widening from about 1780 to 1850 in Britain; from about 1840 to 1890 in the USA; and from the 1840s to the 1890s in Germany. He suggests that a narrowing of income inequality possibly began towards the end of the nineteenth century in the UK, and around the time of the First World War in the USA and Germany.
The prognosis for poor countries attempting industrialisation and capitalist economic development (and assuming some success in repeating past patterns of development) is not, then, a good one with respect to the possibility of narrowing inequality. A halfcentury or more of widening inequality can be expected on the basis of the historical figures. Indeed, Kuznets notes that the size distribution of income in less developed countries was more unequal than in the developed countries during the post World War II period.
This experience has been encapsulated in the so-called Kuznets curve, or the U-shaped Kuznets curve, which simply puts in graphical form Kuznets' conclusion regarding the experience of the now advanced countries. The graph shows that as per capita income rises, the income share of the top 20% of income recipients first rises quite rapidly, stabilises at around 57 per cent, and then falls more slowly.

Rutherfordian ------------------------------ RDRutherford

by Ronald Rutherford (rdrradio1 -at- msn -dot- com) on Wed Mar 10th, 2010 at 02:02:31 AM EST

Kuznets's 'cautious hypothesis' (none / 0)

Thanks for the diary and presenting Kuznets, who I had not heard of, but who -- not surprisingly -- has come up on ET before -- again, not surprisingly, in a couple of comments by

Migeru: GDP emerged out of the work of Simon Kuznets in the 1920's, I believe. Back then it was called National Income. In a way, from the point of view of tax base, replacing the hard to measure National Wealth with the easier to measure (transaction-based) National Income (which measures not wealth but economic activity) makes it easier to tax income than to tax wealth.

But just how well established is the Kuznets curve? The "Criticism" section for its Wikipedia entry is short, not very well written, and poorly cited. Still, even though your excerpt calls it a 'cautious hypothesis', I think it is quite bold, and if true, extremely important. So I wonder how generally accepted it is among economists and historians.

The march of civilizations is a series of defenses that man has put up against the dread of pure existence.

by marco (cowannar at gmail punkt com) on Wed Mar 10th, 2010 at 02:47:58 AM EST
[ Parent ]

EKC - Environmental Kuznets Curve (none / 0)

In response to Migeru's comment about Kuznets in The roots of the subprime crisis by Eric Zencey, Zencey replied: I know of Kuznets from the application of his Kuznets Curve to pollution and environmental externalities--the so called Environmental Kuznets Curve, which is used to justify the idea that development requires pollution, and that further development will lead to cleaner air, cleaner water, etc. as consumers in developed nation choose a different "mix" of goods, and when they have enough money, they choose to reduce pollution.

While on the one hand Wikipedia, citing the "The Environmental Kuznets Curve: A Primer" by "Yandle B, Vijayaraghavan M, Bhattarai M", says that

Since 1991, Environmental Kuznets Curves (EKC) have become standard features in the technical literature of environmental policy.

on the other hand, the Criticisms of environmental Kuznets curves section, citing the same Yandle et al primer, says that:

Yandle et al. argue that the EKC has not been found to apply to carbon because most pollutants create localized problems like lead and sulfur, so there is a greater urgency and response to cleaning up such pollutants. As a country develops, the marginal value of cleaning up such pollutants makes a large direct improvement to the quality of citizens' lives. Conversely, reducing carbon dioxide emissions does not have a dramatic impact at a local level, so the impetus to clean them up is only for the altruistic reason of improving the global environment. This becomes a tragedy of the commons where it is most efficient for everyone to pollute and for no one to clean-up, and everyone is worse as a result (Hardin, 1968). Thus, even in a country like the US with a high level of income, carbon emissions are not decreasing in accordance with the EKC.

Indeed, in that same comment above, Eric Zencey added:

The data don't bear this out; but that rarely gives a neocon pause.

I contributed to the entry on the EKC in The Encyclopedia of Earth, a gated wiki.

______

The march of civilizations is a series of defenses that man has put up against the dread of pure existence.

by marco (cowannar at gmail punkt com) on Wed Mar 10th, 2010 at 03:02:29 AM EST
[ Parent ]

Re: Ecology Economics, Environmental (none / 0)

I hope to not bore everyone to death, but I do want to include my conclusion from my paper on Kuznets curve from class assignment:

Section IV: Conclusion.
This paper covered a lot of material by bringing up a lot of complementary theories including Lewis-Two Sector Model, Harris-Todaro model, Killick's flexible economy, and Bottomley's interest rate determination. Even though the Kuznets Curve theory has a lot of intuitive understanding based on other theories as well as many observers including Marx and Upton Sinclair, it is important to test whether it is able to be predictable. Stiglitz notes that: "But a good theory should have no implication which is inconsistent with observations." (Stiglitz, 262) And Birdsall et al showed that at least in the East Asian experience the theory has limited predictive power. But this does not mean it does not have any explanatory powers for when inequality does increase during industrialization. Which means that it most definitely not that inequality is a requirement or necessary for development as Birdsall et al pointed out in the East Asian experiences and it is not sufficient considering all the nations that have high levels of inequality but development is slow or non-existent? Namibia with the highest Gini index according some estimates (Wiki) and clearly showing non-convergence with other developed countries or the world as the CIA notes growth in 2008 was 3.3% while the world's growth was at 4.1. (CIA) It is predicted even slower growth in 2009 and 2010 according to the IMF with growth rates of -0.7 and 1.8% respectively. (IMF)
There is also the possibility that HICs are facing a similar Kuznets curve as the inequality between skilled and unskilled labor has been widening. While it may be relatively small, it seems significant and across a variety of markets and Nations that would reflect varieties in social structures also. For example even in Japan it was noted in NBER (NBER): "Wage income inequality rose initially in the 1950s but declined in the subsequent two decades, and has increased slightly since the 1980s. This recent increase in Japan, however, is very small compared to the recent surge in wage income concentration in Anglo-Saxon countries." This may be a subject to consider more in the future...

Rutherfordian ------------------------------ RDRutherford

by Ronald Rutherford (rdrradio1 -at- msn -dot- com) on Wed Mar 10th, 2010 at 02:12:33 PM EST
[ Parent ]

the norms of reciprocity (none / 0)

While viscerally a "property rights" based approach to managing commons seems ultimately ineffective if not destructive to me, the "design principles of robust, long-enduring, common-pool resource institutions" that Ostrom identifies seem rather utopian:

Clearly defined boundaries should be in place.
Rules in use are well matched to local needs and conditions.
Individuals affected by these rules can usually participate in modifying the rules.
The right of community members to devise their own rules is respected by external authorities.
A system for self-monitoring members' behavior has been established.
A graduated system of sanctions is available.
Community members have access to low-cost conflict-resolution mechanisms.
Nested enterprises--that is, appropriation, provision, monitoring and sanctioning, conflict resolution, and other governance activities--are organized in a nested structure with multiple layers of activities.

And I think my skepticism stems essentially from one of the key ingredients for "self-organized commons" identified in your excerpt:

the inclinations that arise from these networks for people to do things for each other (i.e., the norms of reciprocity) (Putnam 2000)

Norms of reciprocity are delicate things that evolve in fragile ecosystems over long periods of time -- and thus, I think, they are very rare. If so, then how can we propose a policy for managing commons on such a precarious basis?

The authors recognize this to some extent (my bold):

Potential problems in the use, governance, and sustainability of a commons can be caused by some characteristic human behaviors that lead to social dilemmas such as competition for use, free riding, and overharvesting.

But I wonder if they may be overly optimistic about the sufficient abundance and robustness of norms of reciprocity needed to overcome these "potential problems".

The march of civilizations is a series of defenses that man has put up against the dread of pure existence.

by marco (cowannar at gmail punkt com) on Wed Mar 10th, 2010 at 03:22:24 AM EST

Re: the norms of reciprocity (none / 0)

Reciprocity is not rare. It is a euphemism for a transaction, or an exchange, the conditions thereof implied by usages of the word "business". Reciprocity is also defined mathematically as the relationship of a whole number (x) to its multiplicative inverse (1/x).

Reciprocity is an axiomatic term of physical or natural laws and their formulae. ("inertial" entities notwithstanding)

"Norms of reciprocity" introduces to the discussion unspecified mores, or shared customs, practiced by members of a society to facilitate exchanges.

Diversity is the key to economic and political evolution.

by Cat on Wed Mar 10th, 2010 at 08:48:42 AM EST
[ Parent ]

Re: the norms of reciprocity (none / 0)

Reciprocity is also defined mathematically as the relationship of a whole number (x) to its multiplicative inverse (1/x)

I would rather you hadn't said that...

En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma

by Migeru (migeru at eurotrib dot com) on Wed Mar 10th, 2010 at 09:05:06 AM EST
[ Parent ]

Re: the norms of reciprocity (none / 0)

Would you be less cryptic?

Diversity is the key to economic and political evolution.

by Cat on Wed Mar 10th, 2010 at 09:31:18 AM EST
[ Parent ]

Pot, meet kettle. (none / 1)

(and this from the Queen of the Crypt!) ;-)

You can't be me, I'm taken

by Sven Triloqvist on Wed Mar 10th, 2010 at 09:35:13 AM EST
[ Parent ]

Re: Pot, meet kettle. (none / 0)

I am polite, no?
References to reciprocity in ET comments, in particular Oct 2009.

Diversity is the key to economic and political evolution.

by Cat on Wed Mar 10th, 2010 at 10:00:18 AM EST
[ Parent ]

Re: Pot, meet kettle. (none / 0)

You are always polite. Inscrutable, but polite. And I wouldn't have it any other way...

You can't be me, I'm taken

by Sven Triloqvist on Wed Mar 10th, 2010 at 10:05:36 AM EST
[ Parent ]

Re: Pot, meet kettle. (none / 1)

BWAH!

Diversity is the key to economic and political evolution.

by Cat on Wed Mar 10th, 2010 at 11:02:16 AM EST
[ Parent ]

Re: Pot, meet kettle. (none / 1)

The Oct 2009 thread is a great one.

The march of civilizations is a series of defenses that man has put up against the dread of pure existence.

by marco (cowannar at gmail punkt com) on Wed Mar 10th, 2010 at 10:56:01 AM EST
[ Parent ]

reciprocity according to Robert Putnam (none / 0)

Cat: It is a euphemism for a transaction, or an exchange, the conditions thereof implied by usages of the word "business".

Robert Putnam means reciprocity in the sense of generalized reciprocity, which is something quite different (the exact opposite, in fact):

Bill (host): I want to clarify -- and it's in this context -- Paula's been talking about trust, and you've talked about trust: trust is not the same thing as blind faith.
Robert Putnam: No.
Bill (host): It is more a matter of being able to predict reliably what somebody will do.
Robert Putnam: Yeah.
Bill (host): And usually we would like that prediction to be something positive rather than something negative. That makes the relationship possible in ways that just blind faith, you know, that you're going to throw yourself on the mercy of a group of individuals or another individual.
Robert Putnam: Right. Actually, technically what social scientists who study this have come to the conclusion is the key is something called reciprocity. Reciprocity is kind of a highfalutin term that just means, "I'll do this for you now, without expecting something back immediately from you, Paula, because down the road Bill, Bill will do something for me, and you'll do something for Bill, and anyhow we'll all see each other at choir practice on Thursday." That kind of sense of, you know, what goes around comes around, that's a very powerful basis for trust.
<...>
We do actually in a way even now practice a kind of reciprocity, but it's a very special kind of reciprocity. It's "I'll do this for you now because you're going to do that for me", so [it's a] favor trading kind of thing. And that's not particularly efficient; that is, where you only do for somebody else when they're doing for you. The more effective kind of reciprocity is generalized reciprocity: "I'll do this for you, I'll pick up this hitchhiker now, not expecting this hitchhiker's going to do something back for me immediately, because down the road somebody else will pick me up when I'm hitchhiking (not this same person). That kind of generalized reciprocity is really what's fallen way off in America. It makes actually harder to live in this society, when you don't have that generalized reciprocity, because you've got to keep constantly keep track of do I owe him a favor or do I not owe them a favor. In a society where you operate on the principle of generalized reciprocity, you just do, and then it will come back around.
Robert Putnam on the Paula Gordon Show (Conversation 6), 2003 October 16

Interestingly, earlier in the interview he describes Rick Warren's congregation as an example of social capital in the social capital desert of Orange County. (Social capital is intimately linked to [generalized] reciprocity].)

The march of civilizations is a series of defenses that man has put up against the dread of pure existence.

by marco (cowannar at gmail punkt com) on Wed Mar 10th, 2010 at 10:31:17 AM EST
[ Parent ]

Robert Putnam (none / 0)

of course being the "(Putnam 2000)" cited in the Ostrom excerpt in the diary:

Self-organized commons require <...> a high degree of social capital on the part of the stakeholders. <...> Social capital refers to the aggregate value of social networks (i.e., who people know), and the inclinations that arise from these networks for people to do things for each other (i.e., the norms of reciprocity) (Putnam 2000).

The march of civilizations is a series of defenses that man has put up against the dread of pure existence.

by marco (cowannar at gmail punkt com) on Wed Mar 10th, 2010 at 11:05:05 AM EST
[ Parent ]

Re: reciprocity according to Robert Putnam (none / 1)

No. See here:

We do actually in a way even now practice a kind of reciprocity, but it's a very special kind of reciprocity. It's "I'll do this for you now because you're going to do that for me", so [it's a] favor trading kind of thing.

A distinction without difference of exchange (search "altruism" in ET comments for example, in particular, gift (i.e. exchange that cannot be (plausibly, i.e. mathematically) quantified ergo monetized or "priced") x : 1/x.

"Generalized" signifies deductive reasoning of delta price history: proof of macroeconic hypotheses which attempt to "decompose" microeconomic phenomena into formulaic terms of aggregate "output" into nominal (price) components, perforce quantifiable "value".

Reciprocity is always a condition of exchange. Whether or not the exchange signifies an equality is some thing determined by "norms of reciprocity" or ideology or custom, ergo macroeconomic ideology that dominates ET discussion of "good" and aggreate ("national") political economy metrics. And, AND, tenets of capitalism perforce promote INEQUALITIES a/k/a "asymetrical information" in order to justify surplus (profit) by ARBITRAGE, that is essentially, a difference between parties' exchange customs ("norms of reciprocity" i.e. laws).

As for Rick Warren, he recently managed to collect $2M from parishoners, an oversubscription to debt < $1M. That's "free" money surplus for Mr Warren's enterprise whatever that may be, actually. To that point: I read the Saddleback transcripts of the so-called debate between McCain and Obama at Warren's website. I bookmarked the transcripts. And today discovered these are SCRUBBED. So much for "social capital" and electronic "social networks." Time magazine dupes are here.

Demonstrating reciprocity: Many people do not know to what enterprise they give their money, although they expect a benefit to themselves by doing so.

Diversity is the key to economic and political evolution.

by Cat on Wed Mar 10th, 2010 at 12:03:09 PM EST
[ Parent ]

A distinction with difference (none / 1)

Cat: A distinction without difference of exchange

Hmmm. I think there is a difference. Namely, the generalized sort of reciprocity precisely does not involve conditions, e.g. a condition of exchange. Generalized reciprocity has no strings attached; with special reciprocity, strings are most definitely attached. These differences are the norms that define the latter form of reciprocity from the former.

At least, that is how I read Putnam/Ostrom on this.

The march of civilizations is a series of defenses that man has put up against the dread of pure existence.

by marco (cowannar at gmail punkt com) on Wed Mar 10th, 2010 at 12:22:33 PM EST
[ Parent ]

Re: A distinction with difference (none / 0)

By "no strings attached" (to a transaction) do you think Putnam refers to gifts?

Example 1. I live in NYC. I move HH. I leave goods I no longer need curbside, demanding no payment. Anonymous persons take those objects they want or need.

Example 2. I live in MD. I subscribe to a "free-cycle" BB and advertise goods, demanding no payment. Anonymous persons take those objects they want or need.

Example 3. I send flowers to a friend on the occasion of her birthday.

Example 4. City of Vancouver builds housing for persons participating in Olympic meets for which they do not pay.

By "strings attached" (to a transaction), to what terms exactly does Putnam allude that void the essential condition of reciprocity, denoting inequality aO=1/b | O = object value, a=b.

Diversity is the key to economic and political evolution.

by Cat on Wed Mar 10th, 2010 at 03:52:54 PM EST
[ Parent ]

anonymity, identitifiability, pay back (none / 1)

Those examples are tough. And raise interesting questions.

I think 2 is a form of generalized reciprocity as Putnam construes it. Not so sure about 1, 3 and 4. In 1, there is no way anyone can identify you as the source of the goods/services given away. In 4, the reciprocity is closer to specific than generalized (we build you guys free housing if you come and participate in the Olympics [bringing all the money and cachet that surrounds that event]).

In 3 -- and this is something I started having questions about as soon as I started posting on this diary -- there are two possibilities: You gave that birthday gift to your friend out of pure love, with no expectation of getting something back. In which case, this would not be a case of reciprocity (generalized or specific), because -- as I have come to realize -- even generalized reciprocity involves of receiving "pay back" at some time somehow from some person, though these, by definition, remain undefined and undetermined. However, if you gave that gift with the hope or expectation of getting back something, then it is a case of reciprocity. And it is a hybrid specific-generalized reciprocity, because on the one hand presumably your friend would be the most likely person you would hope/expect to get something in return from, but on the other hand, you may not know or care if that were at your own next birthday (i.e. a specific date) or just general kindness/kind acts in the aftermath of your gift; also, it is possible that others besides your friend would "pay you back", because they were touched by your thoughtfulness or wanted to do something for you so that you would give them a birthday gift when theirs came around. So complicated example.

In 2, you are identifiable/identified as the source of goods and services, but those accepting them are anonymous, but that is not as relevant, I think. In both specific examples I've found from Putnam himself -- picking up a hitchhiker, and members of a town pitching in for an education fund for other people's kids -- the identity of the receivers is not that important or useful. What is important is that the act occurs within a community context, in particular, where members of the community are mutually identifiable, even though the specific givers and receivers in particular transactions are not.

This last point -- the requirement of a community context -- is one I realized after reading further on Ostrom and Putnam's work. And it is a key point that distinguishes generalized reciprocity from "universal love".

There is another point of difference, which forces me go back on the "no strings attached": in fact, there are conditions involved, but they are weaker than those in specified reciprocity, albeit in significant ways (so it still is a distinction with a difference). The condition is that the giver does expect "pay back", but not from a particular person or by a particular time or in any other specific set of circumstances.

These two points -- the need for a community context, and the expectation of "undetermined" pay back" -- distinguish generalized reciprocity from "universal love" (e.g. the Buddhist/Christian sort). The indefiniteness of the pay back distinguishes generalized reciprocity from specific reciprocity.

The march of civilizations is a series of defenses that man has put up against the dread of pure existence.

by marco (cowannar at gmail punkt com) on Thu Mar 11th, 2010 at 02:25:14 AM EST
[ Parent ]

Re: anonymity, identitifiability, pay back (none / 0)

The mathematical rule of reciprocity denotes transformation of terms as one of two expressions or two identities: either a sum of terms equal to 0 (addidive inverse); or the product, 1, of a number (x) and its inverse (1/x). Either case implies the inequality of the terms of reciprocity (-x < x, x > 1/x) operated, on one hand, and unity on the other symbolized by operation of the terms. Unity is signified by the equality sign that joins two or more expressions. Both sides of an equation sybolize equal values in order for the scale to balance and the equation to be true, 0 or 1.

I'm glad you replied with that reference. It helped me clarify the Putnam "distinction". It is not the comparative or returned value of the object exchanged; it's always the identity per se of the actors to each other.

Specific reciprocity means "You do x for me, I do y for you."
You do x for me = I do y for you
a - x + y = b + x - y
a ≠ b , x = y
In other words, who you are to me is of greater value than what we exchange.

Generalized reciprocity means "I'll do x for you with faith that someone, sometime will also do something nice for me, even if you don't directly repay me for what I do.

I'll do [x] for you with faith [y] = someone sometime will also do something nice for me, even if you don't directly repay me for what I do [x/y]

Let y = "someone sometime will also do something nice for me, even if you don't directly repay me for what I do" = the unknown value, innumerable quantity = faith = ∞

a - xy = b + x/y

This value proposition reminds me of Hamilton's Rule to explain eusocial (or perfectly social) behavior observed among insects. That is C < R x B, such that C= cost to the actor, R= genetic relation of actor and recipient, B= benefit to the recipient. wiki relates the solution to inequality implied by exclusive genetic representation as cooperation:

Social behaviours can be categorized according to the fitness consequences they entail for the actor [a] and recipient [b]. A behaviour that increases the direct fitness of the actor is mutually beneficial if the recipient also benefits, and selfish if the recipient suffers a loss. A behaviour that reduces the fitness of the actor is altruistic if the recipient benefits, and spiteful if the recipient suffers a loss.

Sarah Hrdy relates altruistic kinship test to alloparenting or distributed caregiving:

Hamilton's rule provided sociobiologists with a universal truth: it applied to all social organisms, all other things being equal. But when are all other things ever equal? Especially in a formula that has built into it functions like "cost to an organism" and "benefit." It's impossible to consider these without reference to the environment in which organisms develop, the age and condition of the individual, and constraints imposed by others in that environment....
However we define them, alloparents play critical roles in all cooperative-breeding species and in many primate societies where such assistance allows mothers to breed at a much faster rate than would otherwise be possible.... Those who can, breed; kin who can't, help out.[1999: 69-92]

"universal love," agape, these words express one concept, I think.

Diversity is the key to economic and political evolution.

by Cat on Thu Mar 11th, 2010 at 05:53:01 PM EST
[ Parent ]

Putnam's 'Bowling Alone' (4.00 / 2)

Some quotes I found from the first chapter of Putnam's Bowling Alone (the formatting/quotation marks gets sloppy towards the end, so it's hard to see which are Putnam's words and which are the blogger's):

Robert D. Putnam | Blog

"Whereas physical capital refers to physical objects and human capital refers to properties of individuals, social capital refers to connections among individuals -- social networks and the norms of reciprocity and trustworthiness that arise from them"
"...our lives are made more productive by social ties."
"...most of us get our jobs because of whom we know, not what we know -- that is, our social capital, not our human capital"
"Social connections are also important for the rules of conduct that they sustain", such as reciprocity. There are two kinds of reciprocity -- specific and generalized. Specific reciprocity means "You do x for me, I do y for you". Generalized reciprocity means "I'll do x for you with faith that someone, sometime will also do something nice for me, even if you don't directly repay me for what I do."
"A society characterized by generalized reciprocity is more efficient than a distrustful society for the same reason that money is more efficient than barter. If we don't have to balance every exchange instantly, we can get a lot more accomplished. Trustworthiness lubricates social life a society more efficient. Social ties make a society more efficient. Social = more efficient. Business leaders, are you listening?)
Social capital is a powerful force as it can enable us to accomplish things we could not have accomplished on our own. Strong social networks = strength. Business leaders, are you listening?
The positive consequences of social capital include mutual support, cooperation, trust, institutional effectiveness i>
<"Economic sociologist Mark Granovetter has pointed out that when seeking jobs -- or political allies -- the "weak" ties that link me to distant acquaintences who move in different circles from mine are actually more valuable than the "strong" ties tha link me to relatives and intimate friends whose sociological niche is very like my own." For moving an idea or a project forward, the experience of people far from you can often be more valuable than that of the people closest to you. That's an argument for creating social networking tools inside business that connects people across department or functional team lines -- create opportunities for the input of disparate experience.

The bolded sentence is what is most pertinent to our discussion, though the rest of it helps understand Putnam's overall "vision".

The march of civilizations is a series of defenses that man has put up against the dread of pure existence.

by marco (cowannar at gmail punkt com) on Thu Mar 11th, 2010 at 02:31:07 AM EST
[ Parent ]

my mistake (none / 0)

in the previous comment: As Putnam explicitly states, generalized reciprocity is not "the exact opposite, in fact" of reciprocity but, oddly enough, a generalized form of the "special kind of reciprocity" that you describe.

The march of civilizations is a series of defenses that man has put up against the dread of pure existence.

by marco (cowannar at gmail punkt com) on Wed Mar 10th, 2010 at 10:43:11 AM EST
[ Parent ]

Re: the norms of reciprocity (none / 0)

re: "norms of reciprocity"

(l) firm level strategic planes of trust formation um derived from "cognitive map of contract" in The Economic institutions of Capitalism, Oliver Williams. Click to enlarge.

I've been waiting for Mr Rutherford's article. Since commentators ascribed to the Nobel committee the mysterious wisdom of GOD --contradiction of good-- to justify its peace prize selection, in particular, I've been wondering, Why Olstrom shares a prize with Williams? I tentatively concluded, the committee did so to dramatize complementary theories of political economy: on the one hand, a "natural" model of transaction (business) behaviors or what one wishes; on the other, an "artificial" model of transaction (business) behaviors or what one has. Neither theorist is a macroeconomic expert of the "neoclassic" school, typified by Wayne's World ideology of comparative advantage and deducted (and legal) applications of GAAP. Rather they are inductive reasoners. So by "artificial", I mean to modify purposefully transaction behaviors proscribed by laws --normalizing rules of conduct of members of a society, jurisdiction.

Diversity is the key to economic and political evolution.

by Cat on Wed Mar 10th, 2010 at 10:51:53 AM EST
[ Parent ]

Nobel? (none / 0)

Well I'll be damned.

I certainly hope she's right and I'm wrong.

She conducted her field studies on the management of pasture by locals in Africa and irrigation systems management in villages of western Nepal.
Elinor Ostrom - Wikipedia, the free encyclopedia

Definitely need to read up on this.

The march of civilizations is a series of defenses that man has put up against the dread of pure existence.

by marco (cowannar at gmail punkt com) on Wed Mar 10th, 2010 at 11:14:33 AM EST
[ Parent ]

Re: Nobel? (none / 0)

Psycopaths win games by killing their opponents, metaphorically or literally. That's the bottom line.

Every time a voter selects a psychopath to govern, they reduce their chances of "winning."

Diversity is the key to economic and political evolution.

by Cat on Wed Mar 10th, 2010 at 12:24:39 PM EST
[ Parent ]

Re: the norms of reciprocity (none / 1)

I've been waiting for Mr Rutherford's article.

Well thank you. But I then must ask to elaborate on that sentence.

I was mostly just throwing some things together because the conversation I was having on such matters was so rudely cut off {another place}. And as such I knew the members here would help expand my understanding of the issues. I will definitely read through all the thread to digest some of the concepts I am not familiar with including "reciprocity".

Thanks.
Ram Jaane, godknows and Ron Rutherford...

Rutherfordian ------------------------------ RDRutherford

by Ronald Rutherford (rdrradio1 -at- msn -dot- com) on Wed Mar 10th, 2010 at 12:58:43 PM EST
[ Parent ]

Ostrom's Nobel Speech (none / 1)

Her speech summarizes her work, which is a lot more than just common pool resources, and is only about a half an hour long. Well worth watching, listening, and thinking about.

http://nobelprize.org/mediaplayer/index.php?id=1223&view=1 Nobel Prize Speech

I've seen her lecture twice over the years and she is a fine teacher and a gracious lady.

Solar IS Civil Defense

by gmoke on Wed Mar 10th, 2010 at 07:25:07 PM EST

Re: Ostrom's Nobel Speech (none / 0)

Thanks for this. It was a bit frustrating that she could not go into specifics about how her studies led to her findings, but what are you going to do in a half-hour speech describing your life's work. While I remain skeptical about the viability of her findings as the basis for public policy, now I see that there actually has been a lot of empirical research done leading to them. And I like the overall conclusions (even if they still seem to good to be true to me).

Definitely enough to encourage further investigation: I hope to wind up convinced!

The march of civilizations is a series of defenses that man has put up against the dread of pure existence.

by marco (cowannar at gmail punkt com) on Thu Mar 11th, 2010 at 02:35:31 AM EST
[ Parent ]

Ecology Economics, Environmental Economics and Free Market Environmentalism. Kuznets Curves. | 28 comments (28 topical, 0 editorial, 0 hidden)

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