economics, history, humor, oversimplify, politics

Twelah of Stonina

No, the title is not the name of a character in a dreary fantasy epic. It links 2 examples of something that can happen to oversimplifications as circumstances change: what is initially harmless (and perhaps mildly beneficial) can become pernicious. As in my earlier post arguing that oversimplification is unavoidable but can be done honestly, a whimsical example that is easily understood breaks trail for a serious example that is not.

1. Puzzles

Instructions for puzzles usually explain what the solution should look like, w/o constraining how to get there. The Jumble series of puzzles has been around for decades, originally just on printed pages but now online also. I sometimes solve the puzzle as printed in my daily newspaper. (Yes, I am that old.) Taken literally, the instructions for a Jumble do constrain the how, but in a way that strikes me as a harmless oversimplification in explaining the what. More precisely, it was harmless until the series went online.

The weird words in the title of this post are scrambled versions of the ordinary words wealth and nations. A typical Jumble puzzle invites the reader to unscramble several such scrambled words and then use the letters at some specified positions in the ordinary words to complete the caption of a cartoon. Printed and online versions of the puzzle for 2016-06-10 are displayed below. Both the layout and the use of “Now” in the printed instructions indicate that unscrambling comes before completing. Similarly for the online instructions revealed by the [HELP] button.


While I sometimes proceed in the instructions’ order, I more often guess the completion before unscrambling all (or even any) of the words. So what? I can put my pen anywhere on the page at any time. The sequencing in the instructions is just a convenient way to explain what would be a solution to a Jumble puzzle. One could rewrite and reformat the instructions so as to explain that w/o extraneous sequencing (as in the instructions for Sudoku), but it is not obvious how to write sequence-free instructions for Jumble that are as clear as the oversimplified instructions with extraneous sequencing. Why bother?

Here’s why. Look at the online version. That bright green square is a place for typing, if U so choose. The interface does a good job of allowing U to drag letters rather than type. After unscrambling all the scrambled words, U will see the available letters appear above the caption and can type or drag to complete the caption, just as U typed or dragged when unscrambling.  While the interface displays several signs of  good software engineering, it takes the informal specs too literally and mandates the heuristic of unscrambling all the words before doing anything to complete the caption.  (Being a nerd myself, I can sympathize.)  What began as a harmless oversimplification became a killjoy.

As it happens, I started by guessing the caption for the 2016-06-10 Jumble, then verified that my unscramblings of 3 words were consistent with my guess, and then used the resulting tentative knowledge about letters to be contributed by the word still scrambled as a hint about how to unscramble it. (A tiny example of how science works.) No can do in the online version. There is a [HINT] button that doles out a single letter in a single word. My preference for making my own hint is not just a consequence of my being compulsively self-reliant. My own hint is discovered and might be misleading because I might have guessed wrong at the start. The online hint is an infallible gift from on high. No fun in that.

If U want to work on the online version of this particular Jumble, U can click on its image to visit a page with today’s puzzle and then use the page’s calendar widget to go back to 2016-06-10.

Now it is time for the serious example, which starts in the same century as the scene depicted in this example, but on the other side of The Pond.

2. Free Markets

The other momentous document published in 1776 was Adam Smith’s The Wealth of Nations, with a then-harmless oversimplification that has become a now-pernicious dogma.

Smith’s readers were familiar with intrusive governments and quasigovernmental organizations like craft guilds. Mercantilist governments restricted who could sell what to whom. Guilds set the prices of what their members made. That was normal, as was censorship, state-sponsored religion, and commercial privileges granted by royal whim. Smith was aware that his readers might find his free-market ideas disturbingly anarchic, and he tried to reassure them with his famous fantasy about an invisible hand. He succeeded too well.

Smith remarked that, while he advocated much less intrusive government than his readers considered normal, there were still important government functions needed to make his free markets work. He mentioned some explicitly. Unsurprisingly, he did not mention those that would not be on anybody’s radar for over a century. Markets cannot work properly w/o transparency: potential buyers need to know what they would be getting and how much they would be paying. Apart from providing a trustworthy money supply, there was no obvious need for laws and regulations to make markets transparent. They seemed obviously transparent; nobody wearing a 3-cornered hat noticed that transparency was being assumed and might someday need to be enforced.

With the passage of time, Smith’s ideas took hold, the economies of his nation and ours grew richer and more complex, and economists eventually realized that markets cannot be perfectly transparent. What happens when they are seriously opaque? When getting pertinent info is costly? When some of the info floating around is false? When insiders have pertinent info that they act upon but keep to themselves? Long technical answers won Nobel Prizes for Kenneth Arrow and Joseph Stiglitz. The financial crisis of 2008-2009 and its precursors illustrate a somewhat oversimplified short answer that suffices for present purposes:

The shit hits the fan.

By the time the importance of transparency and the need for laws and regulations that enforce it had become common knowledge among thoughtful advocates of free markets, the invisible-hand fantasy had morphed into market fundamentalism. That dogma is a godsend for anybody who wants to act like a psychopath but suffers from the inconvenience of having a conscience. It is OK if I scramble to enrich myself and U scramble to enrich yourself, no matter how much we harm each other or anybody else.  If the stupid gummint stays away and just lets The Market work its magic, everything will come out as well as possible in the real world, where resources are scarce and buying anything precludes buying something else with the same money.

Like religious fundamentalism, market fundamentalism is rigid, simplistic, and oblivious to the suffering it causes. The real world is indeed harsh. It is also vastly more complex than fundamentalists concede, perhaps more complex than they can imagine. Enforcing fairness and transparency w/o stifling useful innovation is not easy. More generally, finding a good balance between public and private economic activity is not so easy as it seems to market fundamentalists (or to socialists, at the other extreme).

A much longer (but still readable) discussion of opacity and other market failures can be found in the book The Roaring Nineties by Joseph Stiglitz. Perverse incentives lead to perverse behavior. Is that really surprising?


6 thoughts on “Twelah of Stonina

  1. Wow again Mel. Your command of language continues to astound. And I love the subject, which, as you stated, is kind of a continuation from your Golden Rules Post. Maybe it’s age, probably is. But when I was younger I was a pure free markets guy. And I’m still a libertarian. But it does take a balance, doesn’t it? And, while my 25 year old self would smack me for saying this, there is a place for oversight and regulation. If the invisible hand reaches rudely across the table and takes a piece of your cake while you are not looking, it should be smacked. I’ve often thought my “mellowing” in my old age turns this old quote on its head. But, I guess that would be an oversimplification.

    Liked by 1 person

    1. We both see more nuance and subtlety than when we were young. Thanks for the link to the history of the quote about mellowing in the other direction, from left to right (if we go along with the common linear oversimplification). Sadly, some people get more simplistic as they age.

      Times have changed also. My natural attitude toward politics and life in general is pretty much libertarian conservative. I was a Republican long ago (back when “liberal Republican” was not an oxymoron and “conservative Democrat” was a euphemism for “white racist”). Nowadays, my devotion to fairness and transparency leads me to the Warren wing of the Dems. Everywhere else is even more uncomfortable.

      Liked by 1 person

  2. Our world economy is like a giant king mattress worn in the middle. Regardless of ideology, there will always be a gravitational force pulling toward the center representing compromise. The difference between cultures determines the time-frame it will take. Thi is my example of oversimplification reality.

    Liked by 1 person

  3. Well said.

    When I confront the free market extremeistss (not to mention the hard-core Anarchists) I just bring up the barbed wire wars in 19th century American frontier. Below are from, and they show that competing interests, even when both are valid and beneficial in and of themselves, lend communities to turn to collective (governmental) action:

    The greatest cause against barbed wire grew out of the closing of the Open Range. With the purchase of land and fencing in of the range, many small ranchers and cowmen were left without land for their cattle to feed on and without water for their cattle to drink from. Thus with the growing hatred of barbed wire, and now a new impetus for survival, many men of the frontier began to take action. The first steps were simply cutting down the fences, but quickly, the scene developed into a full range war. Small interests were matched against big interests, as blood was shed, fences were cut to pieces, and communities were torn apart. Vigilante justice reigned supreme, and terror seized the land. Eventually state legislatures were called to end the problem, which did not cease until the late 1880’s.

    Liked by 1 person

    1. Thanks, especially for the discussion of range wars. In the interest of fairness, let me try to give a market fundamentalist account of the Wild West.

      An invisible hand was ripping out fences while another invisible hand was installing them. [The left hand knoweth not what the right hand doeth.] The stupid gummint intervened before an invisible foot had a fair chance step in, kick ass, and introduce a genetically modified breed of cattle that could subsist on barbed wire and be welcomed by farmers because the cows tiptoed around crops and left precisely calibrated doses of fertilizer.

      Liked by 1 person

      1. The market fundamentalist sounds like George C. Scott’s General Buck Turgidson in “Dr. Stangelove” (I mean what’s a few more thousand settlers dead, give or take a few hundred)

        General “Buck” Turgidson: ….Now, truth is not always a pleasant thing. But it is necessary now to make a choice, to choose between two admittedly regrettable, but nevertheless distinguishable, postwar environments: one where you got twenty million people killed, and the other where you got a hundred and fifty million people killed.

        President Merkin Muffley: You’re talking about mass murder, General, not war!

        General “Buck” Turgidson: Mr. President, I’m not saying we wouldn’t get our hair mussed. But I do say no more than ten to twenty million killed, tops. Uh, depending on the breaks.

        Liked by 1 person

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