Metaphysical Demons in Organizational Theory
The works of Scott Alexander in Identifying the incentive monster of Moloch
What is Moloch?
What is moloch
In his seminal Essay “ Meditations on Moloch” Scott alexander describes his thoughts as such...��“A lot of the commentators say Moloch represents capitalism. This is definitely a piece of it, even a big piece. But it doesn’t quite fit. Capitalism, whose fate is a cloud of sexless hydrogen? Capitalism in whom I am a consciousness without a body? Capitalism, therefore granite cocks?
Moloch is introduced as the answer to a question – C. S. Lewis’ question in Hierarchy Of Philosophers – what does it? Earth could be fair, and all men glad and wise. Instead we have prisons, smokestacks, asylums. What sphinx of cement and aluminum breaks open their skulls and eats up their imagination?
And Ginsberg answers: Moloch does it.”
Examples of moloch
As a thought experiment, let’s consider aquaculture (fish farming) in a lake. Imagine a lake with a thousand identical fish farms owned by a thousand competing companies. Each fish farm earns a profit of $1000/month. For a while, all is well.
But each fish farm produces waste, which fouls the water in the lake. Let’s say each fish farm produces enough pollution to lower productivity in the lake by $1/month.
A thousand fish farms produce enough waste to lower productivity by $1000/month, meaning none of the fish farms are making any money. Capitalism to the rescue: someone invents a complex filtering system that removes waste products. It costs $300/month to operate. All fish farms voluntarily install it, the pollution ends, and the fish farms are now making a profit of $700/month – still a respectable sum.
But one farmer (let’s call him Steve) gets tired of spending the money to operate his filter. Now one fish farm worth of waste is polluting the lake, lowering productivity by $1. Steve earns $999 profit, and everyone else earns $699 profit.
Everyone else sees Steve is much more profitable than they are, because he’s not spending the maintenance costs on his filter. They disconnect their filters too.
Fish farming continued
Once four hundred people disconnect their filters, Steve is earning $600/month – less than he would be if he and everyone else had kept their filters on! And the poor virtuous filter users are only making $300. Steve goes around to everyone, saying “Wait! We all need to make a voluntary pact to use filters! Otherwise, everyone’s productivity goes down.”
Everyone agrees with him, and they all sign the Filter Pact, except one person who is sort of a jerk. Let’s call him Mike. Now everyone is back using filters again, except Mike. Mike earns $999/month, and everyone else earns $699/month. Slowly, people start thinking they too should be getting big bucks like Mike, and disconnect their filter for $300 extra profit…
A self-interested person never has any incentive to use a filter. A self-interested person has some incentive to sign a pact to make everyone use a filter, but in many cases has a stronger incentive to wait for everyone else to sign such a pact but opt out himself. This can lead to an undesirable equilibrium in which no one will sign such a pact.
Other examples
Capitalism. Imagine a capitalist in a cutthroat industry. He employs workers in a sweatshop to sew garments, which he sells at minimal profit. Maybe he would like to pay his workers more, or give them nicer working conditions. But he can’t, because that would raise the price of his products and he would be outcompeted by his cheaper rivals and go bankrupt. Maybe many of his rivals are nice people who would like to pay their workers more, but unless they have some kind of ironclad guarantee that none of them are going to defect by undercutting their prices they can’t do it.
Like the rats, who gradually lose all values except sheer competition, so companies in an economic environment of sufficiently intense competition are forced to abandon all values except optimizing-for-profit or else be outcompeted by companies that optimized for profit better and so can sell the same service at a lower price.
(I’m not really sure how widely people appreciate the value of analogizing capitalism to evolution. Fit companies – defined as those that make the customer want to buy from them – survive, expand, and inspire future efforts, and unfit companies – defined as those no one wants to buy from – go bankrupt and die out along with their company DNA. The reasons Nature is red and tooth and claw are the same reasons the market is ruthless and exploitative)
From a god’s-eye-view, we can contrive a friendly industry where every company pays its workers a living wage. From within the system, there’s no way to enact it.
(Moloch whose love is endless oil and stone! Moloch whose blood is running money!)
Other Examples
The Two-Income Trap, as recently discussed on this blog. It theorized that sufficiently intense competition for suburban houses in good school districts meant that people had to throw away lots of other values – time at home with their children, financial security – to optimize for house-buying-ability or else be consigned to the ghetto.
From a god’s-eye-view, if everyone agrees not to take on a second job to help win their competition for nice houses, then everyone will get exactly as nice a house as they did before, but only have to work one job. From within the system, absent a government literally willing to ban second jobs, everyone who doesn’t get one will be left behind.
(Robot apartments! Invisible suburbs!)
Naming the beast
A basic principle unites all of the multipolar traps [...]. In some competition optimizing for X, the opportunity arises to throw some other value under the bus for improved X. Those who take it prosper. Those who don’t take it die out. Eventually, everyone’s relative status is about the same as before, but everyone’s absolute status is worse than before. The process continues until all other values that can be traded off have been – in other words, until human ingenuity cannot possibly figure out a way to make things any worse.
In a sufficiently intense competition [...], everyone who doesn’t throw all their values under the bus dies out – think of the poor rats who wouldn’t stop making art. This is the infamous Malthusian trap, where everyone is reduced to “subsistence”.
In an insufficiently intense competition [...], all we see is a perverse failure to optimize – consider the journals which can’t switch to more reliable science, or the legislators who can’t get their act together and eliminate corporate welfare. It may not reduce people to subsistence, but there is a weird sense in which it takes away their free will.
What is the answer?
The Universe is a dark and foreboding place, suspended between alien deities. Cthulhu, Gnon, Moloch, call them what you will.
Somewhere in this darkness is another god. He has also had many names. In the Kushiel books, his name was Elua. He is the god of flowers and free love and all soft and fragile things. Of art and science and philosophy and love. Of niceness, community, and civilization. He is a god of humans.
The other gods sit on their dark thrones and think “Ha ha, a god who doesn’t even control any hell-monsters or command his worshippers to become killing machines. What a weakling! This is going to be so easy!”
But somehow Elua is still here. No one knows exactly how. And the gods who oppose Him tend to find Themselves meeting with a surprising number of unfortunate accidents.
There are many gods, but this one is ours.
Bertrand Russell said: “One should respect public opinion insofar as is necessary to avoid starvation and keep out of prison, but anything that goes beyond this is voluntary submission to an unnecessary tyranny.”
So be it with Gnon. Our job is to placate him insofar as is necessary to avoid starvation and invasion. And that only for a short time, until we come into our full power.
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