One bright day in late autumn a family of Ants were bustling about in the warm sunshine, drying out the grain they had stored up during the summer, when a starving Grasshopper, his fiddle under his arm, came up and humbly begged for a bite to eat.
“What!” cried the Ants in surprise, “haven’t you stored anything away for the winter? What in the world were you doing all last summer?”
“I didn’t have time to store any food,” whined the Grasshopper; “I was so busy making music that before I knew it the summer was gone.”
The Ants shrugged their shoulders in disgust.
“Making music, were you?” they cried. “Very well; now dance!” And they turned their backs on the Grasshopper and went on with their work.
I admit I’m quite fond of this fable. It promotes industry, a diligent work ethic and frugality. It also promotes effective risk management. The Grasshopper is not only lazy but blind to existential risk (a.k.a starvation). The Grasshopper not only fails to mitigate this risk but fails to identify it in the first place. The Grasshopper is the OptionSellers.com of the forest. And so the Grasshopper gets her comeuppance.
(of course there’s a BUT)
This fable “works out” the way it does because it’s set in a stable social system that respects the Ants’ property rights. Relax that condition and you might get very different results. Let’s pick up where we left off, for the extended edition:
“Making music, were you?” [the Ants] cried. “Very well; now dance!” And they turned their backs on the Grasshopper and went on with their work.
But the Grasshopper did not go back to dancing. Instead, the demoralized Grasshopper wandered the autumn landscape, sharing her tale of woe with other insects. Much to her chagrin, many others had not saved food for winter, either.
“What right do the Ants have to let us all starve?” the Grasshopper asked. “Why, wouldn’t that make them murderers?”
The other insects who had not gathered food for winter nodded in agreement, muttering among themselves about the greed and selfishness of the Ants. Did the Ants really deserve their hoard of food if they were going to lord the power of life and death over everyone else in the forest? It was hardly a crime to raise arms against someone who intended for you to starve to death, after all.
And so the Grasshopper and the other insects murdered the Ants and ate all their food.
My extended edition of this fable is about metastability. Or, more accurately, a breakdown in metastability. A superficial reading of metastability might make it seem like a breakdown in law and order. That’s not quite what I’m talking about here. Law and order might break down within an otherwise metastable social system. Whenever there’s a riot in an American city, for example, law and order break down. But a riot in and of itself does not alter the core values and mythology shared by American citizens.
A social system remains metastable as long as there is a reasonably broad consensus regarding its core values and mythology. Without this consensus, metastability weakens. Put another way: first-order threats to social stability, such as isolated riots and street crime, are risks that lie in the body of the distribution of outcomes, both for individuals and society. Metainstability is a higher-order threat. The risks associated with metainstability lie in the tails of the distribution. They fall under the broad category heading of Really Bad Stuff and include things like:
- violent revolution
- property expropriation
Back to the Ants and the Grasshopper. Would it behoove the Ants to share a bit of food with the other insects to shore up the metastability of the forest’s social system?
There’s no “right answer” to that question. This isn’t physics. The policy wonks among us might propose developing some model for relating the conditions of the forest’s welfare state to the political inclinations of its citizens. A neat exercise, but a reflexive one. Ultimately, the whole thing hinges on the insects’ subjective perceptions of themselves and their relationship to the other entities in the forest. The insects’ perceptions of themselves and their relationship to the other entities in the forest may or may not have anything to do with wonky policy position papers. The insects are under no obligation to act “rationally.”
The serious existential risks associated with this concept of metastability, and the reflexive nature of social systems, are the reasons we negotiate a social contract. Modern society is the output of a long and tortured series of negotiations over how and why we should structure the social contract to limit the nastiness and brutishness of the state of nature.
In the language of Epsilon Theory, managing risks to metastability requires the following:
Clear Eyes. Look through narratives and symbolic abstractions to see the world as it is.
Full Hearts. Treat others as principals in the negotiating process, in a way that promotes potentially cooperative game play.
My personal answer to the question of whether the Ants should share some of their food (or rather, whether the state should compel the Ants to share some of their food) is yes. Of course, we can endlessly debate the finer points of how exactly such a system should be structured. But broadly speaking, I think it ought to consist of the following:
- Some form of temporary unemployment insurance
- Some minimum level of health insurance coverage
- Some form of old-age pension scheme
Now, I certainly don’t believe these things are an unalloyed good. They have costs. There will inevitably be inefficiency and graft involved with their administration. People will free-ride on them. To me, these costs and inefficiencies are the price of some metastability insurance.
Am I completely at ease with these policies?
I think any clear-eyed view of them has to acknowledge social welfare programs tend to expand over time, and the power of the state along with them. The historical example of Prussia is instructive here. In the 19th century, the Prussian state was confronted with increasing social and political tensions between its rural and urban classes. Recall that Marx believed socialist revolution would happen first in Germany, not Russia. The tension intensified following German unification in 1871. Germany had a metastability problem. The Prussian solution was, in large part, the creation of a social welfare state.
In his history of Prussia, The Iron Kingdom, Christopher Clark writes:
The medical insurance law of 15 June 1883 created a network of local insurance providers who dispensed funds from income generated by a combination of worker and employer contributions. The accident insurance law of 1884 made arrangements for the administration of insurance in cases of illness and work-related injury. The last of the three foundational pillars of German social legislation came in 1889, with the age and invalidity insurance law. These provisions were quantitatively small by present-day standards, the payments involved extremely modest, and the scope of the new provisions far from comprehensive–the law of 1883, for example, did not apply to rural workers. At no point did the social legislation of the Empire come close to reversing the trend towards increased economic inequality in Prussian or German society. It is clear, moreover, that Bismarck’s motives were narrowly manipulative and pragmatic. His chief concern was to win the working classes back to the Prussian-German ‘social monarchy’ and thereby cripple the growing Social Democratic movement.
[…] By the eve of the First World War, the Prussian state was big. Between the 1880s and 1913, it expanded to encompass over 1 million employees. According to an assessment published in 1913, the Prussian ministry of public works was ‘the largest employer in the world’. The Prussian railways administration alone employed 310,000 workers and the state-controlled mining sector a further 180,000.
I don’t believe it’s possible to divorce the expansion of the Prussian welfare state, and the Prussian state more generally, from the subsequent arc of German history. Prussia is a cautionary tale.
So, where do we draw the line? Is there a way to balance a pragmatic view of social metastability with checks on the expansionist tendencies of the state? There’s no single answer to that. But there’s a process. Clear Eyes, Full Hearts, again. When considering a particular policy, ask:
Is this policy designed to promote equality of opportunity or equality of outcome?
How might this policy serve the interests of the State and Oligarchy?
What abstractions are being used to sell me this policy?
Does this policy respect my autonomy of mind, or is it a manipulative “nudge”?
Which brings me back to policy wonks. The way I write about policy wonks you might think I’m completely dismissive of them. Not so. We need folks out there conducting social science research. When that research is conducted with a proper scientific mindset (see The Road To Tannu Tuva), it provides valuable perspective on the tradeoffs associated with various policy initiatives. What I am suspicious of are policy wonks as optimizers–policy wonks promising The Answers.
Because there are always tradeoffs. There are always consequences. Some are intended. Some are unintended.
That’s what we learn from the Ants and the Grasshopper.
Why “share”?? Why don’t we couch this in terms of “sell”?? Surely the grasshopper has some valuable minstrel services that he can provide to entertain the ants while they work…no?
That’s certainly the ideal solution here! Particularly in the case of a single grasshopper. Actually, as far as metastability is concerned, in the fable’s base case involving the ants and a single grasshopper, it’s perfectly fine to just let the grasshopper starve. A moral philosopher might challenge that view, but the moral philosophy of this is a whole other issue.
In fact, you can easily imagine the Ayn Rand version of my “extended edition,” where all the insects are strict utilitarians. Here there’d be no need for any “metastability insurance” because of a strong consensus around libertarian utilitarian values as the organizing principles for society.
Likewise, you can imagine a Scandinavian “extended edition” where all the insects are social democrats or whatever. That society may have a very different set of consensus values and an entirely different level of metastability.
This is what I’m driving at when writing about metastability as a reflexive process, and why the social contract is necessarily something that’s negotiated. The obnoxious, twenty-five cent word for this process would be “dialectic.” Outside of relatively small, culturally homogenous communities, it becomes increasingly difficult to establish a strong consensus around values. The example of Prussia used in the post is a prime example. The Prussian “solution” to the problem of forging consensus around shared values at scale was to bind cultural identity to the state. It worked pretty well. Too well, in fact.
Anyway, for the purposes of this post I’m not concerned at all with whether libertarian or social democratic values are inherently superior. I’m more concerned with the idea that at the scale of a large, technologically advanced nation-state, maintaining social metastability is a balancing act across different constituencies. Because a widening gyre is synonymous with a breakdown in metastability. And breakdowns in metastability are usually bad.
I usually say I have a strong libertarian lean - which prompts calls of “weakling” or “traitor” from my hard-core libertarian friends. My entire argument back to them is captured (in a much better way) by this piece, which requires several reflective readings as it’s just that smart and important (I’ve been through it twice and plan to go back).
My reason for “leaning” libertarian is that I’m fine with a hardcore ant-grasshopper world where we, literally, let grasshoppers die in the streets. I’d do my best to work - offer value in return for value - save, struggle and survive in a libertarian society, in part because I believe in its philosophical integrity and superiority and, in part, because I believe I’d succeed. But if I didn’t, I think (you never know until tested), I’d accept dying in the street as the outcome. I also believe advanced private charities would evolve, but that’s a separate piece of the philosophical puzzle.
Okay, so why the “lean?” Because libertarianism is not politically viable in any country I’m aware of. As I tell my Randian friends, that’s a beautiful philosophy you got there - but from a practical point of view, get back to me when you’re no longer <5% of the population. Politics is often defined as the art of the possible; if so, pure libertarianism is an intellectual parlor game - fun, even impressive, but not practical - not possible.
But its ideas can be incorporated into the discussion and that's where we libertarian leaners can have real-world impact. To the point raised in the piece, "So, where do we draw the line? Is there a way to balance a pragmatic view of social metastability with checks on the expansionist tendencies of the state?" a libertarian leaner can have practical impact. We can argue for - and educate to the benefits of - a limited government and raise risk concerns around an expanding one, but you can't do that if you are only talking to <5% of the public about the intellectual purity of, say, only having private roads - sigh.
The second benefit of being part of the discussion is impacting what is described in this piece as a culture's / country's "core values and mythology." The traditional American mythology of the rugged individual / of a Puritan work ethic / of personal responsibility is being challenged by a collectivist one (see AOC for a real-time example). And it's that battle that will determine the future of America.
To illustrate, I'll close with this: if America didn't have its traditional values and myths firmly established, the country would have experienced a revolution in the Great Depression, but socialism or communism - any revolution (I know, technically, socialism isn't a revolution) - was a philosophical bridge too far, so Americans slogged on through a decade plus of economic misery rather than wipe the American gameboard off the table. To show how much those traditional values and myths have changed, I sincerely doubt America today would endure anywhere near that amount of suffering before demanding a revolution (launched from a safe place, I guess).
Thank you for taking the time to provide such a thoughtful comment, Mark. This is a wonderful enhancement/extension to the original note!
‘Ants’ produce our food and energy. Grasshoppers pontificate at best. Grasshoppers want to dis-arm the ants, both literally and via Electoral shenanigans. Long live the ants!!
Was unable to give a "thumbs up, so let me commend: high-quality thoughts, admirably expressed.
Excellent note, this was great. A thought:
“I don’t believe it’s possible to divorce the expansion of the Prussian welfare state, and the Prussian state more generally, from the subsequent arc of German history. Prussia is a cautionary tale.”
Absolutely. And to expand a bit on how complex and interweaved history, culture and sociology can be in determining outcomes that used to happened on relatively longer time frames in at least the 18th and 19th centuries: recall that some of these ideas toward a Prussian/German ‘welfare state’ came from events and ideas formulated from Prussian history. Particularly in education. The Prussian movement toward subsidized education had its seeds in a series of military shortcomings, including the Napoleonic wars, which led to ideas about decentralized command (Auftragstaktik) in military units through (initially) officer education among other things. This education system wasn’t limited to intent to military leadership principles, but to enhancing the collective cultural symbols, stories and traditions (Kulturnation) intentionally. The education reforms came significantly prior to many of the other welfare state initiatives, but as you said, they are part of the history arc pre German hegemony and are related to what happened with other social reforms later.
So why I am making this point? The idea is that especially in history, that while ideas and history arcs that promoted major shifts in social metastability in various states happened at different paces (the Prussian example versus say the Russian experience of Marxist revolution - also undivorceable however from Russian history), the overall trend was from slower to faster. On a relative level to now, they happened at a pace that seems very slow by 20th and 21st century standards. I am sure the reasons are expansive - expansion in overall literacy, invention of the printing press, increased ease of transportation etc.
So if mythologies are the bedrock of social contract, and the velocity of mythology is increased at an increasing rate (for lots of reasons that ET has discussed far better than I can), then does that inherently lead to waning metastability and more Really Bad Stuff? Is there an upper limit on the velocity of mythology change that if approached causes new embedded mythologies (reflexivity) that promote competitive (in a bad way) games that are hard to unlearn at a societal level? It feels that way right now. Not that ‘feels’ should be the framework for analyzing this!
When we see capital allocators and legislators operating (let’s assume honestly) on the basis of current ‘Social Contract’ only to have a shift that entirely changes the outcome and create more instability on short term timescales (years) happen more and more often, is this entirely inevitable?
I don’t know, but I feel like it is. It’s hard for me to not think that way, read Obama and Schumers positions on illegal immigration in the early 2000s that would be entirely untenable to Dems or liberals now (widening gyre), to massive capital projects that have complex regulatory processes being hijacked at the 11th hour (ie pipelines) when stakeholders thought that the process accurately expressed prevailing Social Contract. With more observers to these processes, are we more beholden to observer effects than ever before? I hope I am wrong that the velocity of mythology/narrative/social contract is inherently accelerating, and a certain level of velocity becomes incompatible with metastability. It seems that way right now, and while historically speaking my measurement period is very short, there are lots of examples over the last several hundred years that could generally support this idea.
Thanks for reading my ramblings.
And at the risk of being ostracized, I suspect we of the ET Clear Eyes and Open Hearts are not ants but actually Racoon Grasshoppers.
Excellent article and discussion.
I worry unfortunately, that the “Grasshoppers” have long figured out they can force future generations to pay for the food they eat today,
since future generations don’t get to vote and millenials don’t understand it’s implications (perhaps the Fed has anesthetized us all?) .And the ants lost so many elections fighting that “scam” that they went along with their own “scam”, repetitive tax cuts, i.e. “supply side theory”
I believe the original fable was harsh to prevent long term society breakdowns, not create them.
Protect future generations, not enslave them to debt repayment.
Never seems to be much discussion about that immorality.
Thanks Peter. I think you are right to point to debt-financed “can-kicking” as a key dynamic here. I’ve spent a lot of time (probably too much time) thinking about whether societies are inherently meta-unstable in the long run, precisely because of the seemingly irresistible temptation to engage in debt-financed can-kicking. Personally, I lean toward “yes”, and tend to view this as a cyclical process as Will and Ariel Durant describe in The Lessons of History. But it’s a moderate-confidence view, and something I still spend a lot of time thinking about.
Thanks for taking the time out to share these comments! In particular this struck me:
“I hope I am wrong that the velocity of mythology/narrative/social contract is inherently accelerating, and a certain level of velocity becomes incompatible with metastability. It seems that way right now, and while historically speaking my measurement period is very short, there are lots of examples over the last several hundred years that could generally support this idea.”
I share your view of accelerating velocity. And the inevitability of this process (or not) is something I spend a lot of time thinking about.
Another way I’ve been thinking about all this, which I didn’t spell out in this post, is through the lens of calculus and the “option greeks” from finance.
So take a given society. We can then assess its social stability or rate of change. Social stability is the first derivative (a.k.a delta in options-speak). Metastability then measures the acceleration/deceleration in social change. It’s the second derivative (a.k.a gamma in options-speak).
Critically for this metaphor, gamma is convex. It changes at an increasing rate relative to moves in the price of the underlying. In my view, social systems are inherently short gamma. They’re negatively exposed to change. The more significant the change, the more rapidly change accelerates and the greater the existential risk.
In finance, the solution to this problem is simply to hedge. I doubt it’s possible to gamma hedge an entire social system at the scale of a large nation state like the US, such that society is effectively gamma neutral (or even long gamma). I think the best we can do is try to clip the left tail.
Let’s face it, ‘capitalism’ is dying from inequality and its political fruits. But is this real capitalism? Is the supposed idleness of the ‘losers’ of globalization the major cause of its sickness?
Since there is no free market in money and core financial assets, there can’t possibly be a free market in the economy. What we really have is a hidden form of socialism. For just one example, you can draw an arc from the central planning of money, through the geopolitical games played to stabilize this system, to the global monetary and financial imbalances that lost millions of US jobs to outsourcing.
There is absolutely nothing new here. The twilight-of-the-gods for the British Empire was ‘fixed’ in the mid-19th century by a monetary game called the international gold standard (i.e. by declaring silver, which was used by most of Britain’s economic competitors, non-money.) The imbalances grew again (surprising how they always seem to!) until a second ‘fix’ was implemented by World War I in the form of transferring the British bubble to a relatively debt-free America, by first crushing Germany’s hope of hegemony.
Sadly, most people argue over socialism vs. capitalism. Reality has been an imperial-bubble system over the modern centuries.
Politics come from morality. The fundamental question is this: what is the morality behind the forced redistribution of wealth? And should those of us who disagree with it be compelled to participate, for the supposed benefit of “society”?
Continue the discussion at the Epsilon Theory Forum