Tagged: Gauss

“Big” industry

Have you ever noticed the popular disdain for large companies or industries? Those on the left often throw out an ipse dixit that large companies are intrinsically nefarious, including but not limited to:

  • big oil
  • big pharma
  • big banking
  • big business
  • big tobacco

There’s also mistrust of “big” industries among the right. Breitbart’s branded media properties imply a distrust of:

  • big government
  • big journalism
  • big Hollywood

Shortly before he died, Andrew Breitbart had also planned on some coverage of “big education.”

I don’t know if Breitbart’s explicit strategy was to piggyback on the left’s branding of the modifier “big” as obviously derogatory, but the derogation of “big” industry is popular enough for Breitbart’s readers to expect critical coverage and commentary about government, journalism, Hollywood, etc.

The principle underlying mistrust of “big” industries has to do with perceived power imbalances. Corporate personhood is offensive because it seems to be a contradiction in terms. Individual people seem accountable, but corporations seem faceless. You can complain to your village’s blacksmith, but you can’t complain to a Fortune 500 company. Facelessness implies Kafkaesque bureaucracy and a lack of control.

By nature we’re comfortable navigating personal relationships at a local level, bound by Dunbar’s number. When dealing with familiar clansmen at a local level, we can vie for resources, reputation, status, etc. We feel empowered when we’re dealing with such local relationships. We learn who will help us and who will hurt us.

As against the evolutionary environment of our ancestors, today we participate in an economy many orders of magnitude larger than what can be entirely contained within the scope of Dunbar’s number. We don’t understand supply chains. Products arrive to us as if by magic. We feel less in control.

Organizations in modern commercial society scale by a power law. Ancestral, evolutionary economies weren’t so liberated, and couldn’t command nearly as many resources in an orderly way.

Our intuitionist brains haven’t caught up. The cognitive toolkit we’ve inherited was suitable for navigating pre-commercial Gaussian environments, but the mental model breaks down in explaining modern commercial society. We mistakenly attribute “big” industries as existing in a Gaussian context, when many actually exist in a Mandelbrotian one. A big industry in a Gaussian context is intractably predatory, because it implies zero-sum gains. A big industry in a Mandelbrotian context is no more threatening than anything else in day-to-day life, because it delivers familiar goods and services that are obviously replicable.

When Marx examined the Industrial Revolution, he was limited by a Gaussian paradigm. Looking backwards, he noticed that feudalism was Gaussian and zero-sum, but couldn’t yet see that capitalism was fundamentally different. Only later would we understand that capitalism has Mandelbrotian elements.

In capitalist Mandelbrotian environments, we can suffer from or benefit from Black Swans.  In feudalist Gaussian environments, we’re trapped in poverty, divvying up resources politically.

When you hear an industry derogatorily described as “big,” resist the heuristic that deems that industry Gaussian and therefore nefarious and predatory. Don’t rely on a cached thought.