Prospect theory (and nerds)

Another great bit from Schneier:

People tend to be risk-averse when it comes to gains, and risk-seeking when it comes to losses. If you give people a choice between a $500 sure gain and a coin-flip chance of a $1,000 gain, about 75 percent will pick the sure gain. But give people a choice between a $500 sure loss and a coin-flip chance of a $1,000 loss, about 75 percent will pick the coin flip.

People don’t have a standard mathematical model of risk in their heads. Their trade-offs are more subtle, and result from our brains have developed. A computer might not see the difference between the two choices — it’s simply a measure of how risk-averse you are — but humans do.

This fact might not seem like a big deal, but it overturned standard economic theory when it was first proposed in 1979. It’s called “prospect theory,” and was developed by Daniel Kahneman and Amos Tversky to explain how people make trade-offs that involve risk.

Bruce Schneier
How the Human Mind Buys Security

He goes on to explain that this is why it’s so hard to sell insurance. People are more willing to take risks on losses.

Combine this with the right-wing anarchist ideal from Armed and Dangerous:

How can you reconcile your anarchism with your apparent advocacy for state-based counter-terrorist activities?

Easily. Consider this quote from Frederic Bastiat, one of the great thinkers of individualist anarchy “Law is solely the organization of the individual right of self-defense which existed before law was formalized.” The problem with governments is not that they function as organized self-defense; it’s that they claim a monopoly on that function (and others) and coerce to enforce those monopolies. So there is no contradiction between endorsing a government’s actions when it acts in my defense and working towards the abolition of the monopoly.

Commenting on Open source warfare != open source software

(Also, from another comment after more discussion)

Milhous is missing the most important funding mechanism – insurance companies, which is how we socialize risk in a free market.


From these bits of information, I conclude what I’d suspected all along (and you probably did too): human nature makes anarchism unfeasible. As soon as irrational actors are introduced, who don’t calculate much (or at all), the paradigm of unenforced, group-sponsored national defense breaks down.

I believe such incurious people are the mean, rather than outliers (which is not to disparage the incurious), and I therefore conclude that anarchism can only succeed in that unusual culture where the majority is made up of intellectual outliers. Take, for example, the early American settlers (high IQ and entrepreneurial) and early hacker culture.

To put it in psychoanalytical terms, most people (I think two thirds, though arbitrarily) act according to the invisible decisions and mandates of the unconscious id. The id is the home of sociosexual reasoning, hierarchies, power, politics, justice, physical force, and cultural norms. Individualists act according to the conscious and rational ego, which oversees language, functional computer programming, and acceptance of human diversity. We’ll call these people “nerds”.

(The distinctions aren’t perfect. Both groups are influenced by admixtures of id and ego reasoning. I assume that I still have to explain this to the infernal uberdeterminists.)

Only a nerd-majority society can succeed in creating an individualist anarchy.

I was influenced to use nerd/jock terminology by Steve Sailer’s recent excavation:

Nerdishness appears to me to be one of the main manifestations of masculinity, although radically different from the more famous hunter/warrior/jock/leader mode (let’s use a term from African politics and designate representatives of the better known form of masculinity as “Big Men”). Certain fundamental trade-offs tend to distinguish nerds from Big Men In the realm of intellectual traits[…]

Steve Sailer
Nerdishness: The Unexplored Cornerstone of the Modern World

About Aeoli Pera

Maybe do this later?
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