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Societal systems: Methodology, modeling, and management
J&n ment.
W, Soutketlsnd, New
So&ml
York: North-Holland,
Sysfems: Methodology,
Modeling,
and Manage-
1978.
is devoted mainly to an original and specific theory of social systems, although there is also much background information of a more general nature. The author proposes that social systems have four dimensions: economic, cultural, social, and political, which must be examined simultaneously, and that they have only a few basic forms. He connects the latter to the view that the determining factors are neither human nature nor outward circumstances, but ideas. The basic process is what he calls the diaelectrical engine, which goes from thesis to antithesis, but then instead of proceeding to synthesis, usually goes back to thesis. The central source of change is the individual he calls a prophet. Prophets include Adam Smith and Kari Marx, and may or may not be religious in their orientation. They express dissatisfaction with the current state and preach a return to its opposite. In the first chapter, the author discusses seven bases of behavior, associated with the types of society. These are of three general types: data-driven, inductive, and deductive. Data-driven behaviors are more or less those of a nonintellectual nature: homeostasis, innate drives as reflected in the concept of id, trial and error. Inductive procedures are of two kinds, simple Pavlovian association and ‘ampliative behavior in which the individual extrapolates from previous cases or formulates some empirical rule. Deductive processes fall into three classes: idiosyncratic, discursive, and exegetical. The idiosyncratic processes are those which differ in different individuals, and include both interpretative behavior, such as art, and hypostatized behavior, such as insanity. The exegetical behaviors are deductions from a fixed, explicit set of rules. These can be either proscriptive (forbidding certain behaviors) or prescriptive (encouraging certain behaviors). The discursive behaviors include principled behavior, following flexible guidelines, and heuristic behavior, where there is no existing principle to follow. Both involve modifications of behavior on the basis of feedback. The seven types of society can then be listed in a table. ‘This book
Behavioral mechanism
Society type
Example
Proscriptive exegetical
Dogmatic, institutionalized ideological
Feudal Europe
Prescriptive exegetical
Affective-sentimerwl
Liberalism, uninstitutionalized religion
Principled-discursive
.Axiomatic-rational&d
Capitalism
Inductive-associative
.4daptive-conditiontd
Primitive tribes
Inductive-ampliative
.4daptive-correlative
Secular, opportunistic degenerate capitalism
6.
Interpretative-idiosyncratic
Intrinsic-originative
A scholarly discipline
7.
Hypostatized-idiosyncratic
Intrinsic-compulsive
Hermits, drug culture
1.
The book expounds in detail the typical cultural, economic, social, and political mechanisms and pathologies of these seven types with historical illustrations. T’k author proposes the following transition matrix for changes. modelled as a \larkuv process where the seven types are listed in the order 4, 1, 3, 2, 5, 5, 7: 0 0 0 0 0.1 0 0
1 0
0 0.7 0.6 0 0
It is a very interesting
0 0.4 0 0 0 0 0
0
0
0.5 0.2 0 0.1 0 0
0.1 0.7 0.2 0 0 0
0
0
0 0 0.1 0 0 0.1 0 0.2 ~ 101 0 l i
and thought-proyoking
book.
Jerry R. Green and Jean-Jacques Laffont, Incemires in Public Decision-Makirzg. New York: North-Holland, 1979. The book is a comprehensive treatment of an important area in modern mathematical economics. It is well written, and the mathematics is mainly multi\ariablt: calculus with some probability theory, but the reader may find it difficult unless he has some acquaintance with the mathematical economics literature. An economic mechanism is said to be incentive-compatible if it is in the primate interest of each individual to cooperate. Frequently this means that the indi\ 13uaE must accurately report data known to him but not the government . In garni theoretic terms it means that there is an equilibrium of some sort, such as a dc>minant strategy equilibrium, Nash equilibrium, or strong equilibrium. l\toreo\ er. wzh an equilibrium should give a Pareto efficient result: there is no alternati\ t: pcwibk outcome in which everyone is better off. As the number of agents tends to infinity, the market system approaches inxnti~ c compatibility (perfect competition). If each agent seeks his own interest onI>. the result is Pareto efficient. Surprisingly, for a finite set of agents the market is not incentive compatible, and M. Satterthwaite and H. Sonnenschein haye recentI! proved there is no alternative to the market system which is incentive-compatible in the situation where individual agents have market power. Socialist syscen~s are IW
W, Soutketlsnd, New
So&ml
York: North-Holland,
Sysfems: Methodology,
Modeling,
and Manage-
1978.
is devoted mainly to an original and specific theory of social systems, although there is also much background information of a more general nature. The author proposes that social systems have four dimensions: economic, cultural, social, and political, which must be examined simultaneously, and that they have only a few basic forms. He connects the latter to the view that the determining factors are neither human nature nor outward circumstances, but ideas. The basic process is what he calls the diaelectrical engine, which goes from thesis to antithesis, but then instead of proceeding to synthesis, usually goes back to thesis. The central source of change is the individual he calls a prophet. Prophets include Adam Smith and Kari Marx, and may or may not be religious in their orientation. They express dissatisfaction with the current state and preach a return to its opposite. In the first chapter, the author discusses seven bases of behavior, associated with the types of society. These are of three general types: data-driven, inductive, and deductive. Data-driven behaviors are more or less those of a nonintellectual nature: homeostasis, innate drives as reflected in the concept of id, trial and error. Inductive procedures are of two kinds, simple Pavlovian association and ‘ampliative behavior in which the individual extrapolates from previous cases or formulates some empirical rule. Deductive processes fall into three classes: idiosyncratic, discursive, and exegetical. The idiosyncratic processes are those which differ in different individuals, and include both interpretative behavior, such as art, and hypostatized behavior, such as insanity. The exegetical behaviors are deductions from a fixed, explicit set of rules. These can be either proscriptive (forbidding certain behaviors) or prescriptive (encouraging certain behaviors). The discursive behaviors include principled behavior, following flexible guidelines, and heuristic behavior, where there is no existing principle to follow. Both involve modifications of behavior on the basis of feedback. The seven types of society can then be listed in a table. ‘This book
Behavioral mechanism
Society type
Example
Proscriptive exegetical
Dogmatic, institutionalized ideological
Feudal Europe
Prescriptive exegetical
Affective-sentimerwl
Liberalism, uninstitutionalized religion
Principled-discursive
.Axiomatic-rational&d
Capitalism
Inductive-associative
.4daptive-conditiontd
Primitive tribes
Inductive-ampliative
.4daptive-correlative
Secular, opportunistic degenerate capitalism
6.
Interpretative-idiosyncratic
Intrinsic-originative
A scholarly discipline
7.
Hypostatized-idiosyncratic
Intrinsic-compulsive
Hermits, drug culture
1.
The book expounds in detail the typical cultural, economic, social, and political mechanisms and pathologies of these seven types with historical illustrations. T’k author proposes the following transition matrix for changes. modelled as a \larkuv process where the seven types are listed in the order 4, 1, 3, 2, 5, 5, 7: 0 0 0 0 0.1 0 0
1 0
0 0.7 0.6 0 0
It is a very interesting
0 0.4 0 0 0 0 0
0
0
0.5 0.2 0 0.1 0 0
0.1 0.7 0.2 0 0 0
0
0
0 0 0.1 0 0 0.1 0 0.2 ~ 101 0 l i
and thought-proyoking
book.
Jerry R. Green and Jean-Jacques Laffont, Incemires in Public Decision-Makirzg. New York: North-Holland, 1979. The book is a comprehensive treatment of an important area in modern mathematical economics. It is well written, and the mathematics is mainly multi\ariablt: calculus with some probability theory, but the reader may find it difficult unless he has some acquaintance with the mathematical economics literature. An economic mechanism is said to be incentive-compatible if it is in the primate interest of each individual to cooperate. Frequently this means that the indi\ 13uaE must accurately report data known to him but not the government . In garni theoretic terms it means that there is an equilibrium of some sort, such as a dc>minant strategy equilibrium, Nash equilibrium, or strong equilibrium. l\toreo\ er. wzh an equilibrium should give a Pareto efficient result: there is no alternati\ t: pcwibk outcome in which everyone is better off. As the number of agents tends to infinity, the market system approaches inxnti~ c compatibility (perfect competition). If each agent seeks his own interest onI>. the result is Pareto efficient. Surprisingly, for a finite set of agents the market is not incentive compatible, and M. Satterthwaite and H. Sonnenschein haye recentI! proved there is no alternative to the market system which is incentive-compatible in the situation where individual agents have market power. Socialist syscen~s are IW