Ktetics

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Introduction

Jack Hirshleifer’s “Introduction” to his volume, The Dark Side of the Force, is an excellent start to the analysis of coercive acquisition and its current place in the economic corpus. As strong as it is, my comments serve to reinforce its strengths and align it more closely with ktetics.

Ktetics is the art of acquisition: production, trade, coercion.

Ways to Make a Living – Ways to Acquire What You Want

“ … there are two main methods of making a living. The first aims at producing useful goods and services for exchange with other producers. Alternatively, you might try to appropriate a larger slice of whatever is being produced.”

Hirshleifer imagines two ways to make a living. In the first he joins production and trade into a single “way.”  The second way is through “predation and conflict.” While the basic idea fits with ktetics, the presentation is confusing.  First, production, trade and coercion need to be evaluated simultaneously. The individual implicitly or explicitly chooses between the three acquisition approaches, predictably choosing the lower “cost” approach. Hirshleifer suggests this when he later says that production and trade exist in the shadow of coercion. 

Furthermore, production for one’s self is one way of making a living.  Production for one’s self a good that can be traded is a distinct second way of making a living. Most of us produce labor that we trade for dollars. Later, these dollars (savings) are traded for other goods and services we might want to acquire.  Alternatively, rather than trade our labor for dollars, we might decide to use our labor to steal (coercive acquisition) someone else’s dollars. Here there might want to introduce the idea of a social or moral cost to our coercive production function.

In any case, ktetics proposes three “arts of acquisition:” production (self), production for voluntary exchange (two-party), and non-voluntary coercion.

Coercive Acquisition

“The way of conflict does not necessarily involve violence. Among the usually nonviolent forms of contests are strikes and lockouts (industrial conflict) and lawsuits (legal conflict).”

Hirshleifer makes a very important observation here. Non-voluntary coercion (the way of conflict) is “not necessarily” violent. In fact, violence is arguably a relatively minor, albeit dramatic, element of coercion. 

More significant to ktetics is the role of institutions.  Market exchange (dollars for donuts) is a social institution backed up by the force of the courts and our moral sense that it is so automatic we hardly think about it. The legal system, which Hirshleifer mentions prominently, is managed coercive force brought to bear (again implicitly and explicitly) to enforce its rules decided actively in cases before it or more passively in its precedent decisions. Social/cultural institutions are all about us. They represent the low-cost way a society negotiates what would otherwise be, or lead, to coercive behavior.

In the development of the filed of ktetics, perhaps a valuable first step is the development of a typology of coercive behavior management from voluntary to non-voluntary, from violent to non-violent, including biological and psycho/sexual necessity.

Conflict Redistribution

“The way of predation and conflict merely redistributes that total (less whatever is dissipated in the struggle.”

This is a bit simplistic. Struggle has economic consequences of its own in terms of production and innovation consequences. Conflict can stimulate parts of an economy and discourage others. Conflict has consequences that are much more than redistributive.

“And in fact all choices take place in the shadow of conflict.”

“3.  Any settlement or compromise arrived at, and even the process of exchange itself, takes place in the shadow of the potential conflict lurking in the background.”

The Conflict Shadow

Again, Hirshleifer hits the mark. Conflict or the potential for conflict exits and changes behaviors – economic behavior.  This “shadow” does not have equal force across all social realms and its “intensity” or perceived intensity an ever-present factor. For example, coercive acquisition – theft – is an essential choice in every market transaction.

Conflict: Central to the Fabric of Economic Thought

“Traditional economics has been almost exclusively devoted to one of these branches, the way of production and exchange.

Mainline economics has not totally ignored conflictual activities: topics such as crime, litigation, labor-management struggles, rent-seeking contests, redistributive politics, and so forth have received a certain amount of attention. But these investigations have not been woven into the central fabric of economic thought.”

Another excellent point … it is not sufficient to apply economic tools to conflict problems.  As the potential for exchange affects individual production, so too coercive potential affects production and exchange.  The economic tools themselves must be reevaluated – recalibrated – with this in mind. Economic analytical models might well be considered mis-specified should the coercive option be ignored.

An Economic Theory of Struggle?

“The first aim of conflict analysis in economics is therefore to provide an underlying theory of struggle that will be applicable to all the specific topical areas such as warfare, litigation, strikes and lockouts, crime, power politics, and family quarrels.”

Again, not only is this a bit simplistic, but it harkens back to the says of the “Socialist Struggle.” Ktetics is perhaps better positioned in this early stage of analysis to even handedly evaluate the production costs and functions of coercion – its science as well as its practical arts and methods – more than the struggle itself.  To the extent that we seek a “first aim” perhaps it should be in terms of how an individual makes a choice between the three ways to acquire what he/she wants.

A Unified Economic Theory

“Ultimately, a unified economic theory should allow for both of the two /THREE/ main forms of social interaction: on the one hand exchange and contract, and on the other hand struggle and contention.”

Yes, all three forms of social interaction should be part of ktetic theory. This is where you want to go.

Bibliography Selection

Annotated bibliography for each article from a ktetics perspective is required.

Beyond Optimization

“Conflict theory shares with exchange theory the central analytic paradigms of optimization on the individual level of analysis and societal equilibrium on the aggregate level. Features like preference functions, competition, increasing and decreasing returns, and so forth play comparable roles in both branches of economic theorizing.”

Ktetics relaxes the economics maximization paradigm: maximization is but one of the possible successful closing solutions. In a military context, maximization loses its punch because there are rarely optimal outcomes for the military and much less than optimal outcomes for the many individual casualties.  Furthermore the societal equilibrium is better thought of in terms of a violence threshold. That is to say you want to learn – your theory to explain – how to manage societal interactions at levels beneath a violence threshold.

Non-Voluntary Engagements

“The key difference is that the social interactions dealt with in exchange theory are a source of mutual advantage, whereas in conflict theory any advantage gained by one party must come at the expense of its rival or rivals.”

Actually, mutual advantage is the core of voluntary exchange as opposed to non-voluntary coercive exchange where one is a loser, the other a winner, of value.