Society as an Octopus

(As appeared on our May 2017 Newsletter)

Recent research into the way octopuses behave has shown that their nervous system is quite unlike human beings. Instead of its “brain” being confined to a central location, it is in effect “distributed” through its body and legs. Many descriptions of human’s nervous systems see its functioning as like a “CEO” controlling the passive body from its position of knowledge, based on the inputs of the senses to the brain. Indeed, that is a reasonable description of how it feels to us. Decisions seem to be made in our “heads”, not in our feet! But this is not the case with the Octopus, which receives sensory information from cells located in each of  its legs, which can then take local “decisions” without any central direction from its “brain”.

Why am I discussing biology in a Lion Rock Institute post, you may well be asking? Well, you may already have spotted the analogy with society. Perhaps because our own experience is of our body being guided by our well-informed centralised brain, there may be a natural tendency for us to imagine that society should be structured in a similar way. The Government plays the role of the “brain” of society, getting input from the population (consultations or “elections” for example), then guiding the body of society in the “right” direction.

Perhaps the passive acceptance, by many in our city, of decisions with which they are not inclined to agree, stems in part from this analogy in their minds of how society ”ought” to work. We simply accept that the “social contract” in modern society necessarily involves our conceding decision making on many aspects of our lives to a “central authority”, whether elected or not. But if we think, instead, of the analogy of the octopus, matters look quite different. The “legs” receive their own information of local conditions that affect them and take their own decisions for action. They have no need of central direction. Indeed, their own decisions are more appropriate since they are based on that leg’s own needs, not an “average” assessment of the needs of all.

Now imagine Hong Kong as an octopus with 7.1 million legs. What is the best solution to achieve outcomes that suit the diverse needs of each of them? Is it for a “central nervous system” to try to aggregate all of the information it has and come up with a single policy that suits all? (Think universal pensions, MPF, Minimum Wage, Standard Working Hours. All are “one size fits all” solutions applied uniformly to millions of people.)

Or is it it better to permit (and not prevent!) each citizen to provide for their own savings for retirement, to decide themselves what hours they wish to work, and at what wage? Are not individual citizens better informed about their own needs, their own trade-offs, for example between working more hours or taking more leisure?

There are two basic flaws in a society with a central government that takes decisions on behalf of citizens when it need not do so. First there is the “information” problem. Just like the octopus, the “head” of government simply does not, and cannot, know enough about the desires and preferences of 7 million people to make good decisions on their behalf. This was a simple point made by Austrian economists some 100 years ago, when they pointed out how central planning in the Soviet Union must fail. No committee can have enough information, in real time, to know how much steel to produce (for example) or at what price.

It is a matter of profound sadness that 21st century societies all over the world continue to make this fundamental mistake. The most overt elements of oppression of the soviet period may have gone but the underlying attitude to the structure of  government has survived. Indeed, this structure has become even more legitimised. And this is more dangerous than it was in the soviet period, because so many think “freedom” has been won. Yet they have unconsciously conceded to the state so many decisions about their own lives that they should be taking.

There is second flaw here which is rarely noticed. Even if some of us concede “one size fits all” policies don’t work in practice, what should also concern us is the coercive nature of this type of government in principle. To be forced to save in the MPF, rather than making our own provision for retirement, is scandalous. To be prevented, effectively by force, from employing someone at a wage that reflects the value of their input is not only bad economics which reduces wealth creation but it is also fundamentally against the spirit of a free society.

Why do so many people not notice these features of the society we live in? Why do people not march against this loss of freedom?

Perhaps because people tend to accept the absence of freedoms they never had. Even though they resist freedoms that they already have being taking away. Every citizen today has grown up in a world where “freedom” has been defined by western democracies. While elections are therefore prized, and their withdrawal would be fiercely resisted, the absence of many economic freedoms that states routinely withhold from citizens are simply accepted as “normal”. People are told that this was the “social contract” they accepted when they were born into this society. Of course none of us was ever asked to sign any contract and could not have refused to do so if we had been.

In medieval times the right to vote was absent everywhere, and hence its presence now is noted as a great example of “progress” in the modern world. Yet people in earlier centuries would have been amazed to see the interferences in daily life that are seen as routine today. To require someone to have a licence before they can teach for example. The typical citizen then would not be surprised at not having the vote. It was “normal” for him that the King was in power. But to have the King tell him how to farm, what seeds to use, how to trade at the daily marketplace, he would not understand such a world. His world was much more like the octopus. If the body decided to move off somewhere else, his leg would have to follow (the Prince did have some power after all), but otherwise his “leg” could make its own decisions.

Maybe Hong Kong can become more like an octopus again, as it was in the days of freedom and growth in past decades.

Nick Sallnow-Smith

Chairman

The Lion Rock Institute