Richard Dawkins: The universe is queerer than we can suppose

Clifford Stoll: 18 minutes with an agile mind

Isabel Allende: Tales of passion

Matthieu Ricard: Habits of happiness

Barry Schwartz: The paradox of choice

Larry Brilliant: The case for informed optimism

Dan Dennett: Can we know our own minds?

Howard Rheingold: Way-new collaboration

Tony Robbins: Why we do what we do, and how we can do it better

How A New Paradigm is created

| View | Upload your own

Fallacies

Formal fallacies

Formal fallacies are arguments that are fallacious due to an error in their form or technical structure. All formal fallacies are specific types of non sequiturs.

• Appeal to probability: because something could happen, it is inevitable that it will happen. This is the premise on which Murphy's Law is based.
• Argument from fallacy: if an argument for some conclusion is fallacious, then the conclusion must necessarily be false.
• Bare assertion fallacy: premise in an argument is assumed to be true purely because it says that it is true.
• Base rate fallacy: using weak evidence to make a probability judgment without taking into account known empirical statistics about the probability.
• Conjunction fallacy: assumption that specific conditions are more probable than a single general one.
• Correlative based fallacies
  • Denying the correlative: where attempts are made at introducing alternatives where there are none
  • Suppressed correlative: where a correlative is redefined so that one alternative is made impossible
• Fallacy of necessity: a degree of unwarranted necessity is placed in the conclusion based on the necessity of one or more of its premises
• False dilemma (false dichotomy): where two alternative statements are held to be the only possible options, when in reality there are several
• If-by-whiskey: An answer that takes side of the questioner's suggestive question
• Ignoratio elenchi (irrelevant conclusion or irrelevant thesis)
• Homunculus fallacy: where a "middle-man" is used for explanation, this usually leads to regressive middle-man explanations without actually explaining the real nature of a function or a process
• Masked man fallacy: the substitution of identical designators in a true statement can lead to a false one
• Naturalistic fallacy: a fallacy that claims that if something is natural, then it is "good" or "right"
• Nirvana fallacy: when solutions to problems are said not to be right because they are not perfect
• Negative proof fallacy: that because a premise cannot be proven true, that premise must be false
• Package-deal fallacy: when two or more things have been linked together by tradition or culture are said to stay that way forever

Propositional fallacies

Propositional fallacies:

• Affirming a disjunct: concluded that one logical disjunction must be false because the other disjunct is true.
• Affirming the consequent: the antecedent in an indicative conditional is claimed to be true because the consequent is true. Has the form if A, then B; B, therefore A
• Denying the antecedent: the consequent in an indicative conditional is claimed to be false because the antecedent is false; if A, then B; not A, therefore not B

Quantificational fallacies

Quantificational fallacies:

• Existential fallacy: an argument has two universal premises and a particular conclusion, but the premises do not establish the truth of the conclusion
• Illicit conversion: the invalid conclusion that because a statement is true, the inverse must be as well
• Proof by example: where things are proved by giving an example

Formal syllogistic fallacies

Syllogistic fallacies are logical fallacies that occur in syllogisms.

• Affirmative conclusion from a negative premise
• Fallacy of exclusive premises: a categorical syllogism that is invalid because both of its premises are negative
• Fallacy of four terms: a categorical syllogism has four terms
• Illicit major: a categorical syllogism that is invalid because its major term is undistributed in the major premise but distributed in the conclusion
• Illicit minor: a categorical syllogism that is invalid because its minor term is undistributed in the minor premise but distributed in the conclusion.
• Fallacy of the undistributed middle: the middle term in a categorical syllogism is not distributed
• Categorical syllogism: an argument with a positive conclusion, but one or two negative premises

Informal fallacies

Informal fallacies are arguments that are fallacious for reasons other than structural ("formal") flaws.

• Argument from repetition (argumentum ad nauseam)
• Appeal to ridicule: a specific type of appeal to emotion where an argument is made by presenting the opponent's argument in a way that makes it appear ridiculous
• Argument from ignorance ("appeal to ignorance"): The fallacy of assuming that something is true/false because it has not been proven false/true. For example: "The student has failed to prove that he didn't cheat on the test, therefore he must have cheated on the test."
• Begging the question ("petitio principii"): where the conclusion of an argument is implicitly or explicitly assumed in one of the premises
• Burden of proof
• Circular cause and consequence
• Continuum fallacy (fallacy of the beard)
• Correlation does not imply causation (cum hoc ergo propter hoc)
• Equivocation
• Fallacies of distribution
  • Division: where one reasons logically that something true of a thing must also be true of all or some of its parts
  • Ecological fallacy
• Fallacy of many questions (complex question, fallacy of presupposition, loaded question, plurium interrogationum)
• Fallacy of the single cause
• Historian's fallacy
• False attribution
  • Fallacy of quoting out of context
• False compromise/middle ground
• Gambler's fallacy: the incorrect belief that the likelihood of a random event can be affected by or predicted from other, independent events
• Incomplete comparison
• Inconsistent comparison
• Intentional fallacy
• Loki's Wager
• Lump of labour fallacy (fallacy of labour scarcity, zero-sum fallacy)
• Moving the goalpost
• No true Scotsman
• Perfect solution fallacy: where an argument assumes that a perfect solution exists and/or that a solution should be rejected because some part of the problem would still exist after it was implemented
• Post hoc ergo propter hoc: also known as false cause, coincidental correlation or correlation not causation.
• Proof by verbosity (argumentum verbosium)
• Psychologist's fallacy
• Regression fallacy
• Reification (hypostatization)
• Retrospective determinism (it happened so it was bound to)
• Special pleading: where a proponent of a position attempts to cite something as an exemption to a generally accepted rule or principle without justifying the exemption
• Suppressed correlative: an argument which tries to redefine a correlative (two mutually exclusive options) so that one alternative encompasses the other, thus making one alternative impossible
• Sunk cost fallacy
• Wrong direction

Faulty generalizations

Faulty generalizations:

• Accident (fallacy): when an exception to the generalization is ignored
• Cherry picking
• Composition: where one infers that something is true of the whole from the fact that it is true of some (or even every) part of the whole
• Dicto simpliciter
  • Converse accident (a dicto secundum quid ad dictum simpliciter): when an exception to a generalization is wrongly called for
• False analogy
• Hasty generalization (fallacy of insufficient statistics, fallacy of insufficient sample, fallacy of the lonely fact, leaping to a conclusion, hasty induction, secundum quid)
• Loki's Wager: insistence that because a concept cannot be clearly defined, it cannot be discussed
• Misleading vividness
• Overwhelming exception
• Spotlight fallacy
• Thought-terminating cliché: a commonly used phrase, sometimes passing as folk wisdom, used to quell cognitive dissonance.

Red herring fallacies

A red herring is an argument, given in response to another argument, which does not address the original issue. See also irrelevant conclusion

• Ad hominem: attacking the personal instead of the argument. A form of this is reductio ad Hitlerum.
• Argumentum ad baculum ("appeal to force", "appeal to the stick"): where an argument is made through coercion or threats of force towards an opposing party
• Argumentum ad populum ("appeal to belief", "appeal to the majority", "appeal to the people"): where a proposition is claimed to be true solely because many people believe it to be true
• Association fallacy & Guilt by association
• Appeal to authority: where an assertion is deemed true because of the position or authority of the person asserting it
• Appeal to consequences: a specific type of appeal to emotion where an argument concludes a premise is either true or false based on whether the premise leads to desirable or undesirable consequences for a particular party
• Appeal to emotion: where an argument is made due to the manipulation of emotions, rather than the use of valid reasoning
  • Appeal to fear: a specific type of appeal to emotion where an argument is made by increasing fear and prejudice towards the opposing side
  • Wishful thinking: a specific type of appeal to emotion where a decision is made according to what might be pleasing to imagine, rather than according to evidence or reason
  • Appeal to spite: a specific type of appeal to emotion where an argument is made through exploiting people's bitterness or spite towards an opposing party
  • Appeal to flattery: a specific type of appeal to emotion where an argument is made due to the use of flattery to gather support
• Appeal to motive: where a premise is dismissed, by calling into question the motives of its proposer
• Appeal to novelty: where a proposal is claimed to be superior or better solely because it is new or modern
• Appeal to poverty (argumentum ad lazarum)
• Appeal to wealth (argumentum ad crumenam)
• Argument from silence (argumentum ex silentio)
• Appeal to tradition: where a thesis is deemed correct on the basis that it has a long standing tradition behind it
• Chronological snobbery: where a thesis is deemed incorrect because it was commonly held when something else, clearly false, was also commonly held
• Genetic fallacy
• Judgmental language
• Poisoning the well
• Sentimental fallacy: it would be more pleasant if; therefore it ought to be; therefore it is
• Straw man argument
• Style over substance fallacy
• Texas sharpshooter fallacy
• Two wrongs make a right
• Tu quoque

Conditional or questionable fallacies

• Definist fallacy
• Slippery slope

The New Narcissism

December 29, 2006
If This Is One of The Sexiest Things You've Ever Seen, You May Be a Narcissist


A quick primer on the new Narcissism.

I don't mean the traditional Kernberg, Kohut, or even Freudian descriptions. In the modern times, I think narcissism has evolved.

A narcissist isn't necessarily an egotist, someone who thinks they are the best. A quick screen is an inability to appreciate that other people exist, and have thoughts, feelings, and actions unrelated to the narcissist. These thoughts don't have to be good ones, but they have to be linked to the narcissist. ("I'm going to get some gas-- because that jerk never fills the car.")

The narcissist believes he is the main character in his own movie. Everyone else has a supporting role-- everyone around him becomes a "type." You know how in every romantic comedy, there's always the funny friend who helpes the main character figure out her relationship? In the movie, her whole existence is to be there fore the main character. But in real life, that funny friend has her own life; she might even be the main character in her own movie, right? Well the narcissist wouldn't be able to grasp that. Her friends are always supporting characters, that can be called at any hour of the night, that will always be interested in what she is wearing, or what she did. That funny friend isn't just being kind, she doesn't just want to help-- she's personally interested in the narcissist's life. Of course she is.

A comedian I can't remember made a joke about actors in LA, but it's applicable to narcissists: when two narcissists go out, they just wait for the other person's mouth to stop moving so they can talk about themselves.

So on the one hand, the narcissist reduces everyone else to a type, as it relates to himself; on the other hand, the narcissist, as the main character in his movie, has an identity that he wants (i.e. he made it up) and requires all others to supplement that identity.

A narcissist looks the same every day; he has a "look" with a defining characteristic: a certain haircut; a mustache; a type of clothing, a tatoo. He used these to create an identity in his mind that he will spend a lot of energy keeping up.

Consider the narcissist who wants his wife to wear only white, high heeled pumps. The narcissist wants this not because he himself likes white high heel pumps-- which he might-- but because the type of person he thinks he is would only be with the type of woman who wears white high heeled pumps. Or, in other terms, other people would expect someone like himself to be with a woman who wears those shoes. What he likes isn't the relevant factor, and certainly what she likes is irrelevant. What matters is that she (and her shoes) are accessories to him.

Never mind that the woman is obese, or 65, or the shoes out of style, or impractical-- the shoes represent something to him, and he is trying to reinforce his identity through that object.

Narcissists typically focus on specific things as proxies for their identity. As in the example above, that the woman might be obese or a paraplegic could be ignored if the footwear was the proxy for identity. These proxies are also easy to describe but loaded with implication: "I'm married to a blonde." Saying "blonde" implies something-- e.g. she's hot-- that might not be true. But the narcissist has so fetishized "blondeness" that it is disconnected from reality. The connotations, not the reality, are what matters (especially if other people can't check.)

This explains why narcissists feel personally sleighted when the fetishized object disappears. "My wife stopped dying her hair blonde; but when she used to date her other boyfriends, she was in the salon every month. Bitch." He doesn't see the obvious passage of time, what he sees is part of his identity being taken from him, on purpose. Here's the final insult: "she obviously doesn't care about me as much as her old boyfriends."

As a paradigm, the narcissist is the first born (or only) child, aged 2-3. Everything is about him, and everything is binary. His, or not his. Satisfied, or not satisfied. Hungry, or not hungry. Mom and Dad are talking to each other and not me? "Hello! Focus on me!" Youngest children don't typicaly become narcissists because from the moment of their birth, they know there are other characters in the movie. (Youngest more easily becomes borderline.) Control, of course, is important to a narcissist. If you can imagine a 40 year old man with the ego of a 2 year old, you've got a narcissist.

Obviously, not all first borns go on to be narcissists. Part of their development comes from not learning that there is a right and wrong that exists outside them. This may come from inconsistent parenting:

Dad says, "you stupid kid, don't watch TV, TV is bad, it'll make you stupid!" Ok. Lesson learned. But then one day Dad has to do some work: "stop making so much noise! Here, sit down and watch TV." What's the learned message? It isn't that TV is sometimes good and sometimes bad. It's that good and bad are decided by the person with the most power.

So the goal in development is to become the one with the most power. Hence, narcissists can be dogmatic ("adultery is immoral!") and hypocrites ("well, she came on to me, and you were ignoring me at home") at the same time. There is no right and wrong-- only right and wrong for them. He's an exaggerated example: if they have to kill someone to get what they want, then so be it. But when they murder, they don't actually think what they're doing is wrong--they're saying, "I know it's illegal, but if you understood the whole situation, you'd understand..."

Narcissists never feel guilt. Only shame.

Knowledge is Obligation

Wednesday, May 17, 2006

Knowledge Is Obligation

Posted by ClinkShrink from Shrink Rap

In the January 2002 issue of the AAPL newsletter there was an interview published with a well-respected & experienced forensic psychologist and correctional clinician, Joel Dvoskin. He described correctional work more eloquently than I have ever heard before. When I finished reading this, I kind of wanted to stand up and cheer:

To me the moral thing, the ethical thing, is not to cut and run. It is to maintain one's dignity and professionalism in the face of bad circumstances. It is to understand the difference between reasonable flexibility and selling out. It is speaking with honor and humility (even in court) about how it ought to be, and resisting the understandable temptation to sink into self-righteous and angry denunciations. It is protecting your own hope against all assaults, because hope is the most precious gift you share with your clients."

I think this should be framed and hung on the wall of every correctional psychiatrist's office.

If we had offices...

The Uncertainty Principle

The Last Psychiatrist, March 7, 2007

A commenter emailed me some of his thoughts on narcissism, and wrote:

...those studies where people rank each other in a room for different attributes having never met them... I think what's going on is we assign people personalities based on how they look and force them to become a certain thing, creating a whole custom world for them...

which puts the idea of "profiling" on its head. Do we actually ever "figure people out," or do we change them into what we think they are by the act of engaging in a relationship (on any level) with them? It sounds a lot like a psychological version of quantum entanglement:

When two systems, of which we know the states by their respective representatives, enter into temporary physical interaction due to known forces between them, and when after a time of mutual influence the systems separate again, then they can no longer be described in the same way as before, viz. by endowing each of them with a representative of its own... By the interaction the two representatives have become entangled.

Which, unfortunately, sounds a lot like this (p. 236):

The unreflective consciousness does not apprehend the person directly or as its object; the person is presented to consciousness in so far as the person is an object for the Other. This means that all of a sudden I am conscious of myself escaping myself, not in that I am the foundation of my own nothingness but in that I have my foundation outside myself. I am for myself only as I am a pure reference for the Other.

You can't know who a person is without relating to them, and once you do that, you irrevocably change them.

Only in relationship to another do you get defined. Sometimes you can do it with your God; but either way, any adjective has to be placed on you by someone else. Are you brave? Strong? funny, stupid, nervous? All that comes from someone else. So when someone relates to you, they define you. You can try to control this-- hence the narcissist preying on the borderline to get her to see him the way he wants to be seen-- but ultimately it's up to the other person.

So we're are, or become, whatever a person thinks we are? No, it's worse than that-- we want to be what they think we are. That's why we maintain the relationship, otherwise we'd change it. ("I divorced her because I didn't like who I became.")

We do it because it is easier, and it serves us. You're kind because he sees you as kind-- which in turn allows him to be seen as someone who can detect kindness. And you accept that you're kind-- or mean/vulnerable/evil/brilliant-- because it serves you-- there's some gain there. But a strong person accepts that on the one hand the other person gives you definition, and on the other hand you are completely undefinable, free, at any moment, to redefine yourself. You can defy him, biology, environment and be anything.

You say: but I can't be a football star just because I want to. But that's wanting someone else to see you in a certain way. Do you want to play ball? Go play ball. "But I won't get on the team." Again, that's wanting to change someone else. Change you first.

But what about-- identity? That's the mistake, that's bad faith. Thinking that our past is us; what we did defines us. Our past can be judged-- what else is there to judge?- but it can't-- shouldn't-- define us, because at any moment we are free to change into something, anything else. And so, too, we can be judged for not changing.

Ultimately, you are responsible for everything you do and think. Not for what happens to you, but for how you choose to react. Nothing else made you be. Nothing else made you do.

Trinity said it best: The Matrix cannot tell you who you are.

Reciprocal Determinism And Why Punching People Out Is Way Cool

A quick addendum to my previous post on the "Psychological Uncertainty Principle."

A reader pointed out that some of this is explained by "reciprocal determinism", which basically means that you respond to your environment, but then force a change in your environment which further changes your behavior. For example:

1. "Girls don't like me. Girls don't like me. Girls don't like me." Repeat x 100.
   
2. So a girl thought she liked you, but then met you, and now decided you're a nutter. So she bolts.
3. Now you have proof girls don't like you.

It sounds like reciprocal determinism says who you are affects your environment, which then affects you.

That's wrong. In the above example, it wasn't ever true that girls didn't like you. You made it true. You changed your behavior, somehow, that made it so that girls don't like you. You received some gain from making it true that girls didn't like you-- perhaps it helps you avoid intimacy, etc, etc.

So your identity never enters the equation. Reciprocal determinism is about behavior, not identity. Albert Bandura (the originator of this concept) was responding to Skinner's behaviorism.

Wikipedia's article on reciprocal determinism is a perfect example of this exactly wrong use of the concept. They describe how low MAOA enzyme can cause you to be antisocial. In fact, it is the opposite: having low MAO-A does nothing, but having high MAO-A seems to be protective. The reason people became antisocial (synonymous with criminal) in those studies was that they were abused-- in essence, they imitated the behavior.

The experiment Bandura is famous for speaks to my point about the absoluteness of your responsibility for your identity: kids watched adults beat up a bobo doll, and were then put in a room with a bobo doll, and, surprise, the majority then imitated this behavior, even using the same hitting techniques and repeating the same phrases the adults did. Nothing genetic or even environmental affected this outcome-- almost all the kids did it (and almost none of the control kids who didn't watch the adults beat up the doll).

So watching the Matrix causes kids to go Columbine? Bandura would have said yes. But oddly no one ever wonders why then the cooking channel doesn't result in more pies, or why porn hasn't prompted rampant depilation. Bandura's theory of reciprocal determinism required a key element: reinforcement. There has to be a gain in the imitation, in the identification. You may have "learned" the violence by watching it, but you won't display the violence unless there is some reward-- it isn't just a reflex, some part of your core identity. You decide to imitate it, because it rewards you. How? "I want to be just like my Dad" (except he beats Mom.) "Neo is so cool." (Didn't he kill all the human security guards?) "Thug life!" Etc. Note that no one ever imitates the violence of, say, Gollum. Want to know why? Because Gollum never scores any chicks.

So once again, you pick who you are. Or: you picked who you are, how you behave, whether you know this or not. So now ask: why did you pick this person, this identity? And what is preventing you from changing any or all of it?

Narcissism in Society

From The Last Psychiatrist - December 17, 2006

Time's Person of the Year Is Someone Who Doesn't Actually Matter

That would be you.

The short version of the Time article is that we as individuals have formed a community on the internet (YouTube, MySpace, Wikipedia, etc), and this community is starting to "build a new kind of international understanding, not politician to politician... but person to person."

Ok, no. Wrong, wrong, wrong all over the place.

The author of this piece is Lev Grossman. Grossman is fairly famous book critic, one of the better ones. He also wrote a novel that's a nod to Borges. This isn't bad, it's just context.

The entire problem with Grossman's premise is exemplified by his first paragraph:

The "Great Man" theory of history is usually attributed to the Scottish philosopher Thomas Carlyle, who wrote that "the history of the world is but the biography of great men." He believed that it is the few, the powerful and the famous who shape our collective destiny as a species. That theory took a serious beating this year.

Well, not exactly. Grossman's thesis is that we matter, we can shape our destinies; he puts that in contrast to Carlyle's premise that great men help shape destiny. But that's not what Carlyle actually says. Here's the actual quote:

In all epochs of the world's history, we shall find the Great Man to have been the indispensable savior of his epoch;--the lightning, without which the fuel would never have burnt. The History of the world, I said already, was the biography of Great Men.

Carlyle doesn't say great men shape destiny; he says great men, and only great men, cause history. These great men should be given power to run society because only they can be trusted to do it. Great men actually drive history, not shape it.
Democracy can't be trusted. Paternalistic socialism, or at least a non-hereditary, anti-capitalist, aristocracy is all that can keep us from the dark of ochlocracy. Individuals trump ideology-- which sounds like a good motto, except when individuals means Stalin and ideology means liberalism. Oh, and the last book Hitler read was Carlyle's History of Friedrich of Prussia.

So Grossman is not really paraphrasing Carlyle correctly. This is important because Grossman is a book critic with a PhD from Harvard in comparative literature. Either he simply did not know this about Carlyle, which I have to assume is impossible, or it didn't matter: he commandeered the quote, stripped it of the meaning Carlyle intended and used it the way he needed to use it. And that exactly describes the problem: truth and reality aren't important, what's important is you.

Because "You" as Person of the Year is actually quite portentuous. It's is both representative and symptomatic of the problem of our times: narcissism. Nowadays we are so alienated and matter so very little to larger society that the only thing that inflames any passion is to be reminded of this. Consider Bush and Cheney. Put aside politics for a moment, it is clear that their single-mindedness of purpose ignores each of us as individuals. Give them the benefit of the doubt, that they are doing what they think is best. But it's best for society, for America: what we hate is that it isn't for us, for you, for me. That's what people hate about them, the seeming indifference to our individual worth, to our sense of importance. Our votes don't count; everything is about religion; "Global War On Terror." Where in all that is the individual? We are tools to their "higher cause." I know people say that they are angry at the cause; but I think it's really anger that we're being used for anything.

Being on YouTube, having a blog, having an iPod, being on MySpace-- all of these things are self-validating, they allow that illusion that is so important to narcissists: that we are the main characters in a movie. Not that we're the best, or the good guys, but the main characters. That everyone around us is supporting cast; the funny friend, the crazy ex, the neurotic mother, the egotistical date, etc. That makes reminders of our insignificance even more infuriating.

Take a look at the photos in the Time article: a DJ, a punk rocker, a guy in dredlocks, a kid dancing with headphones, a guy singing into a mic, a hot chick taking a photo of herself-- none of these people could ever be "Person of the Year." They barely have identities outside of their image. (And observe how so many are defined through music they listen to.) They must be defined by something from without, like a tattoo. But they deserve everything anyone else can have. It's their right.

I'm not saying each of us as individuals is insignificant. We should, could, matter. But to protect ourselves from an existential implosion, we decide to define ourselves through images and signs, rather than behaviors; lacking an identity founded in anything real makes us vulnerable to anger, resentment. But no guilt, ever. The narcissist never feels guilt. He feels shame.

It can't last. If society chooses to make narcissism the default, it's going to have to deal with society-wide narcissistic injuries-- when we suddenly realize that it isn't solely our movie and we're really not the main character. And no one wants to see this stupid movie anyway. This inevitably leads to violence: the school shooting, inexplicable knifing over Play Station 3, Andrea Yates, beating the wife because she wore the wrong shoes type of violence. Oh, they weren't white high heeled pumps? That bitch! She used to wear them for her old boyfriend.

I'm not sure anyone in psychiatry sees this-- they are too busy documenting Pharma excesses and Lamictal outcomes-- but it is the problem of our times. The only ones who seem to notice are advertisers, marketers-- they see it. They don't judge it, they simply profit from it.

Grossman could morph Carlyle into what he wanted because Carlyle doesn't matter, what matters is what Grossman wanted, what Grossman needed. Carlyle doesn't exist, or he only exists as we need to use him. He becomes a tool, another supporting character. Anyone actually read anything by Carlyle anymore? Why bother? We only need a few soundbites for our own use. Grossman is a clearly a good writer and hardly the problem here. But picking "You" as Person of the Year only reinforces the collective delusion that our individual selves matter more than other person, or a collective good, an ideology, truth, or right and wrong. It's relativism with a cherry twist.

It won't last. It absolutely can't.

The Moral Hazard

The Last Psychiatrist - August 22, 2007
The Moral Hazard

If you behave badly because you know you'll get away with it, that's being "bad."

A Moral Hazard is different. If you behave "worse" than you would have otherwise, solely because you know that you won't have to bear the consequences, then you have a Moral Hazard.

I'll emphasize: the key is that your behavior is in itself not necessarily "bad." It is simply worse than your behavior otherwise would have been, because you know there won't be consequences.

Here's why it's called a Moral Hazard: if there are no external consequences, the only thing that would prevent you from behaving worse is an internal set of rules.

Where do these internal rules come from?

Let's run some examples, starting with the current credit problem:

* Too much risk (credit) got the hedge funds (and us) in trouble. If Bernanke lowers rates to save the economy, and thus inadvertently bails them out, the hedge funds have learned they can take bigger risks next time, because they know Bernanke will (inadvertently) bail them out again. It’s not that Bernanke wants to bail them out, he doesn’t. He wants to save the economy—but the hedge funds now know he will repeatedly do this and can act “worse.”
* Insurance: If you have no car insurance, you drive very, very, very carefully. The Moral Hazard describes when a person, upon getting insurance, drives “worse” (read: less slowly, rolling stops; doesn’t avoid talking on cell phone.) NB: he is not driving badly; he is actually driving normally. But he's driving worse than "very carefully." The term “worse” is relative to other behavior. The point is that his behavior has comparatively worsened because he doesn’t have to worry as much about the consequences.
* Moral Hazard is cited everywhere in the universal healthcare debates: if healthcare is free, people may be less attentive to preventative measures, or overuse medical care. Before you scoff, imagine behavior if you had to bear all the cost personally. To counter the Moral Hazard, we have limits, deductibles, co-pays, etc.
* A subtype of the Moral Hazard is the principal-agent problem, in which one party has more information/knowledge they can use to maximize their own benefit. A doctor, having considerably more information/knowledge than a patient, can use it to maximize his benefit, not even necessarily at the expense of the patient. For example, he could bill for an extra service. He can ask the patient to return more often than necessary to get the extra visit fee, perform unnecessary tests, etc. So, too, lawyers, and politicians, etc.
* A more interesting example is the doctors who recommend a treatment modality-- for example, Depakote for maintenance bipolar--because it furthers their career, though it may not be as effiacious as another modality or more toxic.
* People invoke the Moral Hazard to complain about easy bankruptcy laws: if there are no consequences to declaring bankruptcy, people could borrow excessively and then simply walk away.

But what causes the Moral Hazard? Why do all people, to varying degrees, fall prey to different forms of the Moral Hazard? Why, and to what extent, does behavior worsen when there are no consequences?

Causes of the Moral Hazard

Succumbing to the Moral Hazard means that you have priced your gain above the loss of the other. Let me be clearly emphatic: your gain is priced not above the gain of the other, but specifically above the loss of the other. That's what makes it a Moral Hazard, and not an economic or strategic hazard. They know their actions cause a harm to the other, but do it anyway.

So the real question is, what makes people not care? Let's be clear that I am not talking about evil; I'm talking about the context dependent decisions of gain vs. loss.

There are two cases:

1. The loss is determined to comparatively trivial. The inattentive insured driver knows that insurance rates will be raised, but he figures he himself only caused a tiny part of that raise, which is considerably outweighed by his gain of getting to use a cell phone in the car. Similarly, each individual hedge fund figures it contributes very little to the overall risk cycle.
2. Unknown sufferer. While it is necessary that someone suffer some loss, it is not necessary that the specific identity of that someone be known. In fact, not knowing the specific identity makes it that much easier to find in favor of your gain, that much easier to be seduced by the Moral Hazard.

It's case 2 that is the psychiatrically interesting one. What about when the person harmed is clearly identified? How do you facilitate, psychologically, the harming of that person? The answer, of course, is to strip that person of their individuality, and see them only as an extension of you, your situation.

And so we return to it.

The Moral Hazard and Narcissism

The Moral Hazard is narcissism. The degree to which one is susceptible to the Moral Hazard is the measure of the individual's narcissism.

Remember, this isn't about evil; it's about what psychic variables make "your gain vs. their loss" calculations easier or harder to solve.

In an extreme case where a clearly identifiable person is greatly injured—say, a doctor who prescribes chemotherapy to a non-cancerous patient just to collect fees—the person can act precisely because he fails (or chooses not) to see the person as a separate entity—he only sees the person as it impacts himself.

The Simpsons' Mr. Burns used to refer to his employees as "organ banks." That's narcissism.

The Moral Hazard is, in essence, the opposite of Kant's categorical imperative.

So the causes of Moral Hazard are the degree to which a person

1. is able to see others as individuals and not only as they impact himself;
2. has an internalized set of rules that do not change regardless of how it impacts himself.

Everyone has a level of narcissism, thus, everyone faces Moral Hazards.

It's not that only narcissists fall prey to Moral Hazards; it's that narcissism is what allows you to see a Moral Hazard, where others don't. Consider the principal-agent problem: Say you're a lawyer. You could easily bill for an extra hour, no one would know. Ok: did that ever occur to you?

So the variables all impact your response to a Moral Hazard, and are covariant: your level of narcissism; your gain vs. their loss; the identity of the person harmed, etc.



The Application of the Moral Hazard to Others

But an even better description of the relation of narcissism to Moral Hazard is how your behavior creates a Moral Hazard for others.

A good example is parenting. If a three year old throws a tantrum, you can either appropriately deal with it, or give in to it. But if you give in, you know the kid will throw a bigger tantrum next time, because he has learned there won't be any repercussions. There are two things you want: you want to teach him that these rules will be consistently applied, "so don't try to get away with it;" but, more importantly, that rules in general are consistently applied, so learn the rules and internalize them, with no consideration of your own gain-- don't try to calculate if you can get away with it, even if you can get away with it. That second lesson is how you prevent (reduce) narcissism.

So good parenting requires that you always address tantrums in the same way-- consistently. Eventually, he internalizes the rules, they become part of his personality. You have thus averted his facing Moral Hazard; you have saved him from narcissism.

But now you're in a store and he throws a tantrum. The Moral Hazard still applies, but there's a new variable: your embarrassment. Do you deal with the tantrum the same way as at home, or do you give in-- stick a cookie in his mouth, buy the toy, whatever-- just to shut him up, hoping to deal with it back home? Clearly, the latter likely reinforces bad behavior. You know this. What do you do?

Do you teach him rules are rules, no matter where and what-- save him from narcissism; or do you let him slide this time and reinforce that rules are context dependent-- in essence, reinforce his narcissism?

How you teach your kid about the Moral Hazard is, in fact, your own personal Moral Hazard: do you gain a little at the store, at a loss to his development?

Now you can see how your creating Moral Hazards for other people reflect your degree of narcissism. Let's say it's a fact that free auto insurance leads to worse driving. If you are a politician who votes for free auto insurance because you will gain in popularity, knowing that it causes a Moral Hazard for others which is to the loss of still others, then you have double the narcissism.