Stagflation, Stag Hunt Dilemma, and Stag Parties

Three takes, unrelated to current events

Welcome to a new format where I write about things I like and hate. The working name is “this guy rocks/this guy sucks,” with “guy” to be interpreted loosely.

This guys sucks: Stagflation

Let’s start with a topic chosen at random, with no connection to any unfolding current events: stagflation.

To understand Stagflation, we need to start with the Keynesian model. This model starts with the aggregate demand in an economy: how much people, governments and investors are spending. When aggregate demand is high, we get a “hot” economy, with low unemployment, high inflation, and lots of growth. The government might try to cool things down by raising interest rates and cutting spending (to prevent bubbles and bottlenecks). But they better be careful—too much cooling leads to a “cold” Keynesian economy: low inflation, high unemployment, not much going on. Government would then turn the heat back on by increasing spending and lowering interest rates.

But wait! The Keynesian model is incomplete. It doesn’t account for “supply shocks”: sudden shortages of supply, which might come from geopolitical events, global pandemics, or the imposition of high import tariffs by the world’s largest economy, to give a few examples chosen completely at random.

The 1973 Oil Crisis (a supply shock) shattered the Keynesian consensus. It caused “Stagflation”: a previously unimagined economic state with high inflation, high unemployment and low economic growth. In other words, the worst of all economic worlds. Costs go up, but the money doesn’t feed growth. We end up with a tepid economy, hot on inflation and pricing, but cold on employment and growth. Governments typically have few options here, as the traditional Keynesian remedies would either play into one problem (high prices, inflation) or the other (low growth, high unemployment).

Since 2008, central banks have tended to favor pumping money into the economy and letting inflation fly until things get back to normal, but they’ve done this enough times that prices are starting to get wild.

Anyway, stagflation sucks.

This guy rocks: Stag Hunt Dilemma

The Stag Hunt Dilemma is a game theory problem that’s a lot like the Prisoner’s Dilemma with one key difference.

The setup comes from Rousseau:

“If it was a matter of hunting a deer, everyone well realized that he must remain faithful to his post; but if a hare happened to pass within reach of one of them, we cannot doubt that he would have gone off in pursuit of it without scruple.”

The idea is, you need a lot of guys to coordinate to catch a deer and feed everyone well. But if one guy runs off on his own, screwing up the deer hunt, he can catch a rabbit. He’ll eat poorly, and everyone else will go hungry.

If you’re in the group, do you trust that everyone will do their job and share the reward? Or do you secure a smaller prize, alone?

The difference between the Stag Hunt Dilemma and the Prisoner’s Dilemma is that in the latter, the defector gets more than they do in a scenario of total cooperation. In the Stag Hunt Dilemma, the defector gets less. The only motivation for defecting is distrust of one’s fellows.

The deer is a thriving global economy.

The deer is the cultural legacy we’ve inherited.

The deer is a functioning political system. It’s civil rights and rule of law.

The rabbit is gratuitous tribal signaling.

The rabbit is turning our political system into a negative-sum winner-take-all-ideological battle.

The rabbit is I’d rather be hungry than eat with you.

(This post is for informational purposes only. Names, concepts, and historical references bear no resemblance, satirical or allegorical, to events currently unfolding in the world. The author invokes immunity from left-wing cancellation campaigns, right-wing blacklists, and retributive strikes of any ideological stripe or character. Any allusions to persons and events refer purely to those the reader considers to be out-tribe political enemies, not that those allusions actually exist or anything.)

This guy also sucks: Stag parties

There probably exist people who can sincerely and unironically enjoy a stag party in all its pleasures. And maybe, in some ways, those people are closer to the late-stage Buddhist moment-by-moment enjoyment of existence than a dissolute intellectual like myself could ever be. But, “one must suffer for beauty,” taste > bliss. 0/10, do not recommend stag parties.