Varoufakis offers two thought experiments demonstrating different problems with the way neoclassical economics deals with scarcity. I’m trying to think out how they might play out or not play out in the classroom, which is actually kinda interesting, because Varoufakis uses the practice of grading to frame them.
The Free Rider Problem: “Suppose your teacher comes into class one day and tells you that your percentage grade for a full semester will be decided as follows: each one of you will selesct an integer between 1 and 9 (including 1 and 9). You will write your chosen integer on a piece of paper with your name. Then the teacher will calculate the average of the chosen numbers and your individual grade will be set to: 11 times the AVERAGE of all integers chosen in class minus your OWN choice of integer.
So, for instance, if there are 50 of you in class and everyone chooses 9, then the average is 9. Since you have chosen 9 also, your grade (and everyone else’s grade) will equal 11 x 9 – 9 = 90 percent — a pretty good one. In this sense, it is in everyone’s interest that all 50 of you select integer 9.
However, imagine that you thought that all of your 49 classmates would, indeed, write down 9. If you were to choose a smaller integer, say, 1, then the average would diminish from 9 to 8.82 (49 x 9 + 1 divided by 50) but your grade would rise to 11 x 8.82 – 1 = 96.02 per cent. By contrast all your other classmates (who we have presumed chose 9) will receive 11 x 8.82 – 9 = 89.02 percent. This is a typical case of free-riding — you would be taking a ride on your mates’ back” (232).
(Yes, Varoufakis is Australian.) The general conclusion he draws: “the free-rider problem reveals how groups of instrumentally rational people may act in a manner which is detrimental to everyone’s interests” (232).
The Coordination Problem: Varoufakis changes the free-rider problem slightly to offer a different experiment. Imagine, he suggests, that now “Your grade is determined by: 11 times the MINIMUM choice of integer in the class minus your OWN choice” so that “everyone writes down an integer between 1 and 9, as before, the teacher makes a note of the lowest number chosen [. . .] and then subtracts from that your own choice of integer. Thus if everyone chooses 9, again everyone in the class will receive a 90 per cent grade. However, it takes only a single person to choose a lower number to wreck that prospect. So if you think that the minimum choice in the class will be X [. . .], the integer that will maximise your grade is X! Unlike the earlier case of the free-rider problem in which you had an incentive to select the lowest integer possible, here you have no such incentive. You will be best off if you select an integer equal to the lowest chosen in the class” (236).
The interesting part is how Varoufakis describes this working in practice: “In a class comprising 113 mature MBA students (most of them highly accomplished professionals with years of managerial experience), more than 80 selected integer 1 when asked to play this game to determine part of their assessment mark. Why did they fail to coordinate so spectacularly? The answer is: lack of trust caused by uncertainty. If one believes that someone in the group will pessimistically expect that there is a person who will choose integer 1, then one has every reason to select 1. If others anticipate this, they will choose 1 too. In the end the group fails to coordinate on the choice that would benefit them all” (236).
What does this have to do with writing instruction? Nothing, directly. But these experiments illustrate two difficulties with the world as viewed by neoclassical economics — which, today, is the most widely prevalent economic paradigm. Furthermore, writing instruction — like other components of a university education — is expected, in the common rhetoric of the Bush administration, to help serve the economy, and to make students more competitive in the so-called global information economy. Finally, computers and high technology are assumed to be one of the primary engines driving this economy. To me, the free-rider problem and the coordination problem stand as direct evidence that certain qualities of the market economy as conceived by neoclassical economics are inherently problematic; that the invisible hand can’t fix everything, and has its own inefficiencies and shortcomings. They stand as direct evidence, in other words, that we may want to construct other fairer and more workable understandings of the economic context that shapes and is shaped by the workings of education and technology.
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