by Russ Roberts on October 3, 2011

in Civil Society, Family, Web/Tech

I am reading a fascinating book, The Art of Immersion, by Frank Rose–I’ll be interviewing him this week for EconTalk and if all goes as planned, the interview will be up on the web on October 11.

The book is a look at storytelling and how the web has made storytelling immersive. Along the way, he discusses Lost, a very immersive story, obviously, for millions of people. I saw a few episodes but never immersed myself in that world. Rose discusses Lostpedia, the Lost Encyclopedia and the wiki available online about everything Lost. In particular he mentions that there is an article in the wiki on the economics of the island.

I checked it out for fun. It’s pretty bizarre. Written initially (then later edited by others) by a self-proclaimed socialist who at the time was a grad student in economics, it lays out three approaches to resource allocation on the island:

  • The socialist approach allocates resources through consensus and planning.
  • The capitalist approach relies upon a market to allocate resources based on supply and demand.
  • The tribal approach holds that in small communities economic decisions can be made at a personal level. That such a community is not of sufficient scale to require or manage a formal system of exchange or enforcement of laws. Thus the tribal approach relies on small-scale exchanges and community resources.
I’m not sure what role consensus plays in socialism. There’s lot of planning in capitalism of course. What distinguishes socialism from capitalism is who does the planning–whether it is done from the top down or the bottom up. Under socialism the State does the planning, and usually owns the means of production. There’s also a focus on egalitarianism under socialism at least in its ideal state.
The article continues:
Jack represents the socialist approach to resource allocation. Jack is a mostly benevolent person who attempts to solve the problems of the Island imposed by scarcity, even to the point of personal exhaustion. Jack’s surname, “Shephard,” reinforces this interpretation – he exists to care for and organize the survivors.
I wouldn’t call that socialism. I’d call it kindness. Or voluntary action which is part of a civil society allowing freedom of various kinds. I haven’t seen much the show, but does Jack even encourage (let alone decree) consensual decision-making by the survivors on who gets what? What I have seen of the show is that it’s full of conflict (better story). Is Jack really a socialist?
Later on, the article claims that Sawyer embodies capitalism–”every man for himself”–a quote evidently from Sawyer:
Sawyer is seen as representing capitalism. In this context, Capitalism is defined as an economic and social system in which the means of production are predominantly privately owned and operated for profit, and in which investments, distribution, income, production and pricing of goods and services are determined through the operation of a market economy.
One of the most depressing things about capitalism’s reputation is that many people believe that selfishness and greed are the essence of capitalism. I write about this at length in The Price of Everything (and The Invisible Heart.) Entrepeneurs are motivated by many things. Profit is one of their motivations–without profit it is difficult to sustain an organization. But surely you can make a profit and be a nice person. In fact, it is often the case that kindness enhances capitalist success while greed makes it harder to be successful in the marketplace. And you can get deep non-monetary satisfaction from doing your job well. We are all self-interested, but few of us are selfish. Most of us share with our family, our friends, and strangers.
The person who wrote the Lostpedia article appears to think that what defines socialist is niceness and caring about others and what defines capitalism is being cruel and selfish. This is a particularly weird view given that there is no State on the island (at least I don’t think so) and little or no market activity–later on in the article it mentions that there is very little exchange.
Maybe someone who is more familiar with the show than I am could edit the article to make it a bit less biased. The article at the top says the article has been nominated for a “clean up” for “better flow.” It won’t be an easy task–the structure is sort of set with Jack as the socialist and Sawyer as the capitalist. If you’re a fan of the show, take a look and see what you can do.
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Fred October 3, 2011 at 1:43 pm

I’ve never understood what is nice and caring about being generous with property that does not belong to you.

Chris O'Leary October 3, 2011 at 1:50 pm

Because ALL gains are ill-gotten and you’re just returning them to their rightful owners (which is the people who had precious little to do with their creation).

Chris O'Leary October 3, 2011 at 1:49 pm

In part because the country seems to have lost its was, I’m in the processing of revisiting my long-stalled/deferred book, The Paradox of Pain. In it I tell the stories of multiple, highly successful entrepreneurs.

One of the things that I have found is that, often, the richest ones are first and foremost problem solvers. Most set out to solve a problem that they had, solved it, and then found that other people had the same problem (at which point I guess they turned into greedy capitalists). Many never had any intention of becoming entrepreneurs, much less rich. It just happened because they solved a problem that was affecting large numbers of people. It’s hard to argue how that fits into the whole capitalism as exploitation/parasitism narrative of the left.

L October 3, 2011 at 2:04 pm

I’ve a handful of friends (Randroids) obsessed with the idea of raising egoism to the level of a moral standard. I tried to point out some Hayek stuff to show them how solidarity and cooperation plays a big part in our social order, specially in the “micro-cosmos”.

So I’m collecting material on this subject, can someone please indicate some reading material? (besides the books already mentioned)

SaulOhio October 3, 2011 at 2:10 pm

How about David Kelley’s “Unrugged Individualism”? There is no contradiction between ethical egoism and benevolent tendencies like solidarity and cooperation. There is no contradiction between self-interest and kindness, generosity, compassion, or charity.

And using the slur “Randroid” doesn’t especially endear you to me.

L October 3, 2011 at 2:32 pm

sorry, I said it in rather playful manner. I wouldn’t hold a grudge over this sort of minor disagreement

vikingvista October 3, 2011 at 4:00 pm

The Oist virtue of selfishness is simply that there is no virtue in sacrificing your values. A thinking, judging, mortal creature should act to further its interests. One can critique some values, but this principle is solid, and is intended as the antidote to collectivist and altruistic belief systems which find justification for systematic extortion, looting, enslavement, and murder. Even Rand gave examples where she would accept the loss of her own life to preserve her values, values including people she loved. Including the virtue among your values, as Oists do, is what makes you want to respect the autonomy of others. Perhaps counterintuitively, selfishness as a general principle affects how you treat others, and is consistent with the noninitiation of force principle.

The boldness of getting behind the term “selfishness”, with all of the negative connotations in common usage, has brought widespread attention to the key distinctions between individualism and collectivism, that softer more ambiguous intellectual approaches by individualists failed to accomplish. Rothbard pushed a similar bold use of “anarchy” to draw attention to the fundamental problems of statism that the ambiguous use of “government” by other, perhaps more timid, voluntaryists failed to accomplish.

The shock of seeing someone dare to embrace a “clearly” evil idea, especially when you agree with some of their other statements, tends to make you interested in persuing their explanations. It’s a good rhetorical device to get people to emerge from their soup of preconcieved notions and think clearly about ideas, and to for the first time question some of their passively inherited beliefs.

Eric Hammer October 4, 2011 at 8:15 pm

Well put. I never understood why people don’t get that sharing can be quite selfish. If I share the food I cook for dinner with my wife, it is because I value her more (along with 10^23 other things I get out of the deal).
I think the issue is that people rarely ask “and then what?” when it comes to such social actions. They see someone sharing, and say “See, that person isn’t selfish” and never ask what that person might get out of it, what their life will be like afterwards as opposed to not sharing.

Most of us learn at a pretty early age that sharing will help people to like you, and not sharing makes them less likely too. Most of us are social enough that buying a little friendship with a little sharing is a good deal.

Of course, ask someone to share their wife, then suggest that they are being selfish for not wanting to. You can get a pretty good idea of how much people value other people’s friendships or goodwill based on that.

Chris October 3, 2011 at 2:07 pm

I just watched the entire series on Netflix in two weeks. Jack is a leader and always willing to sacrifice. Sawyer might be receiving the “capitalist” tag because early on he scavenges all the supplies he can from the plane and hoards them, producing dubious value for the island (it could be said he’s safeguarding the supplies, but repeated scenarios seem to indicate he’s not productive.) But his pre-island life is as a con artist. Trying to fit Jack or Sawyer into the capitalist/socialist is quite a stretch and seems more like a confirmation bias than anything else. Sure, Sawyer tries to corner the market, but he’s a scoundrel, not an entrepreneur. How many pickpockets get labelled as capitalists?

SweetLiberty October 3, 2011 at 3:33 pm

[Sawyer] scavenges all the supplies he can from the plane and hoards them, producing dubious value for the island (it could be said he’s safeguarding the supplies, but repeated scenarios seem to indicate he’s not productive.)

Sawyer’s initial act in “scavenging” unclaimed materials was productive! While others on the island presumably were busy building shelter, gathering food and water, etc., Sawyer spent his time and energy harvesting material goods that he saw as having value. He then traded for other goods as demand for his supply increased. If he had spent his time climbing trees and gathering coconuts, would you still say he produced “dubious value for the island”? While Sawyer’s life prior to landing on the island was indeed one of deceit and fraud, the simple act of gathering resources and trading them does not make him a scoundrel. In this regard, he is a capitalist, one to be applauded for his foresight and effort.

Chris October 3, 2011 at 5:07 pm

That’s true. But he’s also a monopolist. He uses that monopoly power to coerce and achieve a sort of political power as well which causes problems in several instances. That’s what I was referring to as being of dubious social value. Sawyer’s behavior in that sense could fit well with the anarchist critique of capitalism. But I don’t think that’s fair because it doesn’t address the core of what people who call themselves “free market capitalists” usually defend. I think Sawyer (almost every important character for that matter) was meant to represent something more fundamental than “capitalist.” It’s mostly neither here nor there. And the fundamental character flaw is responsible for his lack of virtue as a capitalist.

(As for the hoarding itself, the items Sawyer collected seemed to be mostly items that would remain safe had they not been collected — non perishable. Meanwhile, others were tending to much more time sensitive matters. His contribution seemed to be mostly in saving scarce items from over consumption. Certainly valuable, but very possibly abused as well.)

vikingvista October 4, 2011 at 4:12 am

“anarchist critique of capitalism”

What’s that?

g-dub October 3, 2011 at 2:09 pm

It’s hard to argue how that fits into the whole capitalism as exploitation/parasitism narrative of the left.

It doesn’t, but they don’t care if anything the say makes sense if examined rationally. Everything they say and do is to affect attitude on an emotional and superficial level.

Their goal is to take. To make the “takings” legal, they main thing the political entrepreneur produces is problems, real, perceived, or total fiction. Once the problem is produced, the solution to the problem is “taking.”

The takers get the honey
The givers sing the blues
–Trower, Too Rolling Stoned

Scott G October 3, 2011 at 2:13 pm

My favorite part from The Price of Everything goes a long way in explaining this photo I took on a Saturday afternoon at the Apple campus in Cupertino, California.


The fact the tourists take photos at the main entrance of the Apple campus is closely tied with what Dr. Roberts (aka Ruth) says in The Price of Everything.

Henri Hein October 3, 2011 at 3:00 pm

Scott, good work. There is a type in the first paragraph, though: it should be “Cupertino,” not “Cuperino.”

Henri Hein October 3, 2011 at 3:01 pm

Hmm, I made a typo pointing out a typo :-/

Ken October 3, 2011 at 2:18 pm

“Entrepeneurs are motivated by many things. Profit is one of their motivations–without profit it is difficult to sustain an organization. But surely you can make a profit and be a nice person. In fact, it is often the case that kindness enhances capitalist success while greed makes it harder to be successful in the marketplace. And you can get deep non-monetary satisfaction from doing your job well. We are all self-interested, but few of us are selfish. Most of us share with our family, our friends, and strangers.”

I tell my students, “The First Rule of Sustainability is you have to be able to open the doors tomorrow morning.”

vikingvista October 3, 2011 at 4:18 pm

It still sounds apologetic for profit. Besides its positive social effects as a signal for efficient resource distribution and driver of lower prices, profit is an abstract form of value. Everyone who seeks profit has an intended use for it. Merely “keeping the doors open” isn’t what makes profit acceptable, and certainly isn’t what motivates businessmen. When a person manages to accrue huge profits through his peaceful and voluntary interactions with others, I can as a rule think of no better manager of those resources.

SaulOhio October 3, 2011 at 2:21 pm

I’ve got a problem with your use of the word “selfish”. What differentiates “selfishness” from legitimate self-interest? Most of the other behaviors or traits lumped in with self-interest to create what I think is the anti-concept of “selfish” are, as Ayn Rand explained, counterproductive to anyone acting in their own self-interest.

Read the first couple pages of the introduction to her “The Virtue of Selfishness” to get a better idea of what I am talking about.

dave smith October 3, 2011 at 2:55 pm

I dealt with this very article in my principles classes when the show was popular. I concluded much the same as Russ…there was not enough economic activity on the island, and not enough people , for any economic “system” to be present. The entire article is ludicrous and written by people who do not understand socialism or capitalism.

J. W. October 3, 2011 at 2:57 pm

I am reading through Hayek’s lecture “Individualism: True and False” and recently came across a passage where he discusses the perception that individualism advocates selfishness, which he argues is a misconception. Please excuse the length. It is related, though, and may be helpful to some who have already commented:

As the belief that individualism approves and encourages human selfishness is one of the main reasons why so many people dislike it, and as the confusion which exists in this respect is caused by a real intellectual difficulty, we must carefully examine the meaning of the assumptions it makes. There can be no doubt, of course, that in the language of the great writers of the eighteenth century it was man’s ‘selflove’, or even his ‘selfish interests’, which they represented as the ‘universal mover’, and that by these terms they were referring primarily to a moral attitude, which they thought to be widely prevalent. These terms, however, did not mean egotism in the narrow sense of concern with only the immediate needs of one’s proper person. The ‘self’, for which alone people were supposed to care, did as a matter of course include their family and friends; and it would have made no difference to the argument if it had included anything for which people in fact did care.

Far more important than this moral attitude, which might be regarded as changeable, is an indisputable intellectual fact which nobody can hope to alter and which by itself is a sufficient basis for the conclusions which the individualist philosophers drew. This is the constitutional limitation of man’s knowledge and interests, the fact that he cannot know more than a tiny part of the whole of society and that therefore all that can enter into his motives are the immediate effects which his actions will have in the sphere he knows. All the possible differences in men’s moral attitudes amount to little, so far as their significance for social organisation is concerned, compared with the fact that all man’s mind can effectively comprehend are the facts of the narrow circle of which he is the centre; that, whether he is completely selfish or the most perfect altruist, the human needs for which he can effectively care are an almost negligible fraction of the needs of all members of society. The real question, therefore, is not whether man is, or ought to be, guided by selfish motives but whether we can allow him to be guided in his actions by those immediate consequences which he can know and care for or whether he ought to be made to do what seems appropriate to somebody else who is supposed to possess a fuller comprehension of the significance of these actions to society as a whole.

To the accepted Christian tradition that man must be free to follow his conscience in moral matters if his actions are to be of any merit, the economists added the further argument that he should be free to make full use of his knowledge and skill, that he must be allowed to be guided by his concern for the particular things of which he knows and for which he cares, if he is to make as great a contribution to the common purposes of society as he is capable of making. Their main problem was how these limited concerns, which did in fact determine people’s actions, could be made effective inducements to cause them voluntarily to contribute as much as possible to needs which lay outside the range of their vision. What the economists understood for the first time was that the market as it had grown up was an effective way of making man take part in a process more complex and extended than he could comprehend and that it was through the market that he was made to contribute ‘to ends which were no part of his purpose’.

It was almost inevitable that the classical writers in explaining their contention should use language which was bound to be misunderstood and that they thus earned the reputation of having extolled selfishness. We rapidly discover the reason when we try to restate the correct argument in simple language. If we put it concisely by saying that people are and ought to be guided in their actions by their interests and desires, this will at once be misunderstood or distorted into the false contention that they are or ought to be exclusively guided by their personal needs or selfish interests, while what we mean is that they ought to be allowed to strive for whatever they think desirable.

vikingvista October 3, 2011 at 4:24 pm

Thanks for posting the passage.

J. W. October 6, 2011 at 3:31 am

You’re welcome!

Greg Webb October 3, 2011 at 3:02 pm

LOST! was fiction. It was a fun, action-packed television drama about various people lost on a mysterious island. Many of the elements of the story were science fiction, not just dramatic fiction. The story, other than minor references to scavenging, hunting and fishing, and supplies dropped in by airplane or shipped in by submarine, does not address resource allocation. The writer of the Lostpedia article on resource allocation was simply creating additional fiction.

The character of Jack Shepherd was that of a physician who wanted to be loved by everyone so much that he kept trying to be the leader. His decisions were often wrong and hurt others – sometimes intentionally and sometimes not. And in one episode, he used torture to get his way. So, in many ways, the character of Jack Shepherd was exhibiting typical human behavior by seeking “applause” from others through efforts to control everyone and everything around them, which often leads to mistakes that harm everyone and brutal behavior to obtain that control. In that way, Jack was exhibiting the typical statist behavior. In that way, our fictional doctor is a lot like our very own doctor George.

Henri Hein October 3, 2011 at 3:10 pm

I cannot speak about “Lost,” but I can say that the ideal socialist system indeed relies on consensus. Such systems are possible at a small scale. I spent some time in a kibbutz in Israel. It (like many kibbutzim) is small enough that all voting members can gather in the dining hall and vote, by literal hand-showing, on proposals and issues. Open-minded libertarians would find many admirable elements in their charter. For instance, member ship rights could never be revoked, and strict term limits were built in.

The system fails to scale, of course. I think one big source of division between socialists and capitalists is that the socialist, on the one hand, does not see how poorly the system scales, and the capitalist, on the other hand, only sees the drawbacks to the scaled-up horror it becomes.

steve October 3, 2011 at 3:16 pm

I love socialist bashing.

1.) Socialists spread kindness, equality, and fairness at the point of a gun.
2.) Socialists blame any problem on failures in Capitalism.
Even in Socialist societies.
3.) When people are fat and happy, Socialists see immenent scarcity
everywhwere in natural or other resources requiring immediate
government action.
4.) When people are in fact suffering from some scarcity. Socialists think
it is caused by speculators or other Capitalists hoarding the resource
and not any actual scarcity.
5.) Socialists believe in egalitarian decision making in all things. By this
they mean you should vote once a year for the socialist party and then
shut up and do as your told.
6.) Socialists have a love/hate relationship with guns. They hate it if you
have one, but love the idea of arming the police with assault rifles and
body armor.

Well that was fun. Wish I could think of one that actually offended socialists. Undoubtedly they would word them differently, but they basically say these things every day.

Henri Hein October 3, 2011 at 4:15 pm

Steve, maybe they don’t get offended because participating in “you’re stupid! no you’re stupid!” type exchanges, while they can be fun for some, are ultimately not all that deprecating.

Methinks1776 October 5, 2011 at 11:20 am

Yah…but, if they are too stupid to understand how repulsive that list is, then they’re too stupid to be offended by it :)

My experience with Socialists is that the only thing that changes their mind is actual experience with Socialism.

M.R. Orlowski October 3, 2011 at 4:14 pm

Murray Rothbard’s Man, Economy, and State does an excellent intro to”Island” or “Robinson Crusoe” economics.

vikingvista October 3, 2011 at 4:33 pm

Although he didn’t originate any of it, I agree that his presentation of economic fundamentals in that tome is very good and accessible (with some perhaps trivial exceptions). If it weren’t for the mere fact that it was written by the controversial Rothbard, I think the early chapters would be quite acceptable as a standard high school classroom micro text.

Troy Camplin October 3, 2011 at 4:32 pm

I enjoyed this book myself. I commented on it here:


Ike October 3, 2011 at 6:04 pm

I’ve seen every episode.

The categorization of Jack and Sawyer fails on its face, as most of their decision-making is based on incomplete information and sheer terror of survival. The author has merely decided that Socialism is Good, and Capitalism is Bad — therefore Jack must be a Socialist and Sawyer his opposite.

You’d be better served trying to determine whether Les Miles or Nick Saban is more socialist or capitalist.

(I will grant that toward the end, Jack asserts himself in a rather authoritarian manner… and he is rather obsessed with returning to Utopia, to the extent that he wrecks families and destroys his career. Hey, maybe there’s something to that theory after all…)

Iain October 3, 2011 at 6:10 pm

Isn’t the supposed tribal approach completely superfluous? The “personal level” can occur in capitalism and socialism (i guess lol).

Joseph Devon October 4, 2011 at 8:35 am

The wiki article can’t be anything other than glossing an Socialist/Capitalist article on top of the show Lost. The show is about individual characters, their past, and their current interactions in a bizarre and stress filled environment. Within the first season Jack has located a water supply, tortured someone, seen his dead father, and applied first aid. Sawyer in that time has looted the plane, been tortured for hoarding supplies which he wasn’t actually hoarding, desperately traded some of his supplies to get a new pair of reading glasses and shot a polar bear.
Great show (in the beginning) and spot on writing as far as each individual encounter between people played out, but there is little there that addresses various social structures outside of some quotes and speeches meant to suggest these structures before a smoke monster attacks or someone gets kidnapped.

Chucklehead October 4, 2011 at 2:46 pm

“I’m not sure what role consensus plays in socialism.”
The only consensus is on who does the planning. The intent of the planner is supposed to outweigh the bad outcomes.

Yeti October 5, 2011 at 10:58 am


Re “The intent of the planner is supposed to outweigh the bad outcomes”

I guess it didn’t work out all that well in real life under the noted socialists Hitler, Stalin, Mao, Pol Pot, etc. etc. etc.

NL_ October 5, 2011 at 1:27 pm

I loved Lost and faithfully saw every episode. It’s not really very instructive on economics and is only somewhat instructive on proto-politics and the state of nature. Ultimately Jack is “the leader” and everybody sort of defers to him, without any serious inquiry into the way leadership happens or how people generally form societies.

The show focuses narrowly on the characters themselves and how they grow as people, and thematically on the Island and all the crazy stuff that happens there. It’s not a very in-depth contemplation on the organization of human affairs.

The brief show Deadwood on HBO got a little more into these questions in the formation of a settler community in South Dakota into a town in a newly organized US territory. It goes a little more into politics and certainly more into economics (the local doctor charges everybody for services and is portrayed as basically honorable). It’s not Free to Choose or anything; it was a story about characters and sex and violence. But it’s fun and hard more of an econ slant than a lot of stories. Also a fun show because most of the characters were a mixture of positive and negative traits (which is like Lost, actually).

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