Unicorn Governance, Typical Mind Fallacy and Unicorn Markets

This week I read Unicorn Governance by Michael Menger. Menger argues that some people states as magical entities that don’t actually exist (“unicorns”) and when they say that “the state should do X” they don’t realise or don’t properly think about the fact that the state is a group of people with particular incentives rather than a single benevolent actor and because of this misunderstanding make error in reasoning about the states behaviour.

He proposes what he calls the Menger test:

1. Go ahead, make your argument for what you want the State to do, and what you want the State to be in charge of.
2. Then, go back and look at your statement. Everywhere you said “the State” delete that phrase and replace it with “politicians I actually know, running in electoral systems with voters and interest groups that actually exist.”
3. If you still believe your statement, then we have something to talk about.

An example he gives of this is:

When someone says, “The State should be in charge of hundreds of thousands of heavily armed troops, with the authority to use that coercive power,” ask them to take out the unicorn (“The State”) and replace it with George W. Bush. How do you like it now?

I think this concept is overall useful and seems closely related to the rationalist skill of Tabooing Words. But I have two additional points I think are worth mentioning.

Firstly it is possible that this test will be less effective than Menger and other libertarians may think due to there already existing bias against the state and it components (politicians, bureaucracy etc.). For example, I did the Menger test myself for several of my beliefs about things that I think the state/”politicians I actually know, running in electoral systems with voters and interest groups that actually exist”  should do and they seemed to hold up pretty well. For example:

Me: “I think the state should run some form of socialized healthcare, most likely a hybrid of different aspects of the UK, France, and the Nordic countries”

Menger Test: But the state is a unicorn, so you should taboo it. So what you actually mean is “I think a group of politicians elected by uniformed voters and given money by pharmaceutical interest groups should run a form of socialized healthcare” (possibly adding phrases like:”with money taken from the taxpayer without consent by force”)

Me: Well it does sound worse when you put it like that, but the reason I agree with the policy (the empirical success of similar systems compared to systems without socialized healthcare) are still the same so I don’t feel the need to shift my position. But if you have other arguments or empirical data against my position Id love to hear it.”

But I’m most likely not the target audience for the test because I have already mentally reduced things like the state to their components. I definitely think there are people who haven’t thought about this before that could benefit from the test.

The second point is that I think it would also be useful to do this for “The Market” in addition to just “The State.” After all we shouldn’t apply more scrutiny to one side than to another.

So the Reverse Menger test:

1. “Go ahead, make your argument for what you want the Market to do, and what you want the Market to be in charge of.
2. Then, go back and look at your statement. Everywhere you said “the State” delete that phrase and replace it with “the actual people who own and run businesses, making decisions with imperfect information trying to maximise the amount of money they make.”
3. If you still believe your statement, then we have something to talk about.””

I predict that if a libertarian reads the above they will most likely still support whatever they wanted the Market to do in the first place which may help them understand why the original Menger test isn’t as effective as they think it should be.

(By the way, in the above reversed test I wasn’t sure how harsh to be to the market, I didn’t want to go to over the top but its probably a bit more extreme than the original.)

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