I know there must be reasons and this is a dumb question, but I’m a bit of an abstract thinker and have trouble grasping it from a big picture presepctive. Can someone break this down for me? Can’t we all just kind of agree to just kind of… Reset some numbers or something?
Sincerely,
I’ve never taken an economics class in my life
In: Economics
I never studied economics either. I study biology, but there is a useful corollary called and ESS (evolutionarily stable system). An ESS is system that is stable because it is not easily disrupted by ‘defectors’, individuals whose behavior doesn’t align with the system. Infinite generosity is not an ESS because a single individual who chooses to be greedy will disrupt the whole system by preying on those who follow the rulse. Often, infinite greed is also not an ESS because a few moderately generous individuals may be able to work together in times of scarcity and perform better than greedy solo actors. The true ESS is usually somewhere in between, where most individuals are sometimes greedy and sometimes benevolent, and the mostly-greedy individuals are balanced out on average by the mostly-benevolent individuals.
What you describe is possible in theory over a short period of time, but it is not evolutionarily stable because if we all ‘agree’ that when a crisis is over we will just reset, there are enough people who will benefit from defecting from that agreement and later advocating against it that the policy will never be followed.
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