From: Ian Grigg <iang@systemics.com>
Date: Sun, 28 Jul 1996 22:58:38 +0800
To: "Timothy C. May" <tcmay@got.net>
Subject: Schelling Points leads to interesting family investment opportunities
Message-ID: <31FB5FFA.41C67EA6@systemics.com>
MIME-Version: 1.0
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Hi Tim,

you said:
> The _costs_ of extending beyond the Schelling point boundaries
> is deemed to be too high, and the boundary persists.

This reminds me of the transactional theory of business units.
Working from memory, the optimal size of a business unit is
positively related to the cost of the transactions conducted
between units, other things being held constant.

Thus, in a place where it is "expensive to do business" the
dominant form of company will be large.  Conversely in a
cheap business environment, small companies will predominate.
This notion spurs one to examine the transactional costs and
to decide (or not) to lower them...

The interesting part for your family context is that falling
transaction costs have purportedly produced a shift away from
large companies to smaller units.  Those falling costs are in
the sphere of digital communications, other technology, and
regulation.  If such were to apply to the context of families,
upbringing children and education in general, one might
predict that the size of the family should shrink.

In a sense we might have already seen this.  The extended
family is really just a memory for most westerners, but is
still the norm in poor countries.  And I guess we have seen
a strong increase in the number of single-parent families
in most western countries.

One would then be lead to ask, if you are proposing that
Internet technologies in general and crypto in particular
are influences on the Schelling points related to the family
rights set, can this result in smaller family units?

That is, the cost of providing (net) education falls, and
the ease of crypto communication allows children to grow up
as individuals in the big wide Inter-world rather than the
shoolyard.

If I were permitted to ramble without judicious limit, I would
talk about the economic unit becoming a single person, and that
person becoming responsible for their own success, regardless
of their age.

In this view of the future, a child is an economic unit, and is
responsible for his own education, and thus must learn for the
future.  Obviously there is a bootstrapping problem here previously
known as birth, and this could be addressed by well-meaning
investors purchasing educational rights to a mother's future child
(in effect, buying an unborn baby).  The child then becomes the
ward of the investor, who attempts to raise the child to produce
the maximal return.

Of course, in order to eliminate the distorting effects of
love and child-like whims (I don't want to log into teacher
today), there would have to be a free market for raising rights,
based on caveat emptor examination of progress.  Thus would be
exist an informational approach to encourage the child's
attention to books, and of course, towards a successful career
as an investor in the youth of tomorrow.

This would also allow specialisation of investment, those that
concentrate on the early years, those on the teens and those
that reap the final rewards of first productive working years.
The arisal of these strata would lay to rest for ever that
old saw of the economists by showing that there is no market
failure in education, and thus no need for regulation.

And in answer to those anticipated questions from concerned
parents, no, I don't have any children, and yes, in the new
world, senior citizens can contract to investors to provide
granny services, so that they won't be unemployed.

But perhaps I should really have placed a judicious limit
on my ramblings :-)

-- 
iang
iang@systemics.com