Beyond greed: Mammon as an analogy for maloptimization and wicked problems

“Why do market failures happen?” is the question at the heart of much of my writing at Misaligned Markets.

In this post, I want to share an analogy that helped me develop a framework to understand this question. “Mammon” is how I refer to the tendency for technology, social policy, and other goal-oriented human action to give rise to seemingly paradoxical and unintended consequences. It may seem unusual to begin a blog on political economy with a biblical reference, but I assure you, this isn't a sermon.

Finding deeper meaning in the “greed” of Mammon

Despite its dramatic connotations, “Mammon” is a Greek word (mamōnas) for “wealth.” This term derives from the Aramaic word māmōnā, which may have been used in the Gospels instead of a native Greek term for wealth. As Aramaic was spoken among early Christians in Judea, these words were occasionally transliterated. Over time, “Mammon” evolved into a demon or god of wealth in popular imagination, causing people to focus solely on material indulgence. 

I believe Mammon aptly symbolizes the “god” of our age—not only because of our obsession with wealth but also because understanding the ancients’ skepticism toward wealth reveals deeper concerns about goal-oriented behaviors like wealth-seeking. 

Although many cultures criticized wealth, Aristotle provides one of the most compelling critiques.^[1]1 In Book 1, Chapter 9 of Politics, he distinguishes between two uses of money and highlights that one is explicitly perverse:

Hence some persons are led to believe that getting wealth is the object of household management, and the whole idea of their lives is that they ought either to increase their money without limit, or at any rate not to lose it. The origin of this disposition in men is that they are intent upon living only, and not upon living well; and, as their desires are unlimited they also desire that the means of gratifying them should be without limit. Those who do aim at a good life seek the means of obtaining bodily pleasures; and, since the enjoyment of these appears to depend on property, they are absorbed in getting wealth: and so there arises the second species of wealth-getting. For, as their enjoyment is in excess, they seek an art which produces the excess of enjoyment; and, if they are not able to supply their pleasures by the art of getting wealth, they try other arts, using in turn every faculty in a manner contrary to nature. The quality of courage, for example, is not intended to make wealth, but to inspire confidence; neither is this the aim of the general's or of the physician's art; but the one aims at victory and the other at health. Nevertheless, some men turn every quality or art into a means of getting wealth; this they conceive to be the end, and to the promotion of the end they think all things must contribute.^[2]2

This quote has haunted me since my first reading. It's incredible that as early as 350 BCE, Aristotle understood that the pursuit of wealth can turn into an exercise which mindlessly turns everything, including non-monetary things, into a means of making more money. This ultimately robs the world of its complexity. As Aristotle articulates, wealth-seeking can lead to wars waged for financial gain rather than defense. It can lead to medicine that overdiagnoses rather than helps patients pursue healing. Almost everyone alive today has an example of how monetary gain created perverse incentives that resulted in a worse experience for them. That is to say nothing of an entire system which encourages the creation of new ways to commodify human interaction and defers evaluating the consequences in order to pursue an insatiable drive for growth under the presumption that “bad” growth will eventually be mitigated.

Aristotle’s insight is also interesting for another reason; it gets us closer to understanding a property of “greed” that is universal to concepts beyond greed. Rather than critiquing wealth for its own sake, Aristotle points to an important attribute of wealth-seeking that causes it to diminish and supplant other goals and values. This is a tendency which applies to other domains.

Mammon as the god of maloptimization and wicked problems

What Aristotle identified in Politics was a subset of a phenomenon known as “goal displacement.” Goal displacement erodes a person’s goals and values with the proxy metrics and subgoals that are used to measure the goal. In other words, goal displacement leads people to pursue outcomes that are merely correlated with their true goals and values. Examples of this might include: likes on social media replacing the more meaningful desire to build enduring friendships with real people; academic paper citation rates replacing the drive to identify a genuinely novel and understudied area of knowledge; or clicks on news articles triumphing over creating meaningful and informative content.

The problem, though, is that proxies and subgoals do not fully substitute for end goals and values. Therein lies the danger of falling into the trap of mistakenly pursuing too much of something, even in service of what we really want. Aristotle, rightly in my view, articulates that wealth is not the same thing as health and security. When we treat wealth as an end in itself, we risk allowing wealth-seeking to overshadow these more meaningful pursuits. Like a cursed Midas touch, this may push us towards actions that permanently alter our environment, making it impossible to achieve other important goals. 

Goal displacement is not something uniquely induced by wealth. It is, in fact, a very common challenge faced by any agent or entity with a goal—like people, governments, companies, organizations pursuing any conceivable objective. The world is very complex, and it’s extremely easy to fail to represent that complexity when setting the goals which guide our actions.

In this regard, I see Mammon not as the god of greed but as the god of goal displacement and all the problems that emerge from this tendency.^[3]3 The consequences of Mammon can be felt when systems we design and influence produce undesirable outcomes—almost as if our efforts were being guided by a deceptive deity whose aid comes at a steep price. Any time we mindlessly pursue a specific objective at the expense of everything else, Mammon’s payment is whatever we end up sacrificing to achieve the outcomes we think we want.

Goal displacement, optimization, and wicked problems

Goal displacement tends to occur when agents engage, knowingly or unknowingly, in optimization and fail to achieve the outcomes they actually want.^[4]4 You can think of this as “maloptimization,” or optimization failure. We’ll speak about optimization in detail elsewhere because it’s a fairly abstract idea that often requires mathematics to articulate fully. However, at a high level, it refers to processes that produce the “best”^[5]5 outcome given specific criteria or constraints.

As esoteric as that sounds, you’re likely intimately familiar with the effects of optimization because we live in a world driven by the directive to optimize everything: more profits, more jobs, more economic efficiency. Achieving these goals requires altering social, political, economic, technological, and environmental systems to maximize their ability to produce outcomes we want. Optimization can also mean minimizing or making less of something that is not desired within our environment: less disease, mortality, waste, and resource loss. In your own life, you might personally have a job where you’re judged against quarterly or annual metrics that are expected to improve after each performance review. You might have also witnessed your company’s review system be gamed by other employees who understand intuitively that measuring company outcomes with narrow objectives creates loopholes that can be exploited.

Optimization is neither good nor bad; it’s something that simply occurs in the world. Humans do it, often intentionally, as is the case with designed systems. This could be when a social media marketer maximizes user clicks on ads or a mechanical engineer optimizes the throughput of a factory. Natural and dynamic systems with no human creators can sometimes also “behave” like optimized systems due to the interaction of their constituent parts. For example, some biologists and philosophers of science consider natural selection to be an optimization process that emerges from the interplay of organizations and their environment.^[6]6 The environment creates selection pressures which elicit changes that make an organism’s offspring better suited for the present environment.

Of particular relevance to goal displacement are “runaway” optimization failures. These are failures that usually emerge from systems that are complex and stochastic, with limited points of intervention. Examples of these include ecologies, technology, companies, governments, societies, and markets.

The key feature that causes “runaway” failure in such systems is that optimization is generally indefinite—that is to say that it’s continuously ongoing and won’t stop unless something makes it do so. This tends to be the failure playing itself out or the system correcting itself. As systems like these increase in complexity and age, the possibility that they begin to behave in ways that its makers and users don’t intend increases. Thus, runaway optimization can be seen as a mechanism that exacerbates goal displacement. When a system continually optimizes for a displaced goal without intervention, the effects of “misalignment” between the system’s purpose and the outcomes it produces become increasingly amplified.

The term “wicked problem” has been used to describe the challenge of mitigating failures that emerge from such systems. As a rule, wicked problems typically:

1. Have no definitive formulation. It’s hard to identify and articulate what exactly the problem is. Or the problem can be described in multiple ways. 
2. Have no stopping rule. There’s no ideal time to intervene. It might even be difficult to do so. 
3. There’s no way to immediately get feedback on solutions to wicked problems. In fact, every solution is a one-shot solution that must be deployed before you get complete feedback. 
4. Wicked problems do not have an enumerable (or an exhaustively describable) set of potential solutions, nor is there a well-described set of permissible operations that may be incorporated into the plan. 
5. Every wicked problem is essentially unique. 
6. Every wicked problem can be considered to be a symptom of another problem.
7. The existence of a discrepancy representing a wicked problem can be explained in numerous ways. The choice of explanation determines the nature of the problem's resolution. 
8. Whoever applies a solution to a wicked problem has no right to be wrong. They’re on the hook, so to speak, for problems caused by their solution.

It’s important to note that not all runaway optimization failures are wicked problems, but many wicked problems involve runaway optimization, which makes understanding these dynamics important. Early in this post, we talked about how even simple goals that are poorly specified and are intended to be pursued indefinitely—like wealth-seeking or clickbait articles—can also exhibit mindless or runaway optimization and goal displacement.

Collectively, we face an increasing number of wicked problems stemming from runaway optimization. These include issues like climate change and inequality. As this blog’s name implies, Misaligned Markets is concerned with the wicked problems emerging from market capitalism and how this results in markets that are “misaligned” with the goals of us, its participants. The object of this blog is to develop a systemic view of issues like market failure which we'll do in future posts.

Summary

Philosophers like Aristotle identified that wealth-getting or wealth seeking had the ability to “displace” our other goals and values because it can easily be mistaken for an end unto itself. This tendency is not unique to wealth. It is very easy for measurable goals and metrics to displace the complex objectives they correspond to. “Mammon” is a metaphor that takes this insight, which ancient philosophers and theologians recognized in wealth, and applies it more broadly through concepts like optimization, Goodhart's Law, etc. The metaphorical Mammon refers to instances where optimization processes lead to unintended consequences. Mammon is a deceptive deity whose aid comes at a steep price. That price is whatever we end up sacrificing to achieve the outcomes we pursue.

• Optimization is the process of modifying an environment or a part of an environment to better match desired criteria. This can involve deliberately designed systems. Optimization can also “emerge” through the interaction of components within an organic system. Examples include: 
• Designed systems: Social media ad clicks, the throughput of water through a pipe.
• “Emergent” optimization: Arguably evolution.
• Many social problems like climate change and market failure are a special type of optimization failure, or “maloptimization,” called a “wicked problem.”
• Wicked problems are complex and challenging issues characterized by several key features: 
  • They typically lack a definitive formulation, making it difficult to pinpoint the exact nature of the problem. 
  • They do not have a clear stopping rule, meaning that determining when to intervene can be problematic. 
  • Solutions to wicked problems are usually one-time applications that must be implemented without immediate feedback, as there is no straightforward way to gauge their effectiveness. Wicked problems do not have a finite or exhaustively describable set of solutions or operations that can be applied.
  • Each issue is essentially unique, often serving as a symptom of another underlying problem. The explanations for the discrepancies that give rise to wicked problems can vary widely, influencing how the issues are understood and addressed.
  • Those who attempt to solve wicked problems bear the responsibility for any negative outcomes resulting from their interventions.

Recommended reading

1. Book: Thinking in Systems: A Primer by Donella Meadows
2. Book: The Unaccountability Machine: Why Big Systems Make Terrible Decisions - and How The World Lost its Mind by Dan Davies
3. Book: When More Is Not Better: Overcoming America’s Obsession with Economic Efficiency by Roger L. Martin
4. Book: The Ingenuity Gap: Facing the Economic, Environmental, and Other Challenges of an Increasingly Complex and Unpredictable Future by Thomas Homer-Dixion
5. Academic Paper: Value Capture by C. Thi Nguyen
6. Academic Paper: Playing it Forward: Path Dependency, Progressive Incrementalism, and the “Super Wicked” Problem of Global Climate Change by Kelly Levin, Benjamin Cashore, Steven Bernstein, Graeme Auld

Affiliate disclaimer

Books on this page and throughout the site link to my Bookshop.org affiliate pages, where your purchase will earn me a commission that will go towards covering site costs. If you at all find the books I recommend interesting, consider purchasing through Bookshop, which shares profits with local bookstores. You can learn more about how you can support Misaligned Markets here.