Quiet Days in Quedlinburg

Non-zensical notes on money, compassion, and the Harzer Roller

Posted Aug 08, 2015

Source: J.Krueger

Die Stadt ist schön und gefällt einem am besten wenn man sie mit dem Rücken ansieht [The town is beautiful and you like it the most when walking away from it]. ~ Heinrich Heine, “Die Harzreise,” with a clumsy translation by j. k.]

After 4 weeks at “The Institute” in Westberlin, suckling at the teat of thinking by sampling, I delved deep into the mythic heart of Germany. That mythic heart is the mountainous Harz region. Along its northern flank lies a string of towns, each with a medieval castle, a baroque palace, a botanical garden, and lots of half-timbered houses. The pearl on this string is Quedlinburg, which goes back to Ottonic (Ottonian), perhaps even Carolingian times. The town with its Romanesque cathedral is gorgeous and historically significant, so it is now a UNESCO World Heritage site. Until 1990, the town and the region were just inside the non-country, non-nation, non-entity of East Germany. For me, growing up in West Germany, it might as well have been on the dark side of the moon. As West Germany was being westernized and Americanized (really!), East Germany was not Russified, only Sovietized. As a result, it retained some of the aboriginal Germanness now lost in the western parts. In the Harz mountains, all this comes into sharp relief.

J. Krueger
Source: J. Krueger

There has been little in-migration, only out-migration, further solidifying the region’s aboriginal character. The myths Germans associate with the Harz are about witches. There are several places around the hills said to be their dance floors. Pic Rosstrappe By one theory, the witches represent Saxon deities or demons that the Frankish conquerors in Charlemagne’s time tried to suppress with catholic ardor. Now they are part of the Harz’s allure to tourists.

Credit Allemand

J’ai du crédit, donc je suis. ~ d’Card

Germans distrust plastic money. They regard cash as more real, and try to hold on to it (in both senses). There are exceptions. I have never had a problem renting a car or buying gas using my AE card. Elsewhere, the reception is mixed. I want to cautiously say that credit cards are more widely accepted now than they were 10 years ago, but deep pockets of resistance remain. Some vendors accept the so-called EC card, which is a debit card for locals. International tourists need not bother to shop. Incidentally, it is a mystery that in such a cash-loving country there are so few ATMs. Where is all the cash coming from that people use? Also, large denominations (100, 200, 500) are rarely welcome. You need to pack a wad of 50s if you want to live. 

The refusal to accept credit cards bears some resemblance to the ultimatum game (which, by the way, was first described by German economists). The seller demands that the buyer bears the inconvenience of paying in an unpreferred way (cash); otherwise, no trade and both lose. The buyer usually accepts (I assume) if he wants the items and if he has (or can get) the cash. This reinforcement history seems to prove the seller right. But then again, the sellers can have it their way only if they have no competition or if they have an agreement (a trust) among themselves to refuse credit cards. They feel confident in their refusal and get rewarded for it often enough. Not that I want to line the pockets of credit card companies, but I, like many buyers, like the prerogative to choosing my method of payment and keeping the cash in my pocket and at low levels. How can the recalcitrant sellers be challenged? It is not easy. If you want the item and the seller knows it you’ve already lost the game.

Or have you? An economist might say that in fair trade, both parties gain from the exchange. And if all is in equilibrium, the seller’s gain in happiness (value, utility) from the money is as great as the buyer’s from the object. In other words, in equilibrium, the seller wants to sell as badly as the buyer wants to buy. The trick is to convince the other party that one’s own gain is smaller than theirs. He who convincingly signals that he can walk away from the deal has the upper hand. Here, the game takes on the aspect of chicken. The seller who resonantly rules out certain payment options is sending such a signal. The cash-paying buyer is the chicken.

How can you unchicken yourself? If the seller is as eager to sell as the buyer is to buy, the buyer can call the bluff and propose an ultimatum. Take the card or leave it. This may be difficult psychologically, though, if the buyer’s fantasy has just been inflamed with thoughts of possessing the object. The buyer’s main battle, then, is not with the seller, but with himself. For starters – and practice – the buyer may deploy the bluff-calling tactic only if he is truly indifferent between buying the object now and here, or not. Perhaps the buyer will find that the seller caves, which would be a nice coup, or the buyer can walk away assuming that the seller will feel the regret of not having made the sale. Remember, sellers’ must sell, eventually, or perish. 

Ah, Quedlinburg! May the Greeks, when kvetching about the Germans and their fiscal games, recall that once one of their own, Princess Theophanu, who is being remembered in this town in part for having reputable introduced the fork into this barbarous land, was Empress of Germany, and almost a millennium later, a German prince, Otto of Wittelsbach, was their king.  


I like pity. Pity is good. ~ Costanza

The Dalai Lama is the posterman of compassion in the Jetztzeit. Compassion is his religion. If we all were more compassionate, the world would be a better place. This is a nice idea. How can we not subscribe? How can it be achieved? Or can it? If it is achievable, are we not at fault for not achieving it? If it isn’t achievable, why is that? Are there alternatives?

The Dalai Lama is not the first to push compassion. The medieval catholic church during urged their sheep to imitate christ through com-passion by sharing in the suffering. The reformation took a different tack and compassion became collateral damage to the doctrine of predestination, the idea that god’s grace is not tied to human deeds however good and noble.

Nor is the Dalai Lama the only champion of compassion today. Many psychologists study compassion as part of a packet of attitudes and sentiments that they think will make their discipline more positive, while others fold compassion into the bundle of prosocial values. For the former, compassion yields psychic benefits for the self, whereas for the latter, there is a tension between prosocial and self-regarding values, often in a zero-sum sort of way.  

An empirical paradigm for the study of compassion is the dictator game. One person, Joey, receives an endowment of money and is told that he may share it with another person, Paulie, if he so desires. Many participants transfer a small amount, compassionately, while many others give nothing – as game theory demands – while still others split the money evenly. The money in the dictator game is a windfall. Whatever Joey chooses to keep is a gain. Even then, though, compassion is a rather limited affair. Now consider a game in which Joey receives the same amount of money – usually $10 – and is sent home. He is instructed not to spend the money and to return with it a week later. Upon his return, the dictator game is played. By now, Joey will have psychologically taken possession of the money, considering it his endowment. He no longer sees it as a gain, but as part of his status-quo capital. This is bad news for Paulie. Any transfer will feel like a loss to Joey, and most people – as Schopenhauer, Kahneman, & J. 6Pac will assert – are averse to losses. 

Yet, it is the modified version of the game that captures the situation of the man in the street who is called upon to be compassionate. A situation presents itself that calls for a donation or some kind of help, and he needs to reach into his pocket of status-quo capital if he wishes to respond. Drifting through Berlin’s subway system, this brute fact hit home for me. There is now much more panhandling there than I remember from the good old days anno murum. It becomes clear fast that you can’t give to everyone, unless you feel no shame about giving very small amounts. To never give anything is a coherent, and game-theoretically justifiable, rule, but it feels churlish; its price is social guilt.

If you want to give some, you need a decision rule. There are several possibilities: [1] Give once (or twice or thrice) a day. This is a version of Islamic law. To keep it easy, give to the first panhandlers you see in the morning, because it is harder to know when you’re meeting the last. Set aside a certain amount per day and give it away until it’s gone. [2] Give probabilistically. This is a version of the mixed-motive equilibrium strategy. Each encounter with a panhandler is a game, and you enact the prosocial option with probability p. You may set p in advance, which requires further thought. To give with p is hard because it is difficult to do anything deliberately with a certain probability (please raise your finger with probability .4). Dice and coin tosses externalize the production of p, but it would be odd to stop in front of a panhandler, pull out a pair of dice, and then having to apologize for not throwing snake eyes. Things will not improve if you let the panhandler do the casting or tossing. [3] Reflect on some preference ranking, and, for example, give to those panhandlers you consider worthy. I fell into this strategy on the Berlin subways when I found myself giving to musicians but not to those who merely held out their hands. This strategy raises its own concerns. Although something may be said for a merit-based approach and the rewarding of effort, the implication is that some of the most needy will fall through this crack.

Whichever strategy you choose, you will have to acknowledge that you can’t give everything to everybody. Reality dictates an inverse relationship between the amount you can give to an individual and the number of individuals. Your wealth is a non-infinite pie. Theories of compassion of the positive psychology type and theories of social values blithely ignore this limitation. They trumpet the glories of compassion as if there were no limits. But the results of the classical dictator cannot stand as a moral rule. If you give to everyone who asks 10% of what you have, you’ll approach zero wealth fast (if the others live by the same rule, making you a potential recipient of compassion, things get more complex, a theme I have explored elsewhere).

A real person trying to figure out how to be compassionate must confront and deal with the fact of limited wealth. The most robust strategy that I am aware of comes from the theory of inclusive fitness and its derivatives. This theory states that compassion will fall geometrically over genetic distance – where social or psychological distance can serve as proxies. With compassion tapering off in the social distance, inclusive fitness is served both rationally and adaptively, while moralism is offended. Moralism demands that we ignore social, psychological, or genetic distance without teaching us how to do it. The dictate to treat everyone as one’s brother is high-minded but hollow when that treating requires effort or expenditure. But all is not lost. Nature has also given us the ability to respond to distress and emergency if it saliently unfolds right in front of us. Empathy in the moment when it matters can override the discounting effect of social distance.  

J. Krueger
Source: J. Krueger

Ambling through the historic core of Quedlinburg, I came upon a pleasant young person who drew me into a conversation. I knew that some kind of pitch was at hand and I asked her – pleasantly – to cut to the chase. I saw the UNICEF logo and expected a request for a donation. And how can you be indifferent to UNICEF? It is such a worthy cause. Her job should be easy. But she (they) messed it up by overreaching. She wielded an I-Pad in front of me, asking me to provide all kinds of personal data and make a commitment to become a sponsor. My offer to make a one-time donation without leaving my data was denied.

This was a strange kind of ultimatum game. Children play it occasionally when sulking after receiving a gift smaller than the one demanded (the clever ones will signal their likely sulking in advance, when their parents still have time to get a larger gift). The idea seems to be that once you have a case for a legitimate request, there is pressure on the other party to give generously. To then not give anything is calculated to produce a psychological cost. In other words, the person (the mark) is put into a position of choosing between two types of cost. This is not a desirable prospect unless you are delighted to be asked to give a lot and perceive it as an honor. Robert Cialdini, the eminent student of how one gets people to comply with a request, found that the opposite of the UNICEF strategy works well. Tell the mark that ‘even a penny will help.’ They will most likely give a sizeable amount because they don’t want to look cheap.