Evolution of societal organizations

How does a society organize?

A societal grouping may be disorganized. Such random groupings arise as crowds in busy areas. A crowd behaves like a "gas" composed of individual that react to events. Some emergent patterns can develop from the autonomous behavior of each individual.

Structured organizations are:

family -- the start of kin organizations pre-date history
hierarchical -- developed 1000s of years ago and used in religions, military, and government
corporate -- developed 100s of years ago and used for businesses
market -- developed 100s of years ago and used for consumers
network -- developing now?

Family structure may have been one reason why humans evolved big brains. The evolutionary advantages are large for knowing and remembering the many inter-personal relationships of a village. Instead of treating other members the same, if a person knows the other person, then both might benefit more than would occur in anonymous interactions.

The transition from "family" to "hierarchical" is thought to be due to the need to organize large militaries.

A "market" is very useful for price discovery and dealing with large numbers of buyers and sellers.

Is the internet producing a new societal organization, the "network"? People build networks of relationships that transcend other organizations. Could this be the result of an electronic society?

International reply coupons

Most investors have heard about "Ponzi schemes". These are the name for investment scams where promises are made and new investors' money is used to pay old investors. Eventually, the scheme collapses when new money slows. Surprisingly, the basis for Ponzi's scheme still exists. Ponzi bought IRCs (international reply coupons) in low-cost countries and sold them in high-cost countries. It's a valid arbitrage. IRCs can be exchanged at post offices for international postage. http://www.upu.int/en/activities/international-reply-coupons/about-irc.html Unfortunately for Ponzi's victims, while buying and selling IRCs could theoretically be profitable, there were several problems. First, the market for IRCs is small. After all, making only a few cents per IRC requires many millions to be traded before a large firm gets profitable. Second, in addition to the overhead of buying and selling coupons there is a large cost to shipping and handling all those coupons. Finally, the biggest problem was that Ponzi was an outright crook. He wasn't really buying the IRCs, he only took in investor's money and claimed he was trading IRCs.

Comparing advertising and economics is revealing. Both attempt to understand how people make economic decisions. From their origins over a century ago, they assumed people make rational decisions based on information. Early advertisements were loaded with information about the product. However, advertisers found that people aren't completely rational and other things besides information motivates purchases. For example, soft drinks are sold on emotion, not nutrition. Economists simplify consumers as rational consumers that seek to optimize decisions on utility. However, economists are moving beyond that simplistic view based on insights from studies of behavioral economics.