In many of my previous posts, I have referenced my military experience, to relate to many of the economic principles discussed in class. The a triangle relationship in the principle-agent model occurs in many situations. Many times it can even be a quadrilateral relationship. An example of this is in the Vietnam war, officers had the responsibility to work under the direction of their commanding officers, providing the best possible situation for their troops, as well as looking out for the well being of the civilians of Vietnam. This kind of responsibility to the people, as well as the broader governing body is typical of most government positions. One recent example of conflict arising from the triangle principle-agent model is the most current presidential election.
In modern presidential elections, in the United States, their is always a choice for voters between two candidates from either the Republican or Democratic party. Each side elects one candidate who is representative of the party's ideals, and political agenda. This has formed a triangular principle agent model in our political system, with the party being the principal, along with the individual candidate from that party, and the agent being the American people. In the past, very little conflict has arose between the two principals, the candidate and the party, as most often the sole reason that the candidate is elected is because of their shared ideals, and political agenda, with their party. In the 2016 presidential election we saw a different situation on the republican side.
Donald Trump ran under the republican title, with no prior experience in government, or any prior serious affiliation with the GOP. Many of his policies, and ideals, did not match up with the GOP, nor the democratic party. The american people decided on November 8th, and elected Donald Trump to be the next president of the United States. This means that in the next coming months work must be done between Donald Trump, the republican party, and the democratic party to come to a middle ground on the policies, and ideals, for the good of the american people.
There are several way that this tension can be, and must, be resolved. As we saw on November 10, President Obama, our current democrat president, sat down and had productive discussion about the best ways for Donald Trump, and the current administration to have an effective transition of power. This is a common organizational practice. In the presence of conflict between two principals, both principals meet, and have a civil discussion, to form a unite front, about what is the best plan of action for the agent.
Another way that this conflict of ideals between parties, and presidential-elect Donald Trump, will be resolved, is through the system of checks and balances. The congress and the senate are put in place, with representatives from the democratic and republican party to ensure that all actions taken by the government are in the best interests of the american people. This also occurs in organizational practices. when businesses have a CEO, and a board of executives who have to approve certain measures, to ensure that they are in the best interests of whatever agent they serve.
Their are several other ways that this tension will be resolved over the next several years, and it is clear that there is more than one effective way to resolve conflict between principles in a triangular principle-agent model. The actions of the american people are independent of what the government decides. Policies, and laws, can have an influence over the actions of the people, but at the end of the day the people act independently. So if conflict is not resolved, the agent (the people in this case), often act in accordance with one master while ignoring another. This especially apparent, in reference, to politics because of the political affiliation that most individuals attach themselves to. They will act in accordance with the intentions of their party. This happens in other organizations, as favoritism towards one principal, or another, is common, and causes the agent to act in a way more in line with their preferred principal.
Economic principles is correct usage. (For example, making a choice based not just on its direct reward but also its opportunity cost is an economic principle.) However, the person who interacts with the agent is the principal, not the principle.
ReplyDeleteAs to the topic of your post, on the one hand I welcome you coming up with a different example, just for variety, but on the other hand, I really wish you had chosen a different example. Passions are still running quite high on this one, so it harder to give an arm's length analysis and get any sense of agreement that the analysis is objective.
Also, while I have quite strong views on this, I prefer to keep them private rather than share them with the class. If you want to discuss those with me one on one, that would be fine. But I will not indulge that online as I fear the downside risk from doing so might be quite large.
So I will dance around what you said and simply take on what you said in the last paragraph. In particular, you wrote this sentence:
Policies, and laws, can have an influence over the actions of the people, but at the end of the day the people act independently.
I have some guess as to what you mean, but you might talk that through. Instead of the word independently, you might consider the alternative impetuously. And you might try to tie this to the class. Elsewhere we've discussed departures from rationality. Indeed in the class session from last Tuesday we discussed conflict and its sources. There is a PowerPoint for that session and one of the slides is about bullying. Bullying was given as a possible source of conflict, though the context was meant to be the workplace, not all of U.S. society.
In any event, you might try to draw out your thinking via that connection which might enlighten while at the same time tie better into the class.
I did try to be as objective in this post as possible, but I absolutely understand where you are coming from as passionate opinions on this topic are plentiful on both sides of the coin.
DeleteI agree with what you said about impetuous behavior being a more consistent pattern of behavior of people, from an economic standpoint. But I also, feel that an independent mindset plays into this impetuous behavior. People's need to feel independent of the control of government policies can often lead to them acting impetuously as a reaction, or overreaction, to the policies governments attempt to impose.
Like Professor Arvan said, it's rather difficult to really elaborate on this post because of the ridiculous tension surrounding this past election. I will ask one question however. Is there really a way to satisfy both sides of this triangle? Sure there is popular vote, trying to satisfy the most Americans in this country, but is there really a way?
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