Economic incentives in tango: empiricist vs. praxeological view

When you look at Facebook or forum discussions about why milongas are so dead the explanations seem to follow a similar logic to empiricist views of economics: if you fix this thing or that thing then the situation will improve, and the government or milonga organisers should do this or that. You need to find out by collecting data what the problems are and then try to fix these problems piecemeal. By contrast, a praxeological approach to economics and human behaviour of the Austrian School (see lecture by Hanz-Hermann Hoppe below) offers explanations which are true a priori and which view any government action as having a negative consequence on the economy. For example, they would say that in economics we don’t have to test empirically the statement that if A sells X more cheaply than B does then people will buy from A and not from B, all else being equal. They see human behaviour as responsive to incentives, and that in the long run you get more of what you incentivise.

So for example, we don’t need to test empirically the prediction that if dancing teachers make most of their income from running dancing lessons and either don’t make money or lose money from milongas then (a) they will promote more dancing lessons, workshops, bootcamps, etc., and (b) will prefer to organise practicas or practilongas which are oriented towards their paying students and which view non-students only from the point of view of providing partners to their paying students, and obtaining new paying students, so that (c) there is likely going to be a conflict of interest and a negative vibe between teachers and their paying students on the one hand, and experienced dancers who aren’t taking dancing lessons on the other.

Thus, I can make some praxeological predictions that are true a priori when someone asks the following:

There have been a lot of discussions recently about how to improve tango, whether to attract new people to it or to make it a better experience for those already there.

One regular theme is friendliness, or lack of it. Some organisers and teachers specifically say that their events are friendly. What are organisers specifically doing to make their event friendly? What expectations do they have of attendees to help make an event friendly?

London Tango Facebook Group

Whether people are friendly or not depends on their preferences. People might act superficially friendly or nice and yet a person may feel that the milonga is not friendly. More generally he might not feel that he’s getting value out of the event that he expected either in terms of dancing or social interaction. So one question we need to ask is what these people were expecting to get out of milongas that wasn’t delivered and what led them to expect these things? There was some preference or value that they were expecting would be satisfied but in the end wasn’t. Typically dancing lessons are a very socially structured sort of situation whereas a milonga is not. You can’t expect your milonga experience to reflect the dancing lesson experience but people probably don’t know this. The people who were disappointed had expectations of some value, some preferences being met, based on prior communication they had with their teachers and the other people in the class but in the end their expectations were not met.

As Hanz-Hermann Hoppe points out I can predict a priori what you will do with a good such as an orange depending on your preferences but I can’t predict your preferences because those depend on your knowledge or beliefs of what you can do with a good such as an orange (or a milonga). If you’re disappointed with a good that means that you had some beliefs about what you can do with a good, eg., eat it, but this preference was not met, eg., the orange was for some reason inedible. Similarly, people had some beliefs about what you can do with a milonga, what value you might get from it, which turned out to be false and so they’re disappointed.

Now if you think about the preference ordering of the dancing teachers, which would be a higher priority: making the milongas more friendly for people who already took lessons and just want to dance, or to make the milongas more friendly for new people? Even the most high-minded of teachers can’t reasonably stay in the teaching business without students which invariably means either (a) bringing in new people, or (b) teaching new material to their existing students. And then the question might be asked whether the constant teaching of new steps/patterns/figures or bringing of new people will provide for stability and friendliness (see also Why inefficiency and obsolescence is not a bug but a feature of “Argentine Tango” teaching)?

We can also look at the likely preference ordering of people who only attend a milonga vs. the teachers and their students. Often a milonga will be held after a lesson. The teachers have done a good amount of movement as have their students. A person who’s been relatively sedentary all week or all day will appreciate some basic dances to begin with whereas the lesson crowd has other interests. There will be more in-group/out-group dynamics and there will be more practicing of moves or seeking of practice partners among the students. The teachers and more advanced students will be running through their attention seeking moves. It will be like a restaurant where a bunch of intimate couples have to share the space with a large party of people speaking loudly. Everyone is friendly, so what?

I also don’t need to test empirically the prediction that the curation of music or the adherence to codigos are likely to be a mere afterthought for the teachers since the students are busy working on their steps and just want to get out on the dancing floor whatever the music might be. It is the praxeological rather than empirical mode of argument that tells you that once you structure tango dancing around teachers and lessons you will get particular sorts of outcomes and this is guaranteed in the long run. This is because human behaviour is responsive to incentives. The business model based around the teaching of steps rather than around quality tango music assumes that there is economic demand for the steps and only secondarily the demand for the music as a background for the steps.

One way to view the matter is in terms of the promotion of the food pyramid which tells people to prefer carbs and vegetable fats over animal products which was followed by the obesity epidemic. If you promote the idea that quality tango music is valuable and that steps are secondary, then you change the structure of incentives. Just as the promotion of plant-based diets and of the idea that animal fats cause heart disease have become established in the mainstream consciousness through sustained government propaganda, so the idea that dancing is a movement activity whereas careful listening to music is boring and elitist is similarly promoted in education and mass culture.

We can tell what people prefer simply by looking at what they’re buying. They buy dancing lessons and are willing to fork out a lot of money for lessons, workshops, privates, shoes, etc. They expect to then recoup their “investment” by attending relatively low cost milongas. The problem is that their economic reasoning is flawed: the milongas are not likely to be of high quality if you’re spending all your money elsewhere. You get what you pay for. Also, if people spent a lot of money on lessons they won’t want to dance with novice dancers or outsiders because they view that as probably a psychic cost which they’re unlikely to recoup, ie., they don’t view it as an investment. Judging simply by people’s actions it’s easy to see that people see the value in (ie., prefer) being able to break out the moves that they acquired in the overpriced workshop. At no point did they invest in any serious study of the music which they view purely from the point of view of the moves acquired in the workshops and bootcamps.

People who invest in dancing lessons exhibit short term thinking and then are surprised when things don’t work out in the long term. More and more people are able to see the fallacy of consuming junk food but fewer seem to be informed about consuming junk culture. More and more people are becoming aware that when you enter a convenience store or a supermarket 90% of the food items on the shelves are addictive and toxic to their body. They seem less aware that 90% of the mass cultural products are addictive and toxic to their psyche.

Now there are broader economic reasons why people ceased to have low time preference (ie., preference for delayed gratification) and instead have high time preference (ie., preference for immediate gratification) which is why so many people these days are in debt and overweight. Praxeological thinking tells us that if you print money this will cause inflation and subsequently high time preference, ie., immediate consumption rather than long-term investment. You don’t need to test this empirically, you just know that it will happen. Roger Scruton suggested that there is similarly inflation in the cultural sphere which is manifested in the proliferation of kitsch art. In that case, consumers of kitsch cultural products are like people who believe that you can improve the economy by printing paper money. You don’t need to do empirical studies to find out what the results of this will be: inflation and devaluation in either the economic or the cultural sphere.

Also:

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