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Freedom has a price (45)

Philosophy and System Design Are Linked

Any reader of New Phaistos will have seen firsthand the interaction between philosophy and system engineering. While they may seem like completely different fields at first glance, they share a fundamental connection. When designing a system, one must establish foundational principles and reflect on key questions: What is the system trying to achieve? What is it optimizing for? And, perhaps most importantly, what trade-offs are acceptable?

One particular intersection of philosophy and system design that I’d like to discuss is the concept of freedom—specifically, the freedom a system grants to its users. Some systems are centralized and meticulously planned to optimize outcomes for the collective good. Others are decentralized, granting individuals greater autonomy but often at the cost of inefficiencies, inequalities, or even sub-optimal collective results. The approach a designer chooses is influenced not only by technical considerations but also by personal biases and the ultimate objectives of the system.

Power to the People Has a Price

Consider the example of managing a road network. Imagine we need to connect two cities, A and B, and we have two available routes:

  1. A highway with multiple lanes that consistently takes one hour to travel between A and B.

  2. A provincial road that is shorter but prone to congestion—the more cars that use it, the longer the journey takes.

Now, let’s assume 1000 cars per hour need to travel from A to B. Each driver independently chooses a route. The highway always takes one hour, but the provincial road's travel time depends on the number of cars using it: if x cars take the provincial road, the time it takes is x/1000 hours.

From an individual driver’s perspective, the provincial road always seems like the better choice since x/1000 is always less than one—until too many people choose it. If all 1,000 drivers take the provincial road, it also takes one hour, leading to an inefficient outcome where both roads are equally slow. The total time spent across all drivers in this worst-case scenario is 1,000 hours.

However, from a government’s perspective, the goal might be to minimize the total time drivers spend on the road. The optimal solution, in this case, would be to split traffic evenly between the two roads:

  • 500 cars take the highway (500 hours total).

  • 500 cars take the provincial road, where each journey takes 500/1000 = 0.5 hours (250 hours total).

This results in a combined total of 750 hours—a significant improvement over the 1,000-hour outcome when drivers make selfish choices.

This 250-hour difference is what mathematicians and game theorists call the price of anarchy: the cost society pays when individuals pursue their own best interests rather than an optimized collective solution.

Balancing Freedom and Efficiency

The price of anarchy is a powerful concept that applies far beyond road networks. It emerges in economics, network design, environmental policy, and even online platforms. While centralized control can optimize outcomes, it often comes at the cost of personal freedom and adaptability. Conversely, full decentralization maximizes individual autonomy but can lead to inefficiencies and social costs. The challenge for policymakers, engineers, and designers is to strike a balance—leveraging mechanisms like incentives, regulations, or algorithms to guide individual decisions toward better collective outcomes while preserving as much freedom as possible. In the end, the right balance depends on what we value most: efficiency, fairness, or autonomy.



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