The Interactive Economy Is Too A Supply Chain Economy

   (Commentary posted by Roger Erickson)

The P2P Foundation shows how all bureaucracies inevitably miss the point of why they were founded. In this case the P2PF argues:

The interactive economy is not a supply chain economy

Sorry, but they're applying apple bandages to a constantly bleeding orange challenge.

Of course the interactive economy is a supply chain economy. 

It's supplying Increasing Cultural Adaptive Rate!

Members just aren't aware of what they're really supplying. Claiming that they aren't supplying what they are supplying isn't gonna make that task go away. This is tragic.

If you're gonna make a claim to being on the bleeding edge, you at least ought to be able to smoothly redefine blood as it evolves added functions. :(

Otherwise, you may as well be a tree claiming that it isn't forming a forest. This may be beyond rocket science, but they're still missing the point.

Adaptive Feedback, Thoughts & Suggestions Not Adequately Disseminated - Change Nothing

(Commentary posted by Roger Erickson)

At least not soon enough to matter.

To adaptive aggregates, tempo always matters.

A rough semblance of an issue widely disseminated this week is always better than a perfect discourse delivered long after the fact .... to too few.

The following is from a Dec 1 book signing at the DC office of the American Federation of Teachers.

"In his 18 years as an opinion columnist for the New York Times, Bob Herbert championed the working poor and middle class. After filing his last column in 2011, he set off on a journey across the country to report on Americans who were being left behind in an economy that has never fully recovered from the Great Recession. The portraits of those he encountered fuel his new book,Losing Our Way. Herbert’s combination of heartrending reporting and keen political analysis is the purest expression since the Occupy movement of the plight of the 99%."

Less than 100 out of ~320 million residents of the USA attended. There was minimal (if any) press coverage in the local DC newspapers.

Herbert's conviction? "The truth will set us free." Yet he doesn't say when. Perhaps when the truth is adequately disseminated? To a threshold proportion of the electorate?

And if data is meaningless without context, don't we have to simultaneously disseminate adequately adaptive perceptions of our national context either simultaneously, or beforehand?

“Asked by a World War II veteran, ‘What happened to us?,’ Bob Herbert does what he has done all through his remarkable career as a journalist: He sets out to find the answers from the ground up. Searching out the stories and experiences of everyday Americans, and digging deep into facts and figures from ‘the high noon of capitalism’ to the widening gulf of our present vast inequalities, he takes us to the heart and core of our troubles while holding firmly to the conviction of his lifetime: that the truth shall set us free. Here is America as revealed by a great reporter whose empathy with everyday people inspires trust on their part, honesty on his and discovery for all who make the journey with him.” — BILL MOYERS, Former White House Press Secretary

“In a series of haunting portraits, Losing Our Way is an unforgettable reminder of the struggles facing America’s middle class today. Herbert has given us a sweeping picture of what has gone wrong in America—how we have underinvested in infrastructure, let corporate policies dominate the education debate and fought needless wars that resulted in a tragic waste of life. A brilliant and devastating portrayal that explains how our priorities and policies have gone awry, Losing Our Way will make you angry and determined to put our country back on course.” — JOSEPH E. STIGLITZ, Winner of the 2001 Nobel Prize in Economics and Author of The Price of Inequality

At the book signing, Herbert's book was available for purchase for $20.

If even 10% (32 million) of our residents received this book (which hasn't happened), that'd just transfer $640million from residents to the printers/publishers (including a tiny royalty to the author) - thereby feeding the very inequality they SAY that they want to erase. Might as well guarantee you'll never reach a goal, by triggering an infinite series of steps that also keep moving the target - like a clown kicking the hat he stoops to seize.

This is a distributed task which our aggregate cannot win without changing it's methods, to regain free, mandatory education of ourselves, by ourselves.

If those involved really wanted to make a difference, don't THEY need to be aware of changing context too?

Wouldn't it be far better to distribute Herbert's book as a free pdf, to every citizen in the USA?

There are more ways to lose our way every year, involving novel ways of losing track of both context and tempo.

Capitalism cannot operate separate from Statesmanship. 

Selling controlled access to insights works for personal competition among system components. Adaptive suggestions not actively broadcast & disseminated for free do not progress to Aggregate Adaptive Rate. 

There is no "I" (or capitalism) in teamwork, nor in policy, nor in statesmanship. 

If we cannot keep personal capitalism operating within tolerance limits, then we cannot preserve and manage Aggregate Adaptive Rate.

Statesmanship requires awareness of Aggregate Capitalism as well as the sum of Personal Capitalism, and it also requires the brains to see that our Aggregate Survival tracks dynamic co-optimization of the sum of those two variables across changing contexts, not optimizing either in isolation, in given contexts.

AS ~ Sum[ki(AC) + sum{Ij(PCi)}]

(i denotes transient contexts) 

(k & j denote context specific, polynomial variables)

Non-economist citizens used to learn such team concepts in the course of childhood, or at least in high school civics &/or calculus classes. What happened?

Render (to tolerance limits) unto hoarders all that serves personal gains & copyrights.

Render unto OpenSource, all that serves Statesmanship and Aggregate Adaptive Rate.

Put another way, if we can maintain separation of Church & State, why not separation of personal capitalism and Statesmanship? It's the only way we'll survive.

It's either separation of Corporation & State, or Fascism. It's our choice to make, the sooner & more widely the better.

Letting civil servants & citizens be divided & conquered by sociopathic wealth hoarders isn't the answer. Just define their operational tolerance limits and let them live within them, like all components of an evolving system.

There is no path of aggregate survival that does not involve dynamically adapting equilibria between increasing numbers of conflicting forces. Deal with it. There is no point in any institution "winning" by killing it's teammates. That's an oxymoron of the most base sort, that only moronic NeoLiberals believe.

Perceived Injustices Are Meaningless Without Context ... Surviving Reality Requires Continuous Exploration of Response Options

(Commentary posted by Roger Erickson.)

Injustice?

"If the wealth of the world's 5 richest families was confiscated no human being would have to starve again."

This one misses the point, even if technically plausible. Better to define optimal tuning options, rather than ONLY define current injustices.

Problem? The rich are given, and are hoarding, immobilized, an outsize proportion of present fiat?

Suggested alternative? Why bother confiscating it? Just alter the ratio of feeding it (excessive hoarding) vs feeding dynamically distributed fiat. The huge hoards of unused fiat would wither as fast as they accumulated - or become irrelevant.

Why? Because today's net public fiat is always dwarfed by tomorrow's. It's been unstoppable for 4.5 Billion years!

How Public Initiative (fiat) used is NOT. That depends entirely upon the quality (including tempo) of OUR distributed decision-making.

Here's a suggestion. Participate, yourself, in defining your own local and your own country's distributed options.

If you don't, some deranged economist will!

And that will only constrain the rate of exploring our cultural options.

Then you'll have to deal with the PRINCIPLE OF PRIOR PLAUSIBILITY, where an initial hypothesis builds outsized institutional momentum, SOLELY for lack of early opposition or alternatives. The statistics of phenotypic persistence dictate cultural agility. If we want to adjust quickly, then we have to end some cultural habits as fast as we start other ones ... or be far more selective about which ones we start!

Hence Leonardo's famous maxim.

"It is easier to resist at the beginning than at the end." Leonardo da Vinci

He might just as easily have said "be selective," rather than just "resist."

And an immediate corollary?

"Democracy works better when practiced every minute, instead of trying to repair it every four years."  RGE :)

Call it the "Broken Democracy" approach. :( The prize to keep our eyes on is our own, constantly increasing Cultural Adaptive Rate. That's the best way to prevent the crime of innocent fraud.

ps: If we question the adaptive value of human fat, why don't we question the cultural utility of obese wallets that immobilizes people in gated communities? A fatty liver is bad for personal health. A fatty wallet is bad for cultural health. Anything beyond 0.1% having fatty wallets is an epidemic of unhealthy demand leakages, i.e., sloth.

(effects of liver cirrhosis)

Stages of cultural damage?

  From healthy culture (distributed decision-making)

  To cultural financial fibrosis? (bought politicians; "yellow" NeoCons)

  And on to cultural liquidity cirrhosis? (free trade? foreign adventures?)

Any artists care to illustrate a cirrhotic Wall St. poisoning American policy agility?

Biology-101 ..... Does Institutional Persistence Without Change Slow Adaptive Rate? (Does a Duck Swim?)

   (Commentary posted by Roger Erickson)





So was Minsky the only economist who ever took biology 101?

Why don't all economics students learn this BEFORE starting college?

"The very stability of institutions .. is .. the source of political decay [as] circumstances change and institutions fail to adapt."

Ya think? (Really, I had no idea that people in other professions had NOT learned that at the onset of their education!)

That observation was the STARTING point of the theory of evolution - articulated and discussed as early as 1840 - and the onset of modern biology.

170 years ago, and that's not an axiom of economics? What the hell happened to the fundamental concept of a well-rounded education? Today's specialists wander only among their own choir?

If at least 10% of an electorate doesn't understand some prerequisite for democratic organization ... then that electorate won't require their politicians to understand. Consequently, Policy Space will shrink, and Policy Agility will dwindle. Without an informed electorate, an informed policy staff is highly improbable.

It's that simple?

"We" as a people are what we (in aggregate) train and practice becoming? Failing to quickly incorporate adaptive perspectives into preparatory education amounts to yet another shabby trick - played on ourselves!

This naturally leads to a simple conclusion, borrowed from the field of statistical process control. "Cease, forever, checking for [Adaptive Value] after the fact. Instead, [continuously manage Adaptive Value from the onset of the development process]."

In short, if we don't revitalize K-12 education, we can't succeed in our own Adaptive Race. Nor will our erstwhile democracy.

Outcomes Based National Evolution - Measured by Nominal Metrics Like GDP, Or By Real Outcomes? (Why Must We Ask The Obvious?)

   (Commentary posted by Roger Erickson)




There's a reason why homo-econo-ignoramus doesn't appear on this chart. All those pompous Nobel Prize winners simply don't matter, any more than the methane coming from livestock.

Does GDP correlate with general welfare of the people ... or with national Adaptive Rate?

More to the point, what do we do with all our increasingly possible leisure time?

Oh, maybe quit trying to tell people what to do and how to do it, and instead leave exploration of our expanding options up to their increasingly distributed ingenuity?

Ya think?

Did every one of the soldiers working with General Patton have a defined job? No and yes. Their JOB was to cooperate ingeniously in navigating their dynamic context, AS AN AGGREGATE! The best way to survive as an aggregate is to NOT assign arbitrary jobs to all members, and to instead invest in distributed freedom to increase the net adaptive value of distributed decision-making.

GDP? Jobs? Really?

There are more relevant questions to ask. Start with the fact that no amount of humans is ever "necessary," except in the viewers perspective. Do we know who or what will be asking these questions? Not yet we don't.

The only known reason for separate classes within any species or culture, is as a tool for extending dominance hierarchies, i.e., to use your neighbors before they use you.

To see that, all you have to do is perceive "the value that dominants gain from suppressing their subordinates" - which is right out of biology-101, and presupposes a perspective where competition for over-subscribed static resources exists. What if that perspective itself no longer applies? How? Once an aggregate transitions to a state where the importance of dynamic assets is finally recognized as far outweighing the importance of static assets. That's always been true, of course, ever since the first "better way" was first recognized. It's just that most humans STILL don't recognize that tautology!

Relevant answers, and the data to support them, depends on who defines context, and why. Without a useful definition of our changing context, we don't arrive at an optimal definition of "value." For instance, is the ratio of static vs dynamic value changing rapidly, as the ability of humans to transcend biological niches continues to expand? Unfortunately, you won't hear that question posed in many, if any, economics textbooks, simply because the very perspective of orthodox economics is too primitive to even keep up with the existing range of other human disciplines.

Again, these observations about dominants suppressing subordinates - and WHY - are right out of biology-101, and have been documented out the wazoo, for many social as well as non-social species (despite what these particular authors claim, that it's been proven ONLY for meerkats - they're likely just posturing for tenure in some academic department :( ).

For example, in most "pack" animals, from meerkats to lion prides to wolves, the dominant male & female completely prevent subordinates from reproducing (often over 90% of the time), so all you really have to follow are the boundary conditions - i.e., who's offspring do & don't survive. You can see the same dynamics at every level of the phylogenetic scale, from viruses to human beings. The core system dynamics don't change very much, but the accumulated methods sure do.

Same thing occurs in upper class vs lower class humans and other primates - e.g., chimpanzees. Lots of poor people scrimp on their own child rearing or forgo reproducing, while working to help rear the children of rich people. Offspring of chimps less dominant in their packs don't get the same perks that "yuppie" chimp kids do. But there's a clear reason for that, as long as access to static assets is a point of competition.

Once you look, do you see any difference whatsoever - once you compare fungi, meerkats or humans? (Note also that continual revolutions - in all species - illustrate frequent turnover among which phenotypes are dominant, and which are suppressed. There's no guaranteed permanence, at least not out on the cutting edge of an evolving species or culture.)

But now we're talking about a whole new layer of opportunity, never before exposed (at least to this extent) by any species except human cultures! What happens if OUR context changes markedly, and the prior relevance of dominance hierarchies becomes less relevant, or completely irrelevant? How long would it take humans to even notice, and re-adapt?

If there are countless machines around to solve increasing proportions of support tasks .... then there is a point beyond which there is no longer any previously recognized gain to be had from suppressing subordinate humans!

Duh!

We've been discussing teamwork, military resiliency, and democracy for over 2000 years, and still not really catching on. So no, human cultures don't instantly re-orient to altered context. Perhaps it's finally time to automate the production of cultural return-on-coordination. How? Perhaps by subtly adjusting K-12 education? It'll take practice, not predictions.

If our survival pressures switch from reproduction of humans to reproduction of increasingly more adaptive human cultures, then the "moment" of adaptive pressure moves even further away from inter-personal competition and towards aggregate coordination, a complete transition in perspective that has actually been underway throughout biological history.

Yes, past transitions equal or greater in scope have already been documented. Apparently, you're not required to learn about them in order to get a degree or even a prize in economics. There have been multiple "singularities." In the big scheme of things, that topic is actually quite passé. We're just taking the upcoming one rather personally, due to our very constrained perspective on context. :)

Here are just some of the known transitions, or past singularities.

1) Transition from "inorganic" chemistry to self-replicating organic molecular assemblages (there may have been prior ones, this is just an arbitrary start to our list, for now; and don't forget quantum physics & the prior Big Probability Events; they're candidate singularities too)

2) Transition from self-replicating molecules (autocatalysis) to self-replicating template structures (i.e., appearance of condensed methods for "directed" construction; e.g., protein catalysts and the incredibly old rna-based ribosome enzyme)

3) Further transition from partially to fully template-driven self-replication - i.e., the dna/rna/protein based replication sequence common to prokaryotes, archaeryotes & eukaryotes

4) Even further transition from unicellular to massively multicellular template-driven self-replication
("layers" of self-replication, where only "germ cells" replicate, and trigger the build-out process we call embryogenesis)

5) Yet another transition is known? Yes! Various "social" - and very few "Eusocial" - species already exhibit various stages of passing another transition, where "germ members" dominate replication to various degrees (including humans), and the rest of an entire social culture divert increasing proportions from hyper-local to more indirect reproductive efforts.

Many people are asking what the next transition might be, and how soon?

There's no freaking way to know! The race is to PARSE what's happening, and adjust while it happens, not to predict it.

Compared to the known history of biological diversity, the entirety of economics writing is just pure BS, incredibly boring, noise, of no adaptive consequence whatsoever.

The truth is, Economics Lacks Imagination.

We gotta be on our toes, and think harder about what's coming down the pike OUTSIDE of the brain-dead dung-box we call orthodox economic theory. It's always time to move on, or we won't be among those moving on.

At what point is the entire human species "needed?" Depends on who or what is asking, and how the questioners define need. If robots become self-replicating, will it actually be far easier to advance "culture" by doing away with humans altogether. SciFi folks have been imagining & discussing that for many decades.

However nothing yet, from dying planets to SuperNovas to the BigBang has extinguished biological evolution, so it's doubtful that anything we can imagine can hold a candle to the real options. Consensus is that some variety of carbon life would undoubtedly colonize and live off/in/within any robotics we can build.

Relevance is obviously a moving target.

Jerrit Erickson writes:

"Ten billion humans are no more or less necessary than any humans, or
life itself for that matter; we don't know why we're here, if there
even is a reason. That hasn't stopped everyone from acting like
there's a plan up to this point."

Precisely. The whole point is aggregate resiliency through net diversity, either static or generated on demand. Hence, in our human cultures there are countless competing plans, each becoming obsolete as fast as contexts change.  Plus, all our plans are soon replaced by even better plans, which are made obvious just by observing unpredictable change. So a corollary point is to never stop SELECTING from all those proposed plans.

We navigate contexts by reacting and adapting, and NOT just by blithely predicting.

Zero predictive power, seemingly unlimited adaptive power (so far, at least), that's what we have.

What would General Patton have said about telling people HOW to manage GDP, or to "get a job?" Here's my 1st guess: "@#$%^&*! Don't be a fool, Cultural Soldier! Now what's our situation?"

Our Biggest Problem Is Lack of Utilization ... of Reason & Careful Consideration

   (Commentary posted by Roger Erickson.)

Raising Minimum Wage Is Not The [Simple] Answer [Which the Poorly Informed Often Assume]

Try explaining this to those who haven't thought about system dynamics ... and you'll often find some VERY IRATE simpletons prone to insulting anyone attempting careful reasoning.

When reading economic policy discussions I'm constantly reminded of a comment from a physician a decade ago. We were discussing interactions between Maryland state health policy and the local county Medical Association - from the point of view of system dynamics. My MD friend, head of the Medical Association, admitted that all the many little things wrong with clinical practices were trivial, compared with the dominant issues that affected public health. Rather, he admitted, the far bigger issue was that our various clinical services were grossly over-utilized today, compared to 60 years ago.

He was referring to the overwhelming rise of self-induced illnesses, due to obesity & lifestyle, which were themselves byproducts of dietary & lifestyle product advertising run amok. If you haven't worked in a clinical setting, you may not appreciate the sheer volume of US citizens who return daily, weekly or yearly, complaining about adult-onset diabetes, high blood pressure, heart disease, declining lung capacity, sleeplessness, muscle weakness .... while totally ignoring the common sense issues of eating better and less, smoking & drinking less, less drugs, more exercise, and other lifestyle choices. A common clinician's complaint is that they have near zero ability to enforce compliance. In other words, patients don't listen to common sense, and instead listen primarily to advertising.

The inverse of that point immediately came to mind when reading John Harvey's warning about expecting too much from raising minimum wages, and especially from the expected comments by people who ARE poorly informed, and don't WANT to be informed ... at least not yet.

It seems that our problem in political economics is a LACK of utilization? Underutilization of our capacity for careful reasoning and inquiry.

Worse, the extent of that resistance to rational thought often seems to have an almost religious tone. Perhaps it's a variant of St. Augustine's old prayer. "Lord, let me be something other than ignorant .... but NOT YET!"

Why not now? And why all the anger? The resentment is too common to be caused by surprise & denial alone. We seem to have cultivated a hostility to learning. What's wrong with learning? Why the aversion to considering emerging details and subtly tuning ongoing perspectives and responses to a world that is constantly made more subtly complicated ... by our own flood of new insights and inventions? So what is so wrong with being wrong? Most of us feel quite happy to note that we no longer think and act the way we did at age 5, or at some prior state of learning, and easily excuse our prior selves ... since we've moved on. So why don't we extend the same generosity to each other that we do to ourselves? One clue is that criticism always triggers a defense mechanism, and hence resentment follows excessive criticism.

Have we created a culture that is too critical of people who have not yet learned enough, so that too many are deathly afraid of being wrong? Does being wrong HAVE to invoke a fight-or-flight panic response? And inversely, are we REALLY more secure if we seek the comfort and protection of the uninformed?

This is not a new topic. People have discussed this very issue for centuries.

"Thinking is the hardest work there is, which is probably the reason why so few engage in it." Henry Ford 

"People will do anything in their power to avoid thinking." [Unnamed, 18th Naturalist, quoted by Louis Agassiz] 

"The true triumph of reason is that it enables us to get along with those who do not possess it."  Voltaire

And of course we still face the question of what to do about our current predicament. Something simplistic and faith-based ... or some subtle, unpredictable cultural tuning, based on careful reasoning?

Everything is connected to everything, so for our Adaptive Rate to stay the same ... everything beneath the surface has to change. That means we have to LET everything ... and everybody ... change. Learning is easy, and amazingly fast ... IF we let ourselves and others learn, and don't generate a citizenry which is overly resentful of anything that does smack of learning.

No need to get angry, but perhaps an unadapted, unchanged citizen ... and citizenry ... is the most terrible thing of all to waste.

Setting Net National-Context-Awareness As A Desired National Outcome

   (Commentary posted by Roger Erickson.)




How about an electorate learning how to lead it's own culture? Can that group-quality be developed by studious group-reflection and group-practice? The answer is obviously a resounding yes, if evolving cultural history is any guide.

How do we the people, as an aggregate, go about DOING that, in a pragmatic, objective way?

There's too much to possibly discuss in just one beginning, so I'll only touch on one facet, indirectly brought to light by a review of the rather forgotten Korean Civil War of 1873-to-today (if not older).*

Rather than getting sidetracked in the wealth of details, please consider what this EXAMPLE means to us, and it's implications for what has and is happening to our own culture.

First off, there are SO many insightful observations on our own, multi-faceted context floating around - from political operations to fiat currency operations, and beyond ... but all of them are under-distributed, under-utilized & hence under-leveraged by we the people, as an aggregate.

When inundated by indicators, the classic solution is to summarize, and discriminate KEY indicators to coalesce around, while letting all others float within local tolerance limits. Yet that presumes that there is always some reference to orient group behavior to. Is it cultural survival? If we are what we-the-people practice, as a whole, then surely we should practice being more systemically aware of what we are, as a group, practicing, so that we can monitor, assess, judge and actively shape what we are becoming, rather than just finding out, after the fact.

Is the answer always more information? How many people will EVER read ANY scholarly bestseller - soon enough to matter? Enough to be statistically significant for real-time policy formation OR for continuous pursuit of an adequately "informed" electorate? Obviously not, since available data always scales faster than the data generators.

Walter Shewhart's words are prophetic.

* Data have no meaning apart from their context.
* Data contain both signal and noise. To be able to extract information, one must separate the signal from the noise within the data.

Obviously, we can't keep all people fully informed. That would reduce to a failed attempt to have clones, and it would destroy the very diversity which we depend upon. Plus, as Shewhart and others showed, the endeavor would be meaningless. We have to keep our diversity and use it too.

To keep evolving our own culture, it seems that we continuously need new cultural models, which must be preceded by new methods, appearing at a faster rate.

What kind of cultural models?

1) Constantly changing models for consciously managing the adaptive rate of our culture, and electorate.

2) Does that mean objective models and metrics for assessing the group-context-awareness of our electorate? Yes?

3) Does that mean setting national-context-awareness as a Desired National Outcome - and then usefully defining "National Context"? At a minimum? As one necessary but not sufficient aspect of an "adequately informed" electorate? Surely? Isn't that what Democracy does - when we let it work?

4) Does that also mean defining National Adaptive Rate as a necessary correlate of rate of change for an ongoing polynomial?

a) Rate of usefully re-defining National Context.

b) Rate of setting new Desired Outcomes worthy of our evolving culture;

c) Rate of adjusting milestone goals accurately defining successful pursuit of those Desired Outcomes.

d) Rate of adjusting our entire, cascading spectrum of policies, strategies, tactics, methods and tools ... in agile pursuit of our constantly evolving goals and summary outcomes.

So when can we see a, b & c spelled out throughout both our cultural outlook AND our K-12 curricula, so that it becomes incorporated into our growing list of guiding principles for all of our subsequent endeavors?


***


*Some of the fascinating insights that this book offers are rarely heard details about the fateful steps circa 1950 that led us to abruptly turn a de-militarized US economy into the Military Industrial Congressional Complex (MICC) which still defines us - and how that sudden reversal also aided the backlash to the 1930s pragmatism and the return to archaic Monetarism and excessively simplistic forms of Conservatism, bordering on Ludditism. It's a sobering reminder that our chosen actions dictate who we become. As we tried to police the world, the world changed us. It's not at all clear who is the victor in that exchange. It doesn't seem to be us.

This book is by Bruce Cumings. Those familiar with the Chicago school of NeoCon, NeoLiberal & Monetarist economics will be surprised that Cumings is on the faculty of that same school, in the History department. Go figure. Maybe there's still hope for the USA, right in the NeoCons front yard!

Cumings' data reveals a long history of Koreans bitterly divided between factions that profitably collaborated with the occupying Japanese between 1910-1945, and those of many stripes who obstinately insisted on either liberty or death. The actions & words of the opposition should have been familiar to Americans, but they weren't recognized, and hence weren't respected.

The paperback version I read is a bit chopped up, since it is condensed from his much larger 2-volume set, but it is still a fascinating read, since it largely details how fundamentally misguided our Korean policy has been, from start to finish, and most of our entire Asian policy too, after 1950.

Aside from the MICC, the book's other parallel to America today is the description of growing alienation and polarization between an Upper Looting Class and a comparatively destitute lower class, with no Middle. Are we listening?

Evolution Don't Care About Metallic Or Any Other Imagined Peg For Adaptive Rate.

   (Commentary posted by Roger Erickson)

Week In FX Asia: India Caught Between Inflation And US Fed

?? What? Surely it's more accurate to say that India is caught between conformity & lack of bold leadership?

Expanding options call for bold exploration? And increasing quality of distributed decision-making?

Not complaints as to why someone or some agency doesn't make life easy for the co-dependent 1% parasitizing the middle-class in given countries?

Life was tough back in the 1920's/1930's, when most countries went back off the intra-nation gold std for good, and instead opted for policy agility, and using their brains more often.

It was also tough in 1944, when the US Gov re-started inter-gov convertibility of $US for gold (can't be smart all the time!), and again in 1971, when the US Gov finally ended inter-gov convertibility of $US for gold.

Listen. Why the hell can't all nations & all citizens go back to the time-honored convertibility of general welfare of the people for Public Initiative, aka FIAT?

Is there any other floating correlate that matters?

Evolution don't care about metallic or any other imagined peg for adaptive rate. Social evolution follows the quality (including tempo) of distributed decision-making. Get over it, Luddites & Libertarians, we're a social species, not independent hermits.

Institutional Momentum? Suppressing New Science Theories? Phenotypic Persistence? What About Adaptive Rate?

   (Commentary posted by Roger Erickson)



System statistics, by any other name.

IMF (& ECB, & European Parliament) economists all tend to favor economic models which exclude everything relevant to the pursuit of financial stability?

Who new? :( Those who understand fiat currency operations.

Who knows how to combat institutional momentum, & maintain Adaptive Rate?

Many, as it turns out, yet still far too few to matter. This is a recruitment way. We have to save the vast majority from themselves.

Adaptive Rate Is Neither Left Nor Right, Neither Communist nor Capitalist ... it's OpenSource :)

   (Commentary posted by Roger Erickson)



Gotta love it. Trotsky once called for open-source, totally transparent looting ... as the only way to keep capitalists honest! :)

At the risk of alienating everyone, let me cite Trotsky's article, "The Transitional Program of the Fourth Internationale." In arguing for total fiscal transparency Trotsky points out that "business secrets" are routinely justified on the basis of efficient competition. But in fact they are not "secret" from the supposed financial "competitors," only from the public being routinely bilked.

(in the comments)

As stated: Adaptive Rate is neither left nor right ... it's OpenSource! :)

US & EU Both Pledge "1 billion" ($/euro) Loan Guarantees For Ukraine - While Pledging Nothing More For Their Own Electorates

   (Commentary posted by Roger Erickson)

Loan Guarantees For Ukraine

This raises two sets of questions, about what we're doing domestically, and why, compared to what we're doing internationally, and why. Initial questions about why domestic US/EU electorates can't guarantee fiat investment in themselves, and instead submit to austerity ... is exceeded only by the sheer number & depth of half-truths, mis-conceptions and outright lies included in this article.

Example? Reduced tariffs go directly back to the exporter? No, that only reduces costs for the importing consumers (maybe only the intermediary merchants), and MAY increase the volume of exports being extracted from the "beneficiary" country. In reality, look for more EU/US firms to set up subsidiaries in the UK, and move yet more jobs from serfs in receiving countries to even lower-paid serfs in sending countries being looted. Can you say "internal devaluation?"

Where have we heard this story before?

Read on, & decide for yourself what these loan guarantees really imply.

There's a theme to the last 40 years? When electorates cede all governance to their merchant classes, they get what they claim was unpredictable ... less innovation, invention & leadership ... and more risk control, "management" and stagnation.

What, exactly, WOULD the Desired Outcome for national policy be, if we bothered to survey our actual citizens? Can we pick some worthwhile goals FOR OURSELVES, and go for them, instead of merely managing existing risks? Forget defense & offense, the best cultural evolution is an active Adaptive Rate?

Diversity Minus Selection Is Meaningless - Just Stockpiling Static Assets

   (Commentary posted by Roger Erickson)

In 1929 [Leslie] White ... realized that socialism was the alternative to capitalism, which was in serious trouble through the 1930s.

A critical attack from Maxim Gorky, claiming that White was not a Marxist and not a Communist but a bourgeois evolutionary scientist who dealt with human problems only through science"

Now THAT is academic infighting! :) Wow! Would that still be classified as criticism today? Sadly, yes, in many circles, for diverse reasons.

How do you get people to explore their options?

Well, first you have to circumvent their life-threatening taboos.

I'm liking this Leslie White. Sounds like he recognized how deeply our processes were flawed, but never quite figured out how to do anything objective about it. 

What tipped him off? One hundred thousand years of exquisitely adaptive & evolving tribalism?

What do you do when you subconscious tells you that NOTHING we are doing currently is accelerating selection, and instead is only building up surplus diversity .... which we may, might, SOMEDAY, maybe actually select from?

What'd Walter Shewhart say? That data minus context is meaningless?

Then simple algebraic substitution leaves us with the following:

"Diversity minus selection is meaningless."

You want a case in point?

Let's start with the axiom that adaptive rate is always the rate-limiting issue, in every profession, within every culture.

So, in all seriousness, what avenues and methods would have triggered a far faster change in economic textbooks, teaching and policy advice?

Note that the recent Bank of England summary of operational reality came 81 years after Marriner Eccles finally took the USA off the gold-std and completely reinvented the FED.

81 years? Seriously?

We'd still be working on the Atomic bomb if physicists worked that slowly!

Some university physics departments probably wouldn't even be teaching relativity or quantum mechanics yet!

If other disciplines shared information that slowly, half of practitioners in relevant fields wouldn't know about DNA, or turbo-charged engines, or autism ... or most other operational advances.

Didn't the UK go off the gold-std a few years before the USA did? I have no idea how much the BoE changed, relative to FED adaptations. Given that the UK also went to a fiat currency, the main adaptations were presumably similar, from the get-go?

Personally, I think that that the topic of Adaptive Rate in Academic Economics is deserving of one helluva serious review paper, targeting the state of economics education. Objectively measured, it's adaptive rate might be honestly estimated at near zero.

Plus, trying to standardize academic economics research & teaching across national policy regimes is mal-adaptive, by definition.

Orthodox economics is Machiavelli's Economics by any other name?

Is it actually a generally agreed upon cultural taboo, to question the nonsensical axioms of orthodox economics?

Fascinating Reads: John Boyd And Orienting to Context (i.e., Driving Adaptive Rate)

   (Commentary posted by Roger Erickson)

For those who know, there's a unbroken, inter-disciplinary link between:

Wallace_&_Darwin => Walter Shewhart => W.E. Deming => Toyota Production System => John Boyd

There's too much to discuss or read in one post, so here are some references just about Boyd, to start with. One can work backwards from there, just as Boyd did.

On The Making of History: John Boyd and American Security
http://www.usafa.edu/df/dfh/docs/Harmon54.pdf

BOYD ON AL QAEDA'S GRAND STRATEGY
http://globalguerrillas.typepad.com/globalguerrillas/2004/05/journal_boyd_on.html

Boyd: The Fighter Pilot Who Changed the Art of War
http://www.booknotes.org/Watch/158365-1/Robert+Coram.aspx

John Boyd’s Art of War
http://www.theamericanconservative.com/articles/john-boyds-art-of-war/

Introduction to the Strategic Theories of John Boyd
http://chuckspinney.blogspot.com/p/compendium-colonel-john-boyds.html

ps: Paradigm, of course, refers to the set of methods which an aggregate (molecular, CNS or culture) uses while attempting to orient - successfully or not - to context, as the backbone of Adaptive Rate.

ps: ps: Shewhart's PDSA cycle looks at mfg adjustments post policy decisions, a method which Deming tried to push into policy & governance itself, and which Boyd re-named from the policy/goal/outcome perspective as the OODA Cycle or OODA Loop.

Basing Policy on "GPD" - Group Public Discourse As A Dynamic Measure of Cultural Adaptive Rate

   (Commentary posted by Roger Erickson)




How useful is GDP as a policy metric? Not very. Even the most rudimentary analysis shows that reliance upon GDP as a metric is embarrassingly naive.

In fact, even the simplest thoughts constantly remind us of the utter failure of the economics field to stay relevant to national demands, let alone national options. Let's try some added perspective. Look at our situation this way.

The culture of a nation-state is an organism, as alive as any one of it's citizens.

How do nation-states survive? By the agility of their national behavior, of course.

Given of course, that the agility of other nations changes, how do we keep the Adaptive Rate of our nation chugging along, within striking distance of the leaders in this endless marathon of human evolution?

It's called Democracy

hat tip to Scott Fullwiler

The HIP (Human Impact + Profit) method of investment analysis

The very fact that we have to keep restating the obvious is itself an illustration of why we keep failing.

Personal level.
There's ample evidence that narrow pursuit of wealth defines neither the "best" adults, nor the "best" and most enduring families. After all, how many people would sell their kids, spouses or kin ... for any amount of currency? [Yes, everyone defines "best" differently, and differently each year. Nevertheless, when push comes to shove, currency possession never tops the defining traits of healthy individuals, or their families.]

Corporate level.
There's another article every year or so, documenting that companies which have wider goals than simply profits are sustained - on average - for much longer periods.

National level.
There is, of course, also ample data that nations that have wider social goals than just dog-eat-dog personal profits ... also endure and prosper better than those without general welfare of the people as their goal. It's called Democracy. Odd that the USA, of all nations, would forget that.

Yer doin' a heckuva job, Wall St.!
However, at the end of each day, whatever Wall St's nominal "job" is, it sure as hell doesn't correlate very well, at all, with our individual, corporate, or national REAL work and purpose. Certainly not with Public Purpose. And that bit about doin' the work dictated by one or more gods? Get real! (Not just nominal.)

As Warren Mosler keeps repeating, the entire finance industry long ago became more trouble than it is worth. Isn't it obvious, once again, that OUR responsibility is to change our own trivial, accounting industry, sooner rather than later? So that it can be a useful tool aiding OUR adaptive rate, rather than a parasitical burden, on OUR nation and culture?

Nick Hanauer & Eric Beinhocker — Capitalism Redefined

It isn’t the amount of money that a society has in circulation, whether dollars, euros, beads, or wampum. Rather, it is the availability of the things that create well-being—like antibiotics, air conditioning, safe food, the ability to travel, and even frivolous things like video games. It is the availability of these “solutions” to human problems—things that make life better on a relative basis—that makes us prosperous.

This is why prosperity in human societies can’t be properly understood by just looking at monetary measures of income or wealth. Prosperity in a society is the accumulation of solutions to human problems.

These solutions run from the prosaic, like a crunchier potato chip, to the profound, like cures for deadly diseases. Ultimately, the measure of a society’s wealth is the range of human problems that it has found a way to solve and how available it has made those solutions to its citizens. Every item in the huge retail stores that Americans shop in can be thought of as a solution to a different kind of problem—how to eat, clothe ourselves, make our homes more comfortable, get around, entertain ourselves, and so on. The more and better solutions available to us, the more prosperity we have.

The long arc of human progress can be thought of as an accumulation of such solutions, embodied in the products and services of the economy. The Yanomami economy, typical of our hunter-gatherer ancestors 15,000 years ago, has a variety of products and services measured in the hundreds or thousands at most. The variety of modern America’s economy can be measured in the tens or even hundreds of billions. Measured in dollars, Americans are more than 500 times richer than the Yanomami. Measured in access to products and services that provide solutions to human problems, we are hundreds of millions of times more prosperous.

Growth as the Rate of Solution Creation

If the true measure of the prosperity of a society is the availability of solutions to human problems, then growth cannot simply be measured by changes in GDP. Rather, growth must be a measure of the rate at which new solutions to human problems become available. Additionally, since problems differ in importance, a new view of growth also must take this into account; finding a universal flu vaccine is more important than creating a crunchier potato chip. But in general, economic growth is the actual experience of having one’s life improved. Going from fearing death from a sinus infection one day to having access to life-saving antibiotics the next isgrowth. Going from sweltering in the heat one day to living with air conditioning the next is growth. Going from walking long distances to driving is growth. Going from needing to go to a library to look up basic information to having all the information in the world instantly available to you on your phone is growth. (Obviously, some solutions, like air conditioning, may create other problems, like global warming. How to make the trade-offs between solutions and problems is one of the central challenges of any society—an issue we will return to later in this essay.)

This all implies that we must find new ways to measure progress….

Democracy — A Journal of Ideas

Capitalism Redefined

Nick Hanauer & Eric Beinhocker

See also Eric Beinhocker, A Truer Form of Capitalism [points out that Ayn Rand was down on economic rent as market distorting]

This is making a splash. The frame is beginning to change with pretty remarkable speed.

Bill Gross Close To Tripping Over The Definition of Fiat ... Let's Hope He Falls On A Dictionary

Commentary by Roger Erickson

Scrooge McDucks ... Say. Isn't that just an alias for Fiat McClucks? If it spends, taxes and lobbies by fiat ... maybe it IS all just fiat? Yet what good is fiat if we practice it on everything except thinking? Cluck, cluck. Poor McDuck. Clever enough to acquire a duck suit, but still no wiser than a chicken.

Bill Gross notes that extreme wealth disparity triggers declines in distributed savings, and declines in distributed investment too. Both are obvious, logical points. However, his ONLY suggestion is to tax the wealthy more?

Why? To get more fiat? For whom? For the issuer of public initiative contracts and public initiative coupons - i.e., fiat currency?

Note to Bill. The US Treasury doesn't need any fiat back. Beardsley Ruml said so, on page 35, 68 years ago!

Here's a hint to Bill. Let's assume the Treasury DID need to get some fiat back, in order to get more fiat to express. You know, in case the sky was falling. I'm just clucking! Bear, er .. duck with me.

1) What would it do with that extra fiat? Spend it on public contracts? :)

2) Who would get to earn and keep some of that extra fiat? Labor? But ONLY if their income increased more than their taxes did?

So, Bill, EVEN IF THE TREASURY DID NEED TO GET YOUR HOARDED FIAT CURRENCY BACK, IN ORDER TO HAVE SOME ... it would have to spend it and tax labor at lower rates to achieve anything with it.

So, count me dense, but ...

3) Why not just encourage the Treasury to spend more on labor NOW, instead of waiting to get your taxes back?

4) Why not just drastically reduce taxes on labor? NOW! Instead of waiting on both clawed-back fiat AND arbitrarily delayed initiation of further fiat?

What on earth is the difference between 1,2 versus 3,4? Only tempo?

And maybe parsimony? And even then, ONLY for this particular context? Yes, a fiat currency regime ALLOWS for an expanded Policy Space and increased Policy Agility. It guarantees neither, however. Only fiat combinations of awareness/initiative/intelligence guarantee faster/better/leaner application of fiscal and monetary policy tools.

What? Bill Gross says 3&4 might further reduce the buying power of his remaining private savings hoard MORE than strategy 1&2 did? Higher inflation than 1&2? Really? Maybe. It depends .. on a LOT of implementation details. Yet isn't increasing inflation just an increased tax on saved capital - i.e., just what Bill wants? And, hasn't Bill already concluded that the timeless purpose of national policy is to increase our real economic options, not just hoard fiat numerals in bank accounts?

Look Bill, mathematically, it hardly matters whether you raise taxes on capital faster than you raise taxes on labor ... OR ... you lower taxes on labor faster than you lower taxes on capital. Right now, please do whichever is bureaucratically simplest in our current situation. That is, use Occam's Razor. In a fiat currency regime, the difference between those two situations is purely a matter of semantics, not reality. Either way, the amount of fiat used to denominate a desired adaptive rate is a dimensionless number, one that scales with the size, adaptive rate, context and arbitrary habits of a given population. What matters is the social computation latency - and policy latency - required to recognize and implement adaptive policy. Reducing that latency across multiple situations STARTS by recognizing that 1,2 and 3,4 are mathematically the same.

You are VERY CLOSE to rediscovering the definition of "fiat." Go for it! Pull a Ruml.*

* What's that Ruml-ing I hear in the distance?

Avoiding Cultural_Auto_Immune_Social_Diseases

 (Commentary posted by Roger Erickson.)



Bill Mitchell dredges up the proverbial question ... begging a non-ideological answer.
If we can mobilize to consensus outcomes imposed from the outside ... then what keeps us from mobilizing to SELECT better/faster/leaner Desired Group Outcomes all the time?

If you can have full employment killing Germans …

At the weekend I watched Ken Loach’s latest film (documentary) – The Spirit of ’45 – which was a classic – interesting and disturbing. After watching it I cannot understand how anybody could not achieve a score somewhere well into the south-west quadrant of the – Political Compass. It emphasised how societal values have changed and undermined the collective will that emerged in the early Post World War 2 period which garnered the political process into delivering structures that would never again see the mass unemployment and hardship that the Great Depression created. It was a hopeful period and politicians reflected that hope and acted as a mediating force in the underlying class conflict between workers and capital. The film traces how that “spirit” has broken down and what is required to once again make economies work for people rather than subjugating the needs of people to the economy – which really means allowing a small proportion of people to extract the benefits arising from the hard work of the rest of us. The film influenced today’s blog.

The title of today’s blog comes from an oft-stated piece of wisdom from former British politician – Tony Benn. He regularly noted that if you can have full employment killing Germans why can’t you have it doing other socially useful activities.

Tony Benn was a champion for Britain’s national health scheme, which was introduced during Clement Atlee’s Prime Ministership. US film maker, Michael Moore interviewed Benn for his movie Sicko and to get things off on a good footing today, here is the interview.

Tony Benn also said he became more radical the longer he spent time as a Government minister. Please read my blog – One should become more radical as one grows older – for a twist on that theme.

Tony Benn was also interviewed by – PBS – (October 17, 2000) and was asked whether the Great Depression led to a “huge loss of faith in markets and governments”, to which he replied:

Well, before the Great Depression, the gamblers ran capitalism and brought the economies down. And what happened? The war followed the Great Depression. In war you mobilize everything. Governments tore down the railings in Britain and America to make bullets. They rationed food, they conscripted people, and they sent them to die. The state took over. And after the war people said, “If you can plan for war, why can’t you plan for peace?” When I was 17, I had a letter from the government saying, “Dear Mr. Benn, will you turn up when you’re 17 1/2? We’ll give you free food, free clothes, free training, free accommodation, and two shillings, ten pence a day to just kill Germans.” People said, well, if you can have full employment to kill people, why in God’s name couldn’t you have full employment and good schools, good hospitals, good houses? And the answer was that you can’t do it if you allow [overly local definitions of] profit to take precedent over people. And that was the basis of the New Deal in America and of the postwar Labor government in Great Britain and so on.

The sentiment expressed here was a major theme of Ken Loach’s current film and clearly is a compelling narrative for those who do not see the economy as a separable, natural entity from the people and the natural environment.

                                         ***
Lots to think about here.

"[In 1941] A local bank provided him with the necessary working capital and thus made possible the founding of Henry J. Kaiser Company, Ltd."

My how times have changed!
Today, banks "doing God's work" focus more on screwing their customers, and their communities, and whole municipalities, and the US Middle Class, and even foreign nations ... all with the active complicity of OUR supposed Public Servants. Oh, and we spy on anyone and everyone, ALL THE TIME!

Would it hurt to just get back to being VERY SELECTIVE about which, simplest choices increase our collective Adaptive Rate the most? Then maybe we could PREVENT ourselves from combating each others efforts so often, and battling ourselves so much. Just let easy happen ... instead of mobilizing to fight ourselves? 

How about we put some thought into selecting those things which make it harder for citizens to work in opposition to one another? Sure we need a cultural immune system, to protect ourselves from other agents blundering into harming us. At the same time, our cultural immune response has to be selective enough to avoid Cultural_Auto_Immune_Social_Diseases. That only holds to reason. So lets just use some of our vaunted reason.

Don't Look Now - But Some Zombies Are Recognizing the Return On Coordination

Commentary by Roger Erickson

This is like a segment from "Night of the Living Duh" movie series, where a fraction of the zombies actually start to mutate, & develop rudimentary cognitive skills. That's right, undead thinking. Given enough time, who knows where this might lead to?

Costliest 1 Percent Of Patients Account For 21 Percent Of U.S. Health Spending

You don't say? So the highest cost is the cost of coordination?

If we don't interrupt their train of thought, they might ... just MIGHT ... realize the obligate corollary. The highest investment return, by far, is the return-on-(investment in) coordination.

You can lead even a species of diverse molecules to be social, but you can't make 'em use their group intelligence? At least not at any impressive Adaptive Rate. 

How long has it been? 3.5 billion years? 

Guess we can wait a bit longer for our current species' train of thought to start loading at the station. There seems to be this National Semantic Debt clock that ISN'T ticking. No wonder our cultural train of thought is conflating "loading at the station" with "getting loaded at the station." Cognitive Prohibition, unwittingly (to say the least) imposed by Merchants?