Subsistence Living Amidst Hoarded Plenty - vs - The Insanely Great Performance Of Social Species

   (Commentary posted by Roger Erickson)

The “sharing economy,” or a brief recurrence of sharecropping mentality? Or both? Should we be complacent, giddy with relief, or expect even more depressing hardship before sanity breaks out again, on a larger scale? Is everything going to change as much -  better or worse - as plentiful prophets are always claiming?

"You only find this new economy if you look hard for it. In Greece, when a grassroots NGO mapped the country’s food co-ops, alternative producers, parallel currencies and local exchange systems they found more than 70 substantive projects and hundreds of smaller initiatives ranging from squats to carpools to free kindergartens. To mainstream economics such things seem barely to qualify as economic activity – but that’s the point. They exist because they trade, however haltingly and inefficiently, in the currency of postcapitalism: free time, networked activity and free stuff. It seems a meagre and unofficial and even dangerous thing from which to craft an entire alternative to a global system, but so did money and credit in the age of Edward III."

Uh ... so what? I'm not sure this helps anyone. It's just stating what all can see, without making any useful suggestions, or any useful warnings.

Let's start with the warnings. A national government is the ultimate current example of cooperative coordination, and is a remarkable achievement for any population. Tearing an organized government apart, and attempting to replace it with isolated pockets of coordination is NOT necessarily progress. In fact, that's the same, insanely juvenile, logic that various Bolsheviks & Capitalists, from Stalin to Pol Pot to Scott Walker and the Koch brothers, fell back on. Tear some highly evolved thing apart, and plan to replace it with something better? Like 5-yr olds dismantling a watch, that strategy rarely, if ever works, while evolution does.

Meanwhile, if you look at the insane profit margins of firms like Uber, they present ample opportunities for Capitalists (or Pol Pots) to - once again, and a little bit longer - steal the commons. This time, they're stealing your time, which is rather like belling the cats. Except this time it's belling the distributed cats that invent innovations, so that the bell-makers can steal them faster. The form changes, but not the goal.

Yes, new forms of coordination will continue to break out, but don't expect pickpockets with MBA degrees to stop stealing whole railroads.

Sinks in any system stop destroying aggregate output ONLY when sources surround sinks with enough warning lights and stop signs.

The desired outcome of the process we call "coordination" is to reduce any & all frictions, from individual frictions to institutional frictions. Success tracks our ability to fine tune the little things that keep us and all of our institutions from working at cross purposes. (Kudos to Col. Casey Haskins for helping to drive home that concept.)

Who controls what Marx called the “power of knowledge?” To a biologist, that seems like a specious question - revealing that the questioners mind is trapped in the capitalist dogma of agent-based competition to seize & control - for what sustainable purpose, they never explain.

Doesn't it seem more sensible to instead ask, why anyone would limit the power of aggregates to compound knowledge? Isn't that the same logic as "why shrink the flock of geese that lay golden eggs?"

To a biologist, this whole discussion is an aberrant tangent. Capitalism is no more than the mores of a bandit or Cossack camp, a population with members recently & briefly ripped from integration in a social species. Given time, even bandit bands re-invent coordination & teamwork, and return to their social-species instincts. The only question is, how much time? The answer depends on the cleverness the bandits wield, and the contexts they find themselves in. No one said evolution is easy, just unstoppable.

Our "general intellect" won't blow anything sky high, except in the mind of the aberrants. It will just allow us to regain the aggregate-intellectual-agility we once had in fluid tribal societies, before our growth spurt created our existing, supra-tribal population sizes, and thereby briefly turned us into the less-agile bandit super-society we call capitalism.

Paul Mason seems to be missing his own forest, by populating it with one too many of his own, distracting trees. All those little experiments in "sharing" on a larger scale? They started from scratch, mostly BECAUSE few, if any of the participants knew they were supposed to read attempted summaries of unpredictably distributed innovations, by people like Paul Mason. And, as noted, they were just prevented from continuing coordination on a national scale, through use of a functional government serving the needs and desires of the people.

It may come across as harsh, but what useful purpose does Paul Mason play? He travels around telling people what they see in their own mirrors? I don't get it. Does anyone remember the name of the Dinosaur who traveled around telling compatriots that the end of sauropods was occurring? Methinks it was rather obvious to all, and they didn't throw parties for scribes recording the obvious. In fact, they probably ate him.

Now about those requested suggestions. What would help cut through all the useless chatter and clutter of banalities? Maybe cooperative interactions with each other? How many of each other? There's the rub. If citizens could know summaries of what ALL of their co-citizens knew, they wouldn't have to worry about their food supply or "money" supply. They'd have more options, plenty of free time, and literally endless suggestions. For now, I'll only make one suggestion.  Personally, I think that we should be paying one helluva lot of attention to what gets taught in those cooperative kindergartens. Tomorrow's aggregate adaptive rate may well depend largely on the utility of such adaptive methods.

We are what we practice, we practice what we train, we train what we teach, and we teach what we see (not what we say).

In the end, we as a people learn the dynamic sum of what we do, and our descendants live with the outcomes we deserve.

It's literally not enough even to do unto others what you would have done to you. To make your culture even more adaptive, you now have to do unto the 7th generation yet unborn what subtle, small things you would have had your ancestors prepare for you. That's how subtle & complex our adaptive challenges now are.  In other words, our challenge is to think ahead, as never before, and more every year.

If that cascade isn't actively and exquisitely coordinated into a whole greater than the sum of it's parts, then we get the distributed civil war of capitalism, instead of the insanely great performance of finely tuned, highly adaptive, social species.

Well Duh! Didn't John Law Say This ~1715, And Beardsley Ruml In 1946? We Can PRACTICE Doing Better.

(Commentary posted by Roger Erickson)

Working Paper No. 529: Banks are not intermediaries of loanable funds – and why this matters

I thought Beardsley Ruml exploded that myth back in 1946, & that it was obvious even before John Law back in ~1715. It's been officially obvious in the USA since 1933, & since the invention of fiat currency (350 BC?). WHY it's ignored is a far more interesting question, involving the myth of elites being necessary intermediaries of scarce, loanable intelligence.

Tall Paul's Association says that part of the blame is fragmented policies, a balkanized regulatory system and barriers between bureaucratic silos. That's more like it, but both these articles (by BoE & Tall Paul) still consist of pointing out the obvious, year after austere year.

Hello! Anyone home? All those zealots occupying Wall Street but not the space between their ears may want to take notice here. Let's cut to the chase, and project patterns further than the ends of our noses.

WHY are our electorates taking 80+ years to recognize the obvious, EVEN after they boxed themselves into tripping over it, yet again? It was obvious to Greek city-states 2300 years ago, so what's wrong with our culture? What part of the Classics aren't studied? The parts that matter the most?

And why is THAT a perennial truth, pray tell?

Military veterans say that every army in the world is inept at the start of a war, highly organized by the end, and once again inept by the start of the next war. 

Ergo, short of maintaining practice tilting at various windmills, we can't stay good at dressing ourselves. In short, only scalable practice makes scalable perfect (... perfect pursuit that is, of an infinite future).

For a growing aggregate, only aggressive exploration of our emerging options (a bias to exploration) lines up enough windmills worth tilting at. It's up to us to keep up enough practice to be fairly good at SELECTING which challenges are worthy of our growing cultural skills.

No aggregate practice (full & challenging employment) ..... no aggregate gain. No matter how many equations too few people write (and still don't practice).

Finally getting everyone to admit what some have always known is a necessary but not sufficient step. No amount of financial theorizing will by itself be adequate, only full & challenging citizen employment. The evolving moment of group-intelligence in any network or human culture is held in its emerging body of discourse, NOT in its components, its individuals, in silos of copyrighted information OR in the theories that sum our past knowledge. By definition, no theory predicts novel findings. No theory has been final and enduring, only practice has been. Call it evolution if you like, but it's still practice.

Can we move on from the myth of Loanable Intelligence, and instead start generating far more of it, de novo, by aggregate fiat? :)

That'll happen only when citizens glorify General "Next!" more than Captain Obvious.

Fiat Group Intelligence is real, and a product of persistent aggregate practice. 

What On Earth Happened To All Our Ancient Tribal Methods? We Don't Practice Enough To Find What Scales.

   (Commentary posted by Roger Erickson)

Humans have been coordinating on a truly massive scale, for tens of thousands of years ..... without computers, without convertible currency systems, without pencil and paper, and even without agriculture.

How? By constant practice.

And along the way, incredibly useful methods were invented, and practiced, including methods for conflict mediation, among many other applications. Those many tribal methods don't all scale, unadjusted, to fit our current, supra-tribal population densities & mixing rates, but most are necessary but not sufficient steps to practice, while constantly discovering how to organize on an ever greater scale.

Yet here we are today, with nearly everyone acting as though all those finely tuned tribal coordination methods never existed, and that coordinating is a totally new invention. :(

The Theology of Consensus

For Pete's sake! Have we thrown out our cultural methods with the bathwater, not just the baby? Most neighbors today don't even know how to co-run a neighborhood meeting anymore, let alone scale up a supra-tribal democracy. They never get enough practice.

Theologists of all stripes (including the economic theologists) mean well, but they have no prior experience, and near zero practice. Heck, even car salesmen have a personal theology, made up on the spot. That doesn't mean their theology works for their aggregate. Only feedback from group practice determines what does & doesn't work.

Many biologists & anthropologists & ecologists (& other natural scientists) lament the lack of effort to select more critically from our endless list of theologies (and other aggregate habits). Natural selection is eventually coming, of course. We're just not practicing how best to respond, once the hour strikes, or at least not paying much attention to how things are going.

Would we be instantly far better off if we swapped all banksters and orthodox economists for anthropologists and "primitive" tribal leaders? I'd sure vote to give it a try. At least the latter 2 groups have lots of practice and experience at something other than looting and bamboozling.

Aggregate Dystopia – Groupthink and Denial on a Grand Scale; Refusing To Acknowledge The Simple Act Of Aggregate Growth

   Commentary posted by Roger Erickson

Take another example, please!

Eurozone Dystopia – Groupthink and Denial on a Grand Scale

Once considered from another perspective, why should this surprise anyone? Is pan-cultural "dystopia" really so different from the painful, required responses required of other, observable growth spurts? Do the random DETAILS really matter that much? There are 1001 ways to reconfigure any nation, culture or economy. Yet it has to start with a consensus Desired Outcome, and the distributed will to achieve it, regardless of how.

Look at it this way. Just like human adolescents, any aggregate undergoing a rapid growth spurt HAS to get clumsier before it can re-establish how to rewire it's feedback & self-control instrumentation & management apparatus (e.g., "neuronal" systems), in order to regain and/or add aggregate agility for the new, enlarged size.

The red lines in the plot above are hypothetical, but believable, based on what we've already observed. Do institutional, national and cultural rates of change HAVE to peak, and decline? Is death and rebirth also the fastest way for nations and cultures to grow, just as for individual humans? Or can the pattern of cultural growth rate transition to a smoother, continuous progression?

Clearly, subtle extensions to Darwin's theory of evolution must be appreciated. Species and aggregate survival depends NOT just upon adaptive rate, but also upon the ability to sustain positive adaptive rates, and then also upon the ability to avoid intervening backward steps. It's the evolutionary rate, stupid! That rate is the running sum of all Output Gaps and Adaptive Gaps. Once opened, those gaps can never be regained. Allowing those gaps takes our destiny out of our own hands, and increasingly places it in the hope that competing aggregates may be even dumber and lazier than we are. Good luck with that hope.

For now, it's enough to stress that for a growing aggregate, e.g., a growing nation and/or human culture, it's the institutions which have to emerge, disappear or evolve in some new pattern, in order to fit changing scale. Even literature majors eventually catch on to this primordial reality.

"Everything [beneath the surface] needs to change, so everything can [appear to] stay the same."

Ya think? By one perspective, some quite obvious stages of adaptation are:

1) Recognize that self-awareness & self-control changes with size;

    (That's when honest feedback says things aren't working; "frictions" start to accrue,

     from skinned knees in adolescents, to depressions/recessions/class-wars in aggregates)

2) Prepare to change many things, as size changes (practice);
    (In physiological systems, various agents (molecular signals and/or hormones) have 

     evolved which help to actively grease the skids, so to speak, so that rates of 

     deconstruction & reconstruction in neural systems tracks the rate of growth in other 

     organ systems. This is true for everything from pupating insects to molting birds to

     growing human teenagers - and is still evolving in human super-aggregates, i.e., nation 

     states & human cultures)

3) Define success (what should the new-size aggregate be capable of accomplishing?) - and then don't settle for anything less.
    (Individual human "outcomes" and adaptive responses have slowly been defined, over 

     millenia of evolution. Human cultures are virtual machines, capable of rapid 

     adaptations ... when they select to adapt. If this perspective was instilled in our 

     education process, maybe our schools wouldn't be so obsolete.)

Why can't national populations re-define and "re-wire" their national institutions? And why won't they do so a helluva lot faster than in previous decades? Only for lack of intent, education, preparation and practice? What else do we have to do, that is all that more enticing or important? Watch videos? Overeat? Get drunk & pass out on the curb? Hoard nominal currency units?

All that is at stake is our cultural adaptive rate.

And all that's waiting is our endless list of expanding, aggregate options.

What are YOU waiting for?

We Can't Have Our Evolution And Centrally Plan It Too

   (Commentary posted by Roger Erickson.)

(Too bad financial liquidity isn't included in that plot!)

The image above drives home the ancient lesson that increasing capabilities always rest upon increasingly distributed foundations. That's true for weight in architecture, inter-relationships in resilient networks, and education in human populations.

As evidence, Bill Mitchell recently reiterated an idea that recurs periodically, but never quite often enough.

“A massive boost to public education is required."

Yet clearly, “more” education alone won’t necessarily help. “Different” education is also required.

For example, something along the lines of OBT&E, which is a method, and also a reiteration of Natural Selection.

It's also clear that each and every one of our methods is necessary but not sufficient without ongoing adaptive intent - which becomes a method for coordinating all other methods. The utility of all methods still depends upon slowly molding a human culture with a collective focus on Cultural Adaptive Rate as the common guiding light - for all the milestone, Desired Outcomes we pursue as we continuously muddle on.

We have countless options, and they are usually increasing. Increasing our cultural Adaptive Rate reduces to collectively sensing, on any given day, what permutations of our ongoing choices will actually optimally INCREASE rather than reduce our net options.

That’s a practical math problem. In fact, it's a constantly changing, massively multi-variate, adaptive cultural calculus task which we can only pursue via brute-force group calculation (utilizing massively parallel feedback, i.e., by Democracy). By definition, our survival challenges can never be modeled as fast as they change. We have to calculate them, via distributed, organized trial and error. That, plainly and simply, requires complete focus on re-connecting everyone to everyone, and summarizing all available feedback soon enough to matter.

No predictive power, but seemingly limitless adaptive power.

In other words, you can't have your evolution and Centrally Plan it too.

It seems that the baseline for all evolving organizations - of any sort whatsoever - is to have 80% of the components (whether cells, humans or even whole nations) enslaved & poorly managed by a minority still operating by yesterday's methodologies. Some things are always, briefly, the "keystone" species which both enforce existing structure & constrain Adaptive Change in every ecosystem. There are no clear lines separating phenotypic persistence, Institutional Momentum, and hegemony. Yet we must manage those distinctions as best we can.

That's our burden, as an evolving, growing aggregate. You better embrace & enjoy that task, 'cuz it's not going away.

That's the reality of organic growth. Central Planning is always fighting a staged retreat while racing to stay relevant to the expanding numbers who are escaping their comprehension.

On a personal level, it's not so different from what grandparents observe, as first their kids and then their grandchildren spiral out into the future.

It's up to us to make OUR continuous AND INCREASINGLY DISTRIBUTED transitions either relatively graceful, or rather tumultuous. How? Equally clearly, that depends on how we prepare our future citizens, by managing distributed education.

Cultural embryology, that is.

I’ll liberally paraphrase Joshua Chamberlain, circa 1865. 

“We have zero predictive power, but through training and education, we can determine what aggregate adaptive rate we can generate, when each novel group challenge appears.” 

What's that old saying? If you really love something - even the future for you, your kids and your nation - then set it free? No, not unprepared in the middle of the road, figuratively, but in a somewhat protected practice field, and then make the sacrifices necessary to protect it as it learns how to be free from your constraints.

That seems to be what human evolution is all about. We can't have our aggregate evolution and Centrally Plan it too.

No, 2 + 2 (+ something unexpected) never equals just 4. Yet our electorate has to keep making that calculation on a national level, every day, and adjust to the continuous surprises. Human cultures compete on the basis of their aggregate cultural-CPU designs.

What's that mean for citizens? Probably the following message.

If you can't stand the physical math, get out of the evolution!

The alternative is already apparent.

(Right now, we're not using our brains in any organized way, either.)

Policy Agility Games. Join THE MOVEMENT TO RETHINK POLICY SPACE .... FAST ENOUGH TO MATTER

(Commentary posted by Roger Erickson)

Yet another toe has recently been placed in the water (or extended across the gap).

JOIN THE MOVEMENT TO RETHINK ECONOMICS

It's a good start, but heck, that's just a part of our task. It does no good to rethink any part of a whole, if we can't rethink every part, as well as rethinking the whole. That's true simply because - to remain a whole - EVERY part of any whole has to accommodate and adjust to changes in any component part, in real time.

We need far more of these self-organizing efforts, one for every old & emerging discipline ... and across them too.

Until then, too many citizens - and especially lawyers - miss the fact that
AdaptiveRight and CopyRight must be constantly coordinated, to manage the inherent conflict between those two strategies.

When it comes to rethinking exploration of policy space ... there is no half way. If we can't rethink everything fast enough to evolve our nation, then there's no point in rethinking anything.

American policy can't reflect what the growing numbers and diversity of Americans know ... unless we distribute emerging data as fast as the rising demand to explore our emerging options.

Exploring Policy Space requires Policy Agility, which requires Autocatalysis, which means actively driving the TEMPO and BREADTH of new feedback distribution as fast and far as needed.

Every sports team and army knows that. Why isn't the same obvious for all members of every evolving culture? Until it is, we can't achieve an informed electorate, or an agile culture.

When it comes to political-economics, there's a simple point to remember. Our ratio of personal-hoarding to communal-provisioning determines our rate of domestic as well as global nation-building.

Adaptive Rate is neither left nor right ... it's OpenSource!

So how do we OpenSource our own National Adaptive Rate? One piece at a time? Or all of it? After all, recognizing Policy Space does no good, if we haven't already achieved Policy Agility through extensive practice. That's like reading a book and recognizing that you could in theory ride a bike. It still takes practice, to automate all the reflexes that can keep you from falling off. We need a LOT more cultural practice, at all forms of Policy Agility.  Let's go beyond the SuperBowl, and have continuous Policy Agility games.

The saddest part? We knew this 200 years ago.

"A popular government without popular information, or the means of acquiring it, is but a prologue to a farce or a tragedy, or perhaps both. Knowledge will forever govern ignorance, and a people who mean to be their own governors must arm themselves with the power which knowledge gives.”

James Madison in his 1822 letter to W.T. Barry

And of course there's more. Even people armed with knowledge - or other things - aren't saved, until they accumulate enough practice at effectively wielding their assorted "armaments."  In the end, we are what we practice, not what we possess. The importance of our dynamic assets ALWAYS significantly outweigh the value of our static assets.

Stop Pegging Aggregate Policy Options To Narrow Interests & Perceived Personal Options. Aggregate Options Are Bigger Than Any Of Us.

   (Commentary posted by Roger Erickson.)



Personal hoarding of a hill of beans? All that ever produces is more old farts, plus grandchildren guaranteed to be neglected in diverse ways. Working harder to guide aggregate options by way of limited, personal perceptions just won't work, no matter HOW HARD our 1% Central Planners try to think for us, instead of with us. At our present rate, we might as well beat our collective heads against a wall, in unison. Democracy is simple. Just LISTEN, all the time, to all of us. If that keeps getting more difficult, then develop the needed methods, instead of bickering about old methods that can't scale to present needs and opportunities.

Fiscal & monetary policy almost always comes down to attempts to yoke or peg constantly expanding aggregate interests & options to narrow interests & perceived personal options. Aka, pegging public dynamic fiat to private static wealth metrics, which is always and only a function of trust and organizational alignment.

The rare times the two align are most often in times of war ... if even then.

By definition, a growing aggregate ALWAYS needs better/faster/leaner methods for practicing ways to grow affinity, trust & alignment. That seems to be our primary gating issue.

Ironically, the only - widely accepted - formal methodology that comes close to addressing our primary need is the science of military mobilization, which is itself still far off the needed mark needed for our national agenda, and is mostly misused by clueless electorates & policymakers. Luckily, that whole approach seems to be slowly transitioning back towards a timeless, OpenSource science of "outcomes based training & education" or OBT&E.

First [perfected] by Colonel Casey Haskins at Fort Benning, Georgia, OBT&E develops individual confidence, initiative, and accountability in addition to mastery of specific skills. While most training focuses on drilling students to a basic level of performance, with OBT&E the focus is on the total outcome of a task or event rather the particular way it was achieved, [thereby] encouraging the development of tangible skills and intangible attributes such as [group agility,] creativity and judgment.

Just let easy happen ... instead of mobilizing to fight ourselves?

Perhaps more flash MOBT&Es* will be the trigger that transforms us to our next level of achievement?

* Mobilizing OBT&E

What Aspect Of SCALE & Aggregate Degrees of Freedom Don't We Teach To Enough Kids, In All Schools, Everywhere?

   (Commentary posted by Roger Erickson)



(Photo: walking towards, instead of away from, an impending tsunami of context changes.)

Why is it that group intelligence always seems to recede just before devastating changes in group context? Ordinary humans are clearly talented enough to devise many practical applications for exploring perceived options. There are countless examples, from sublime to mundane, such as this one.

Most Pet Lovers Don't Perceive Equal, Parallel Need To Help A Handicapped Middle Class

Do we have to practice austerity, or can we achieve everything we can imagine, and more?

Application of our talents is clearly gated by the process of recognizing and orienting to local, regional or systemic context. Perceptions & practice then drive us to optimize an increasingly complex combination of actions, so that we can all sail through that thicket of micro-to-macro contexts. Social species work exactly BECAUSE recombinant member interactions provide compounding group resiliency.

Please ask every talented person you know, to design some Automatic Stabilizer policies, for a struggling and starving Middle Class.

We are what we practice, even at a cultural scale. So what triggers do we need, to get more of ourselves to perceive our own, constrained, self-handicapped electorate?

Too few seem to see a MiddleClass limping down the road to oblivion, right into the path of another set of predatory sociopaths, whether "Brits" in India, or an Upper Looting Class that eventually self organizes everywhere.

To avoid these self-inflicted constraints, we need an electorate that practices simultaneously perceiving the full spectrum individual needs, AND team dynamics, AND social interdependencies. To maintain Adaptive Rate, a working culture has to juggle all available input, and keep all it's increasing options available.

What aspect of SCALE don't we teach enough kids, in all schools, everywhere?

Instead of hoarding static assets as rent, why aren't we seeing the value of employing everyone to explore our full range of cultural options, so that we can practice achieving even more than what any individual can currently imagine?

Join a citizen's army? Be all that, together, "we" can be?

Support cultural intelligence? A group mind is a terrible thing to waste?

Why don't more emerging students grasp the scale of the group options to be explored? What methods do we need, in order to change our re-emerging electorate back towards a more adaptive path?

Methods drive results?

  Milestone goals drive methods?

    And Desired Group Outcomes drive milestone goals?

      And interacting imaginations drive Desired Outcomes - aka, Group Imagination?

We can't get there by having everyone wishing to hoard above average amounts of static assets. The reality of the boring outcome actually achieved from that dream has repeatedly been trivial compared to increasing our dynamic assets, an alternate outcome which is available to any organized aggregate - but only if they first recognize it.

How To Best Help Shape Aggregate Success?

   (Commentary posted by Roger Erickson)

How to best help shape aggregate success? 

NEVER tell an aggregate HOW to do things?

Instead, help RECRUIT it's members both to an enticing aggregate CHALLENGE, and then also to grant itself distributed PERMISSION to surprise all members with it's distributed ingenuity?

Sounds easy. Requires practice. It IS easy ... with practice.

The Fallacy of Scale (or Composition) Is All That Prevents Aggregates Of Intelligent People From Coalescing Into A Group Intelligence Greater Than The Sum Of It's Parts.

   (Commentary posted by Roger Erickson)



Why Do Management Consultants - and Electorates - End Up Teaching - and Accepting - The Opposite Of What They Were Forced To Practice?

WHY Do We Keep Electing Overly Isolated Theorists To Policy Responsibility Positions, OVER Involved Practitioners?

Commentary by Roger Erickson

Here's another example of very clear thinking by Warren Mosler, ..... pointing out shamefully MUDDLED discourse on fiscal & monetary policy by those who know economic theory ... but NOT banking methods and practices.

Comments on Volcker article

Mosler makes some killer points here. Points that every American deserves to hear made.

The upshot? As always, the difference between theory & practice is smaller in theory than in actual practice. :( Volcker is clearly talking isolated ideology. 

Volcker & Mosler should have been WORKING TOGETHER, INTIMATELY, the past 20 years! Instead, Volcker has remained isolated in his exalted ivory tower, and the US Middle Class has paid the penalty for the resulting policy clumsiness, and missed outcomes.

Sadly, the ruling theorists never catch on.

Even sadder, WE keep electing overly isolated theorists to policy responsibility positions, OVER involved practitioners.

WHY do we do that?

That's our $100 question. We need a balance of operations/practitioner/theorist staff in all operations, just to chase changing context fast enough to matter.

EVERY system process is too important to be left to the presumed process owners. That is the very definition of a system - use of cross-process feedback to coordinate multiple processes into a whole. Why? To produce a whole that is greater than the sum of it's parts. This ain't rocket science, folks. We've always known this. For whatever reason, we're just not doing the obvious.

What idiot would ever ADMIT that keeping emerging theorists & emerging practitioners in isolation from one another is a pragmatic, adaptive idea? None? Because the missing feedback always kills those who remain uncoordinated ...  if any opponents anywhere actually do get a bit more coordinated?

So why is isolation a FEATURE of our class-based approach to self-governance?

If you can suggest ways to get more Americans back to talking more frequently with more Americans .... then for heaven's sake, please start!

What The Hell Does This Say About The Difference Between Orthodox Economics and Actual Results?

Commentary by Roger Erickson

Yale economist James Tobin explained that banks don't lend banking reserves 50 years ago.

50 years ago?

Didn't Marriner Eccles & the entire Fed staff make it all implicitly OBVIOUS ~1934?

We had to wait ~30 years for the 1st economist to alert other economists to altered operations?

Be still my beating heart!

And another 50 years for a trickle of economists and economic programs and textbooks to start to notice?

Is the hair standing up on anyone else's neck?

What the hell - INDEED! - does this say about the difference between orthodox economics and actual results? Is the difference between economic theory and operational practice always 100%, not just greater in practice than in theory? And is that by design, or insularity, or insanity ... or all 3?

In economics, progress does NOT occur one funeral at a time! Rather, economics has become immune to reality! Since the forced retirement of Marriner Eccles from the Fed, progress in political economy now requires the death of entire generations of economics textbooks, and Nobel Prize Committees too. Weren't Nobel Prizes supposed to be for practical applications?

When it comes to burning books, maybe we should make an emergency exception for all existing economics text books? Do it as a threat to National Security.

I sincerely hope that the NSA is finally recording THIS commentary!

Organizational Power and the Limits of Cinematography - or any - Strategy

commentary by Roger Erickson

The power of cinematography as an organization tactic is easily seen. For example, in the Fools on the Hill Movie.

It's also clear - just from watching the movie - that familiarity with the tactical tool is there, but the actual goal, intent & strategy is still superficial.

That superficiality is actually a serious threat. Everyone lacking both Situational Awareness and the ability to adequately manage situational awareness in real time ... STILL thinks that there actually is a verifiable "one, most important thing we can do."

And, of course, most are initially also certain that what THEY are personally certain of ... is certain to solve all problems if simply scaled up to be an assumed certainty for all. Most of the time, that's a fallacy of scale. For example, if you stand up at a sports stadium, you'll likely get a better view. Therefore, obviously, if EVERYONE stands up, they'll ALL get better views. Right?  For most suggestions, we can't predict the outcome, and must practice finding out, the sooner the better.

Our naively distributed certainty in the face of uncertainty is a constant threat to all of our distributed efforts, even as it simultaneously provides the roots of our Adaptive Rate. All the metaphorically blind men groping a group situation still offer themselves the best avenue for success. They just have to organize, compare notes, and use their imagination.

Given we have 315 million and growing "situationally blind people," how do we generate the group agility needed to master constantly accelerating change and increasing complexity?  Do we all just keep leaping to our feet at the Situation Stadium, while getting more and more frustrated?

Group Practice? There are endless ways to initiate and continue organized practice, but here's one set of suggestions, just to get someone's ball rolling.

[If you, as another scout, have even better suggestions, by all means, let all of us hear them, yesterday if possible. And no, 50,000 offers to buy yet another book, for $50, or even $10, just isn't feasible.  Just pick up a phone and call, or send a free pdf, NOW!]

First off, remind everyone that we face constant, distributed, statistical SELECTION tasks? A temptation to organize?

Second, remind them that all continuous selection tasks depend upon scouting - i.e., sampling - strategies, re-sampling and the tempo of re-sampling?

Third, keep everyone comfortably practiced at both the process of continuous checking and re-checking AND the practice of rapidly and openly sharing more, if not all, of our sampled data, at high tempo, and upon demand. Pass-through societies are agile societies. Tuned Situational Awareness = Selectively Tuned Knowledge Throughput, whether in a network of computers, neurons or humans.

Fourth, keep everyone comfortably practiced at coordinating the amazing return-on-coordination available with scalable teamwork, and everything that teamwork entails. Behaviour drives mood in individuals. Group practice behavior drives social mood.

That all boils down to a fairly simple cultural mantra. Continued success of our "more perfect union"tracks the quality - including tempo - of our distributed decision-making, and we should focus most on all those, constantly changing things that improve distributed decision-making as a cultural property.

Even group or distributed Situational Awareness doesn't help if we don't have an adequate and adequately distributed sense of our own Adaptive Rate. This is an ancient observation. To map our survival to changing conditions, we must know both our "opponents" - our situations - and ourselves. In a continuous re-mapping task, it helps immensely to know, leverage and even prod the Adaptive Rate of both ends of the mapping process.

We've always known that. We just don't maintain adequate practice at actually performing it. In general, more OBT&E might help.

If we want to manage our net, National Adaptive Rate - our NAR - why not formulate an open measure of NAR, similar to NIPA, and then practice managing it? Biofeedback works. Social feedback does too, if we bother to adequately sample it, openly share the feedback, and act on it.

Fixing Bayonets, and Charging Toward the Next Adaptive Permutation of Our Own Electorate

Feels like time to buy equities in general? - Warren Mosler.

It's the adaptive permutations, silly.

Warren Mosler's forecasts now make perfect sense to me. He's really changed my life, by illuminating a path through one particularly hard to recognize adaptive window, a conceptual bottleneck. I can extrapolate from that path, to clarify the path to other tough windows as well.  Twenty years back I might have thought Mosler was lost in left field. Yet there's always a steady trickle of people (Socrates, Wallace, Tesla, Shewhart, Deming, Boyd, etc), who sense that orthodoxy never makes enough sense past yesterday, and are already looking for a better paradigm. Improving our National Adaptive Rate means turning that trickle into a stream.  As a nation, we need a faster CAR (Cultural Adaptive Rate).

Every culture faces tasks in dimensions beyond it's training.  We now have thousands of distinct, new professions that didn't even exist when most current adults were born, and a steady trickle of revolutionary innovators in each & every one of those professions. Yet we're grossly neglecting how to continuously explore & select optimal, revolutionary permutations of all these mini-paradigm changers. We're simply ignoring our own, multi-level selection. Our diversity is growing faster than our organizational methods, so that we're actually losing net agility.  That's ironic, since multi-variable calculus is a 400-yr old topic taught in introductory math, but not practiced outside the classroom by 99% of those who've passed a calculus class!

Methods drive results, and we are (mostly) what we practice, not what we say. Therefore, our bigger problem, really, is that even while we're desperately looking for new paradigms, we're simultaneously practicing the opposite, by conditioning most students to either not look, not recognize better ways even when they see 'em, or actively oppose anyone saying a better way is possible (or desired) - i.e., the insidious evil of Credentialism. We need a better underlying paradigm for dynamically addressing our paradigm progression! Our present approach ain't scaling. [Pirsig might say that we're personally dynamic ... yet socially static & self-suicidal, and that we're furiously training static-value thinkers in an obviously and increasingly dynamic-value world.  Hence, our methods momentum, as a vector, is carrying us away from, not closer to, our avowed goals, where we want to go. What happens when methods-momentum & goal-momentum are orthogonal? Ya got a really sick organization approaching an inflection point where survival & failure are equally probable options.]

It turns out that the rate limiting task for all social species - & now cultures - is how, exactly, to scavenge net diversity as a reserve, and drag it - kicking & screaming - through the sequence of rare windows that define an unpredictable survival path through "Adaptation Space." Forget banking reserves.  We need to be operating on an entirely different level - just to survive ourselves.

Unfortunately, we don't drive that situational awareness home at the beginning of training, even in biology 101, let alone in economics or political science or our 2000+ other training diciplines. We always have far, far more capabilities than we need, but always lag in developing the agility to use what we already have. Couch potato culture, indeed! It's actually much worse than even the most pessimistic among us imagine - but never hopeless. If we're a nation, Wall St. & the 1% are the bulk of the expanding duff we're sitting on, while our electorate falls ill exactly because of it! What's the economic metaphor for type-2 diabetes? The self-induced, runaway methods triggering maldistribution of incomes & assets?  What's the simplest prevention AND cure?  Coordinated, economic exercise?  That means simply unleashing public initiative, to feverishly explore, analyze and select from our exponentially expanding group options!  Why are we making this anything except insanely great fun?  What's the next scale beyond individual sociopaths?  Culturopaths?  Is that what we're slipping into? A Rush Limbaugh culture?  The smell is already noticeable, and a cleansing bath is needed - pronto.

Here's our Catch-22 dilemma [where's Joshua Chamberlain when we need millions like him?]:
We can't afford to leave the unmotivated behind, and we can't learn how to motivate their growing ranks fast enough - which means there's a better way.

[Continuously tweak & subtly alter the edu/training production process? Start practicing cheap prevention vs expensive repair in the way we continuously replenish our own electorate? Is it ALWAYS time to "fix-bayonets" in policy battle? We're in continuous war with our own bureacracy.  We don't want to destroy it, and we don't want to dismantle it.  Hence, we must fix emerging tactical bayonets and run circles around, under & through those parts of credentialism and bureaucracy that are always becoming obsolete - so we can take leaner/faster/better bureaucracy with us wherever we all need to go. We need continuously faster national, not just local, OODA loops, and national statistical process adaptation, not control (dynamic SPA, not SPC).]

To do that, we need a bias to action.  We need to trick the Luddites into rapidly enjoying what they don't understand, and make it fun for kids to try insanely novel exploration - WHILE always practicing agile, full-group feedback.  We need methods for continuously improving our quality of distributed decision-making.

We need Master Ooda and the Klaxon Klone Army ("Ooooda! Ooooda!").
We also need theme songs.  "Ooda loop loop, loop .. loop, loop."
   MMTcat stew?  Toughest paradigm alive?

Regarding personal investments, Warren's saying that the few in the know might as well spend more time playing golf, but take their AK-47s with them? :) As usual? That's good advice for those in the know, but also a way for the unpracticed & unprepared to have a heart attack on the golf course!

[And what about the rest of the electorate? We need to rethink more than just currency operations in order to address that growing topic. Personal investing is only treading water for an electorate. We need to figure out which metaphorical bayonets to fix, and which internal obstacles to charge. So far, we've only visualized some of our important goals, NOT how adaptive permutations of domain-specific revolutionaries can self-recognize and mobilize to win a policy maneuver battle and drag the Luddites with them.  That's a new ballgame, on a whole new level and dimension.]

Comically, neither economics nor accounting classes bother to tell most paying students that ignorance is still bliss. We'd be better off starting Econ 101 out with reviews of both Valhalla and CargoCult paradigms! That way more capitalists could at least be conditioned to heartily enjoy whatever time they have on or off the golf course, while audaciously thinking about inventing new games on a greater scale.

To practice, and increase agility at multi-level adaptation, we need to embrace agile use of cargo-cult tricks on on ourselves.  For example, constant battle with every one of our own existing methods - since they constitute our own cargo-cults.  A culture with infinite agility is one where audience participation runs the Kabuki show, knows it, embraces the fun of doing it, makes joke about themselves, and can laugh at themselves.  That takes practice, and preparation.  It's not for the faint of heart, but no harder than watching a toddler enjoying the new risk of learning how to walk.  Our kids - and even the "7th culture yet unspawned" - will do this, whether we try to shield them from the risk or not.  Better to enjoy the hell out of it while we can.

"Rent Theory" as a Symptom?

After reading Michael Hudson's essay, "Veblen’s Institutionalist Elaboration of Rent Theory," one can't help seeing rampant rentier mentality as a symptom, not the original cause.

Component momentum in a system comes as no surprise at all within biology or system theory, or even psychology or anthropology.

From other system perspectives, runaway rent-seeking habits are one specific that falls under the more general heading of institutional momentum. Other names are phenotypic persistence, principal of prior plausibility, etc, etc ... or just random habits unrestrained.

The deeper issue is why the group momentum of such habits isn't recognized, diverted & shaped to other purposes sooner. That comes down to failure at group-wide, situational awareness, followed by failure to automatically trigger appropriate checks & balances in a complex system - a topic well discussed by the framers of our Constitution.

In small tribes, daily or weekly group-wide council discussions address this group awareness requirement. However, given our population size, no current media process parses all our distributed observations fast enough.

That leaves one pondering how far off track we really are, and what the recovery steps are.

Just when we need to be distributing enough resources & time to continually improve the quality of our distributed decision-making abilities ... we've instead gone off the rails.  Our policy decision-making habits are already so concentrated that our population-wide, self-regulation gap may be widening beyond control. Worse, our distributed situational awareness may have lost ability to reconnect. Is the probability of recovery already insignificant? How would we know?  Can that gap be estimated quantitatively?

(And arranging terrorist events just isn't an adequate rallying cry anymore. Black Ops thinking just won't cut it as a continuous mobilization strategy.)

Rampant rent seeking is a symptom of distributed disconnects, & failure to evolve checks & balances as fast as our options are expanding. As a nation, culture or system, we're distracted, and it no longer matters what the distractions are. The core problem is that we can't parse our options fast enough to optimize how we explore them. The result is random policy drift by elites reconstituting Central Planning by any other name.

We need indirection, and the communication throughput to capitalize on best options that some will inevitably stumble upon before all will. It's no longer a question of if HP needs to know that HP knows. Rather, we need to know how quickly HP needs to know what HP knows. There's no other way to drive continuous improvements in group agility.

How WOULD we drive continuous improvement in group agility?  Group practice?  When was the last time YOU acted like an owner of your democracy?

Every day, there are always many things we should start doing differently.  Yet if we don't actually start, it just won't matter what we would'a, could'a, should'a done.

Which Part of "Dynamic Systems" Don’t These People Get?

In a comment at WWS, one F. Beard clarifies a key Luddite rallying cry:
”loans create deposits” = counterfeiting.

It's the new mantra of the slow & left behind.

How else does he imagine a fiat currency system works?  Agile exploration of national policy options is not counterfeiting, it's adaptation & survival.

Statements like F. Beard's miss the point completely. Truth is that an increasingly complex national economy demands increasingly agile & complex policy decisions. There's a time element to agility. Making an increasingly complex system increasingly agile requires making all operations increasingly dynamic - while ALSO independently tightening tolerance limits on ALL our increasingly distributed processes.

That's the only way we can explore our options as fast as they keep expanding.

Throughout history, the slow have always been easily daunted, and left not believing that progress is possible. However, the very existence of history refutes them, immediately & utterly.

One billion years ago, flatworms couldn't imagine that mammals, primate & humans were possible.  Luckily, some fraction weren't cowed ... and here we are, nonetheless.  Rest assured that the future will proceed regardless of F. Beard's advice to deny & ignore it.  That's the comical part.

The sad part?  That we're even continuing a discussion with the F. Beard's of the world.  Must we all also be left behind in the dustbin of history, dragged down by the slow & left behind? As usual, it's a policy choice. Gentlepeople, start your decision engines!  In a complex, dynamic culture such as ours, all distributed decision-making sums to a survive-or-not outcome in each, fleeting context.

We have to choose to embrace the future & move forward - RAPIDLY - or submit and relegate our children as well as ourselves to being left behind with the Luddites.

It's your choice, and this is the last year it matters.  Maybe the last month.

ps:  Policy displays many analogies to sport.  Both require agility in competitive  situations, seconds count, "losing" habits acquire their own institutional momentum, and the glory goes to those unafraid to seize new opportunities ... by embracing new, more dynamic methods.  So why is there a whole field of sports kinetics, while we have no comparative field of Policy Kinetics?

For example, it's common to hear economists & politicians say "I don't deal with operations."  Have you EVER heard a sports coach say "I don't deal with fundamentals?"  Coaches or leaders in any other setting are rapidly fired if they only draw up plays and don't worry about execution.

What the heck has happened to our economics, general policy and especially fiscal policy staff? They're all making the one mistake Napoleon noted as terminal: "paint an imaginary picture of a situation and accept it as real."   In short, they've abandoned the adaptive yoke linking theory & practice, imagination and reality.  Theory is something you diversify to excess, and then select from - but NEVER SETTLE ON!  The only purpose of theory is to compare to operations.  Yet here we are, in the USA, in the 21st century ... idly sitting by while our own policy twits say with impunity "I don't do operations."


Fine.  We don't hire them!  That's the only survival option.  When we have that many schizophrenic thinkers at large, YOU and you alone must select to NOT vote them into either legislative or teaching positions.  It's your choice, and you must select as though it matters.  Because it does.

How About FiscalPolicyFest?

Hacking Campaign Finance Data

This "hacking" approach sounds like a useful set of exercises to start PRACTICING.  However the application-  barring an initial StrategyFest - quickly looks like Divide&ConquerFest, or Distract&DeceiveFest.

Practice is necessary but not sufficient prelude to strategic implementation.