Showing posts with label resilience. Show all posts
Showing posts with label resilience. Show all posts

Monday, January 19, 2015

Allison Gunnar — Economic War, BRICS, and the Power of Self-Sufficiency

Globalization is the hitherto pinnacle of interdependency, crippling any nation that falls foul of those sitting at the center of this entangled geopolitical order. There are many examples of nations that haven fallen foul including Cuba, Iraq, Iran and more recently Russia. In each case, respective economies depended heavily upon imports or exports or both. The response in defense against crippling economic warfare is self-sufficiency.
Self-sufficiency is anti-globalization. The neoliberal globalizers may be overreaching and throwing a spanner into the works as countries realize that they need to protect themselves from interdependence with self-sufficiency. On the macro level this is preferring resilience to efficiency.
First appeared:http://journal-neo.org/2015/01/20/economic-war-brics-and-the-power-of-self-sufficiency/

New Eastern Outlook
Economic War, BRICS, and the Power of Self-Sufficiency
Allison Gunnar

Wednesday, August 20, 2014

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?"

Thursday, January 31, 2013

Graham Barnes — Money and Sustainability – The Missing Link: Review


Graham Barnes reviews Money and Sustainability: The Missing Link by Bernard Lietaer, Christian Arnsperger, Sally Goerner and Stefan Brunnhuber. Opposes public or private monopoly of currency, similar to free banking in order to increase resilience by adding redundancy which admittedly is accomplished by trading off efficiency.

Feasta
Money and Sustainability – The Missing Link: Review
Graham Barnes

Friday, October 5, 2012

Peter Sims — The No. 1 Enemy of Creativity: Fear of Failure

So, I ask you: how do you personally define a "failure"?
If it's going bankrupt with a company you started, getting fired for doing something inconsistent with your values, or needing to break off a wedding engagement or a divorce that could have been avoided if you listened to your heart originally, then, yes, that is a failure, and I can empathize.
However, if your internalized view of failure is anything that is not perfect, then you are disempowering yourself from exercising your inherent creativity.
You're certainly not the only one shackled by these norms, and I don't blame you with the way our educational system is focused so rigidly on "correct answers" and standardized testing. This must change. And modern management systems must become far more adaptive....
Fortunately, the US Army provides a lot of insight about how a highly bureaucratic, command and control organization (the Army of the Cold War) can become more adaptive and creative (which it must when facing rapidly adaptive enemies, and when soldiers and officers can rarely predict what problems they will encounter). It starts with every individual, and unlearning many old bad habits. As Col. Casey Haskins, who heads up military instruction for West Point, has said, "You have to make it cool to fail."
Harvard Business Review | HBR Blog Network
The No. 1 Enemy of Creativity: Fear of Failure
by Peter Sims

Even though I was never a salesman, a number of years ago I put up twenty five bucks for a two-hour course from a salesman I had heard was really outstanding. His spiel was all about failing as the essence of sales rather than succeeding.

His message: in cold call, one in hundred close rate is successful. You just have to be able to take the ninety-nine no's, not all of which are polite. Fear of failure that erects obstacles to trying is mostly about ego-defense and an imposed straight jack rather than rationalized prudence or imagined inability.

His advice: Check off every "no" as being a step closer from a "yes," and analyze each encounter in terms of lessons learned, positive and negative, with a view to improving your ground game.

It was twenty-five bucks well-spent.


Sunday, January 8, 2012

Pathology of Stabilisation in Complex Adaptive Systems


The core insight  of the resilience-stability tradeoff is that stability leads to loss of resilience. Therefore stabilisation too leads to increased systemic fragility. But there is a lot more to it. In comparing economic crises to forest fires and river floods, I have highlighted the common patterns to the process of system fragilisation which eventually leaves the system “manager” in a situation where there are no good options left.
Drawing upon the work of Mancur Olson, I have explored how the buildup of special interests means that stability is self-reinforcing. Once rent-seeking has achieved sufficient scale, “distributional coalitions have the incentive and..the power to prevent changes that would deprive them of their enlarged share of the social output”. But what if we “solve” the Olsonian problem? Would that mitigate the problem of increased stabilisation and fragility? In this post, I will argue that the cycle of fragility and collapse has much deeper roots than any particular form of democracy.
Read it at Macroeconomic Resilience
The Pathology of Stabilisation in Complex Adaptive Systems
by Ashwin

UPDATE: Steve Roth engages Ashwin in the comments:


. Damned interesting thinking. Wondering if you’ve read Dirk Bezemer’s work:
http://www.rug.nl/staff/d.j.bezemer/research
Tried a google search and didn’t find any references herein, thought you’d find it interesting.


. Steve Roth
18 Dec 11 at 3:19 pm



. 
The passage you quote is just a restatement of Minsky who is a Post-Keynesian. I am not arguing for avoiding inflation/deflation per se – it is the rapid cycling that is clearly a pathological phenomenon and a sign of fragility.
Of the Austrians, I have only really read Hayek whom I am significantly influenced by. But I’d be shocked if any Austrian has ever made this point. Even Minsky’s point is one that his centrist followers usually gloss over primarily because his prescription for avoiding this problem of rapid cycling is the ‘socialisation of investment’ just like Keynes.
My departure from Minsky is that resilience usually requires that we allow the system to fight off small sicknesses and restrict our interventions to fighting off severe sicknesses. This is slightly Schumpeterian but he would have probably said don’t intervene at all.
But my deeper point in this post is that there are deep-seated reasons for why we, at least in the West, choose stability. The current fragility only reflects the fact that we have gotten a lot better at the task of stabilisation compared to say a 100 years ago.
Even worse, in an uncertain world it’s hard to distinguish between stabilisation/fragilisation and more genuine progress. The two may even be inseparable.


. Ashwin
18 Dec 11 at 4:02 pm



. 
Steve – Thanks. Yes – I’ve read some of his papers such as this onehttp://www.levyinstitute.org/pubs/wp_665.pdf which is excellent.
There’s a reasonable amount of literature that treats the economy as a complex, non-linear system but there is precious little that treats it as an complex adaptive system. The reason, as Bezemer notes at the end of the paper, is that the model without micro-foundations is hard enough but an agent-based micro-founded model that also gets the disequilibrium dynamics of bank credit creation right is a very complex exercise. It is this adaptive, co-evolutionary dynamic of the system that I am most interested in.


. Ashwin
18 Dec 11 at 5:52 pm



. 
Do you follow Steve Keen’s modeling work? He definitely seems to be moving in the right direction.
When do you think we’ll see anything of interest out of the Santa Fe Institute guys?


. Steve Roth
18 Dec 11 at 6:47 pm


Steve – Yes, I have read Steve Keen’s work. Again, I like a lot of it. But his models are also focused on aggregates. If you ignore the adaptive consequences of your interventions, then you almost always end up with a pro-stabilisation conclusion.

I follow the work at Santa Fe quite keenly but in all honesty, I haven’t seen that much yet on the macro front that excites me.
Ashwin
18 Dec 11 at 9:14 pm

Anders engages Ashwin:


.
. Ashwin – I feel a similar discomfort to LH. I like your piece; but doesn’t it justify an entirely laissez-faire approach to macroeconomics? After all, automatic stabilisers are what they say – an attempt to stabilise the economy.
I appreciate you are not a gold bug, but your piece sounds pretty Schumpeterian – let natural ‘creative destruction’ take its course. You have commented before that you favour a dynamic form of capitalism where business failure is welcomed, but your piece seems to do more than justify letting businesses fail – it justifies poverty and growing inequality.


. Anders
20 Dec 11 at 11:05 am



. 
Anders – Quoting from what I said in my earlier post on river flood management and resilience, “Economic policy must allow the “river” of the macroeconomy to flow in a natural manner and restrict its interventions to insuring individual economic agents against the occasional severe flood.”


So long as automatic stabilisers only protect against severe disturbances, e.g. low levels of unemployment insurance, they have very few fragilising consequences.
Allowing business failure, removing barriers to entry, removing all rents that flow to businesses – these are critical. Insurance for individuals is not the issue here.
As I have illustrated on multiple occasions, it is these rents and implicit protections of regimes such as the Greenspan Put that are responsible for increased inequality. If we allow creative destruction to take place and protect the weak against the collateral damage, inequality will fall dramatically in an instant.


. Ashwin
20 Dec 11 at 1:07 pm



. 
Ashwin – I accept the counterfactual that if there had been better institutional protections erected over the last 100-200 years to banish rent-seeking and barriers to entry, there would be less inequality. But you are making a more ambitious claim: that despite the fortunes and wealth inequality (not to mention the Bourdieusian social and cultural capital) already in place today, somehow the creative destruction of certain business models would lead to inequality being reduced. This doesn’t seem so plausible; perhaps there is a particular post you can direct me to where you make this argument? Doesn’t this even go beyond what Olson was arguing?


To the rest of your comment, it seems you are saying that stabilisation of a complex system doesn’t *always* compromise resilience, but only does so where stabilisation is aimed at non-severe disturbances to the system. The distinction of ‘degree of severity of disturbance’ has a plausibility when it comes to flooding; but in macroeconomic terms, your account needs to characterise a business failure as ‘non-severe’, whilst characterising a person being genuinely without a job as a severe disturbance. I’m a progressive and so have sympathy with this, but it doesn’t seem an entirely obvious delineation that the average WSJ reader would accept.


. Anders
20 Dec 11 at 5:03 pm


.
.
. Anders – You could try the posts under the ‘inequality’ category such ashttp://www.macroresilience.com/2010/09/23/inequality-and-moral-hazard-rents-in-the-financial-sector/http://www.macroresilience.com/2011/11/07/rent-seeking-the-progressive-agenda-and-cash-transfers/ http://www.macroresilience.com/2011/06/13/the-influence-of-special-interests-and-rentiers-on-monetary-and-fiscal-policy/ and if you want an overarching macro framework under which I think, this posthttp://www.macroresilience.com/2011/11/02/innovation-stagnation-and-unemployment/ has it. On a simple level, simply removing this obsessive focus on asset price stabilisation itself would reduce inequality dramatically.


On focusing on individuals, the rationale isn’t really on non-severe vs severe disturbances but on the inability for individuals to game the system to as great a degree as limited-liability entities which I mentioned herehttp://www.macroresilience.com/2011/10/05/a-simple-policy-program-for-macroeconomic-resilience/ :


“In order to promote system resilience and minimise moral hazard, any system of direct transfers must be directed only at individuals and it must be a discretionary policy tool utilised only to mitigate against the risk of systemic crises. The discretionary element is crucial as tail risk protection directed at individuals has minimal moral hazard implications if it is uncertain even to the slightest degree. Transfers must not be directed to corporate entities – even uncertain tail-risk protection provided to corporates will eventually be gamed. The critical difference between individuals and corporates in this regard is the ability of stockholders and creditors to spread their bets across corporate entities and ensure that failure of any one bet has only a limited impact on the individual investors’ finances. In an individual’s case, the risk of failure is by definition concentrated and the uncertain nature of the transfer will ensure that moral hazard implications are minimal. ”


. Ashwin
21 Dec 11 at 1:13 pm


.