Sunday, August 26, 2012

Why the Market Must be Governed

This is a presentation I have been playing with the ideas are still very rough, but I think they should be shared if they are to be improved. :)

The thesis is simple – challenge a fundamentalist neo-classical concept of ‘free market’ economics – the concept of Equilibrium – which is based on the 19th Century physics of a closed system of atomistic, isolated entities.

What I want to propose is the political-economics represent living/complex systems. And these types of systems are now well established as existing 'far from equilibrium'. And so the necessary concept is not equilibrium but rather is Homeostasis.

Equilibrium applied to political economics and social dynamics represents a fundamental epistemological pathology (e.g. Gregory Bateson’s Mind & Nature).

I want to explore some of the Entailments of these concepts as metaphors from 19th Century physics versus metaphors from 21st Century biology – including:          Corresponding Distributions and Implications for economic policy/theory

The real voyage of discovery consists not in seeking new landscapes, but in having new eyes
Marcel Proust

While economists were pursuing their vision of the economy as an equilibrium system, during  the latter half of the 20th century, physicists, chemists, and biologists became increasingly interested in systems that were far from equilibrium, that were dynamic and complex, and that never settled into a state of rest. ...refering to these types of systems as complex systems. ...a complex system is a system of many dynamically interacting parts or particles. In such systems the micro-level interactions of the parts or particles lead to the emergence of macro-level patterns of behavior. (p.17-18)
Beinhocker, Eric D. 2006.
The Origin of Wealth: Evolution, Complexity, and the Radical Remaking of Economics. Harvard Business School Press.

The concept of equilibrium (as applied in modern [liberal, neo-classical economics) arose from the 2nd Law of Thermodynamics. This could be defined as the tendency that over time, for differences in temperature, pressure, and chemical potential to equilibrate in an isolated physical system.

The Oxford Dictionary of Physics defines it as: a State of a system where forces, influences, reactions, etc. balance out until there is no net change. In essence, it sees the economy as or a rubber ball rolling around the bottom of a large bowl. Eventually the ball settles into the bottom of the bowl, to its resting equilibrium point... or lowest Entropy

In this way:

The ball will stay there until some external force shakes, bends, or otherwise shocks the bowl, sending the ball to a new equilibrium point. Since the late 19th Century the organizing paradigm of economics has been the idea that the economy is an equilibrium system, essentially a system at rest. ...the primary inspiration for economists from the late 19th through the mid-20th centuries was not biology, but ...the physics of motion and energy. Traditional economic theory views the economy as being like a rubber ball rolling around the bottom of a large bowl. 

Eventually the ball will settle down into the bottom of the bowl, to its resting, or equilibrium, point. The ball will stay there until some external force shakes, bends, or otherwise shocks the bowl, sending the ball to a new equilibrium point. The mainstream paradigm of economics over the past 100 years has portrayed the economy as a system that moves from equilibrium point to equilibrium point over time propelled along by shocks from technology, politics, changes in consumer tastes and other external factors.

While economists were pursuing their vision of the economy as an equilibrium system, during the latter half of the 20th century, physicists, chemists, and biologists became increasingly interested in systems that were far from equilibrium, that were dynamic and complex, and that never settled into a state of rest. ...referring to these types of systems as complex systems. ...a complex system is a system of many dynamically interacting parts or particles. In such systems the micro-level interactions of the parts or particles lead to the emergence of macro-level patterns of behavior. (p.17-18)
Beinhocker, Eric D. 2006. 
The Origin of Wealth: Evolution, Complexity, and the Radical Remaking of Economics. 
Harvard Business School Press.

Homeostasis, on the other hand is the ability of an open system, especially living organisms, to actively regulate its internal environment. Unlike equilibrium as a path of least resistance – the ball in the bowl, Homeostasis is an active ‘intervention’ against equilibrium & entropy, to dynamically maintain a ratio of forces, factors, influences, reactions integral to the a systems. An ‘identity’ which is constituted through its processes and structure.

Homeostasis, therefore is different from equilibrium. Where equilibrium is the tendency  to a path of least resistance - a coming to a natural balanced distribution - something that will or should happen of itself (e.g. the ball in the bowl). Homeostasis, is an active 'intervention' against equilibrium and entropy, in order to dynamically maintain a necessary ratio of forces, factors, influences, reaction.... that are integral to a system's 'identity' - its fundamental processes and structure (autopoiesis). 

Homeostasis, is enabled by a 'governance' system or mechanism of an organism, whereby the entirety of its existence is self-regulated. This is done to maintain he integrity of its identity. 

The entailment of equilibrium then is: 
  • A natural phenomena arising out of a balance where all should be equal 
  • Suggestive of a 'normal' distribution

Wikipedia explains that in probability theory, the normal distribution is a continuous probability distribution, that has a bell-shaped curve - the 'bell-curve'. The logical conclusion from this concept of equilibrium is that a 'free market' will 'average' difference in a way the creates a large middle class. Thus, an ungoverned market will distribute the gains of productivity in a way that theoretically distributes/allocates resources and benefits in an efficient normal distribution.

However, equilibrium can only arise in conditions of a 'closed system' (which made a logical sense in the age of independent, isolated nation states composed of equally independent and isolated 'rational, atomistic beings'. Another condition is that normal distribution only applies to certain measurable characteristics.

The most fundamental criticism of the 19th century physics adopted by modern economics is that many natural phenomena are not distributed in a 'normal', bell-type-curve, the are distributed in a power-law curve - the '20-80' rule. For example, 20% of the books published constitute 80% of the profits, 20% of the earthquakes create 80% of the damage - this applies to craters on the moon, solar flares, foraging patterns of many species, the sizes of activity patterns of populations, the frequency of words in most languages, frequencies of family names, the sizes of power outages, and so much more. 

Some of the entailments of a Power-Law relationship include, the exponential acceleration of comparative advantage
  • The more connected you are - the more likely you are to be able to form new connections
  • Wealth Concentration, Condensation, where created wealth tends to become concentrated in the possessions of the already wealthy (the more money you have the easier it is to make more money)
The long tail of Wealth distribution - or the 'Trickle-up Economy'. Thus, what we see in an unregulated, 'free-market' is the 'normal' long tail of wealth distribution. But, in these conditions of de-regulated market-systems, where is the 'middle-class' of the 'normal' distribution? The engine of consumption & exchange that powers a market system to be able to consume its own products.

What happens is the reversion to a power-law distribution of a feudal society - of a landed (ownership) nobility/aristocracy and rabble - the cancerous erosion of what a real market system must be founded on.

However, the entailment of a concept of homeostasis suggest that an active intervention is necessary to maintain a chosen homeostasis that dynamically balances a societies chosen values. For example, from 1945 to 1980: the bottom 90% of the population had almost 70% of the wealth, while the top 1% had 10% of the wealth.

This began to change dramatically after the advent of the Reagan, Thatcher, Mulroney governments shifted to monetarist economic philosophies. The result was that by 2005, the bottom 90% of the population had only 50% of the wealth and the top 1% had over 20% of the wealth.

The Homeostically Governed Market

The establishment of perfect justice, of perfect liberty, and of perfect equality, is the very simple secret which most effectually secures the highest degree of prosperity to all...
Adam Smith “The Wealth of Nations” p.726

In 1776 two documents were published – The Wealth of Nations and The Declaration of Independence. Both were presupposed on Responsible Autonomy – the necessary belief that individuals were capable of pursuing what interested them as necessary conditions for their own flourishing. 

Both concepts – democracy and a market-system, required justice, equality and freedom from domination. According to Philip Petit, political thinkers of the day thought this initial interpretation of liberty/freedom was thought to be too difficult to actualize and thus came to be understood as a less effective ‘freedom from interference’. In fact, an understanding of liberty as ‘freedom from domination’ is also more consistent with creating social conditions that support an effective application of ‘equality’.

Therefore, another way to view of Smith’s three necessary (system design) principles, is as guides to:
  • Create and sustain a system that enables the maximization of both individual liberty and prosperity
  • Minimize the Gini coefficient, representing robust conditions of an equality of social wealth and productive capability – e.g. an optimal middle-class
  • And a way to protect the commons and other necessary public goods as the foundations of social prosperity (since the profit motive cannot adequately provide for such commons).
The Gini coefficient is a measure of the inequality of a distribution – a value of 0 expressing total equality and a value of 1 maximal inequality. It is commonly used as a measure of inequality of income. Worldwide, Gini coefficients for income, range from approximately 0.23 (Sweden) to 0.70 (Namibia) although not every country has been assessed.

The Principles of Market Homeostasis 

Homeostasis is the dynamic regulation of a system based on the shifting states (gradients) of key values that determine the ‘identity’ and integrity of the system. The values outlined by Smith are not only orthogonal but are generally in conflict with one another

For example, Communism/Socialism focuses primarily on conditions for equality (and perhaps as a consequence, also emphasized centralization of decisioning/control). On the other hand, ‘laissez-faire’ free-market capitalism focuses primarily on liberty (freedom from interference of individuals, which perhaps is why corporation have needed to be seen as ‘persons’, an interpretation of liberty as freedom from domination would have dramatically different consequences). Thus:
  • Primacy on Equality eliminates incentives to excel
  • Primacy on Liberty – privileges ‘might’ & Long-Tail income distribution
The cure to this is not related to the size (e.g. small) government, (the smaller the government the easier it is for a small group to control), but rather on the effectiveness and agility in establishing appropriate ‘course correction’s for the homeostatic balancing of a political economies core values (e.g. justice, liberty, equality) that form its identity. The cure is agile regulation based on fundamental values integral to democratic/market identity through ongoing process of negotiation – something that the life-work of Eleanor Ostrom has well established.

The aim of a homeostatically governed market-system is the same – establishing a robust democracy that supports the responsible autonomy. This means an ‘equal’ playing field with incentives for competition and cooperation for excellence & innovation to increase the Wealth of People and human flourishing and consistent with a self-governing political-economy. 

Saturday, August 25, 2012

Stepping into a new familial meme pool

When we step into the family, by the act of being born, we do step into a world which is incalculable, into a world which has its own strange laws, into a world which could do without us, into a world we have not made. In other worlds, when we step into the family we step into a fairy-tale.
G. K. Chesterton

In addition to an anxiety engendered by a parental love award on a basis of competitive merit - Margaret Mead points out, the American child is typically limited to the affection of two parents. The very housing condition nowadays forbid the regular presence of numerous relatives and generalized presence of the whole community in the form of adopted 'uncles' and 'aunts'.

So the young American starts life with a tremendous impetus towards success. Hies family, his little slender family, just a couple of parents alone in the world, are the narrow platform on which he stands.

...Success consists not only in winning the approval of parents but in surpassing them. On that premise rests the American way of life, Mead says. We must, in the most signal way, show our superiority to our parents in every department, or we have failed to give meaning to their efforts and our own selves.
In a social and economic sense, success, it would appear, means the virtual rejection of the parents, so that in a symbolic way the child bitten with the success spirit is already an orphan. A Lincoln could stimulate himself with a belief that he was the illegitimate child of an aristocrat, but the child of today, says Mead, nurses the feeling of being only adopted.
Marshall McLuhan,  The Mechanical Bride, 1951.

I've been reading McLuhan this week - his autobiography by Douglas Coupland (of Generation X fame) and his first published book, The Mechanical Bride, published in the same year Harold Innes published The Bias of Communication.. 

These two quotes seemed to resonate with me - a sense of touching the human condition. A sense of my own children and their inevitable experience - how family patterns are more than memetic, but phenotypically embodied in culture.

I think of the hugely popular Pokemon series. The main character Ash Ketchum is about 10 years old. Throughout the whole series their is hardly a mention of his parents and those of his peers who accompany him on his 'walk-about' journey from town to town to engage in battles with various Gym leaders. There seems to be one person in the group who is an older teenager but very few adults make an appearance. This is psychically the situation as kids approach adolescence - peer-group is salient and parental presence is actively as marginalized as they can manage. 

The adventures of the Pokemon kids are screens for the projection of autonomy, and self-assurance in a context of a virtual world. I remember as a child of the baby boom generation - how we ranged throughout our geographic environment in ways that my youngest children and their cohorts have never experienced. But they are digital natives, and their explorations - while not as extensively local as my childhood was, are profoundly more extensive in the real sociality of the virtual worlds. Their autonomy is as seemingly unlimited as those of the Pokemon characters who seem to be free to wander from town to town without fear. They accept that the overarching context is within their capabilities to secure themselves. 

The fairy-tale of Pokemon - is a new family of communities of interest - of epistemic community.

Saturday, August 18, 2012

What would McLuhan say to the idea that Google is making us stupid?

The next medium, whatever it is - it may be the extension of consciousness - will include television as its content, not as its environment, and will transform television into an art form. A computer as a research and communication instrument could enhance retrieval, obsolesce mass library organization, retrieve the individual's encyclopedic function and flip it into a private line to speedily tailored data of a saleable kind.
Marshall McLuhan 1967 - quoted in Douglas Coupland's "Marshal McLuhan: You Know Nothing of My Work"

I may very well no nothing of McLuhan's work - but he is one of my heroes of the mind. I can barely read a page of any one of his books without some brilliant thought provoking comment that remains a projectable salient foresight into the future (near and far).

My daughter has a cognitive disability. Over the years I have encouraged her love of Anime to write her own stories. We call them Romances of Doom - as they are mash-ups of all sorts of anime, movie and cartoon settings and characters. We also love zombies and horror movies. Her stories have characters who die, but then reappear in the next story. They are also eccentric assemblages of time sequences. It is easy to attribute the eccentricity to her disability. 

However, I have also been reading McLuhan's "The Mechanical Bride". He points out the weirdness of juxtaposed articles in newspapers (e.g. using a front page of a 1948 paper) and advertisements in magazines. One of his observations related to this is how the newspaper juxtapositions fragment any sense of coherent unity to the newspaper as an artefact. The newspaper assembled  stories from all over the world onto one page that could be viewed at a glance - in a sense it unified the fragmented world in a collage.

It was seen in Front Page that the real tendency of disconnected news items assembled from all over the world, and place side by side, was to evoke the image of a world society... For the tight little nineteenth-century mind, nourished on 'scientific' doctrines about each nation as an independent organism utterly distinct in heredity and environment from any other, it was natural to transform the news of the workd into a daily romantic novel filled with cloak and dagger episodes and fascinating intrigues hatched in various chancelleries. The news of each day was unified by a underlying plot or dramatize by concentration on great personalities ...

McLuhan p.7

The whole idea of Google making us stupid because we know longer had the stuff to read whole books from start to finish misses the point the fragmentation of our attention began with the popular editorially assembled newspaper. Even television in the last couple of decades has shattered the sense of narrative sequencing. 

Before cable and the syndication of television programs we had to watch the linear roll-out of new episodes in serialized stories. Even when episodes where not intended to present a story unfolding in weekly episodes, for example Seinfeld, over time we got to know the characters.

But with syndication we can watch episodes not weekly but several times a day and without any concern for chronological presentation. Newspapers, magazines, television have been assembling disconnected items assembled from all over and place side by side, for years. One could argue that this has in fact made us stupid - except for the Flynn Effect  which would seem to indicate that we are in fact getting smarter with each decade. 

What this means is that the fragmentation of our attention through shallow assemblages of disconnected information may have made our minds more sensitive to the complex nature of the world. And that the unity of our experience may have less to do with what is presented to us and how it is presented and much more to do with our increasing capacity to find pattern in masses of disparate information.

When you give people too much information, they instantly resort to pattern recognition to structure the experience. The work of the artist ti to find patterns. McLuhan Perhaps it is less about 'finding' patterns than it is about creating patterns.

Since the birth of mass media we have been presented with 'information overload', overload in terms of quantity and disconnectedness of information. We resort to this with the need to project patterns - our own patterns of unifying narratives. It's not so much that we only seek opinions of people who share our views in the bubbles of our 'echo-chambers' - it is that we create our own echo-chamber that we project as pattern onto the world of 'too many dots'. We see the spiders or butterflies in the ink-blots of information as we way-find our paths through the digital environment.

There have been too many dots for years and years - what there is now though - are many more opportunities to engage in conversations wide an increasingly wider variety of people - chances to engage in poly-vocal synchronies. 

In many ways mainstream media had been presenting content and images in a context that is much more like a dream reality - sequences of disconnected themes, items, characters, narratives, desires, fears, etc. In this we were intended to be a passive audience. The digital environment involves us as more committed participant creators and co-creators. Therefore it is this call to action - to participate in conversational co-creation that makes us smarter and offers a medium of dynamic active unification of a larger more social experience - and that means a new type of social consciousness.

Sunday, August 12, 2012

Ten Days at Monk Camp

Today, well I guess I mean yesterday, I finished my third 10-day Vipassana meditation retreat. A wonderful, an intense experience - essentially requiring no talking, eye-contact, writing, reading, electronics, connection to the outside world. Two meals a day and (depending on capacity, 7-9 hours of meditative sitting a day).

Why would someone do this. :)

Meditation in essence is a pragmatic technique and practice of mind-training - training the mind to focus, attend, and develop an equanimity toward the reality of that everything is impermanent.

The first three days were focused on training attention upon the breath, the in and out of the breath, without letting the 'monkey mind' dance from idea to emotion to memory to conversation. Just clear, consistent focus of the awareness of breathing and the sensation of the air going in and coming out of the nostrils. This is called anapana meditation.

Despite what the description implies, this is both not boring and very hard work.

It's hard because the mind is always wandering, and paying attention - developing the muscles of mental focus means constantly bring the mind back to the object of concern. It's also hard because we are asked to sit still.

Now, we don't sit for nine hours straight. :) Sitting is in one-hour session with moving-stretching breaks. But even an hour is hard. I brought my own cushions - 15 inches of memory foam and a back-support. But after 45 minutes - even 15 inches of memory foam turn to stone and squirming seem inevitable. Fortunately we are allowed to shift positions during the first 3 days.

The remaining days are focused on Vipassana meditation proper. Now that a focus on the breath built the muscles of focus on a very small area of sensation - the practice turns attention onto the sensations arising on the whole body. Each day represents a step in the technique.

The theory is the suffering arises from clinging to what we consider pleasure and aversion to what we consider is not pleasure. When we can train our mind to be aware of that first moment of sensation we can exercise choice - rather that simply reaction. But more, since all sensation and all reality is constant change & impermanent - clinging/aversion to a sensed reality that will inevitably change. So the most reasonable stance is one of equanimity.

One learned to watch how all bodily sensation change and in that awareness is the possibility of training the mind not just to focus, be aware, but also to be equanimous.

With the six days of Vipassana training comes the requirement to sit in stillness, without shifting in the slightest your position. There is inevitably pain. What I learned however, is that rather than taking the normal stance to pain - trying to deny it, to block it out, to take the development of focus and use it to focus on something pleasant to overcome the pain, one can actually examine deeply the all the sensations that constitute the pain while including the sensation in the body that are not painful. What happens when I actually penetrated my observations into the pain, is that it stopped being a singular dense sensation. There were many sensations, I became aware of all the muscles I was holding rigid and tight that contributed to the pain, I was able to allow them to relax and experience the muscles relaxing and what I first felt as a singular pain became many sensations, constantly shifting - sort of bubbling. While still intense it became tolerable. By the end of the 10 days I could sit like a stone (even  upon the stone that had been my very soft cushion).

But the object of the training on the sensations - was not the sensation - it was on the development of an attitude of equanimity toward these sensations - how pain dissolves into other sensations, how lovely bright subtle sensations become replaces with less pleasant sensations (numbness, pain, strain, etc). Soon my awareness could watch how sensations moved, dissolved, transformed one-to-another and I learned that I could experience these impartially without clinging or aversion.

At least for brief periods of time. The continued practice of meditation is to deepen, strengthen and integrated these moments of equanimity into an integrated, unshakable foundation for how one experiences all of ones life.

These three 'Monk Camps' :) have shown me that it actually is possible for someone to become liberated, enlightened and achieve this unshakable happiness.

There is great deal written on the theory/philosophy and the details of the training, and it is said better than I can say it.

But having experienced this three times I really believe that everyone would never have a regret for having invested 10 days of their life to experience this training. This is a mind training that has nothing to do with a religious point of view or system - but anyone with deep religious convictions/aspirations could also actually become better Christians, Muslims, Hindus, Jews, etc.

This is a mind training all children can and should be exposed to - it actually enables one to learn that one attention can be trained to focus and to become more finely aware. An essential tool in learning and learning how to learn.

My personal practice is not as rigorous as recommended, yet the benefits I have gained have improved my capacity to enjoy better relationships, a calmer attitude toward tribulations, and really importantly a huge change in my ability to let go negative feelings (without denying them, anaesthetizing them, repressing them), simply with awareness and choice to watch them dissolve.

Ten days is a big chunk of time in a busy life full of commitments, aspirations and obligations. But as said, I don't think anyone would have regrets of investing in at least one such experience.

Saturday, August 11, 2012

Some Wandering Thoughts on the Metaphor of the Stage

The metaphor of the stage is an interesting one. There is a theory of the mind/consciousness "the theater of consciousness the workspace of the mind" that talks of the brain (and the minds extension) creates consciousness through the construction of a 'stage'. This is much the same as Nicholas Humphrey in his lovely short easy to grasp book "Seeing Red" posits as the 'platform' of consciousness. That 'consciousness is not 'sensing' nor 'sensing what is sensed' (though this is closer). He suggests that there is a necessary social component to the arise of consciousness - that it requires that an 'other' also sense that we sense what we sense. In this way 'other' is the implicit stage (because there is no stage without audience)for the arise of consciousness. 
Maybe this is way the ant hill is more intelligent than the ants which compose it, that the slime-mold can become a single organism with differentiated functions even though each cell remains 'autonomous' (except those who surrender themselves to become the procreative 'part' of the collective).
I really like the position that Quentin Meillassoux suggests, that - 'Humans are the ancestors of God'. While I don't believe in a pre-given teleology for evolution Meillassoux could be understood that what emerges in the collective is a higher intelligence - a collective intelligence - that can also interact with it components to make them more intelligent (thus increasing its own intelligence - and on and on).
McLuhan (among others) noted that humans shape tools and tools shape humans. Kevin Kelly suggests that technology is the 7th kingdom of life (ants farm aphids to harvest mold, birds build nests, evolutions uses a 'selection mechanism'). Perhaps matter is the stage for the technology of evolution to manifest life - life creating the conditions for its own becoming.
When humans invented the technologies of language and culture they became the most accomplished - self-programming life form, an acceleration of the 'old technologies of evolution' and the birth of an emergent 'stage' for evolving.
Language does not live in our genes (there is no gene for English, Chinese, etc. Language does not arise in a 'single brain' (although each brain requires processing capacity). Language can only arise in complex social interaction, becoming as McLuhan said an environment in which we live (not something that lives in us) - a new stage for consciousness. 
What I see the digital environment becoming is a stage of a new emergent form of consciousness - one not trapped in the small xenophobic worlds of clan, tribe, village, state. The xenophobia of 'others' becomes the conscious awareness of a whole that enables/necessitate differentiated parts (not a class system) - an ecology - that is not simply self-organizing, but become self-programmable, co-creating the conscious conditions of its own becoming. 
The 'we' are not simply an aggregation of 'I's' but a co-creating/constructing mutualism - a conscious I-that-is-We simultaneously in a global theatre of mind. :)
The digital environment represent a new nervous system and what we care about represents the hormonal ecologies that provide the value (emotional meanings) to the cognitive abstracted differentiated 'whats' produced by the nervous system/sensorium. In this way the collective human social intelligence integrates the rational-emotional systems into an integrated complete 'reasoning' intelligence. 
OK - I better stop here, because this is writing itself and may be way to abstract to make sense.