Sunday, May 1, 2016

Enacting Social Fabric –Accounting-as-Ground of a Social-Political-Economy

Steampunk - Spiral - Space Time Continuum iphotograph by Mike Savad
We measure the flow of time objectively in the sequencing of equal increments – whether they are nano-seconds, days, weeks … on and on. But we experience time very differently as subjective intensities of peaks and troughs –of moments that can seem eternal slowing down like in ‘bullet time’ or in profound blurs that can seem like hitting warp drive. 

The dissonance between a linear measure of time and an intensive experience of time can contribute to difficulties of foresight, or to a personal consistency of effort in sustaining a persistent ‘rational’ line of thought. Curiosities can arise enabling new thoughts, new affordances of reason, and rather than a clear trajectory of navigating focused thinking – our reason becomes a wayfinding that seems more like mycelial explorations.

Mycelial Rootworks - Earth Neuron?
A previous post explored how the mycelial, curiosity-driven focus, can very harness the intensities of insight-attention – whether they grasps at a broader rootwork of knowings or a narrower depth of expertise. However, embodied knowing whose depths are not narrow silos but rather are entangled rootworks of knowledge can encompass deeper layers of fertile soil for the generation of new knowledges.

The rootwork systems of thought I have been exploring through this blog, assumes the ever more familiar view that we are in the midst of a profound change in the conditions of change – a change inherent to the emerging the digital environment.

The Age of Anarchy

Thus far, I’ve argued that accounting, is a fundamental technology in co-creating the human experience. It is a technology rooted in our bio-social fabric – for example the image of primates grooming each other can easily be seen as a type of moral-bookkeeping – where either grooming serves to establish relational credit and/or to pay relational debts. This accounting IS the embodiment of the social fabric that establishes the primate troop.

Entangled Accounting
I have also argued that a useful way to understand the Dunbar number was as a social constraints involved in the social computing of a group’s ‘pecking order’ – a social structure that also provided the affordances that enabled the processes for allocation of resources among those in the group. For example a hunter brings home a large animal – group-status structure has already determined who gets what part and in what portions. Keeping this structure of statuses-relationships also requires a constant social computing of the ‘social-relational-exchange accounts’ – which is the establishing of credit-debt exchanges that is the core of social fabric and structures (the virtual ‘grooming’ among members). 

As long as the group was constrained by the boundary conditions of the Dunbar size and simple status-lineage-clan structures, the accounting of all social exchange could be computed through human memory. But this 'attractor' couldn’t scale to larger groups, as humans learned to domesticate plants and animals and began create surpluses, which in turn enabled increases in group size and density. 

The consequence was a significant increase in social complexity, which enabled rapid proliferation of many forms of specialization, divisions of labor, new statuses, increasingly complicated lineages and histories and more. The rise of these more complicated and complex forms of social exchange hovered at the limits of the memory and social computing capacities of hunter-gatherer systems. Thus despite the fact that human were ‘proto-farmers’ for tens of thousands of years – the capacity to shift to agricultural societies had to wait for the development of concrete accounting mechanisms which enabled the external recording of exchanges – these systems also quickly provided the foundation for writing. 

With the rise of writing came a change in the conditions of change – changing the scale of human entangled possibilities, the scope of complexities and the transaction costs for organizing collective human efforts. 

These consideration can lead us to ask "What came first – density or a new form of accounting?" I would argue that accounting and/as administration were co-created, co-determined capabilities that were demanded/enabled by certain critical boundary conditions of population size and density. Support for this framing of thought can be found in David Graeber’s most recent book Bureaucracy.

The Age of Bureaucracy

Double-entry bookkeeping was deployed in its modern form in the 1300s. While minor innovations have occurred since then, the fundamental atomic unit of tracking and managing value–our accounting system–is still based on this 700-year-old invention. With today’s computers, networks, and cryptography, we now have the opportunity to create a system of accounting that brings us into the 21st century–a system that looks beyond numbers in ledgers and utilizes machine learning, multiparty computation, and algorithmic representation to redefine “value.”
So what’s holding us back?

In discussing the rise of ‘the state’ Graeber outlines three key elements that are important principles or constituents – sovereignty, administration and politics. He notes that the historical origins of each element are not only distinct from each other but have no intrinsic relationship other than their capacity to be assembled in a range of entanglements. Of interest to my argument is Graeber’s view on the rise of the element of administration. 
Bureaucracy=Measuring=Control

I would argue that administration (and logistics) is a practical application of accounting (you can't manage what you can't measure) – although in most contexts, administration is never value neutral or without particular biases:

The second principle is administration, which can and often does exist without any single center of power to enforce its decisions. It could also, of course, simply be referred to as bureaucracy. In fact, the most recent archeological evidence from Mesopotamia indicates that bureaucratic techniques emerged not just before sovereign states, but even before the existence of the first cities. They were not invented to manage scale, as ways of organizing societies that became too big for face-to-face interaction. Rather, they seem to have been what encouraged people to assemble in such large communities to begin with. At least, this is what the record seems to show. The standardization of products, storage, certification, record-keeping, redistribution, and accounting all seem to have emerged in small towns along the Tigris and Euphrates and its tributaries in the fifth millennium BCE, a thousand years before the ‘urban revolution”. We don’t really know ow or why; we don’t even know whether there were actual bureaucrats (in the sense of a distinct class of trained officeholders) or whether we are simply talking about the emergence of bureaucratic techniques. But by the time historical records do kick in there certainly are; we find vast temple and palace complexes with a hierarchy of trained scribes carefully registering and allocating resources of every sort.

David Graeber – Utopia of Rules, p.176

It does seem clear that the arise of bureaucracy is a consequence of a change in the conditions of change. To recall what this means, one way to understand a change in conditions of change is that it represents critical changes in a systems boundary conditions. I’ve been arguing that along with population size and density, other fundamental boundary conditions include: transaction, marginal and opportunity costs; environmental niches, providences and rhythms; levels of technology. All of these boundary conditions combine to constrain how human tend to organize. These constraints are the conditions sustaining ‘attractors of efficiency’. I outlined three basic attractors: The attractors shaping human organization during our hunter-gatherer experiences, those shaping human organization with the rise of civilizations and the emergence of industrial society and the attractors that are emergence with the development of the digital environment. 

Hunter-Gatherer Anarchy
If we consider the boundary conditions of hunter-gatherer groups – the attractor of efficiency favored social organizations based on anarchy (as Graeber describes in a number of his works or as Christopher Boehm describes as reverse hierarchy). Anarchy might not seem efficient but in small groups where cohesion and loyalty to the group have high survival value, the ability to impose decisions by the few onto the rest or even by a majority onto a minority, too easily leaves the group vulnerable to dissension and sabotage. The messiness and tedium of anarchic group processes to achieve consensus are actually more efficient in the long terms because consensus reduces dissent, resistance, friction and sabotage (all forms of transaction costs) regarding the practical implementation decisions eventually agreed upon.

The consequences of potential conflicts within the group are transaction cost that outweighed the cost of initial messy group decisioning processes – because such processes produce the benefits of cultural integration and cooperation. The problem is that anarchy couldn’t scale to larger group sizes with increasing diversity and complexity.

Hierarchic Attractor of Efficiency
As I've redundantly noted, the advent of greater population size, density, diversity of occupational niches and other corresponding complexities creates new boundary conditions that at minimum consist of an exponential increase in the transaction costs (as described by Ronald Coase in his theory of transactions costs). These changes drive the emergence of a new attractor of efficiency – one that favors hierarchic and centralized forms of organizations. 

This attractor of efficiency remained relatively stable for thousands of years. However, as larger centers of population began to proliferate, they enabled an acceleration of new technologies, other innovations and ever new combinations of what already existed began to exponentially increase the possible complexities of exchange and trade. These new boundary conditions began to slowly change certain scales of transaction costs. 

Right now, the technology of the financial system is built on top of a way of thinking about money and value that was designed back when all we had were pen and paper, and when reducing the complexity of the web of dependencies and obligations was the only way to make the system functionally efficient. The way we reduce complexity is to use a common method of pricing, put elements into categories, and add them up. This just builds on 700­-year­-old building blocks, trying to make the system “better” by doing very sophisticated analysis of the patterns and information without addressing the underlying problem of a lossy and oversimplified view of the world: a view where everything of “value” should be as quickly as possible recorded as a number.

The emergence of the industrial revolution was also the beginning the emergence of a new attractor of efficiency – that  of self-organizing markets, new institutions including development standardization and the more rapid flows of information (including the price mechanism). The emergence of market systems and democracy represented a change in conditions of change the boundary conditions that stabilized around a new attractor of efficiency.

Transaction Costs
The ever faster information flows accelerated with the birthing of the Internet. It has become well established that the emerging digital environment has increasingly collapsed traditional transaction costs, created conditions of increasing connectedness (which also creates a type of increased population density) and much more. 

This is a deep change in the conditions of change – one that shifts the salient organizational problems toward other costs, including opportunity cost. Opportunity become dramatically more important as other conditions emerge such as marginal cost approaching near-zero (conditions of an abundance economy), non-rival goods become the platforms of creative innovation (e.g. information), and many others. 

If the transaction costs of creating value go down radically, the form and logic of economic entities need to change. The new landscape of work is alien territory for most of today’s business leaders and business schools, but things are already moving towards a new world. The new topography consists of the network as the architecture of work and work as coordinated, contextual problem solving between non-co-located but interdependent people.

Four fairly new insights are challenging our traditional beliefs:
  1. Value creation happens at the point of use, not the point of production;
  2. Mass solutions are not as competitive as contextual solutions;
  3. Transactions are replaced by interactions because contextual value creation cannot take place without interaction;
  4. Open networks and reach and richness of networking are more valuable than control of proprietary assets.

The Age of Entanglement

Entangled Planet
In the digital environment’s new attractor of efficiency, our entanglement with things, people, data-information, embodied knowledge and thinking systems, will or can become ubiquitously transparent in the immediacy of any and all  moments. Our digital trails will become visible histories in unforeseeable ways - no matter our efforts. As McLuhan noted the computer (the one computer that is the emerging ubiquitous cloud which we are now beginning to inhabit) makes our history present in the moment. 

The atmosphere of the digital environment will enable unimaginable visualization of information, unimaginable forms of analysis, unimaginable personalized service-products, unimaginable emergent opportunities – which we will enact with expectations of dynamic, immediate customization – just as we now expect to be able to search for an answer to any question we can dream up. 

Objects will have their histories available for anyone to query. Within conditions such as these, the boundaries between, history, relationships, reputation, information, currency and accounting dissolve. 

We are now being challenged to more deeply re-imagine a political-social-economy relevant to new types of ‘value’ – value that is non-rival, abundant, intangible and subject to increasing returns.

Let’s give ourselves some permission to imagine some possibles.
The Social Self Ecology

"Perhaps I didn't live just in myself, perhaps I lived the lives of others…My life is a life put together from all those lives: the lives of the poet."
Pablo Neruda – Memoirs, p1

In the inaugural issue of the Journal of Design and Science, has two great articles heralding the rise of the Age of Entanglement. The introductory article by Neri Oxman and a wonderful, eloquent account by Danny Hillis, “The Enlightenment is Dead, Long Live the Entanglement”. 

It is worth including a substantive quote:
We are at the dawn of the Age of Entanglement.In the last age, the Age of Enlightenment, we learned that nature followed laws. By understanding these laws, we could predict and manipulate. We invented science. We learned to break the code of nature and thus empowered, we began to shape the world in the pursuit of our own happiness. We granted ourselves god-like powers: to fly, to communicate across vast distances, to hold frozen moments of sight and sound, to transmute elements, to create new plants and animals. We created new worlds entirely from our imagination. Even Time we harnessed. The same laws that allowed us to explain the motions of the planets, enabled us to build the pendulum of a mechanical clock. Thus time itself, once generated by the rhythms of our bodies and the rhythms of the heavens, was redefined by the rhythms of our own machines. With our newfound knowledge of natural laws we orchestrated fantastic chains of causes and effect in our political, legal, and economic systems as well as in our machines. Our philosophies neatly separated man and nature, mind and matter, cause and effect. We learned to control. Eventually, in the ultimate expression of our Enlightenment exuberance, we constructed digital computers, the very embodiments of cause and effect. Computers are the cathedrals of the Enlightenment, the ultimate expression of logical deterministic control. Through them, we learned to manipulate knowledge, the currency of the Enlightenment, beyond the capacity of our own minds. We constructed new realities. We built complex algorithms with unpredictable behavior. Thus, within this monument to Enlightenment thinking, we sowed the seeds of its demise. We began to build systems with emergent behaviors that were beyond our own understanding, creating the first crack in the foundation. So what is this brave new world that we are creating, governed neither by the mysteries of nature or the logic of science, but by the magic of their entanglement? It is governed by the mathematics of strange attractors. Its geometry is fractal. Its music is improvisational and generative rather than composed … progress in the Age of Entanglement is synthetic and comes from putting things together


The enlightenment, the industrial revolution and ideology of neo-classical economics of the 20th century have all been dominated by a particular concept of individuality – that of an isolated, atomistic, rationally selfish concept of ‘self’. The counter-narrative, as I’ve been arguing for, is one of the ‘social self’ – arising in a context of entangled, mycelial-like ecology. Humans became humans with the invention of language and culture which are inextricably social and socially constructed - even if they are also co-constructed within particular physical environments.

In another wonderful paper, this one by Edwin Hutchins, “The role of cultural practices in the emergence of modern human intelligence”, Hutchins elaborates the conception of embodied mind that deepens the conceptualization of thinking I’ve been exploring. He argues that the best way to conceive the human cognitive system is to understand it as a distributed system transcending the boundaries of body and brain. Thus the condition of human entanglement is one of an embodied and inclusive system – of objects, patterns, events, ecologies and other beings that is the locations where cognition occurs. 

Aba-Novák Blind Musicians 1932

As outrageous as this may sound I was first introduced to such a concept by Gregory Bateson:

“Suppose I am a blind man, and I use a stick. I go tap, tap, tap. Where do I start? Is my mental system bounded at the handle of the stick? Is it bounded by my skin? Does it start halfway up the stick? Does it start at the tip of the stick? But these are nonsense questions. The stick is a pathway along which transforms of difference are being transmitted. The way to delineate the system is to draw the limiting line in such a way that you do not cut any of these pathways in ways which leave things inexplicable. If what you are trying to explain is a given piece of behavior, such as the locomotion of the blind man, then, for this purpose, you will need the street, the stick, the man; the street, the stick, and so on, round and round.”
Gregory Bateson – Steps to an Ecology of Mind, 1972, 459 

For Hutchins, approaching the study of cognitive outcomes as properties of a distributed cognitive system, provides for a more comprehensive understanding of what cognition really is, than current assumption that cognition is solely the consequence of properties of each individual participating in the distributed system:

High-level cognitive outcomes emerge from the orchestration of the elements of distributed cognitive systems by cultural practices.

The claim here is that, first and foremost, thinking is interactions of brain and body with the world. Those interactions are not evidence of, or reflections of, underlying thought processes. They are instead the thinking processes themselves.
Improvisation as Thinking
Hutchins considers that biological evolution did not precede the capacity for language and culture – but that biology co-developed with language and culture – that humans shaped tools and tools shaped humans. For Hutchins it is cultural practices-in-environments that both ground and enable thought processes.

A practice will be labelled cultural if it exists in a cognitive ecology such that it is constrained by or coordinated with the practices of other persons.

Thus all forms of language arise and are produced by-in-for cultural practices – and fluency in both culture and language requires a deep collective tacit knowledge – as Harry Collins has noted. 

In this way, Hutchins notes that thinking, for-as-within speaking, suggests that even low-level perceptual processes are often organized by cultural practices. Cultural practices include particular ways of seeing (or hearing, or feeling, or smelling) the world. Thus cultural practices also involve the orchestrating of sensing.

The engagement of the brain and body with the social and material world through the performance of cultural practices accomplishes several important functions at once. It is the principal, and perhaps the only, means of producing high-level cognitive processes. The enactment of embodied, non-symbolic representations, through which phenomena are seen as instances of culturally meaningful events and objects, is a cultural practice, not a passive innate process.

Improvisation as Practice
The dominant explanatory logic for cognitive science is to reduce cognition to neural correlates within a single brain. Although it is the dominant logic, that doesn’t mean it’s uncontested. The issue is that this dominant logic, is also deeply embedded in current scientific-cultural practice. A practice that wants us to imagine an abstract, generally disembodied, cognitive process or ability and then tries to imagine how the brain could do it. But this is a mistake, because the answer sought depends on how the question was framed. This framing is also deeply imbued in the currently dominant economic paradigm.

What all of these ‘dots’ suggest (to me at least), is that our entanglement is more than a form of interdependence, more than embeddedness in mycelial rootworks that form the structures, processes, histories and veneers of our societies. Our entanglements within these structures, processes, and objects (including the smart-things of the Internet-of-Things) represent collective intelligence, knowledge, data, memories and most importantly – they enact forms of computation and actual thinking arising from a social self(s).

Collaboration - Social Currency
Considering the argument thus far, I believe we have to also re-think, more deeply re-imagine, currency – as a ubiquitous form of accounting system that is also the embodiment of social fabric and imbued in all our enacted cultural practices, memory and social thinking. 

The looming emergence of ‘smart money’ –currency that is more than information with meta-data but is a form of intelligent algorithm or AI – will enable visualized capturing of histories, trajectories, transactional lineages – creating a sense of distributed realism. And as a consequence, we need to begin to provide a more adequate framework for understanding all the looming implications of our entanglement within the ecologies of the digital environment, the Internet-of-things, the blockchain, big data, and more.

Our future social-political-economies will have to embrace a reality that is not only approaching a near zero marginal cost society, but where the predominant forms of value creation will be antithetical to scarcity and will be deeply non-rival. One of the most important economic and social aspects of our future will be to focus on reducing opportunity costs – those involved with generating and seizing opportunity. Our future – economic, social, environmental – will depend on our capacity to scale learning and enable a creative, generative capacity in all we do.

Today, we have the technology and the computational power to create a system of accounts that could retain and deal with a lot of the complexity that the current system was designed to avoid. There is, for example, no reason that every entry in our books needs to be a number. Each cell could be an algorithmic representation of the obligations and dependencies that it represents. In fact, using machine learning, accounts could become sophisticated probabilistic models for what might happen depending on how things around them change. This would mean that the “value” of any system would change depending on who was asking, their location, and the time parameters.

I will continue to explore these ideas in my next post.