Skip to main content


Do help add some fuel to raise attention via change.org.
http://chn.ge/...

Let’s start with a little wisdom from yesteryear. “Money is a new form of slavery, and distinguishable from the old simply by the fact that it is impersonal – that there is no human relation between master and slave.” - Leo Tolstoy

Trade is facing a revival. Reviews and ratings will replace brands. This is why we are organizing a crowdfunding campaign to afford the next phase for a great solution. Purpose is to prepare the launch of a ‘smart trademark’, a simple clear-cut graphic checklist reflecting current condition of and changes in fair trade among people, nature and technology. Of the many certification labels none acts as an all-inclusive ‘prize tag’ showing value instead of costs. None provide a window on fair trade, eco footprint, recycling, sustainable design, open source and so on. None personalizes ‘money’ with a single view on the lowest and highest value, on costs and benefits, to openly promote improvements.

The window of opportunity is now. Don't just 'like', spread the word. Do that little extra. Make some noise. Act.

http://www.indiegogo.com/...
http://www.kickstarter.com/...

 This is a tool, a handle to make things better. We are drowning in tweets, all screaming for our attention. The news fills with the newest of new, ‘new’ chasing ‘now’ in a motion blur with no time left to reflect. Now that the outrage machinery entered social media, many people having started numbing down. For the 500 million years before television when we saw something terrible, we were in the middle of it. Now, when we see something terrible on the evening news, we turn off our emotional processing.. For a moment we feel nothing at all, we are temporarily psychopathic. The news teaches apathy. This results in learned helplessness on a massive scale. Furthermore with the amount of time we spend watching television and being online we get caught into a "solution delusion" because we mistake talking about a solution with applying a solution. At the end of the day, we've spilt our emotional discharge on some theatre and nobody has been helped. Our moment to create meaning has come and gone. And so, bit by bit people start to think that what exists now is all that is possible and can’t even dream about a future that is different from the present.

So, please, turn words into works and help this last chance to become the opportunity it can be and should be. By now we know but what can we do? Aldous Huxley said it “Hell isn't merely paved with good intentions; it's walled and roofed with them. Yes, and furnished too.” This project offers a solution for anyone to get a grip on creating the meaning we want life to have.

Make shopping make sense. Quantifiable Ethics.
My family and I will be grateful for your support.

Thank you and best wishes,
Paul Peters

Discuss

Fri Aug 22, 2014 at 09:10 AM PDT

Healthcare A Go Go

by Paul Peters

“Ceci n’est pas un pogo stick”.

How can healthcare organizations and companies make the shift to becoming treatment service provider with highly customized and ongoing ‘cure and care’? Clearly telemedicine is going to play a significant role in this shift. However, data grows faster than processing power, while also idea-to-use cycles are speeding up more and more. And how are current ‘big data’ efforts going to help with fine-grained information on a detail level where statistical tools need to move beyond assumptions? Maybe the past has some keys to offer?

Old Dutch pharmacies often have a so-called ‘gaper’ (yawner) bust hanging outside as a signboard, usually a Mussulman to signify the relation with Turkey, China and other far-away cultures the Dutch were trading with in the 1600s. This ‘gaper’ usually sticks out his tongue, eyes wide open, not only signifying the often awful taste of some potion that a pharmacist brew but it also hints to their use of the tongue and eye for diagnosis and something we seem to have forgotten in the meantime, performing this stretching motion actually helps release muscle tension in the neck and head, and thus helps relieve a headache. Pharmacists at the time used to be the doctors, while the local barber usually acted as surgeon; a mixed role dating back millennia that only recently got split when industrialization allowed for a more specific organizational form centered on the hospital with centralized procedures and processes further enforcing specialization and delegation.

Undeniably there is a certain minimal role division but recent organization forms have been around so long we have gotten stuck in the administrative hierarchy. As technical capabilities are pushing towards a new level of abstraction, described as the “Nexus of Forces” the combination of ‘social’, ‘mobile’, ‘information’ and ‘cloud’ brings together four trends which essentially translate in the capability to have to-the-point relevant and detailed information anytime anywhere. In other words, big data allows for de-specialization by de-bureaucratization which in turn aids not only in dramatic reduction of costs but a much better healthcare at the same time, one which is more future compliant than the current approach. Most of the medical errors are due to inefficient workflow processes, work breakdown and task allocation and organization, so current advances will happen in several healthcare domains at the same time, mutually reinforcing if done well. Ongoing technological progress in information sciences allows for both dealing with massive amounts of data and doing that much faster too. These may be most apparent with the possibilities as offered by 3D printing and synthetic biology. Not only are we nearing an era when someone’s skin cells can be transmuted to stem cells and then used to print organs or other body parts (recent advances even allow growing in vivo structures as complex as eyes), but this will also allow for designer pharmaceutics generated on-the-fly.

This is happening now. The healthcare, pharmaceutical and life science industries are drinking from a fire hose, drowning in the abundance of genuinely needed information that they themselves help create. This presents us with an emerging new world governed by an as-yet-imperfect integration of biology, bio-technology and healthcare. It comprises data about vast numbers of molecules, cells, tissues, organs, and populations of organisms including humans, their actions and the outcomes of those actions. These entities and data from them collectively constitute a new global biosystem. It has to; the highly detailed granularity level of this information has us move beyond abstraction, so to make sense of all this we have to mimic nature in several ways. The health of the biosystem, including our own health, benefits from taking action, recording and analyzing its consequences. On a macro scale, this new biosystem also includes the conceptual and physical consequences of its evolution: ideas, economics, wealth, engineering, and footprints good and bad. This may very well fit the “ecological civilization” as pursued by China’s government, yet focusing on medical aspects already, but as recent policies clearly show, there are substantial drivers.
§
New technologies are emerging, modalities that enable, extract data from, and compute knowledge from, genomics and proteomics, medical text and images, and not least there is the rise of the digital patient record. The data is collectively escalating into many thousands of petabytes globally. Much is summarized in huge amounts of natural language text, but as to the details of the primary research and data capture there is no time and capacity for, nor merit in, traditional methods of publication. Yet actually there is no time and capacity for, nor merit, in humans reading the conclusions in text form either. It has inspired a meta-science, translational research that facilitates the transformation of findings from basic science and medical data to practical applications that enhance human health and wellness in meaningful ways. With the mathematical and technological solutions being developed in the biomedical arena, other kinds of industry and human endeavor will benefit… and generate more data.

Personalized medical treatment is obviously a next step, yet with the increase in advances and cross-fertilization in nano-technology, bio-technology, information technology and cognitive sciences medical companies are likely to expand beyond the primarily chemical focus and not just embrace genetic and epigenetic approaches, but also bio-physical. Instead of swallowing chemicals, a future pill may contain a self-coordinated swarm of dual-layer carbon nanotubes acting as nano-speakers that help massage internal organs. But likely the same feat can be accomplished by rhythmic sound pulses from a smart phone, a medical domotics system or guided finger drumming and simulated yawning as described above. Mature ‘cure and care’ providers would want to deal with all of the above.

Of the medical specializations pharmaceutics is the most likely to turn more explicitly into an information science, but an evolving information science. In a way the pharmaceutical industry has always been an information industry already, albeit frequently confined to adapting nature’s ideas from its own combinatorial chemistry and “event simulation”, i.e. 4 billion years of running trial and error algorithm that Darwinian evolution allows, albeit it both a causally closed and causally open manner. In the process of evolving as an industry pharmaceutical companies will move from ‘pushing pills’ to becoming a treatment service provider where the idea of ‘patient’ is exchanged by participating users who are monitored nonstop and have adaptive personalized treatment involving a possible cocktail of maybe 30-300 substances. So much knowledge is being accumulated and much more will be added, time cycles are speeding up so fast that the existing modality is failing, limited by one-size-fits-all treatments. This shift is known already, but as their second core business of research and development grows into an information science pharmaceutical companies will need to adapt their information infrastructure to suit that inevitable next step.

Stratified and personalized medicine allow for targeted and hence safer drugs, but the technologies mentioned can surely help address the need to eliminate costly medical errors and inefficient paper, amplified by the pressures on the healthcare system by the aging baby boomer population. Optimizing healthcare IT can already reduce costs in the order of trillions of dollars. These form substantial opportunities to integrate industries, and not least broaden the scope of the pharmaceutical industry from its current state of seeking to develop biologically active molecules in some 10-15 years by increasingly more informed methods, whereas biological evolution took a third of the age of the universe by trial and error to do the same thing. The trick is to also engage in the ultimate therapeutic actions involving these molecules, and keep track of their outcomes.

Such informational feedback can have an invaluable impact, for goal-based artificial selection. We cannot take action without knowledge. We cannot have knowledge without data. We cannot have new data without knowledge. To varying extents the issues of converting less structured information to actionable knowledge as more structured information concerns not so much the amount of data, but the combinatorial explosion that relates to the way in which the individual pieces of information interact. For example, for medical records each with a mere 100 basic pieces of information such as age, gender, events, clinical observations and measurements, diagnoses, therapies, and outcomes there are 2^199 possible combinations of factors with their probabilities that we can express as decision making rules, i.e. about 1000, 000, 000, 000, 000, 000, 000, 000, 000, 000 rules. An ominous task besides the fact that current clinical decision support systems and semantic web technologies are hampered by the difficulties in quantifying indeterminacies and drawing inference from them.

Part of the solution for a sufficiently complex ontological infrastructure involves realizing designs for a logical framework for intra- and inter-cloud interoperability and integration, constructed of swarms of network-centric inference robots, using template-based addressing for adaptive connectivity as this infrastructure continuously seeks for the best ‘semiotic interface’ while merging mobility, virtualization and security. Ongoing coarse-graining are foreseen for conceptual convolution (using deductive and inductive reasoning and affine association for concluding, abstracting, adjacent entrainment) for developing modelless intermediate representations suitable for transmitting information between the faster and slower reasoning and remembering cycles in the system. In that way the infrastructure aims to be adaptive to such a granular level that it can dynamically seek an optimal combination of vector processing and stream processing.

Such a multipolar multifaceted distributed decision support system can be used to allow for the transition from a “pill focus” towards a patient focus, from products to treatment service providers, and support initiatives for collaborative treatment lifecycle management, ongoing testing and monitoring of patients, and allowing for cross-translation between discrete knowledge domains and research areas. Although clearly different areas, these are best served by a universal approach. Only in the days of early computing did this translate into a uniform approach but with self-learning self-organizing systems that step is not so self-evident anymore. Nowadays, a new system is needed to allow for both multipolar viewpoints as well as cross correlation discovery and dependency mappings between different sciences.

In that sense, within the existing business model, pharmaceutical treatment is fairly limited, as people’s genetic makeup is possibly for only 30% involved in the formation of a disease, while many outside forces besides genetic and epigenetic responses remain largely unknown. Blaming it all on the placebo effect doesn’t make the oddities go away. Personalized treatment will in fact greatly reduce risk, both by an medical advisory service for doctors, double-checking on prescription drugs and treatments (most medical errors are simply mistakes), and moving from symptom-based diagnostics to a more realistic function-based which is in much closer adherence to all the medical and bio-tech research being done. Within the context of an adaptive treatment, medical risk is greatly reduced and as a result financial risk as well. In order to get there the information infrastructure need to be deal with to learning from every single treatment to enable the move to greater transparency, greater robustness and greater reliability. An unspoken leftover from earlier times, systems tend to make a snapshot of a knowledge domain, describe it with lots of effort, classify it as ontology – and if it is outdated a new snapshot is made, a new version. Eventually, like a flipbook or a movie strip, one ends up having to deal with many of these snapshots at the same time.

This 19th century approach to scientific exploration translates for companies into the so-called dependency hell. Since, we have come a long way: we now know that ongoing knowledge acquisition is irreducibly ambiguous, due to the necessary use of conceptual modeling. Some knowledge domains may be an amalgamate of 40, 50 different abstract models, each telling a part of the whole story, but not really fitting each other as scientific exploration tends to move from unknown to unknown.

The edge of science is balancing on the push of what has already happened and the pull of the potential, limited to the nearest-neighbor in systematic composition while being directed by correspondence. But science is unable to reach far outside of the known, as we do not have a meta-language to express what we do not know that we do not know, although we can sometimes express what we know that we do not know. And yet, eventhough science can grow towards almost endless recombinations of the known, she moves with one step at a time, or one time at a step. Exploration happens where these two overlap and the space of possibilities is not just the next step as in an unreachable potential, but it is the act of stepping itself, a shaping force in a state of becoming. It is time to leave 19th century photography behind and move to streaming media. If ‘one size fits all’ was true than we wouldn’t see the move into big data and high performance computing as a cloud, but as a big ball of water. Loosely-coupled virtualization greatly adds to flexibility which in turn leads to agility, scalability, reliability, reduced costs, increased security and operations. Many computing infrastructures are suffering from dependencies which have grown so complex normal design patterns do not apply anymore. But the same holds for knowledge domains, and as the time between idea and usage is speeding up, we cannot be fixed down by assumptions in our approach anymore, as it limits the results.

There is a much more simple way involving ongoing data-mining, facilitated self-organizing swarms of search-agents reporting to a central system to maintain a real-time dependency map, goal-driven emergent hierarchies with just a touch of ‘unstructuredness’. Employing a mix of dynamic approaches, from process objects, automata, to complex adaptive systems, in some sense this offers a modeless approach, data without representation. In other words, use of the proper tools for adaptive knowledge curation is a natural result of setting up a truly learning organization. Borrowing approaches from cognitive neurosciences and robotics we get reentrant transparallel experiential selection leading to dynamic synchronization and feature binding, mixed with self-organizing incremental neural networks for unsupervised learning. This results in creating an adaptive system of systems mixing distributed decision support and multipolar multifaceted evolving ontologies. Phased knowledge harvests offer an analytical scheme in which both administrative and medical improvements are addressed.

As mentioned with the US Million Veteran Program; “Genetically speaking, each person’s cells carry within them some 3.2 billion bits of data. That’s how many pairs of nucleotides, or chemical bases, are in the human genome. This represents tens of thousands of protein-coding genes, plus lots of other DNA. By and large, the precise role of one stretch of DNA versus another remains a vast unsolved mystery. There are countless possible variants that could affect health, and scientists have yet to learn about most of them.” Not only that, an intimate relation between the DNA sequence and the folding structure of the entire strand has been uncovered, as well as possible coordinating role of the collagen triple helix. This is not just raw information, but also how information is organized and systematized, requiring a sufficiently versatile approach to knowledge management. “With great power comes great responsibility”… with Big Data comes big information, big knowledge, big wisdom and maybe even big intelligence. A ‘feature’ which is often dodged is that Big Data requires an entirely renewed approach to statistical analysis, databases and queries. “Big” is the elephant in the room, a Trojan elephant, and maybe even, it is elephants all the way down.

A special thanks to Barry Robson, Distinguished Scientist, pioneer in Bioinformatics and Artificial Intelligence, and much much more, for the inspirational correspondence and ongoing opportunity to cooperate.

Discuss

Thu Aug 21, 2014 at 09:08 AM PDT

Europe's Enterprise Zombielimpics

by Paul Peters

There’s this great comic strip of Dutch cartoonist Toon. During five frames a turtle slowly shuffles toward a tree and crashes into it. Each frame shows a point in time. At noon he is happily shuffling forward. At one o’clock he sees the tree. At two o’clock he utters “oh no”. At three he partially retracts his head under his shell. And at four he crashes into the tree… %*@#!!

Once upon a time, in a world not so far, far away, near the end of the bi-yearly gathering of fable and legendary creatures, it were the main tribes of goblins, gnomes, fairies and elves that finally drew up a plan. During an entire fortnight they would enter the sleeping rooms of ‘the humans’ and whisper in their ear “the European economy is seeing light at the end of the tunnel”. Since long they had noticed that ‘the humans’ were sinking into a catatonic monotony of indifferent helplessness, losing faith or at least some basic trust in nature’s workings. Such was a natural event, often caused and solved by fabulous phantasms as part of oral lore since the dawn of time, but this was different, and of epidemic proportions.

After the previous gathering elven spies had been sent around to study dreams that the humans were having. Record them in a sack of small crystals. The investigative reports were quite clear; shadowy echoes originating from modern day news kept bouncing around inside their cranium, their biased negativity dampened and ate up human’s sparkles. Horror, sorrow, worries and existential angst were stopping people from shining. They had forgotten their legacy, betrayed the traditions.

“Ox poo”, had the elders bellowed, “is what the humans have filled their heads with.” The humans had grown scared of a monster called ‘the economy’, a creature, almost certainly a wild animal, that nobody really understood or was able to describe clearly. They used spells involving characters of unknown origin, obscure formulations with numerals and cyphers, multiplicities, fractions and percentages to try taming it, but beyond the obvious self-fulfilling prophecy of the observer effect it seemed like this economy did not want to do what ‘the humans’ wanted it to do. A mere few of their magicians had been able to cut off one of its manifold heads by spending much time staring at large amounts of paper and by trusting their speech to paper, but what this ‘economy’ thing was, nobody really knew… Sometimes it was a machine, like a steam engine, but at other times it was more like a hot air balloon, or a single-celled organism, that would shrink and shrivel if you punctured it. But the strangest thing of all was that you could only talk about it as if talking about something else!

Whatever it may be, obviously this was not good, bad even. During the last gathering the tribal elders had made clear most of them lived inside the collective fantasy of the humans. Their own existence depended on someone believing in them. While the life of humans had been speeding up for quite some generations already, less and less attention was spent on the stuff of legends. Whereas everybody sensible knows that ‘greys’ are simply elves with a cold ‘the humans’ had started projecting their inner space on outer space, babbling on about space aliens, reptilian humanoids and tens of millions had been scaring themselves with a Mayan prophecy that no Mayan had ever made.

This could not go on longer like this, as ‘the humans’ keep on jamming their fantasy, entire worlds were disappearing in a scrambled mess. Elves especially, during the years many had turned green to fit the ‘little green men’ image, but ever since the internet allowed endless reruns of television shows many have lost a finger and the prescribed monkey-like posture makes them look like goblins. And they were disappearing. It was a difficult choice, but they had to do it. All phantasms and apparitions, including archetypes, muses, newbies like Master Yoda, the spirit of the neighbor’s recently deceased cat and even exotic thoughtforms such as emanations, manifestations and egregores, all were to become firm believers in humans. In order to survive themselves they had to believe in people. Believe in the power of people’s actions. That people matter. That people’s actions matter. Even when feeling ashamed of doing so.

Maybe it is due to modern education, but ‘the humans’ seem to have grown unaware of the fact that Adam Smith’s “invisible hand of the market” is invisible because it is their own. Like with the “Hand of God” they are both medium and message. Inventions don’t invent themselves. People need to be inspired to do so, but that can only happen when humans shine. And thus in search for an answer, a temporary transphantasmal task force had looked into social networking, debating the arguable accuracy of “six degrees of separation” and ingrained tribal biases such as the apparent number of social relations someone can maintain. The fortunate answer was that there was no single good answer or even a few good answers.

There were in fact many good answers, but it was impossible to deal these around in time… it would take the address book and logistic acumen of a Santa Claus, and he, unfortunately, did not exist, not even in fantasy land. Sorry, there was a vote and he didn’t make it. Be that as it may, fantasy would not be fantastic if that mere fact would stop them, and not only wise, but cunning as well, the elders mixed these two lights, shook it around a little and came up with a solution. The answer is to not question. Now that was something easy to share. Most talk were random spasms of their thinking gland anyway, resounding opening words of forgotten songs as people had neglected and ignored the language of the birds. And minus those nagging doubts gnawing away at the roots of every sparkling thought ‘the humans’ can do just about everything. Granted, of course, inspired and fueled by phantasms.

According to in-depth studies of the fairies the guardians at many human’s workplace had forgotten the real work. Instead of allowing people to grow onwards to become a master craftsman and do the best they can do, they were forced to occupy a junction in the web of administrative operations while spending their days with drinking coffee, counting coffee beans and the seeming importance of making tabular illustrations appear symmetrical every three moons. Maybe such activities were important a generation earlier, but nowadays with their new calculators it just felt like going through the hollow motions of an obsolete ritual. At work many had cultivated a sense of expertise and importance with some acting as corporate cheerleaders while others filled the air with lots of “wait and see” as if they actually knew what was coming next. ‘New’ and ‘now’ had become so important, the news filled with the newest of new, ‘next’ chasing ‘next’ in a motion blur with no time left to reflect on their own history. And so they forgot the motion of the seasons. Bit by bit people had started to think that what exists now is all that is possible, so they couldn’t even dream about a future that is different from the present, and “wait and see” was what they did.

During the public holidays, another one of those automatisms that humans drone-like subdue themselves to where one’s life is determined by a series of scheduled family meetings tactically placed throughout someone’s yearly working schedule by which an entire continent’s middle management’s decision-related activity gravitates towards the month of March and/or October, ‘the humans’ were to be approached during their sleep and little seeds of hope, faith, trust and basic appreciation sprinkled in their ears. However well intended, these planned breaks of rationed familialism significantly amplified the effects of the joyless mishap of corporate short-termism. Rather than helping others, many tried to fill these small imposed holes in search of a purpose, sincerely hoping for improvement from these overwhelming megaproblems which were always present to cast their shadow. Not knowing how to get their good intentions organized, and not having adequate time and resources, the lack of decisive action made an apparently inevitable double dip even more inevitable. Nothing gets done when nothing is done… they knew that, but what to do?

Evidently there was a top layer in human society but whereas the politician people claimed to be in charge, it was clear that nobody really was. These self-appointed ‘leaders’ had simply escaped the downward drag of peer pressure‘s preference for equality in servitude to inequality in freedom. But they did not bother to organize any kind of goodies for the fear a failure might backfire and blemish their cherished reputation. As had happened with earlier, more utopian ideologies. In an attempt to unite and inspire their people these leaders had traded dreams for nightmares, resorted to undefinable abstract dangers and highlight their unwavering protection against these elusive enemies. Yet, while worse misfortunes strike three times every lifetime, the creeping agony of nameless terror that most likely will never happen had taken human society in an iron grip for the fear of fear itself.

To deal with that, the guardian’s guides, often offspring of daemon-human crossbreeds themselves, searched for answers in large quantities of papers on psychonomy, observational notations about human behavior. They even tried to apply these ideas on ‘the economy’ along with something called ‘game theory’ which, as the fairies sadly reassured, has got nothing to do with play. Educating themself maybe a little too much, they thought these descriptions were also prescriptions, resulting in a collective attributional reformulation, classified under the term “inertia”. Obviously the flow of time had not escaped these astute humans, and as a top obfuscator Kierkegaard had remarked; “Life can only be understood backwards; but it must be lived forwards”. On a cultural level many seemed to share some issues with grasping unpredictable determinism, often stressing one can never be certain of the future whilst simultaneously advocating the preposterous idea that only humans are capable of giving meaning to an otherwise absurd and meaningless world. All the same they mistook a kindhearted excuse for a reason, “inertia”, although the boiling frog story can hardly be called a gentle illustration of a slow catastrophe. Like with climate change and present-day mass extinction the problem isn’t critical phase transitions… the problem is a lack of trust, simple basic trust.

For the guardians it was clear something was wrong. Repeating what they had learned what used to work they started treating symptoms, like trying to score a goal at a chess tournament. Searching answers in in-house marketing, training administrators in mild forms of hypno-suggestibility and even a new and improved systematic therapeutic methodology for lifelike representative enactment of spirit possessions and exorcisms, but, of course, without the spirits, others explored the opposite side of the spectrum. To avoid getting caught in someone else’s indecision and tribal biases, they tried to mold people into a machine, and gradually tried to make everything fit this machine, six sigma style, make their organization lean, anorexic even. Single-minded pursuit of coinage had narrowed down human visionary skills so much they even forgot to learn from their own inventions. Once their machines could imitate other machines, they had started making these super machines more robust by applying lessons from bio-diversity and translating these to general design principles. Reliability, availability and serviceability as a interdepend trio of features that ensured fault tolerance, isolation, corrective retry actions, recovery mechanisms, redundancy, continued operations, downtime avoidance, disruption reduction, predictive analysis, virtualization, parallelism, simplicity, partitioning, clustering and avoiding single points of failure. Systematic invention and structured problem solving methodologies had been in use for two generations. Some humans had become expert designers and all they could come up with as far as ‘the economy’ goes is a caricature marketplace? Really? Balance scales and a butcher’s knife? And some solemn pity? Is that it? Is that the best they have to offer?

And so it happened. The phantasms had to do what they would otherwise never do. Tell a lie. Not just an apparent lie because of the ambiguous verges of the semantically constructible universe, but one of those “noble lies” that make themselves true. “The European economy is seeing light at the end of the tunnel”. As a result they would all live happily ever after, so this winter’s tale could end with a “To be continued…”

Discuss

Wed Aug 20, 2014 at 09:06 AM PDT

A Crime Without Criminals

by Paul Peters

Nowadays Italians tend to complain that Italy does not give its youth a chance. This is so, but this is not the core problem. As a foreigner that worked for a foreign company in Italy, as a foreigner that tried to start a company in Italy, I can assure that the problem runs deeper. Italy has a severe case of neophobia, fear of novelty, of which xenophobia and ageism are just smaller bits. The way the business system in Italy works, it punishes any sort of innovation that is not coming from within the old system.

During the summer of 2002 we moved from The Netherlands to Italy. Working for a small American IT firm I was officially based from Milano, but since then I have worked in some twenty countries. Working as an IT consultant is probably one of the most knowledge intensive jobs around. Besides workweeks which easily added up to sixty hours and more, some additional twenty hours a week are spend on keeping up with the advances in the IT industry itself and the industry it is applied to. With the rapidly rising cost of living in Italy the choice to work as a contractor was inevitable and after some months as a ‘libero professionista’ early 2005 I started my own limited liability company, a normal thing to do in the Dutch-Anglican way of working.

Little did I know… not about the things done wrong, but about the right things left undone. It is not so much that Italians do not care about politics and shun getting involved. No, in fact, at every dinner table politics is a recurrent course. It is not so much that Italian people never made a fist to shake up a failing system, as no country in the post-war world has had so many successive governments. It seems to be that there is too much going on, and as marketing re-entered the mainstream of political scene in a big way during the seventies and eighties it looks like politics got stuck in analysis paralysis. Especially as political parties started outliving their members and tried to adhere to popular ideological catchphrases, the truths of a generation before may have grown outdated and did not resound with a newer generation, eventhough the underlying intend may be equal. What happens if things done with the best of intentions turn out to have negative side effects later on? Such as DDT which saved millions of people due to avoiding starvation, but at the same time lies at the cause of chronic toxicity leading to diabetes, cancer and even affect semen quality? For obvious reasons of efficiency in a delegate democracy we have created an illusionary personal responsibility which is embodied by politicians, but as a role similar to a theatre actor, not as a person. So it may very well be that some politician gets the blame for things they never did.

Better not be a moving target and keep a low profile most politicians must have thought. And so we get a political system that doesn’t clean up after itself. After a while this is going to stink. And at a further stage this is going to rot. But there is positive and negative liberty, having the power and resources to fulfill one’s own potential, and freedom from external restraint. When too many people shy away from, say, flushing the political toilet once in a while, beyond a certain threshold we get negative liberty controlling positive liberty. When trying to shield one’s personal and/or collective interests from others involves missing out on the realization of a potential. And so, averse of advocating ideologies with a limited shelf life, politicians turn to small opportunistic protective moves. However the guard that keeps outsiders out also imprisons the insiders, and the sumtotal of systematic neglect along with a large many defensive moves has resulted in a legal system that fears change. And slowly but surely what one may perceive as power politics turns out to be the gradual fragmentation of a civilization that turns to autocannibalism as the forces of disintegration get caught up in a downward spiral of competitive rivalry and relationships retract to shrink back a community and trade networks to a multicellular undifferentiated goo of battling tribes.

Of course I had read about Italy’s bureaucracy, although that was fairly similar to The Netherlands, which was a little annoying but not much more than that. I had read about ‘amoral familism’ and ‘campanilismo’, and I though Berlusconi was a funny man, unaware he had already died twenty years ago and his followers kept him running on a mix of cocaine, Viagra and Prozac. Of course nepotism happens everywhere, but in Northern Europe the ‘minimally exceptional’ offspring is promoted to the sideline, where their potential damage is minimalized. They get a role in the diplomatic service where they can call in the experts when needed, but you don’t give them a top management function in the idle hope they will live up to the challenge and grow back a missing brain. Italians will say that Italy is “special”, which is the Italian way to say that Italy is just the same like everywhere else. Yes, Italy is bursting with creative talent, but in many cases it is a latent capacity. Italians are superior artisans, craftsmen, engineers, scientist, designers, stylists… but in business and politics, Italy is overshooting the goal. Hello, furbi is not furbi at all. Everybody knows. Coming from Northern countries which are rather stiff and sober, wouldn’t you think that the Italian way is an abundance of power signaling? Look around… How many foreign companies have a big office in Italy? How much foreign investment is flowing into Italy? Italy has been isolating itself with this grasp for the old. And not only that, the double bookkeeping causes a shame-fueled rigidity which results in very uneasy and uneven business partnerships where some that go too far and some that don’t go far enough. It is not that other countries are not corrupt, in fact many Italians are delightfully honest, but it is inefficient.

But ok, back to my experiences. Not having a social or business network in Italy to support me, it was impossible to get any loans from banks, until earning enough which is the stage my company doesn’t need any loans anymore. With an international business sometimes the travel costs alone would max out the monthly allowance on the credit card. Also, the tax office assumes people are cheating, tries to compensate for that by over taxation, and so forces people to cheat. I can hardly make my commercialista cheat for me, can I? So, again, for an outsider trying to settle in, this means I ended up paying about 65% in taxes, IVA not included. And of course, the payment terms are nearly immediate unless one is prepared to pay ridiculous high fines. As far as vultures go, thumbs up, guys. Especially starting the first year with double taxes is a killer.

Because of that i could not build up reserves, pay for training, or even slow down for a month or two for business development as this takes costs before revenue… and ending up in an endless spiral of payments that is simply not possible. That meant non-stop working, although, as my kidneys started failing I was alert enough to add the occasional day for a long weekend. Finally, after six years running to keep in the same place the financial crisis hit and the company i used to do most business with was bought by a competitor. This froze up both the company network and the customer network. Badly managed acquisitions lead to many redundant functions, especially if it concerns a multinational and the European branch is primarily a sales outlet. Fearing their perceived obsolescence, people shrink back to try protect their own turf, shield their position and business relations as the thing that makes them exclusive and end up autocannibalizing their potential. Customers are fed lies pending conclusive answers to the obvious questions they are dealing with as suddenly the future outlook of their big value-add strategic investment changed to cost-cutting a rebuild as a form of damage control.

The effective consequence is bankruptcy… Although, not in Italy, as there do not seem to be mature bankruptcy laws besides a small but cunning theatrical show of public humiliation that Mussolini thought up during one of his fictional insomnia attacks. So the company froze up “in liquidazione”, awaiting an eternal occurrence of a second chance. With the European crisis spreading problems not entirely unlike Italy’s political struggles, national and international intermediary bureaus systematically exclude senior professionals as they don’t provide enough revenue margins for easy work but are too incomprehensible to put in the extra effort to try differentiating on anything beyond price and availability. Mediating seniors messes up a customer’s expectations as they are often an order of magnitude more productive than juniors. The next time the customer wants someone with similar experience for the same price, which in most cases is statistically unlikely and so the customer may turn to another agency. So their offering is artificially commoditized to keep expectations low. Yet the competitive rarity is such that in times of cost-cutting austerity such activities are seen as a luxury, ignoring the ongoing bloodletting which is hollowing out any opportunities and gradually suffocating many European companies. A bizarre Catch 22 where one gets punished for doing one’s best.

Many companies end up in such a situation, and that is because their business network lost cohesion and the connections shrank back into isolation. This doesn’t go overnight… this fragmentation goes gradually, because most business relations try to offer a little hope, but are also afraid for their own position and career. Especially as Finance Managers try to keep the balance sheets clean to position the company for a profitable exit. Italy is not unique there. Italy is full of talent that is locked in by a system that stopped working two generations ago. And these people, like me, don’t have any savings anymore because they tried and tried again, and they couldn’t make ends meet… and now they are locked in by debt, which means that for the time coming every step forward will involve two steps back.

Without any money of my own, my family or the remains of a dysfunctional business network, it is impossible to meet up with the ‘hug and feel’ factor that is needed for solid relationship building. Italy’s answer doesn’t lie with a dramatic diaspora, sending a small percentage of students to move abroad while Italy itself is dying. Yes, obviously international cooperation is key, like with massively growing economies like China. Obvious no-brainer. But that doesn’t mean “cut & paste” Italian business to China. These times are over, because the ‘enemies’ of today are not participants in a geopolitical juggling act, but our own productivity. We are fighting our own efficiency, and we don’t have to. Stimulating students to become entrepreneurs is a luxury solution to a problem which is much, much bigger. Long-term international studies have repeatedly shown that the most successful start-up entrepreneurs are in their forties and fifties, and not in their twenties or early thirties. This is not a few percentage points; this is several times more successful. This success is largely unrelated to the socio-political system… It may be simply because man and wife work as a team. Although obviously in times of growth and luxury people are much more willing to help each other. But in times of crisis, it does come down to “the system”. A system that due to the corporatist State-owned enterprise system was focused on the home market so much it turned into navel gazing.

But that is not where Italy’s strength lies, it is not in some big unity or strong competition, but in its diversity; the large number of small and medium sized enterprises. Resilience by diversity is a much stronger evolutionary force than competition. New forms of adaptive cooperation and collaboration need to be sought so that Italian companies can avoid fighting against their own government and fighting against their own neighbors, but fight for realizing the potential of what they have to offer. When I moved to Italy I thought there was a big market for this… the technologies are there and I have been working with such electronic commerce networks for more than a decade. Is it so hard to see that there is actually little wrong with Italy apart from its biggest mistake of neglect? That the biggest hurdle is due to ignoring opportunities which is gradually breeding total ignorance, which only feeds the ‘horror vacui’, the fear of the unknown, the fear of novelty? Is it only me that thinks there is more than trying to “beat the system” of a game we got trapped in?

After two decades of fiddling around with the Italian Lire to make a rich country seem poor to crank up its competitive value for mass production based economic sectors, since the “mani puliti” action in the early 90’s the Italian economy has been declining. Government spending, incomprehensible inefficient business laws, a suffocating tax system and medieval banking don’t seem to make Italy rise on the global competitiveness indices. In fact in these areas Italy performs worse than Guatemala. It is time to move this system, Italy’s parliamentary governance system and public administration, forward several centuries and make it land in the present. Maybe in the end I do feel Italian as well. As I feel equally ashamed for not trying.

No discussion. No excuse. Just do it.

Discuss

Interestingly, it is a measure grown up in the gaming world that may help address one of a core set of human needs on the workplace, in this case the need to play. “Difficulty level” refers to the relative difficulty of completing a task or objective. Difficulty level can also easily be applied to a collective of tasks, functions and responsibilities that make up a job function as often described with a simple list of competencies based on previous experiences at this junction of a company’s organization. To ensure a person and the job match up correctly, seemingly unbiased standards like educational background, on-the-job experience, certification and training are valued, as well as references, recommendations and psychometric assessments. Often experience is expressed in number of years, as if this is a valid expression of the complexity levels encountered, maybe even the accumulative learning curve gone through. In the end, it becomes like comparing one person with another, and if they prove to have some sort of ‘equivalence’ then it is assumed the other person may be suitable in fulfilling this particular job function as well. But if one actually looks at how teams function, either closely knit or as an officialized department, the emergent value network of skill propagation may look a lot different. If one looks at how high-value technical resources in the modern world of ICT are recruited, it is often nothing more than keyword matching. There seems to be very little adherence to a task’s difficulty level, while this measure is especially important within the ongoing automation every industry is engaged with. Simple, structured, repetitive tasks continue to be automated, but it doesn’t stop at that level, automation is being automated as well, and with the gradual maturation of artificial intelligence this trend is not going to stop, especially as continuous technological improvement is a necessary ingredient of this collective self-organized race condition. Just like the internet has changed the global landscape of commerce within its twenty years of existence, parallel with the ongoing workflow automation this has led to a situation where a whole package of task can be performed elsewhere at some other location, and soon, if software machines can do it the location doesn’t matter at all anymore. The more work becomes like an information science, the more intangible it becomes and the easier it can benefit from ‘economies of scope’, such as on-demand elastic scalability. It is very easy to download a music record to your laptop, tablet, PDA, phone or MP3 player, and this reduced dependency on an underlying infrastructure, a carrier or medium like a CD, makes distribution as easy as typing in the right address.

We have a number of medium-long term trends here, which give shape to a general setting of how work is going to evolve. As technological progress continues to happen in the areas of Information Technology, nano-technology, bio-technology and robotics, the front office white-collar worker is going to experience within a short period of time what has happened with the blue-collar worker in the factory hall. Standardization and reuse have pushed technologies towards local maxima of interchangeability such as electrical power sources and wireless communications, and all this cooperates towards workplaces which are both technically and functionally more or less “plug and play”. What does this have to do with “difficulty level”? Well, if distributing music has become so easy you don’t need to go to a physical music store anymore, any work related to the latter is becoming redundant, unless it complies with certain exclusive qualities appreciated by music lovers, or music freaks, but the general music store is no more.  Also with automated tasks, if built-in workflow in an ERP system has the approval hierarchy worked out correctly, as well as authentication and authorization, there is no need to send paper copies throughout the company anymore, and the mailroom gradually becomes less important. If the ERP system has automated auditing, archiving and retrieval of such information, storing it on electronic media which have a longer lifetime than normal paper, there is no real need any more for manual archiving and in most cases no knowledge is needed on the Dewey Decimal Classification system for libraries, unless for using a common language between different systems.

Likewise, all kinds of tasks have gradually become automated and easier, such as electronic tickets for air travel, online booking of a hotel, or starting a nightly batchrun for a financial report, while word processing tools allow for endlessly reusing copies of the same document, automated spelling checkers are built into it to help correct spelling errors, in as far as EDI and document processing haven’t replaced these activities yet with fully automated procedures. Not only has this reduced the associated workload for any paper-based company communication, it also has lowered the required skillset. These tasks have a maximum difficulty level, and automation has been able to encompass all this complexity and there is no replacement needed for any exclusive variations. These tasks have simple become part of the ‘digitized background’, and are not arbitrary, self-learning chatbots are already replacing helpdesks and are on the verge of having multi-lingual capabilities added which allow cross-translation between some forty widely-used languages without a significant impact on its performance, which is seemingly natural enough that end-users anthropomorphize the ‘being’ at the other side of the phone line.

If this is not enough, smart search engines can load up with specialized dictionaries and are able to perform legal searches retrieving relevant information with a 90+% accuracy. In this case it becomes socially irresponsible not to make use of such facilities, as the best scores obtained by human searches top off at 60%, and composing a valid case out of the right set of laws represents much of the art and wizardry that a legal representative has to offer, so it is obvious that any client wants this level of performance. The caveat is that legal searches is about 90% of what a law firm does, most lawyer work is simply gathering supporting information with the right level of understanding and there is not some other hidden and neglected task waiting in line to replace this activity. Again, the task has a maximum difficulty level and although of course additional functions will be added, the core task itself does not need much improvement anymore, at least not much more compared to the last 40 years which have added to gradually realizing this automated task, but not to worry, current systems are designed to self-monitor and try optimize their tasks. Automation has started automating itself. Digitization started to kick in around 1995, with noticeable growth in labor productivity. Estimates are that the fully automated economy will surpass the physical economy in size in about two decades. As W Brain Arthur would like to stress “the precise figures can be disputed, but that misses the point. What’s important is that the ‘second economy’ is not a small add-on to the physical economy.”

What does this all mean for the future company, and especially, what does this mean for a company now? Well, for one it means that people are both underutilized and overutilized at the same time. Overall most people have been treated as interchangeable machine parts, and people have been evaluated according to the required functionality of these parts in the context of the aggregated machinery as well as how the parts relate to each other, or in systems engineering terms; the portability and interoperability of someone’s activities are generally expressed in domain-specific cognitive skills, and the behavioral interpersonal skills. But if you’d take the average job description as used in recruiting or human resourcing, and erase the domain-specific adjectives, a fairly nonspecific picture arises, one that could apply to just about anyone if it were not for the difficulty level. That is because many jobs have actually been converging towards a fairly similar skill set, and besides the domain-specifics have become “asymptotic indistinguishable”, in the sense that the “just-noticeable difference” between one skillset and another have become so small in an absolute sense that it often does not matter that someone may be better qualified in a relative sense.

The competitive advantageous rarity of the actual job, as a unique collection of tasks, has saturated and any extra differentiating effort is showing diminishing returns, so this extra effort may be of better use somewhere else. And as more and more tasks become automated the mix of aptitude and attitude has tipped the scales towards the latter, which are generally plotted out with the ‘big five’ personality traits:
1.    Openness to experience – inventive/curious vs. consistent/cautious.
2.    Conscientiousness – efficient/organized vs. easy-going/careless.
3.    Extraversion – outgoing/energetic vs. solitary/reserved.
4.    Agreeableness – friendly/compassionate vs. cold/unkind.
5.    Neuroticism – sensitive/nervous vs. secure/confident.

Of course these characteristics are contextual and depending on the job you’d want people that have contradictory scores for any of these, either within themselves or within the team. For example, ensuring adherence to safety procedures in a nuclear power plant are best not left with a cautious bureaucrat but may be too dreary for someone inventive, so instead of having some symbolical function of security inspector it would be more efficient to spread the task over an entire team, as well as automated procedures. It is not needed anymore for a single person to fulfill such a role, as with increasing computing power also translates in a reduced need for delegation in a company’s organization, as employees can now be involved directly with most decision-making processes tasks. Either way, effectively these characteristics need to be seen in the context of the immediate team and the overall organization in the sense of ‘company culture’, shared values which are best described with two polarities: flexibility and discretion versus stability and control, and internal focus and integration versus external focus and differentiation, which were found to form four important types of culture:
1.    Clan Culture – Internal focus and flexible – A friendly workplace where leaders act like father figures.
2.    Adhocracy Culture – External focus and flexible – A dynamic workplace with leaders that stimulate innovation.
3.    Market Culture – External and controlled – A competitive workplace with leaders like hard drivers
4.    Hierarchy Culture – Internal and controlled – A structured and formalized workplace with leaders as coordinators.

So, if the interplay between an organization’s cultural context and someone character are fairly easy to determine in the way they describe potential role that someone can perform, then why is recruiting and human resource management so inadequate in getting the right people for the right job? Are we using the wrong “trust rituals”? Are we using education and degree qualification as a token of someone’s acumen while training often orients on filling the holes in someone’s natural ability? Does that mean many people are actually selected on basis of their defects which they’ve been trying to straighten out? Well, research done by renowned psychologist Csikszentmihalyi on optimal performance (flow) showed that in order to be a productive creative only a single common attribute was uncovered; a minimal intelligence quotient of 120, which places the person in the upper 10% of the Bell curve. Of course, for every individual case there were sensible causal correlations which could explain why someone became a prolific high-performer, and circumstantial factors can bump up a score tens of points, but none served as a common attribute. In fact, much of the recent research in so-called ‘positive psychology’ indicate recruitment and resourcing not only use a large set of unsuitable tools to measure ability, both ‘hard’ and ‘soft’, but we are also making the wrong assumptions on personal motivation and a person’s attitudinal make-up by assuming a static model for the personal traits while not only are these dynamic to some degree, polar opposites occur in the same person and are very much intertwined with the context and group dynamics. If we try to find a minimum set of characteristics that define the utilitarian merit of a human activity, we’d get to a three-way relationship of play, personal recognition and general purpose. Each of these characteristics can be positive or negative, and diminishing or increasing, and we can see that even recruitment is a sort of play, a mixture of role play and sometimes iterated prisoner’s dilemma, where often the formality of the selection process leads to a de-individuation and dehumanization of the (un-)willing participant, which in turn has been reason for many recruiters and hiring managers to skill themselves in mild forms of hypnosis such as neuro-linguistic programming, another working pseudo-science which has gained a level of importance far beyond its range of effectiveness but at least tries to address the lowest level of play, attunement.

But wasn’t Human Resource Management something that one was supposed to do? Well, this snippet of common sense originates in the 1930’s, with the Hawthorne Studies, an nine-year long study concerning the productivity of factory workers in relation to e.g. the amount of light bulbs, distance to the toilet, number of breaks, etcetera, which had uncovered that the workers actually reacted on the attention given by the researchers and not so much on these circumstantial changes. Surprisingly for these early psychologists it turned out that working class people were humans too, something which appears to have not been all so obvious at the time. Along with the newly established compulsory education laws which were, due to the large German population, based on the first modern educational system from Prussia which in turn was introduced so as to produce more obedient soldiers and serfs, this was quite a breakthrough. Methodologies aimed to deal with “workforce management solutions” find their origin in practices that deal with tasks that are on the edge of mental retardation. The “difficulty level” of housekeeping or being part of a cleaning crew, expressed as an IQ, is about 50, which is about as smart as a parrot, chimpanzee or dolphin. It is no wonder that informal selection and ‘old boys’ favoritism produce better results than the formal ‘meritocratic’ procedures. Why staffing firms have taken off to become such a dominating phenomenon in addressing our labor requirements may be because their service is not so much about added value, but about minimizing the costs of failure. There is a ‘one size fits all’ market of undifferentiated commoditized skills, and the niche of high-end executive search firms, and in between we are just fooling ourselves into making use of facilities which have an efficiency worse than random chance but the industry as a whole has surpassed any individual measure while many depend on its mediation for their livelihood. The fact that things work out is mostly despite of the methods used, as the article that is being exchanged is people, people adapt, and can and will amaze you if you give them the chance.

That is also something not so apparent with recruiting, you would assume you want to work with the best, but in many cases a maximum IQ score is applied, under the argument that those with overly-high IQs will become bored easily and exhibit high turnover in the job. Another prevailing idea is that high-performers aren’t good as team players, and once having fulfilled a leadership position they are treated with the latest anti-heroism, which has nothing to do with antiheroic character flaws, but avoiding that project success gravitates around a single individual. This is seen as a risk during the project execution phase, occurring at the chaotic level 1 of the Capability Maturity Model, but it such unevenness is actually very normal within team dynamics and such 80-20 power law distribution should be made to good use on the road towards optimization, not sidestepped. The assumption of an even workload distribution is the anomaly, not the norm, and it is a lot easier to make a planning fit human activity than to have human activity fit the outline of a work breakdown structure’s box. In fact, recent insights indicate a combination of small-world networks and swarm intelligence is a more appropriate model for task allocation and project management, similar to how military units have adopted this model in a behavior called swarming. Gartner’s idea of “work swarms” is based on this, but similar to how people group activities and act like a swarm, so do the tasks themselves, beit in the process of being actualized or shifting position to be the next one on the work queue.

If traffic behaves like this, why apply a method that is more appropriate for a freight train? The illusionary simplicity of boxing in activities has given way for more biomimetic ways of task allocation, as the same technological trends which are changing the shape of work are also providing the key to several solutions, the push forward in complexity keeps pace in the problems it creates and the solutions it offers, but one has to keep up with its evolution. But as swarms go, permanent roles will be an increasingly rare phenomenon, which raises certain dilemmas for the traditional way that companies are organized as well as how traditional recruitment, staffing and employment arrangement are done. Having a large part of the workforce on the bench is like a professional army at peacetime, which may act in a preventive way by the impression created along with serving as a vigilant and prepared group of skilled people, but with every further act of preservation is distancing from its original function and functioning. Whereas for employees, beit short-term, medium-term or long-term, you would want to have them nearby in a sort of consortium which combines the roles of labor union, staffing agency, expert cooperative, mentoring, center of continuous learning, and a network for seed funding for those that desire to be an entrepreneur for a while. Instead of making such a clear but artificial distinction between contractor and permanent employee, it is much easier to work with different kinds of interim arrangements where someone can rotate between a select number of companies, jobs roles, challenges and even now and then try realizing their own dreams. Such a relatively simple model is held back by the practices of recruitment firms, in particular their enumeration, where it simply doesn’t pay enough to provide the extra effort.

On the other hand, it also makes sense for more flexible ways of organization and using proven methods like “value networks” and “strategic alignment framework” any organization and activity can be mapped out as part of a network organization which can manifest in any sort of hierarchical format, just not in an optimized way, yet. Every kind of organization is actually already in the process of becoming a fully dynamic network-centric service-oriented virtual enterprise, and this greatly simplifies certain assumptions and allows for an immediate adoption of a different ‘demand’-model, regarding a company as a network organization in transition, one moving towards reduced ideality where increasingly more of the design principles of the “Service Oriented Virtual Enterprise” are realized. In that respect HR is a function, a role and a responsibility, but not necessarily a craft, a person or a whole department, at least not in the context of daily business for most organizations. Besides the HR specialist, HR is to be a pervasive aspect within company processes. Instead of an imprisoning structure with a rigid hierarchy a company actually becomes a facilitating confederation of whichever function it needs to reach its set of goals. How a person fits within such a landscape, with modern tools it should be simple to apply fact-based continuous event simulation on sampling the interaction between a person, the team, the department and the particular project and see how this plays out. People can do amazing things, but it is not black magic.

The fact that traditional recruitment is more or less running towards its end can be seen with the current shift to domain knowledge, where an attempt is made to find and provide experienced specialists, with experience in the particular industry and the type of work involved. In most cases this is nothing more than automated keyword matching, some peer pressure, and maintaining an aura of trustworthiness. Now that groupware has evolved towards cross-company collaborative suites and these technologies have started to evolve covering different stages of a product’s life cycle, both from marketing and conception towards engineering, production and maintenance, more facilities are developing that can deal with ideas and meaning, and in order to speed up e.g. the bid process for outsourced work, similar features will arise for on-boarding and in-sourcing, in the form of automated story-boarding, where an avatar act as an supporting assistant similar to how wizard-driven development guides a novice through a whole procedure, starting from scratch and finalizing with a decent end result. Ideally, if any of the subject matter is new for the ‘employee’ this can be used to introduce new questions, ideas, approaches, which would never come up at a regulated brainstorm session but can still provide valuable input for this job or any future activity, and the avatar being self-learning, to improve the dialectic way of ramping up someone for the tasks at hand. As many a teacher knows, you can recognize the smart students by the number of questions they ask. Although, as John Taylor Gatto seeks to reverse, those are usually the students that retained that little vulnerable kid in themselves, who haven’t let compulsory education dumb down the wonder yet.

How to move ahead to get back to a more personal and humanly rewarding way of contracting, employing, cooperating and partnering involves revisiting the basic foundations of HR in the area of recruitment and resourcing. We come from an odd background full of formalized trust rituals to ensure that someone fits into a mold the way we have learned that someone should fit in in order to get access to ‘the tribe’, but we should instead learn from the Japanese management culture which is very informal, consensus driven and the tendency to treat employees as if they were family. Borderline familialism is a system that works, like a meritocracy mixed with positive favoritism, because even when we make an attempt to appear objective we neglect many of our built-in in-group biases which make it easier for us to recognize certain traits with somebody akin, than that we can officialize the mental leap needed to intersubjective anthropomorphization in a political correct attempt to avoid any sort of discrimination. This is not an attempt to make a case for forced non-discrimination or total laissez-faire, but in the approach suggested any personal characteristic is a skill or function, even gender, age, of ones place of birth. All such characteristics can have positive or negative effects depending on the context; even bias conformity is a positive treat when it reduces the need for communication overhead. As the recent Supreme Court ruling on gay rights shows, just paying lip service to gay marriage is not sufficient. One has to dare to go all the way, equal right are what is says on the label.

If, in an extreme case, a company, or an entire country, prefers nepotism to such a widespread extend it becomes a sociological trend referred to as amoral familialism, like in post-Mussolini’s Italy or post-soviet Ukraine, they should be free to experience the long term results of such dimwitted behavior as a society turns to a state of auto-cannibalism. Now that the babyboom generation has started to retire, societies at large are faced with inadequate pension plans due to increasing lifespans which put extra strain on generations to come, and although society eventually needs to adopt basic income schemes, not only does the pensioner’s income make a dive of one third, the ‘workforce slot’ is filled up with someone at the beginning of their career earning close to the minimal wage which may be even less than the pension. For countries with an aging population this means that more income will quickly return by being spent on basic cost of living and hopefully some of the purchasing power remains for the extras that make a country rich. Most EU countries have picked up on this and try to make people work longer, both reducing the pension burden as well as the double drop in income, but despite the added value of deep and varied experience and the effect this has on their own productivity and those nearby in the team, in the recruitment world many firms already avoid mediating for people as old as thirty, let alone forty. In hindsight we cannot but wonder why we ever adopted such inadequate means, which not only do not add value, but even reduce it. The value of homogeneity and heterogeneity are primarily context-dependent and instead of having these baked in upfront, it should be part of the matching process itself, we need to acknowledge and understand our biases, the goggles through which we see and valuate someone else, which gives a late justification for all the trust qualifications and rites of passage that are being employed to establish or verify a collective identity.

On one side companies will continue to evolve towards more optimal and adaptive formats, more like virtual business parks and marketplaces, and on the other side a community is evolving dealing with job exchanges and more informal yet more informative ways of resourcing. Setting up the foundations for these remain as neighboring activities, but these are expected to happen anyway, one way or another. But there are businesses possible around small issues with large consequences, such as addressing the ‘first scan issue’. The current way of selecting resumes of candidates who replied on a job advertisement results in the highly likely case of filtering out the best candidates. Due to the internet the number of candidates replying has increased one or two orders of magnitude and now often results in a few hundred replies, or a job request is addressed by searching a database containing many profiles. What even the most helpful recruiter does is print out the resumes, pile them up, and then spend on average ten seconds to scan the resume looking for similar experiences, background, education, residence, age, highlighted accomplishments, hobbies, and the general style, tone, and look and feel of the resume, and based on this matching process the aim is to reduce the pile to a maximum of five or ten possible candidates. Considering a pile of 200 resumes, this whole procedure takes more than half an hour of concentrated attention and a good understanding of all the aspects mentioned above. As a simple example, work in a cross-border region can be done by any inhabitant of the participating nations, whereas the average recruiter, if they don’t recognize the place of residence will most likely default to the country of residence and filter out any viable candidate that may live within a fifteen minute driving distance of the workplace. But how about all the nuances of branch and function specific expertise, on-the-job self-education, or those people without a degree qualification who proved to excel in certain areas at their previous employer and who grew to a leading position because of hard work, demonstrated acumen, and natural ability and who are deemed unfit for mediation because with the workload and issues faced at the previous workplace they never got around to work for a degree as well? Why should they anyway? The degree is to indicate a minimum ability, a door opener but has little practical meaning beyond that. But it gets worse. Often this ‘first scan’ is done by an intern or assistant and what they do is try to get “a feel” of the candidate. Tests have shown that they spend four seconds looking at the name, date of birth, place of living, profession, employer and previous employer, and if they spend a longer time, eight seconds, they look at the same information twice…

In general recruitment firms can’t make a valid case in favor of seniority, which is shameful. If recruiting isn’t much more than keyword matching, there are better ways to do it, less harmful, and a combination of fact-engines and reasoning-engines can greatly help out here. What if there’s a smart engine that can continuously tries to collecting and interpreting as much facts as possible to interpret someone’s resume and online persona, to get to a sort of label-free evidence-based recruiting. Like IBM’s Dr Watson or Autonomy’s ‘Intelligent Data Operating Layer’ a mix of general factoids and occupational specifics can be obtained by reading and analyzing several online encyclopedias and professional dictionaries. Decades of research and development in artificial intelligence, such as natural language processing, have taught that it is as much as what one builds in, but also what one leaves out. Simple evolutionary mechanisms allow such a system to grow a certain level of understanding which increases in accuracy when being able to process feedback and adjust its understanding based on this. Computing science and computing power have now advanced to such a stage a simple adjustable map of how words are related (if they occur often in each other’s vicinity etc.) can piggyback along on the underlying understanding and produce more accurate answers than any individual can. At the moment it is nothing more than a more user-friendly version of a polytechnic pocket book, but along with ability to provide is as-a-Service and its ability to learn from all users, it can rapidly grow and improve with every use. By using facilities like these we can augment our own capabilities and help introduce a more human and worthy means of cooperating.

A worthwhile approach is to assume that any specific person has evolved as the best answer to their own situation, in the sense that a person is an invention of itself. Taking the lessons of systematic invention methodology as a basis, people’s knowledge, skills and abilities can be mapped out in a value network along with growth indicators, growth potential and attractors (like current interests and hobbies). Using self-learning techniques a ‘first scan’ system can read up on business organizations, job descriptions, requirements management, impression management, business- and HR-related ontologies and whatever knowledge general and specialized sources like Wikipedia have to offer. In the end the functionality that the task requires and the functionality that someone has to offer need to get together so that it maximizes merit, by increasing the values of play, purpose and recognition, which includes learning, growth, increasing of degrees of freedom, where it helps developing a more abstracted set of expertise beyond a narrow specialism. In the end, any company’s survival is defined by the interplay of culture and strategy, and these are the sum-total of all the people involved, and even though people can externalize some of their being into automated tasks and procedures like a phone answering machine can reproduce someone’s voice, it serves best to act as if the company’s life force resides in the people. There is more than intellectual property alone, and although “heart and soul” aren’t quantifiable it definitely serves to give them proper recognition, and looking at Japanese management style that goes beyond a five-minute pep talk and some collective cheerleading…

Discuss

Tue Aug 19, 2014 at 09:04 AM PDT

Zen and the Art of Artistry

by Paul Peters

Recent attempts to establishing a contemporary art scene in China appear to be struggling with catching on. As far as commercialities go, enough dealers have an interest to sell, but it seems buyers are not equally eager. Although the market for luxury goods and fashion continue to grow with the obvious ups and downs, it appears craftsmanship is what Chinese buyers are more concerned about and not so much the contemporary characteristics that make contemporary art contemporary.

Growing a better understanding and appreciation of the animistic nature of Chinese culture may provide some deeper insight beyond the surface motions of politics, the economy and societal change. As the reemergence of Traditional Chinese Medicine since the 1950s shows many of Chinese customs are pervaded with a sense of cultivated shamanism. And even Confucianism, once thought to have replaced old belief systems, had simply embraced the preceding, aiming to address the finer nuances of sociopolitical ethics. Although one can ruin ones professional career by discussing such topics too freely, to the Western mind this should not be all too uncommon as even Christianity is an animistic mystery religion, in an anthropological sense. In fact nearly every belief system or ideology is animistic in one way or another, and modern “materialism” has only recently become de-spiritualized with a mix of Sartre’s bleak and blasé existential nihilism, the popularization of psychoanalysis in spite of Freud’s strong distrust of unconscious inner drives and the advent of modern economical sciences with Marx’s “historical materialism”.

Amidst of these meta-trends contemporary art has been shaped by anti-art movements preceding the Second World War. In Germany these anti-art movements were part of the Nazi regime’s organized attempts to rewrite culture and to enforce conformity by trying to ridicule individual expression. Architecture and sculptures were restricted to classical Greek, with heroic military themes for men and motherhood for women. Jazz and music from non-German composers were forbidden and graphic design and paintings had to fit the same propaganda. “Degenerate art” was the term used, both for their policy as well as a historical exhibition held in 1937 where the Nazi party’s efforts amassed. At the exhibition paintings were deliberately exposed in a disordered manner, jam-packed, sometimes unframed pictures, tilted and lopsided to add to the sense of chaos. The exposition was seen as a final blow in an attempt to reprogram public opinion, after which many works of art were carefully hidden in military bunkers and top officials’ private collections or sold abroad. Lesser valuable works were burned to keep the anti-art sentiment going.

These were dark days for social dynamics showing how people’s behavior can be molded with enforced self-policing, where one will try to uphold the other with rules that have been imposed as ‘the norm’. After leaving this period behind much attention was given to the societal function of art, and many artists developed an idea of sociopolitical shamanism, to provide shock treatment for the masses, to move ‘the public’ out of the conformity of consensus reality. Contemporary art in a way has been trying to establish an anti-anti-art movement but due to its reactionary nature has a localized, timely and possibly outdated significance. However, what people say concerning art and what they actually experience is something completely different, and while wrongly calibrated Mayan calendars allegedly close in on the next cycle of our collective evolution with our imminent destruction it may be time to return the muses to their respective arts and aim for a further synthesis of the figurative, visual and tangible.

After some sixty years of trying to educate, elevate and exalt ‘the public’, contemporary art still seems confined to a reasonably small group of artists, art historians and art critics who also make up most of the gallery holders, journalists and government subsidized artists. At the top of the food chain is small self-appointed self-glorifying art clique which actively agitates against it all, a counter-counter culture with anti-anti-anti-art movement tendencies, almost convinced their playful use of ‘the big lie’ somehow makes Plato’s ‘noble lie’ look like crazy wisdom. So far however, contrary to designer-dense ‘fast arts’, like fashion, jewelry, interior decorating, industrial design or creative marketing, the contemporary ‘fine arts’ fail to attract the ‘flight to quality’ which a crisis usually allows for as suppliers are trying to differentiate their offering. Obviously there is some distinction between amateur crafts and professional artistry, but as far as ‘real art’ goes, possibly the idea that beauty is in the eye of the beholder is only half the story.

As a reaction against the manipulation of public opinion during the anti-art era, it was though that art does not have to be beautiful. Confusing public opinion with personal taste, beauty was understood from an anthropological perspective, more or less defined by a distinctive socio-cultural context and while doing so mistakes uniformity for universality. Just because the definition of beauty is malleable doesn’t imply that our actual experience of it is. Studies in the areas of sensory perception, synesthesia and neuroaesthetics are gradually uncovering the biological foundations of our sense of beauty. A large many facets have been uncovered in which our experience is actually the same, why we all pick out the bluest blue or why we associate a “bouba” sound with a rounded shape and “kiki” with a pointy one. These are not social conventions based on some form of consensus. These preferences have a biological basis originating in the workings of our sensory apparatus and the way we form such a sound. In other words, eventhough slight individual variations occur the correspondences among our intersubjective experiences are highly coherent.

If that is so, then obviously there is a biological basis for an artist’s style. And so, besides the cross-cultural influence of African art on a Picasso he also suffered ocular migraines which cause sight to mix with underlying archetypical abstractions. Monet’s case of cataract is well-known, Degas’ fading eyesight due to retinal degeneration a little less. Then we have Van Gogh hallucinatory chromatopsia or even a mild colorblindness, Rembrandt’s aging vision, Cezanne’s nearsighted and Vermeer’s astigmatism, although the latter may have been due to the use of a Camera Obscura. Maybe this demystifies the idea of the sole genius, but it also demonstrates to the artist’s experience is in fact very close to our own, it is associatively affine.

Contrary to most contemporary art these early artists are indeed popular in China and other Asian countries. And also a select few modern artists are indeed welcomed with open arms, while these have been largely neglected in the contemporary scene. The reason seems simple, as the sociopolitical role of Chinese art, even though clearly used for reasons of propaganda, was already established. Art and crafts have been embedded within the Chinese spiritual world since the dawn of time, while practices have been cultivated in formal systems like Feng Shui. While Western society continues to struggle with materialism and a possible behind-the-scenes puppet master who uses some illusionary tricks to make us believe we have free will, Chinese society does not deal with such issues. Although, obviously, passing through the doors of perception is a shared hurdle. Whereas contemporary art tries to glorify individuality in a disconnected world, other arts sought for the universal truth of beauty in a world of interwoven intersubjectivity. Art is grace, dé, 德.

At the root of the Taiji, Li and Qi unite and endlessly morph in conjoined pairs of pattern and energy, order and chaos, space and time. These early artists were able to capture life’s vibrancy, work with it in ways and such intensity that it makes people experience something more. Art is a physiological experience and has only little to do with how one art movement positions itself amongst others, or what some accompanying piece of paper tells you why you should think something is artful. Art is medicine. Art has been a shamanic endeavor all along, and we’re nearing an era where we are rediscovering what makes this world a magical place. Art rages on at the fringes of reality. So, if you really think that much of contemporary art is ugly, that is ok, because it is. And if it makes you feel sick in some way, you may consider a career in Chinese Medicine, because you have a talent. For what it’s worth, you could even become an artist.

Discuss

“Make things as simple as possible, but not simpler.” – Albert Einstein

Gone are the days when automation could be neglected. As manual labor has become mechanized and factory halls have gradually become robotized, so have many mental tasks and administrative work processes gradually become computerized and increasingly absorbed into the digitized enterprise fabric.

Not only has this many CxO trying to drive down the cost of ICT with the effectiveness of an EU austerity package, many companies have cultivated a deep divide between business and IT, as the following story shows:

A man is flying in a hot air balloon and realizes he is lost. He reduces height and spots a man down below. He lowers the balloon further and shouts: “Excuse me, can you tell me where I am?”
Says the man below: “yes, you’re in a hot air balloon, hovering 30 feet above a field.” “Aha. You must work in Information Technology” says the balloonist.
“I do” replies the man. “How did you know?”
“Well” says the balloonist, “everything you have told me is technically correct, but it’s no use to anyone.”
The man below says “Aha, so you must work in business.”
“I do”, replies the balloonist, “but how did you know?”
“Well”, says the man, “you don’t know where you are, or where you’re going, but you expect me to be able to help. You’re in the same position you were before we met, but now it’s my fault.”

Although not an often discussed topic systems design has been evolving with some significant steps and design patterns are common tools for a modern IT Architect.

The use of patterns originates in the 1960’s with the work of Christopher Alexander where his Notes on the Synthesis of Form had been required reading for the students in computing science, and since the publication of A Pattern Language in the late 70’s using design patterns has become increasingly common and one can easily apply them outside of the ICT domain. For example, the larger a company grows, the more time is spent on coordination of the activities in and of themselves, involving all sorts of delegation and specialist functions. Increases in volume, size, scale, and scope of factories, warehouses, distribution centers or the software application landscape, any changes in any of these aspects add to the overall complexity of closely-knit mutual dependencies. Here we focus on these dependencies, to make it clear that quantity has a quality all its own.

When a small company scales up, there is a surprisingly high chance they simply collapse under the weight of its own unregulated business if they don’t bother to take a step back. This is the so-called ‘big ball of mud’ design pattern, or better, design anti-pattern. Global companies have learned their lesson and maintain worldwide consolidation programs to continuously reduce not only the cost of doing business, but also to reduce the overall complexity, moving from a possible ten thousand different applications to just several hundred. This simplification is recognized as the greatest challenge in the coming decades, where the most dramatic reports indicate that some two-thirds of CIOs expect a fatal crash within the next three years. “Fatal”, meaning a loss of several business days, or more.
Not only do they have to deal with very many different applications, but these applications are entangled also in a variety of ways, sharing the same customer details or being part of one or several business processes, so that processing runs need to be coordinated in serial and parallel patterns, to ensure that the right task happens at the right moment. If the average system has between ten to fifteen connections with another system, there may be 50,000 to 100,000 connections in total that have to be dealt with.

While already an ominous task, with increased globalization the demand for zero downtime is increasing, as well as functionality that spans and unifies different applications into a composite whole. This “dependency hell” is for many companies reason enough to apply a Schumpeterian “creative destruction” to their tools. To let them continue as-is, run aground, and then replace and revamp the lot. That is much cheaper than trying to create some order and maintain it. Even though a temporary simplification may occur after five or ten years, the company is likely to be drowning in complexity again. This applies to all sorts of automation, both the computerization of mental tasks and the mechanization of manual labor, as most companies fail to achieve the balance between optimization and adaptivity, and they organize their business according to a mass-production ‘economy of scale’ model of a highly optimized and entangled production line. When a new product is introduced, instead of re-using parts of the existing production line (economy of scope), a whole new production line needs to be introduced. The same happens for companies as a whole, and even entire markets.

This is why manufacturing during its mega-shift from manual to robotics has been hopping all over the world towards Greenfield regions where the cost of setting up a business does not have to carry the legacy costs, and all the investments can go to the newest equipment. You don’t have the costs of breaking down an old office to get the space to build your new one. This usually can be done in a group formation, as grouping much of the supply chain can leverage enormous logistical and communication advantages. These geo-economical shifts will continue until the competitive advantage diminishes as manufacturing itself reaches a stage where the majority of the tools have become interchangeable ‘general purpose’ devices, similar to a computer that can emulate just about any other tool.

As a design pattern, as economies of scale focus on sheer optimization the resulting system will converge towards maximal complexity, whereas with the focus on adaptivity economies of scope converge to a collective of parts, each at a minimal level of irreducible simplicity. It is important not to simplify ones ICT to the assembly line model of a factory hall, just because both are ‘technical’.

With the increased digitization of work processes, a top-down approach such as IT Governance is vital to establish transparent accountability, and ensures the traceability of decisions to assigned responsibilities. Governance is not just a strategic tool, but a tactical means which allows for a high level of flexibility. Flexibility leads to agility, scalability, reliability, reduced costs, increased security and operations.

Moreover, with the increased possibilities offered by digitization, companies are increasingly reflecting the actual value networks in both the way their information systems are organized, or vice versa. Additionally, company formats are increasingly moving towards being a small marketplace on its own, and when the yellow pages are interactive enough to form a marketplace itself, companies will be able not only to register a set of functional offerings, such as bookkeeping, distribution, warehousing, industrial design, repair services, but companies can choose to join forces in a collaborative distribution network, a cooperative virtual warehouse while other companies can e.g. choose to spin off a successful department and offer collective purchasing services to others.

IT Governance, albeit a top-down approach, can very well work with parts that manage themselves. Instead of a static blueprint which is aimed to pre-scribe how things ‘should be’, one can approach Governance in a much more dynamic and involved way. One can do so in three different phases. The first one leans on a system management solution that has matured during the last 15 years and has now become available as Application Discovery and Dependency Mapping. Such tools create a real-time interactive map of applications, interfaces, functions, scripts, descriptors, services, and infrastructure components—and the dependencies among them. When combined with simple search features and recommendation engines it becomes easy to invert the situation of the data center. A reconciliation program can help clean up the mess and create some order. After an initial quick-win bulk-load a repository describing all functionality will continue to fill up while the recommendation engine offers bits of work according to an overall improvement program to maximize impact, so that renewed order and improvements are re-introduced in the IT environment. With meta-programming tools doing the reverse translation, a developer/operator needs to know just one or some programming languages; the rest is translated by the tool to the language-system combination, so that even relatively unknown systems can be re-injected with new functionality.

The second phase involves query-based monitoring and management. Using a centralized repository and dependency injection it is possible to encapsulate a system with a ‘tag cloud’ of descriptors and control points. This simple approach allows for a federated approach, linking systems together as if a virtualized whole, allowing for consolidation, rationalization and virtualization. This can result in coordinated synchronized processing (faster time-to-market), smart provisioning, downtime optimization, improved corporate scheduling, easier maintenance and upgrades, easier matching with system interdependencies and interoperability. Furthermore it allows for a well-integrated approach combining Business Process Management of work streams with underlying Business Service Management of activity streams. Minimizing operations overhead while introducing smarter usage leads to both cost reduction and competitive advantageous usage.

The third phase involves an emerging approach in IT Service Management, a mix of Collaborative Service Lifecycle Management and machine-learning capabilities. Rapid uninterrupted improvement cycles can be realized via closed-loop end-to- end issue management approach. Typical improvements claimed are a 60% reduction in Mean-Time-To-Resolution, a similar reduction in problem resolution (without manual intervention) as well as a large reduction in manual effort. What previously used to be representatives and experts from separate departments, embedding in such goal-oriented and rapid communication cycles allow for the appropriate setting for a faster, iterative and incremental agile software delivery model, one where everyone becomes part of the same team.

Bringing digitization in line with corporate strategy can be an overly complex task, especially when outsourcing deals have broken the chain of experience and too much critical expertise has been externalized. Yet, there is a fairly straightforward way to regain control over one’s IT environment without being faced with an ominously large program. One can automate automation, and by using several modern artificial intelligence applications much of the effort can be reduced by simply automating manual tasks while at the same time facilitating both IT and business requirements. If there ever existed a chasm between these two worlds because the complexity has become unmanageable, this can revert the situation. There is no “IT vs Business” or “Business vs IT”, there is a communication gap, but one that can bring them closer, not further apart.

Discuss

Sun Aug 17, 2014 at 09:01 AM PDT

Next Generation Anger Management

by Paul Peters

“When I look back on all these worries I remember the story of the old man who said on his deathbed that he had had a lot of trouble in his life, most of which had never happened.”- Churchill

Nearly twenty years ago something happened which to this very day still shocks me. At a lake in a park in the city i lived at the time a Moroccan girl had fallen in the water and was drowning. The lake wasn’t all that deep and whenever she submerged she still was able to jump up from the bottom and shout for help, but as having swimming lessons is not as normal in Morocco as it is in The Netherlands she did not know how to swim. During some ten minutes a group of some fifty people had gathered. Alarmed by her shouts they would shout back to her what to do, gesturing swimming motions and talked among each other that something must be done. Finally someone on a bicycle came along, saw the girl, saw the agitated crowd and realized she was drowning, stopped, took out his wallet, took off his watch, jumped in and saved the girl.

The shocking aspect was not so much the total discrepancy between herd behavior and individual, but how easy it is to become trapped in the social dynamics of such a herd. If this guy had not been on a bicycle instead of walking, acting in a 20 km/hour mode instead 4 km/hour, he would have been quickly absorbed into the collective decision making of the growing crowd and chances are nothing would have been done, and the girl had drowned. Becoming an accidental hero may not just be related to having an outsider mentality, unless there was something distinctively rebellious to the fact he was cycling in a park, but it was really related to the physical improbability of his partaking in the crowd formation. The normality of his heroism, and the seductive ease of adopting a role in an anonymous crowd, was both encouraging and disturbing.

Of course, in the media the collective trauma was dealt with in another way, calling for action, public education in the form of mandatory swimming lessons and advertisement campaigns concerning personal responsibility and how to use it, but the basic situational context of the circumstances offer some astounding insight. Just as the “banality of evil” is that it is simply the neglect of doing something good, doing something exceptionally good is a natural thing to do. And if you think you are part of no herd, you are actually part of the circa five percent of people who think they are not part of a herd, the non-conformist ‘alternative lifestyle’ lifestyle profile which has been used for demographic profiling for government policies, sociological forecasting studies for health insurance, pension funds and consumerist marketing since the 1950s. Maybe it is only the one percent sociopaths who are truly free in this sense, but as Jared Diamond figures in his well-researched “Collapse: How Societies Choose to Fail or Succeed” the people at Easter Island were no sociopaths or psychopaths. Still, when Europeans first arrived the island’s population had dropped to some 15 to 20 percent of just a century earlier. There was no “chattering class” or “silent majority” on Easter Island but they simply ran out of wood. Originally the island was covered with a tropical rainforest, but after some four centuries of a thriving and peaceful coexistence of the several clans eventually someone cut down the last tree. With no more trees left, they could not build any more houses, they could not burn wood for heating and cooking, they could not build boats for fishing. Isolated in the South Pacific Ocean even the nearest neighboring island was already two thousand kilometers away. And so, after making just about every other animal species on the island extinct they turned on the only remaining source of nutrition, other humans. When finally the first Europeans landed the era of cannibalism had come and gone and the inhabitants survived on some rudimentary farming and chickens, a diet only sufficient to support and sustain a few thousand inhabitants.

Although the news often tries to prove otherwise, surely we can do better than any “creative destruction” and “Malthusian catastrophe”. Yet our collective arrangements use outdated views which are not only wrong but which are self-fulfilling too. Many government policies are based on game-theoretical approaches, large-scale rule-based decision support simulations which aim to balance possibly conflicting interests and predict a more or less certain outcome. However, biased assumptions have trickled down into the basis of game-theory and eventhough John Nash later corrected his original work these models still assume competitive drives involving “rational self-interest”. Occupying space is not “rational self-interest”. Spatial individuation is a way for an organism to optimize coordination overhead by compactification and metabolic burning rate while sustaining a certain degree of autonomy. If the resource usage of wireless communications would be less than that of a continuous connection we’d use that, as is the case with smell, sound and vision.

‘Autonomy’ can be interpreted as self-determination yet increased understanding of Darwinian evolution clearly shows that ‘natural selection’ moves towards increase in diversity, where self-determination is a form of negative selection and diversity of positive selection, just like Isaiah Berlin’s positive and negative liberty describe two sides of the same coin. If we then assume that individual sovereignty only has significant meaning within the context of a group, then game-theory’s predictive power comes from its ability in framing multiplicity, without any deeper assumptions besides the irreducible constructions during the game itself. These constructions, the patterns appearing during gameplay, are analogue computations which enact and embody certain general functions, such as queuing up at a car park is a way of serializing incoming traffic. Nassim Taleb’s ideas on anti-fragility do indeed indicate that diversity is a much stronger trend than competition or the ‘struggle for life’. But if that is so, then it may be much more worthwhile to extend consider that Darwinian evolution complies with certain features of redundancy, fault-tolerance, error correction, failover, all hard lessons learned in the design of computing systems commonly known as “Redundancy, Availability and Serviceability” (RAS). Irrespective of any motives of individual participants, the game they play is indeed is a form of “projective determinacy” as the evolving construction of the play itself is what the game is about. It does not make sense to make assumptions of deeper drives like “rational self-interest” from which mutual reciprocity emerges if it is more adequately explained as a way of self-dual error correction.

George Soros recently wrote about his conceptual framework for his investments where he aims to map out the dynamics between thinking and reality. Leaning on a “human uncertainty principle”, based on the twin pillars of fallibility and reflexivity, he has managed to create a predictive system where the smallest irreducible human unit is not the individual but a small group. In what Soros calls “interference reflexivity” he maps out the interdependencies of people’s cognitive function and manipulative function and in doing so he is able to precede and embrace Daniel Kahneman’s distinction between reflective and reactive thinking functions as used in behavioral economics. As Soros writes “Economic theory has sought to imitate the natural sciences, particularly Newtonian physics. Consequently my conceptual framework is in direct conflict with mainstream economic theory […] Mainstream economics has pursued timelessly and universally valid laws whose validity can be tested by reference to the facts. I contend that the facts produced by social processes do not constitute a reliable criterion for judging the validity of theories… […] … social phenomena are easier to explain than to predict. The past is uniquely determined while the human uncertainty principle renders the future inherently indeterminate. That is not how Newtonian physics works. […] The process involves reflexive feedback loops between the objective and subjective aspects of reality. Fallibility insures that the two aspects are never identical”.

Using his framework Soros has developed a boom-bust approach to financial crises, which is more or less the opposite of the equilibrium focus in economic theory. This ongoing recalibration of two way communication is much closer to the overshoot and collapse dynamics that is observed in normal signal processing and that most electrical engineers know about from experience. And likewise, the prevailing trend and subjective (mis-)interpretation mutually reinforce each other until they grow apart where it becomes all too apparent, and this discrepancy finally grows beyond an inflection point where either the misconception reverts towards the trend again, or vice versa. Sounds logical, no? Well, yes, it is. You can even mold it in mathematical formulas and run computer simulations, and it has made Soros a very rich and influential man. But it is surprising to see how extraordinary unusual such an approach is. Whoever thought that common sense would be so uncommon that most people cannot distinguish between something complicated and something complex? Many people mistakenly confuse simplicity and simplistic, something easy and minimalist compared to something one-dimensional and unrefined. Or as Warren Buffett “Being a successful investor is not about having a high I.Q. but it does take a temperament that’s willing to step up and actually act. I always tell people, if they’re going in the investment business and you’ve got a 160 I.Q., sell 30 points to somebody else because you won’t need it.” This is good solid advice, but being both street-smart and highly intelligent doesn’t seem to have hurt either one of these investment giants.

So yes, when one verbally or physically drives someone in a corner, obviously spatial constraints become an aspect to be reckoned with, but it doesn’t explain the bystander effect or any auto-cannibalistic withdrawal that happens when society’s fabric unravels by virtue of hidden distress. If we know this, if we consider that people at the EU and national governments know this, then where is the quality effort that we expect from them? Can we consider inefficient governmental policies, like an overemphasis on austerity, a criminal offense? Of course, different interests may favor different approaches, but where does it say these have to be mutually exclusive? Austerity and nearly fixed currency exchange rates favors an economical model with a high degree of foreign trade, especially if the local added value is focused on assembling and finishing already nearly completed products. Austerity seems to have helped pulling the silk route a few seaports up North, yet while automotive manufacturers continue to squeeze down on domestic and neighboring suppliers, customers in large emergent markets like China do not seem to maintain their enthusiasm to pay double the prices compared to other markets. International trade may seem a two-way street, but in the modern globalized world indirect markets can chain up and bypass such preferred supplier arrangements, and when information can flow freely it doesn’t take a rocket scientist to figure out it is cheaper to buy a luxurious BMW in the USA and import it into China than buy it in China where it may even be produced by a nearby factory plant. Eventhough it may have a fleeting appeal as a status symbol, it is not an ultra-luxury investment as a top range Italian car.

Of course, it is more than understandable that Germany has little desire to pick up the tab for governmental malpractice of Berlusconi, Craxi and the likes, but it may be noteworthy that most struggling economies in the European Union have had to suffer with dictators or military regimes until about forty years ago. As Germany may very well know, reshuffling alone doesn’t make the deck of cards go away. Maybe a different game can be played, one that is not so much based on collateralization of real estate and value goods, but one that like Soros’ framework addresses a continuum spanning the social, financial, economic and political spectrum.

But we know all this, or at least we should. Ever since Jimmy Carter’s groundbreaking interview with Playboy magazine in 1976 it has been clear to what extend the public media can influence voter’s behavior. It hardly had anything to do with the democratic ideals of rationality and by the time Thatcher and Reagan were elected most of their campaign was written out by advertising agencies. What was once called ‘propaganda’ in the period after the First and before the Second World War had become the norm, and nowadays popularity ratings seem to dictate national politics as if we’re dealing with a hit parade. Still, despite a Berlusconi’s abuse of his media empire to serve some unclear political purpose as Agnelli’s kingdom slowly but surely fades away, this totals to less than 1% of Italian people and austerity is not only suffocating countries which have a different economical mix but is also causing people to kill themselves. Who’s fooling who? We know economics is part physics and part psychology. We just don’t know which part. Even so, with such a lack of best effort shouldn’t there be a “Good Samaritan law” for politicians? Is the stupidity of negligence a crime?

While the USA shuts down large parts of the government to deal with ideological hijacking by a small group of hardcore fundamentalists caricaturing the anti-slavery activists who founded this “grand old party”, it may be a comforting thought the traditional standoff at high noon leaves little room for playing peekaboo. Well, anything better than having the whole parliament held hostage by a narcissistic media mogul with the fading charm of a rubber ball as slowly but surely his chemical virility turns toxic. Modernity serves us with a noblesse oblique if climbing the social ladder is based on nepotism and mutual secrecy, eventually oligarchic selectivity will filter on dirt and shit floats up. Alas the only noticeable trickle-down effect is reserved for the occasion someone in the penthouse suite flushes their toilet and leaky pipes cause the basement to overflow. Usually this situation doesn’t last for more than a few generations, at some stage as one generation replaces the other, all what makes some noblesse special is their artificially perpetuated exclusivity and in turn the very survival of their self-licking ice cream cone is focused on trying to retain that exclusivity at the expense of any oblige that made them entitled to be considered noblesse… However, some good news, it looks like the steady sale of political Voodoo dolls during the last couple of years is starting to work, first Sarkozy and now Berlusconi. Yes, “patience is bitter, but its fruit is sweet”, although, whoever said “it’s easy to find reasons why other folks should be patient” may have been diplomatic advisor for the construction mafia’s political offshoots like Lega Fnord.

Italy is not the only country dealing with incomprehensible government policies. As a matter of fact, pretty much the same sort of political dynamics are happening all over Europe, as if some prefabricated party-based framework has been copied many times over, only slightly adjusted to the locale taste. Every country has their party originating from the unionized labor movements, a party which pretends to be more business oriented, a party for Christian values, a party for more extreme post-Marxist socialist values and some outspoken mudslinger who tries to stir nationalist feelings by acting as a sort of miscellaneous wastebasket for all the people that do not agree with the current state of affairs but don’t know what to be in favor of and mistake opportunist pseudo-indignation with actual concern. Most parties don’t seem to exist for a reason, not anymore at least, but as a viable justification. It is a pattern repeated all over Europe. In many aspects similar policy changes pop up at one time or another, seemingly applicable for the country at hand but still with a large many shared commonalities. You’d nearly think that they talk with each other outside of the showy events in the newspapers… as if they have acquired the power of telephony or even email, or have “behind the scenes” gatherings in the city of Brussels. For reasons unexplained local politicians appear to have forgotten about the 1993 Maastricht treaty which officialized their participation in the formation of the European Union which happened in late 2009. In effect this means sunsetting the ‘nation state’ as introduced by Napoleon Bonaparte as administrative districts of the Greater French Empire in the early 1800s. Two centuries to improve on the legal reforms realized by the Napoleonic Code. It is not so much the variety of geographical regions but the borders dividing them.

Ever since the early 1700s, when the emergence of both daily newspapers and the parliamentary system in Great Britain coincided, these two have shared a functional overlap. The parliament is meant to act as an ongoing “discussion” concerning the rules of governing a country, a social programming language, but whereas the ICT industry has Moore’s law outpacing Wirth’s law claiming that “software is getting slower more rapidly than hardware becomes faster” it seems that politics has been absorbed by public media, with Berlusconi’s game show on one end of the spectrum, and the Northern European talk show on the other. Maybe it is due to the long cold winters imposing a shared need to survive as a small cooperative community that encourages the Northern tribes’ rationalization bias, where they tend to persuade oneself that something reasonable is also of good value, a habit fueled by a metacognitive inability to recognize their own mistakes and a low tolerance for ambiguity. Instead of heading for the streets and causing a riot, eventhough governmental spending cuts have been at the top of the agenda since the 1979 energy crisis, whenever “the market” is mentioned an ingrained conformity to peer pressure takes over and the “law of supply and demand” is encircled by an authoritative halo. Maybe it has gone unnoticed but as far as public administration, public facilities and similar community endeavors go, the ‘powers that be’ pretty much constitute the entire ‘market’. Ministries, charity foundations and NGOs don’t really have any market dynamics to speak of and as such monopolize their own service offering by default eventhough government policies are trying to enforce a more business-like approach.

And so, if we look at the low lands, they are focused on cost cutting to such an extent that they are suffocating the country’s potential. Despite the BeNeLux region having a GDP of a trillion euro with only 28 million inhabitants making it as rich as Japan, Switzerland or the USA, the economic fabric seems to be losing elasticity. Highly-indebted households have slipped back down into the lower wealth class. The share of the population with low financial assets has quadrupled since the end of 2000, with the corresponding figure more than doubling in Norway and Sweden. Reminiscent of the sturdy grasp for “austerity”, the trend shows that excessive debt poses the biggest poverty risk. Which is of course obvious when primarily focusing on collateralization and not giving people and small businesses a fair chance to recuperate from the hit they’ve taken in the aftermath of the financial crisis. But to illustrate how incredibly wrong today’s nationalism is, it may be worth considering that trade relations between the Netherlands and Italy can be traced back to early Roman settlements nearly 2.000-2.500 years ago. In fact the European landscape shows a whole band following the great rivers. The “blue banana” is a highly dense urban zone from Liverpool, Manchester, along the canals network to Greater London, across the Channel and following the Rhine, across the Alps and onto the Po Valley to cover most of Northern Italy. Housing about 110 million people and covering more than 2000 industrial clusters it forms one of the main economic backbones of Europe.

But that is not all, recent long term studies performed in both Finland and Belgium show that the middle income group is being pushed out due to increase in productivity of both the higher and lower income groups. As the higher income group is growing in productivity faster than the lower income group, the middle income group is largely pushed downward, eventhough both groups are actually growing in size. And this is nobody’s fault. Like with game-theory we have here structure without underlying motives. Of course personal motivation matters, but as long as group size outnumbers individuality it can be molded in a certain direction. If we take these social dynamics and add technological improvements to the mix, where by now a 100 person workforce can do what took 5000 people back in 1950, we then see that as productivity increases we need less and less people to perpetuate the sort of society that has brought us to this stage. One of the surprising effects of the post-WWII babyboom generation is that although diversity expanded due to the sheer number of people, in a pyramidal organization where seniority translates in vertical repositioning at middle management ranks in the administrative control flow, the age group between 45 and 65 tends to occupy most available openings for such a long amount of time that replacement skips a generation. Supply-side economics is a black art, but there is only so much ‘need’ for certain people at certain positions that it pushes out the next age group, generation X, or “the lost generation”, which does not have the same opportunities as the baby boomers because it are the very baby boomers themselves which are standing in the way of their next steps.

Today’s challenges are not the result of an ongoing spending spree or the lack thereof. It is essentially the recognition that top-down governance is failing to address society’s needs and the bureaucratic spasms of the last few decades in using shock therapy based on ‘public choice theory’ to reform public administration have failed. “The market” is an excuse for failing to adequately address issues for which the previous collective arrangements did work quite nicely, or maybe they did but needed a little adjustment now and then. By increasingly detailed top-down bureaucratic regulation, countries like The Netherlands has been suffocating its’ own people at the expense of opportunities for all. That is the core issue, the missing added value by the ongoing mechanization of behaviorisms. Not costs. But that’s ok, most people already noticed. We have left the 1930s behind three and a half generations ago, and according to the Flynn effect the average person now would be highly gifted by those past standards. Governmental structures are needed, because even in a bottom-up self-organizing scenario a centralized approach makes it so much easier to exchange information to everyone as fast as possible. Towns didn’t grow on hilltops for no reason but it makes ‘the news’ spread faster. We shouldn’t mistake something at the top of a vertical organization as being in control; it is a way to maximize the spread of innovation. We can blame politicians that all they do is talk, but that is their purpose. Mastery and leadership is something completely different.

Here, as politicians have gradually turned into accountants trying to straighten ‘the economy, it may be worthwhile to dive a little deeper into some of its workings. In any sufficiently cohesive commerce environment variations in stock and flow of resources will translate to systemic trade opportunities. Obviously some resources are made or found at a different location then where it is processed or consumed, so at one place there is a buildup while at another there may be a shortage.    Due to these stock and flow dynamics similar goods will spawn mutual race conditions, so that these goods interlock in a ‘game’ to maximize value. Iron ore from Sweden may be cheaper than that from China, simply because the transportation costs are lower. But it could also be that Swedish iron needs more preprocessing before it is useful as iron or steel, which could mean the Chinese iron could be considered equivalent if the sumtotal balances out. Such mutual races emerge from the evolutionary tendency for the utilitarian functions of any traded good to converge to universal applicability and interchangeability. This is simply due to economies of scale and economies of scope, where widespread reuse of a more versatile good is both economically more valuable for a supplier and a customer. Essentially it may simply be regional availability or temporal unavailability that makes a customer switch to a ‘competitor’ eventhough these two suppliers are not actively competing but may actually be more than satisfied with their part of the overall market. Either way, such stock and flow dynamics swarm together to form market segments, and these segments themselves will also tend towards universal applicability and interchangeability.

The ‘attractor’ to which such evolutionary dynamics converge to is a universal utility of value, a generally accepted asset that can be used to express value and store it as well. This is when “money” is born. And this “money” can then be used to trade just about everything else. And likewise for the EU, any country or trade system, we reach a maximum of interchangeability with a region’s financial system as “money” is its own adjacent possible. This “adjacent possible” is the potential, or even probable, next step of a system, like a pendulum swinging back when it reaches its maximum angle, an apple falling from a tree perpendicular to the ground or the initial move at a chess game being limited to a pawn or a knight, or ending with a stalemate. As “money” is a general means of exchange, even if the underlying trade system is basic and simplistic, or if it is sophisticated and complex, money will still behave like money. What is important here is that money emerges from a trade system and although it manifests as a separate thing and service it is wrong to see finance as something different from commerce. The two are intimately connected.

What can not only happen is that the behavior of a random system shows a self-excited attractor, but that this attractor itself is complex enough to be capable of universal computation, that in essence the attractor itself it versatile enough to simulate other systems, like a computer does or a video display to some extent. If the system from which such an attractor emerges is sufficiently simple, the attractor reflects back into its originating system and manifests itself through hierarchical organization of the systems’ parts. This means that second-order cybernetic coordination can emerge from a self-organizing system and it manifests itself via the information flow about the system as expressed in the systems’ own organization. In an even more complex scenario the self-excited attractor basin which itself is capable of universal computation, can have such complexity that it spawns a nested attractor which is also capable of universal computation. This is where a system becomes ‘spontaneous’. Try to follow this hierarchical tree of nested coordination, it shows interdependence between parts and whole similar to a parallel rewriting system, such as Lindenmayer Systems or combinatorics of super pseudorandom permutations. It is expected a behavior similar to the logistic function occurs and bifurcation to happen and run wild after some three iterations. Deterministic but unpredictable, this is the edge of a combinatorial explosion in phase space which acts as a systemic horizon of possible configurations. In other words, self-excited nested attractors smear out and form a blur. In the case of an apple falling, this may involve unexpected interference such as sideways wind or someone catching it. In the case of chess, the number of possible games is estimated at 10^10^50, which, for all practical purposes, is so large that no chess master need to worry about unemployment any day soon. Writing down above number alone would fill the entire universe with numbers, twice.

For trade systems, money fulfills that role as a shared value horizon. But money also works in a reverse way as the exchange of money is an irreducible simple trade event. Money is both an embodiment and an enactment and that is where it becomes even more confusing. Money is the natural consequence of any trade system. It is not separate from it, but it is closely tied to the potential and probable scope of the trade system it originates from. If the system is too simplistic, its resultant money is fragile due to a lack of diversity, but if the system is complex enough, the money is resilient. In that sense the versatility of money can be compared with a black mirror. It reflects the economy, but it is very hard to see to what level of detail. A sufficiently versatile money also become portable, so it can be used to express value of new trades by way of analogy. In a sense derivative markets behave like this, except that they are trading the news and not goods, and the speed of derivative trade has grown out of sync with physical reality.

If any trade network has its own “money” to express and measure value, we’re dealing with money as a pure transactional yardstick, but we also have money as a value store over place and time. That would be fine in the case such a trade network is self-consistent and sufficiently isolated, autonomous and independent so to say. But if we have a multitude of these autonomous regions and they trade with each other, their boundaries start to overflow and the networks mingle, especially when dealing with commodities which are an integral part of other products, like iron, oil or electricity. As long as regions are sufficiently mutually exclusive and isolated of each other’s external dependencies, one can solve socio-economical fluctuations by means of exchange rate. Yet if the regions are tied together, directly as neighboring countries like the Rhineland which already spans The Netherlands, Belgium, Luxemburg and the German Ruhr district, but which in turn is an integral part of the European “blue banana”, then such alterations in the exchange rate would feed back on themselves, either spiraling out of control or damping down depending on the overall climate. The only viable way forward is towards a single currency with local differences, advances or hurdles, expressed in price differences. Just like in a real “free market” economy…

However, with a single currency there needs to be shared financial systematics, as otherwise the many different ways that form an optimal local model are becoming dominated by the one that is dictating the pace for the currency. And with their large import-export oriented economical machine accounting for some 42% of GDP that is Germany, eventhough their total economy is only just 20% of the entire EU and about 80% of their exports are within the EU anyway. Because of the current confederal approach in the EU countries are assigned a political weight which leads to false equivalences and it deserves more attention to seek for forms of interest-based syndication, where different regions forms a cooperation so to cover each other’s weaknesses. Germany has a large export, an outflow of new relatively commoditized products, which has started dominating the EU at the expense of countries that are smaller or slower, or have their economy arranged in another way.

This would not be very problematic, but due to regional specialization this conflicts with the regional with the largest monetary flows, London. Local ties are somewhat less important for financial trade however as it became an information science some decades ago but still, financial signals are like a programming language for economic development and having these two in tune will surely benefit both ends of the spectrum and keep them in step with each other. Instead of the excessive focus on collateralization of what were once trade agreements in the form of loans, it would serve the EU to look at a dual layer monetary system. One transnational and one localized, limited and adjusted to the regional spectrum. This can be a system of dual currencies, such as a single trade Euro and local currencies, matching the socio-economical region which is most often the country. Although for an Italy this would imply three currencies, one for the North, one for the South, and one for the Mezzogiorno, but it would also make sense to differentiate a city currency and a rural currency. Instead of such elaborate currency systems, the other possibility is almost readily available and can bridge local stock markets, via Eurobonds. These Eurobonds can span different time periods and different regions, so that there can be short/medium/long-term bonds, with a full or partial trans-regional coverage to allow for shared accountability. This is a natural consequence of shared trade networks, which are the natural consequence of living on this planet.

We shouldn’t fool ourselves that monetary policies are some separate sort of economics. With the existing situation any problematic situation is magnified by ending up in a negative spiral which has no viable future perspective. In the past a befriended neighboring country could provide outside help, by providing loans in Eurodollars, UK Pounds, Swiss Francs, Deutsch Marks, French francs, and one could link parts of the economy to these regional economies, but this has become impossible as most of these countries have become part of the EU already and are as much tied down in their actions by the very rules that help them advance. All moneys are equal, but some moneys are more equal than others…

On a global scale we’re moving towards a level of technical advancement that humanity has never experienced before. Today we already digest more information per day than someone did during an entire lifetime several centuries ago. We have an incredible future ahead of us, which new economic models, new business models, new values, new risks, new opportunities. We have so many wrongs to right such as climate change, famine, slavery, desertification, water shortages and pollution. We are not only on the cusp of an era with staggering scientific and technological breakthroughs but we are also living through the fast mass extinction event in the world’s history. This is an ethical luxury of doing good and having purpose, just by correcting the mistakes of the past. Is it that difficult? It’s just standing up and making a decision because nobody else will. And we put all this at risk by having a bunch of obsolete governments whose overall track record is worse than random chance, whose contribution to society is negative and when we listen to them we become more stupid than before? Austerity is killing the wrong people. Today’s new normal was yesterday’s insanity. Instead of actually doing something we’re soaking in verbal diarrhea. What are we to do? Shout swimming instructions at the drowning or jump in?

Discuss

Sat Aug 16, 2014 at 09:00 AM PDT

The End Of Competition

by Paul Peters

Last weekend, around midnight on Saturday, on my way home, a hedgehog crossed the road to my house. Juiced up by the joys of springtime it apparently had decided to move from one field to the next, an endeavor to be undertaken in the midst of night which involved crossing a road where daytime traffic was too dangerous. Our little friend had picked a route heading towards a nearby streetlamp, but even so I only recognized it about a second before when it was lit by my car’s headlights. Yet, instead of freezing up, roll into a ball so to have its spines point outward in defense of some imminent danger, he took a run for it. Too fast to break I steered along sideways, following the flow while centering the car above him. A quick check in the rearview mirror made sure he was still on his way. Thanks Goodness…

At home a slight surprise surfaced as a result of the hedgehog’s reaction. Resembling familiar strategies in facing up to times of crisis, its well-known characteristic is rolling up, just like a turtle retracts in its shell and an ostrich sticks its head in the sand. But a running hedgehog, that is something new. In fact, in Northern-European countries the threat of being run over is so big that in populated areas so-called hedgehog-bridges and hedgehog-tunnels have been built so to connection habitats which have gotten fragmented and isolated due to roads and other constructs. For larger animals, like deers and wild boars, ecoducts have been built so that these animals can avoid being confronted with dangers they have not developed any viable answer to. Wondering whether some academic research group had already fixed their budgetary holes with EU R&D funding by exploiting the idea of guiding the hedgehogs to the appropriate crossings with Lego traffic signs, some admiration for the hedgehog’s speed grew. Checking the internet reveals they can run with small speed bursts of some 9 miles per hour, about one third the speed of the fastest human.

Come to think of it, there’s this odd notion about animals that their behavior is nothing more than variations on inherited instincts, a remnant of a long-lasting intellectual battle between the vitalists and mechanists which seemed more or less settled around the turn of the 19th century. Not that the issue was resolved, but such rapid progress was being made with scientific breakthroughs, as well as technological innovations, since the spread of ideas reached a critical mass when the stream-driven rotary printing press and telegraphy networks were added to the mix. Either way, engulfed by novelty, the conflict moved out of sight, at least in the public view. In the mechanist view, animals were nothing more than sophisticated machines and its behavior was just ‘going through the motions’, reacting in a fixed and predictable way, like a computer. In the vitalist view animals did have some sort of essence, a life force, a vital spark, but this ‘animal soul’ would merely focus on worldly pleasures, nicely adhering to Freud’s pleasure principle. Contrary to us humans animals lack a ‘divine soul’ to guide them to a higher purpose, a great excuse for occasional indulging in the absurd delights of Florentine steak.

Darwinian evolution is often referred to as ‘natural selection’ or ‘survival of the fittest’, different ways of describing local adaptation. Natural selection comes in both positive and negative tastes and is more concerned with filtering and amplification of physiological characteristics by means of reproduction. Applied to a somewhat wider context ‘natural selection’ became ‘survival of the fittest’ and concerned a possible comparative advantage between two or more variations of the same species and the increased likelihood of the one more suitable to survive times when existence was challenging, in such a particular way that the combined selection criteria actually promoted the more useful variation. Whereas ‘natural selection’ appears to more physiological as it concerns reproduction ‘survival of the fittest’ can be seen as behavioral, or even social, as it concerns extinction. Although... We’re skipping here stages of co-evolutionary variations in interdependent relationships with endosymbiont bacteria as possibly the most surprising. Endosymbionts indicate that our gut flora could be part of our own genetic code. That not only our body is a small group of different species, but even our genetic code could be a small group. Anyway, back to ‘the fittest’ and let’s call it proto-social cooperative competition. If the situation is not life-threatening then competition actually requires cooperation, as research on game theory has regularly demonstrated. There are only winners ‘if and only if’ people stick to the rules of the game. Similar to enacting a theatre play some collective agreement is needed on what conditions are considered as challenging. Competition is conditional behavioral, a form of ‘projective determinacy’ to misuse the name of a most appropriately called mathematical axiom.

Ok, so, if we nowadays understand Darwinian evolution better as Darwin was trying to express it, how come we have this idea of ‘survival of the fittest? Well, Darwin’s “On the Origin of Species” had a very wide reach thanks to industrialized book printing. After the novel and fiction had rather saturated after more than a century, ‘realism’ had become popular and Darwin’s book was wildly popular when it came out, with its first edition sold out the very first day. Besides a small elite the remaining buyers concerned libraries so people could share and discuss these books. And it was in fact the sociologist Herbert Spencer who coined the term ‘survival of the fittest’. And now that we’ve started name-calling, Thomas Henry Huxley, “Darwin’s bulldog” as he had named himself, has been largely responsible to place the idea of morality outside of a religious context. He took a narrow view on evolution as so to claim that all our mental and emotional abilities were inherited, either via natural selection or by breeding. Yet Huxley disagreed on how those abilities actualized. Our natural instincts were considered an opposite force dealing with the ‘struggle for existence’ and in no way could these give rise to mutual reciprocal behaviorisms. Until his death he remained a strong advocate of how our moral values and ethics were partly culture and partly chosen by us.

It would be wrong though to dismiss Huxley altogether eventhough many recent findings regarding the biological basis or morality show otherwise. The way he classified abilities was too narrow, but his intuition was pointing to something more subtle. As a simple example, a knife has the actual ‘property’ of being sharp depending on its triangularity, but it has a potential ‘capacity’ of cutting. Whereas this static property is innate to a knife, the event of cutting is always contextual, in relation to something else. If we take this capacity, the possible uses, and if we try to map these uses according to any property’s degrees of freedom, the mutual combinations, and if we superimpose all such possibilities onto each other, we construct a map of the potential, possible and even probable utilitarian merit of a knife. And then we may actually get an idea of ‘fittest’. But even then, such a simple tool as a knife can be used to cut and carve a heart in a tree, but as carving grew into an art form it also laid the foundation for the printing press. As people grew more skilled and versatile, carving evolved towards an open-ended range of possibilities, a local maximum in expressive power. This eventually evolved in woodblock printing, where entire pages would be carved and then printed as a whole. Yet with our reusable alphabet, it was just several evolutionary steps further on when individual letters were carved and these could be stacked together to form a page, mimicking a woodblock, and this ‘movable type’ printing revolutionized our world. So eventhough the pen is mightier than the sword, the combination of both is even mightier. Not only can a knife carve out the works of Shakespeare, which makes carving an open-ended information transfer medium, it can in turn carve out other tools which form building blocks for another open-ended medium. Can we even speak of “the fittest”? Is the knife the fittest, the act of carving, the woodblock or our place-value based alphabet where we can so easily reuse letters? In the latter case, we have a closed-ended configuration space of properties but a practically open-ended configuration space of capacities. Just like a running hedgehog is vastly more versatile than one rolling up.

Himself an autodidact Huxley has great influence on Britain’s educational system, which may explain why, whereas his stance on morals was too black and white, Huxley did seem to foresee the idea of ‘Homo Narrans’, Storytelling Man. Studies on chimpanzees and gorillas, eventhough the variety in our genetic makeup differs some 5 to 6%, show a surprising similarity our own behaviorisms. “There would obviously be no need for peacemaking if they lived in perfect harmony" as Frans de Waal writes but he did find that they are able of a surprising degree of altruism, compassion, empathy, kindness, patience, and sensitivity. The complexity of this extends towards conflict resolution, cooperation, inequity aversion, and food-sharing. We split off from our fellow apes some 6.5 million years ago and more than 4 million years ago we started walking upright. Evidently we used tools more than 2.5 million years ago and when our brains had doubled in size some 1.5 million years ago we also made a jump in the way we used tools, when we shifted from using natural artifacts to create things to using these natural artifacts to create tools to create things. Since we left our fellow apes behind our brains have grown to three, four times its initial size. Compared to strengthen of dampening features with the normal range of variety this is really an excessive change, and it seems to share the same roots with our advanced tool use, music, language and play. Surely we did some hunting and gathering, but the rest of the day wasn’t spent in front of the television.

Rhythm seems the most fundamental aspect and as the ‘postman always rings twice’ shows this is the most simple audible signaling pattern, but apes, dogs, cats, birds, all use tonal contrast to carry different meanings, often emotionally charged. As sounds don’t need a direct line of sight different sorts of calls are widely used to draw attention and warning signals. Whale songs indicate that, when communication evolves it nearly automatically follows a route through music as a means to separate signal from noise. Even monkeys beat hollow logs for long distance communication. Yet going beyond imitation and enactment and intentionally creating musical instruments seems to have been something we probably started doing already some 400 thousand years ago, we’ve been pretty much the same ever since, yet many of our tools did not leave an archaeological trace and excavations only can demonstrate our creativity took off some 50-60 thousand years ago with ancient bone flutes, jewelry and other findings that survived such a long period of time. We have been dancing, stamping, handclapping and singing for at least some 2.5 million years, 150,000 generations. It takes only 8,000 generations to turn a wolf into a Chihuahua. We don’t just make music, music made us, and everything we do is a little song, every deed a little story. This two-way interplay between biology and culture, the nurturing of nature, the latent capacities of innate properties, if using the right story to access them, this is what Huxley sensed.

Albeit shortsighted, evolution is not a blind force blurting out life into the world. Evolution is better understood as a two-way interplay between part and whole, genes and organism, individual and population, population and habitat, habitat and geographical region. This mutual allometry works both bottom-up and a top-down, and this dynamic mix appears to reach some local maximum when there are sufficiently many components for qualitative discrimination to be juxtaposed with quantitative differentiation. Quantity has a quality all its own, and in the evolutionary hierarchy both seem to alternate roles. That is, our complete set of hereditary genetic information, the genome, is spread over some 23 chromosome pairs which hold some 20.000 genes, in total some 6 billion DNA base pairs, which resides in every one of the 10 trillion cells our body is composed of. And our body, in turn, hosts some 100 trillion microorganisms in our bowel system and skin. And our bodies, we, also seem to live in ever growing social circles, starting with a small circle of best friends, families, clans, social in-groups, rural villages and ending with the tribe sharing a common dialect, shifting an order of magnitude onwards with a scaling ratio of 3, from 5, 15, 50, 150 and 500 to 1500. These social circles appear fairly consistent as far as archeological evidence shows and can be seen since the last Ice Age well into the Middle Ages. We have adapted to these scales and as Dunbar puts it “We know more people than this (the number of individuals we can recognize and put names to is around 1500), but the number we can be said to have meaningful relationships with seems to be restricted to the 150 that form the natural community size of small scale societies.” On average humans have some 150 “friends” eventhough nowadays urbanization has taken us to ever large forms of cities which continue to follow a surprising regularity as far as power law distributions and allometric scaling laws go.

This urbanization trend is only energy efficient up to a certain scale, once it passes a certain threshold in population size, food and other resources need to be gotten from so far away that explaining this purely from an economical point of view doesn’t sketch a complete enough picture. Cities make more sense when arranged in cells. What happens is that the information flow, which emerged to coordinate the resource flow, takes over as the leading form of self-organization, and this web of communications is more efficient when people are closer. This efficiency makes communication more direct and more intense, and allows for ideas to mix and merge much faster than would happen at areas where less people gathered. Consequently this flow of novelty spreads from the city center outward towards the periphery, part of them concerning the increased need for food, clean water and all things needed to feed all the people that are there. In order to keep these dynamics going, these novelty waves need to bring value to the surrounding areas, as otherwise these would simply turn away. In mountainous areas such a village could reside on a hilltop to provide protection in times of need, as again due to the wider view into the surrounding distance, avoiding sun gazing, gravity helping downward strikes and the outward spread of space taking the ‘high ground’ is advantageous during a battle. Sounds nice, but that doesn’t really explain the old feudal system, which actually are the fragmented remains of a previous, much larger, empire. In vulnerable flat areas cities often resided near rivers, so to allow for concentration of trade in the forms of harbor and associated logistics, markets, warehouses and roads. Also novelty tends to cluster, and due to task delegation people formed specializations, which in turn led to the formation of merchant guilds and craft guilds. Very visible still in a city like Paris, the division in districts also reflected the concentration of trade crafts. Until this very day most Management Consultancy firms follow the same apprentice, journeyman, craftsman, master and grandmaster sort of organizational hierarchy as was established by the guilds.

It seems that evolution not only moves upwards but also sideways, and the context of a part is the multiplicity of the neighboring parts which together form a unified whole. As much as any part contributes to forming a whole, so much does the whole reflect back into itself to coordinate the parts. As research in the systemic interdependencies of population and habitat indicates, scale invariance ends up in a chaotic range, wide-open feedback which is so unpredictable it becomes self-delimiting. Slow novelty continues to be predictable in the short term, but if it spread too fast or too vast, a combinatorial explosion happens with such an enormous range of possibilities that we simply cannot tell what happens too far ahead. It is fundamentally indeterminate, although obviously one’s step will not outpace one’s stride. We can’t say much about the medium term, but we can about both the short term and the long term. We have execution and strategy and uncertain tactics in between. Luckily we are better are doing that thinking, and this favors the idea we can set sail for the sun and keep on steering by chaining up short term views. To make this somewhat tangible, in group dynamics an attractor can emerge, as a reference point, a coordinator for the system as a whole. Whereas the members of a small rock group can still synchronize their actions amongst themselves, a large orchestra needs a conductor. Similar to a conductor changing scores to have the orchestra play another piece of music, an attractor which is complex enough (the conductor) can spawn an attractor for itself as well (the score). This second order attractor reflects back into the originating system and would allow it to display 'goal seeking' (back solving) behavior. So, the conductor’s score has the conductor behave in a specific way which in turn coordinates the orchestra’s doings. And likewise with evolution of organisms it is with these nested attractors where things get tricky, especially if these allow for universal computation. This latter open-ended state can be associated with spontaneity while close-ended constraints lean towards autonomy. As with bookprinting, reusing the same letters of the alphabet constraints us to text, but what we can describe with such text has an endless richness and variety. This is the cusp of life, adaptive diversity, and this applies to organisms, cities, products, markets. But when competition aims to guard the letters at the cost of the text, the past has plenty of lessons to teach us what happened to the guilds when protecting ‘novelty’, make one’s specialization exclusive by means of exclusion. Or like with regional rarity in an increasingly globalized world. Longevity needs both. Natural resilience shows a clear preference for group level stable diversity. Redundancy is part of that, but often serves a purpose as a mean of collective self-dual error-correction and not as an invitation for extinction to figure out which copy is the ‘fittest’ and most likely to survive. We’ve come a long way since the 19th century, starting to understand evolution in terms like reentrant entrainment due to transparallel allometric asymmetries.

The people from the Long Now Foundation were kind enough to allow us to share in the memorable vision of Peter Warshall, with a lecture explaining the co-evolution of light, life and color, recorded less than half a year before he himself returned into the light. Warshall exposes an uncanny sense for when the pragmatic turns poetic explaining how light is knowledge at a distance. During the course of evolution on earth, taking billions of years, this distance, this separation from touch, has become an integral part of the body, manifesting in anticipation, which later became expectation, which grew into yearning, which turned into desire, which in turn gave rise to hope and finally transcendence. A tree is water growing into the light. Everything a tree does is initiated by the sun. About two-third of a tree is water, with the stem and woody branches being somewhat dryer, while leaves, twigs and roots are a bit wetter. Having no skeleton to remain upright it uses water’s pressure to give it its powerful tension, like a balloon. Wood is essentially a way to encapsulate and guide water. When sunlight hits the leaves, heat makes them swell a little and as leaves are watertight they suck water from the stem and branches into the leaf, making them expand a little more. On a sunny day so much of the tree is illuminated some excess pressure builds up, all the way from the roots to the leaves and it has to come out. Although some trees have pores and sweat more often a slight pressure buildup occurs after which the water sprays out as vapor. When the air is not too dry or windy, the tree will hold vast to a thin mist in between the leaves. A mist that feeds the entire chemical processes going on, which will keep leaves moist enough and which is just as much part of the tree as the rest. Incoming light is captured in this mist, dissipated and lights it up as a sort of greenhouse. Light which is used again to mix carbon dioxide with the surrounding air, add some water to it and transform it to the building blocks of the tree, the sugars which are used for wood and leaves and as a byproduct oxygen is created, which we humans need to breath. And if you look closer, these sugars form crystal fibers, woven together with threads and tubes of vicinal water, liquid crystal. A tree grows upside down, bathing in light, growing from the sky into the earth while feeding on light and air. What remains is frozen light. Just like with people.

Lately, the term Social Darwinism has grown increasingly popular again as part of laissez-faire capitalism and other free market propaganda, and essentially it tries to take the ‘survival of the fittest’ view and apply that on sociology and politics. The ‘struggle for existence’ is used to justify all kinds of policies where "all animals are equal, but some animals are more equal than others" so that we either need to step back and let nature takes its course or help nature a hand with letting the fittest survive. Of course we have our inertia-bias but taking a step back is a deliberate choice to refrain from performing a natural act, our ‘natural story’. As much as we have stories evolve inside our head, in the three-quarters of our brain that we have gained, we are embedded in these stories, as mimetic enactments, acting out near-archetypical roles. In light of the future, do we roll up or run? Or shall we dance?

Discuss

Fri Aug 15, 2014 at 08:59 AM PDT

The Paradox Of Artificial Life

by Paul Peters

One may say “the eternal mystery of the world is its comprehensibility.” – Einstein

Something you won’t often find in the present-day penny press or add to your ready and prepared repertoire of elevator pitches concerns the unreasonable effectiveness of mathematics. Obviously part of this effectiveness is related to different variations of the observer effect, we see what we look for and we create and improve the tools that suit best, yet it remains a baffling feat that a simple formula can be accurate up to one part in a million or billion. Although deceivingly simple, the gravity law that Newton devised in 1687 is accurate to more than one in a million and we only need to be concerned about difference when looking at the very small or the very large. Devised in 1861, Maxwell’s equations determine the strength with which an electron interacts with a magnetic field with an accuracy of eight parts in a trillion, as verified in an experiment done in 2006. As guestimates go, this goes a little beyond a lucky guess. Obviously this has not gone unnoticed and an increasing number of scientists are flirting with the idea that physics is so successfully described by mathematics because the physical world is mathematical. Although one can construct a framework to describe what is happening, with perhaps the simplest of constructions being the ability to give some event a name, it appears that “constructability” may have a far deeper reach than usually considered. Instead of mathematics acting merely as a conceptual framework that is helpful in describing events as a complicated system in terms of simpler systems, increasingly accurate approximate prescriptions on ever more fine-grained detail levels are uncovering more hidden mechanisms underlying mathematics. That is, many advances are related to deepening insight concerning the mathematical construction within some physical, chemical or even economical context, without so much introducing new ideas to the context. Nature appears to follow a similar sort of approximations, forming levels at different minimal scales of simplicity, constructions of irreducible sophistication, and in a way the sciences are simply re-discovering these. Rediscovering and reinventing these by reconstruction, and similar to many scientific ideas, Nature has to deal with a vast enormity of non-sequiturs.

It is said that in mathematics you don’t understand things, you just get used to them.  The exact sciences turn out to actually need a certain degree of vagueness, fundamental fuzziness and often even contradictions. With our bias towards exactitude the focus has been on systematic composition, whereas e.g. poetry often uses the logic of analogy. While mathematics is a mixture of systematic composition and correspondence, the latter has been given little attention besides its role in symbolic representation. While ‘the laws’ of gestalt theory are widely used in industrial design, no conceptual framework exists yet to gauge the mutual interpretability of neuroaesthetics, of Ramachandran’s “Eight Laws of Artistic Experience”, and apply these to analogue computations. In other words, there are quite a few different styles of logic still to be uncovered.

In an age when one could still become an expert in a scientific field by spending a night in a library, French philosopher Auguste Comte devised a “hierarchy of the sciences”. Moving from the simplest to the more complex the sciences developed in this order: Mathematics; Astronomy; Physics; Chemistry; Biology; Psychology; Sociology. In this nicely layered model particle physics determine how atoms and molecules behave, and these in turn determine the chemical interactions, which in turn determine the biological characteristics, which determine the psychological qualities and so on. As was the fashion at the time Comte followed a line from transcendence ‘upwards’ to the more tangible humanities at our scale of existence, as if one level is the logical consequence of the other, nicely layered on top of each other in a vertical fashion… just like society was supposed to be.

However intriguing and valuable an approach, it doesn’t seem like the appearance of a minimal structure of a new ‘layer’, that this indicates the other ‘layer’ to seize. Chemistry doesn’t stop where Biology begins. Just like perfume can have a clear impact on someone’s psychological mood, electricity is obviously having a great societal impact, or a road system where a certain degree of Boolean logic is unavoidable, where an entrance-ramp acts as an AND gate and an exit-ramp as an OR gate. The ‘lower’ realms continue to pervade the ‘higher’ realms. We’d be better off by trying to establish some arrangement of the potential reach of a science, and relatively close the old model we can follow a nested hierarchy of emergent constructions, mixing the Russian nested dolls with the recursive Droste effect. If we think in terms of “constructability” instead of “comprehensibility”, with structural and functional minima signifying the onset of emergent scales in probability space, we get a hierarchy that mixes transcendence with immanence; Biology; Artificial Intelligence; Computing; Semiotics; Logic; Mathematics; Physics; Chemistry; Psychology.

Although this is arguably erroneous to one degree or another, this is simply to highlight the importance of biology. Eventhough great progress is being made in mixing physics and mathematics, many phenomena in particle physics and astronomy cannot be explained if it were not for insight from theoretical biology. Even if evolution, self-organization and criticality are applicable to astronomy, physics and computing, meaning would be lost if placing these mechanisms outside of biology. The “laws of physics” are better approached as programs or learned behaviors and 3D space actually appears to be out to be one of the simplest complete frameworks that can arise for any kind of systematic arrangement, it is probably the simplest way in which the whole interactive tapestry of objects can organize. Recent research concerning the self-assembling tendencies of variable amounts of 145 different polyhedra (shapes like a cube, pyramid) showed that nearly 70% of the shapes tested produced crystal-like structures even when their environment was as disordered  as possible. Some of these structures were highly complicated, with up to 52 particles involved in the pattern that repeated throughout the crystal. Contrary to the typical idea of entropy, the inevitable tendency towards chaos, even in a mathematical simulation there is no other way than to form ever more complex constructions. If we recognize mathematics as a natural science, life may be an inescapable result of how the universe works.

The insights grown concerning what kind of world we actually live in have been accelerating greatly during the last century and it seems like the sciences have shifted a level of abstraction to incorporate the importance of computing sciences and farfetched areas being mapped out as we study along concern metamathematics, metaphysics and metabiology, and the difference between these three is growing increasingly blurry. One of the deeper insights originates with theoretical biologist Stuart Kauffman. Set to define the fuzzy edge of chemistry and organic life, abiogenesis, he has been gathering increasing evidence that life initially arose as collective autocatalytic sets, collections of molecules each of which can be created catalytically (non-destructive agency of a chemical reaction) by other members within the set, such that as a collective the set is able to catalyze its own production. As a reproductive functionally self-sustaining whole of structurally self-sustaining parts, this is a likely arrangement to make the jump upwards to organic life. His insight is particularly important as it clearly shows how individual parts can cooperate in a minimal collective to form something that is “greater than the sum of its parts”. Replication already happens with more simple molecules though, but it needs to be repeatable enough so that this ‘organism’ doesn’t run wild, or deplete its immediate surroundings.

Studied by modern giants like Mandelbrot and Wolfram, we can see such frameworks in the light of different mixes of order and disorder. Too much order and life can’t emerge, and with too much disorder life doesn’t stick. If we look at Nature again, most of earth’s history earth involved mineral formation until there was such an abundance of atoms and molecules that life as we know it could evolve. Life has been brewing along for some three billion years before it evolved beyond single-cell organisms, until roughly half a billion years ago evolution accelerated and become as diverse and versatile as we now know life to be.  None of the observations really explain why life exploded and it seems that the dynamic equilibrium of habitat and inhabitants grew abundantly fertile enough that when a lower threshold in genetic complexity was reached it allowed for an enormous variety in species to develop. “Quantity has a quality all its own”, as an infamous politician once said.

Life in its organic form seems to have emerged in a similar way on the edge of chaos and order, facilitated by the violent conditions of the early earth, nearly uninterrupted volcanic activity, and thunderstorms discharging electric currents into the primal soup, the dominant gasses intermingled in such a way they created the amino-acids, the alphabet of organic life. Furthering the language of organic life, its grammar appears to have developed analogues to “aperiodic crystals”, a mildly disordered assembly of ordered molecules. Single molecules, although their configuration can be quite information-rich, are too small to provide the expressive power of a grammar so it had to be a collective behavior. Pure crystalline format is far too repetitive to express any higher degree of complexity. Any amorphous solid was too chaotic to express anything. So it had to be a crystal with the right mix of order and disorder, and this turned out to be quasiperiodic crystals, with ordered elements held together in a disordered way. Limestone has long been suspected to act as a placeholder for the development of such behavioral complexity in the form of proteins, yet, if limestone acted as memory by preserving a structured imprint, water acted as processor.

When water is not tightly compressed its outer surface forms a liquid crystal layer. Like glass is actually an amorphous solid (too disordered to be crystalline) a liquid crystal is a form of ordered fluid. When tightly compressed the minimal energy configuration of water is not to arrange itself as single H2O molecules, but it becomes an assembly of five H2O molecules, and it will endlessly bond and re-bond so that it is always moving. With its strange properties water amplifies chemical reactivity and variations about a billion to a trillion times. The more we learn of water, the stranger it gets. Water doesn’t do what a normal substance does; it is always a little bit different, often with staggering results.  If water acted like a normal substance the weather would have probably come to a standstill long ago… but when you put water together in a sea, under the weight of gravity a normal substance would squeeze the lower layers together in an ice format, but not water, no, it actually expands a little so that it keeps the deep sea at a temperature between 0 and 4°C and makes it push upwards. It even seems to match the simplest definition of organic life, a “complex adaptive system”. Although water is not organic life by definition, it is difficult to categorize water and it would be more suitable to see it one of the prime building blocks crossing the bridge between chemical life and organic life.

Water may not be the immediate cause of organic life, but acts as a participating facilitator enabling an extension in utilitarian degrees of freedom. Affine enablement of the nearest-neighbor in possibilities, nested complementarity in probability space, or as Kauffman calls it, “the adjacent possible”. Like evolutionary progress happens in steps, not jumps, a combinatorial reshuffling of existing and newly introduced parts, adjacency implies that these possibilities do not appear out of nowhere, there is a direct line of sight. This visibility requirement indicates that for any semi-closed system this “adjacent possible” expresses a dynamic equilibrium between a system and its immediate environment, the system’s potential energy as it propagates through phase space. Entropy, in the statistical approach thought to be a measure of disorder, may be better suited as an expression of the system’s structural arrangements, the “tensional integrity” of its emergent hierarchy as it reshuffles from actual to potential. In a simple physical setup that is simply the kinetic energy. Nevertheless, visibility means interaction, and eventhough something ‘new’ may enter the picture, a system is always in touch with its potential. As a result, potential energy is an active shaping force, like water not an immediate cause but a determinate yet unpredictable facilitator, due to the potentially numerous possibilities.

To give an idea of the number of possibilities, the average human body contains roughly 7 thousand quadrillion atoms, 7 billion billion billion parts, yet we still move around as a whole, so there are structural mechanisms in play which greatly simplify how our parts are arranged and coordinated, such as a proposed mechanism for muscle coordination involving low-intensity electromagnetic cellular interactions with a high degree of quantum coherence, along with biomechanical tensegrity. Eventhough acting on a ‘higher’ level of complexity, we see ‘lower’ level mechanisms being used in a greatly simplified manner. However, if we take a mechanical look at the different ways we can make a step, hundreds of muscles, bones and tendons are involved, and this gives about a billion times more possibilities than the number of atoms in this universe. Even with a coordinating mechanism in place, the amount of possibilities is mind-bogglingly large, but only a very few of these involve a large enough step to break the 8.95 m world record long jump.

If we take a bottom-up approach sometimes we encounter assemblies with a level of unity that implies a collectively induced coherence, with emergent attractors in phase space. Emergent attractors appear really strange, but they may be what life is about, and as they steer a systems behavior to a certain goal, they seemingly work backwards in time. Sometimes as with certain forms of quantum error correction, such effects “… cannot be used to go back in time, only to reduce the time between cause and effect a little bit”, although this happens in laboratory conditions which are shielded as much as possible from the rest of reality. However, as every little thing, or event, seems to have its own particular timeline, chains of causal events can split and join, and eventhough on an individual timeline there is no such thing as retro-causality, consistent with relativity physics the quantum mechanics ensemble interpretation allows for the possibility to connect one timeline’s present with another’s past. As it is quite impossible to measure the collective future, it is possible to measure the influence of events that happened at different times in the past. Some unusual experiments have been performed which indicate that we do indeed are able to change the past, as long as the particular local timeline was still in a ‘quantum’ state until the observation connected it with global history made it definitive then the outcome can be influenced to some extent. Time may be an illusion, but like a pair of face-to-face mirrors, the further we look, the deeper it gets.

Just like with quantum-mechanical systems, if you drill down to a too fine-grained detail level you will end up with interference problems and you cannot assign probabilities to such fine-grained histories. The details cannot be detached from each other; even neighboring probabilities cannot be treated as separate alternatives. The assembly is a minimal structural whole, with spatial coherence and temporal coherence, a wave. Eventhough it is composed of identifiable discrete parts like any wave function it loses meaning if you subdivide it even more, leaving you with a caricatural sketch. As it turns out, these quasi-classical coherent ensembles are much more prevalent than previously thought and if we explore the world in a top-down fashion, we encounter these self-sustaining complexes which are an irreducible unit, they cannot be split up any more eventhough they are clearly made up of individual parts. Most of these ‘organisms’ have little to do with the subatomic realm from which quantum fields originate, but the approximate framework itself is already reaching up into a realm named quantum biology.

Many physical ‘mechanisms’ pervade the biological world.  The opening of a flower is vital for its reproduction, allowing for its own pollen to be taken by small insects or the wind as well as crosspollination with pollen from other members of its species. Of the several ways that flowers regulate flower opening, maybe the most elegant one uses osmotic pressure. When the first light rays of the morning sun hit the flower bud it heats up the fluids inside the petal’s cells making the fluid’s atoms jiggle around more wildly. In turn this causes the cells to expand a little and by doing so the fluid balance is disrupted resulting in a negative pressure gradient which will cause more fluid to enter the cells. In other words, the petal suck in water which make it blow up like a balloon, and as the petal expands it unfolds and opens up the flower bud. Again, we have here a ‘lower’ level mechanism acting as a controller on a ‘higher’ level of complexity. If this is the local “adjacent possible”, then it is not an open-ended combinatorial explosion, it is a functional arrangement more simple than the structural arrangement would suggest, with enough self-sustaining coherence to have this simple mechanism act as an emergent attractor. Another variation causes the tightly folded DNA ribbon inside the plant’s cells to expand and unfold a little, thereby exposing a particular genetic sequence, one that is activated by the incoming light that exactly fits through the opening in the folding structure. This sequence then starts the ‘program’ to produce the chemicals that cause the petals to open up. Once the sun starts setting, the particular light frequency is absorbed in the earth’s atmosphere and doesn’t reach the plant anymore, which causes it to seize production of the needed chemical and the flower closes as a result of absence of the stimulant. Like many such mechanisms there is an ‘on’ switch, but no ‘off’ switch. As biologists like Prigogine have suggested life is full of these negentropic mechanisms, (thermodynamically open) dissipative systems with a reproducible steady state, like cyclones, hurricanes, living organisms, or convection (concerted, collective movement of ensembles of molecules within fluids). Convection has been widely studied as one of the simplest examples of self-organizing nonlinear systems, self-reinforced spatial expansion by group formation. Eventhough a population of particles starts out with an equal distribution, evenly smeared out, once the particles start grouping, the larger a group becomes, the more surface it has available to attach to its nearest-neighbors. Self-amplifying spatial expansion, just like how most clouds grow.

However simple the workings of such organisms, mechanisms or complexes may seem, the outcome is often unpredictable. When viewed from the perspective of “constructability”, as said, many scientific advances are surprisingly similar in the sense that a deepening of the mathematical construct, which in general reduces the amount of work involved, greatly advances the applicability of a science or technology. Wolfram closely relates this common behavior to “computational irreducibility“, meaning that the only way to figure out what is going to happen is by actually performing each step. One of the definitions of mathematics is the study of the systematic composition of patterns, and eventhough some patterns may originate from a yet unexplored logic, it may be clear that for simple mechanisms and complex organisms alike the capability of computation is indistinguishable of their potential evolvability. Wolfram and his team have been making a map of the mathematical universe, a map of more than three million theorems that have been constructed from intermediary theorems and elementary axioms, self-evident assumptions which are accepted as true. Essentially it is a map of all things that turned out to be decidable and provable. Nevertheless; “Mathematics has navigated through these kinds of narrow paths in which you don’t run into rampant undecidability all over the place” and if one starts to ask mathematical questions at random one would soon run into undecidability. The known mathematical universe has paths following branches into side branches then to face a sudden intersection where separate branches unify and cross over for no apparent reason. When using computing systems to create and explore the space of all possible theorems, one might find new paths and in due course create such a map of the constructible universe. In the space of all possible evolutionary constructs, it is very easy to get complicated results, with evolutionary branches that die down in infinity dullness due to too much order, branches that explode with too much disorder, or those branches with some harmonious balance, some even capable of simulating their own evolution.

Nature however has more tricks up her sleeve to mix ordering and disordering, and there are many ways in which the direction of development is irreversible due to transitions which have a certain degree of undecidability, such as the first mover at a crossroads with a car waiting at every of the four roads, so that the rule which gives traffic from the right priority ends up in a closed loop with all drivers waiting for each other. Eventually something’s got to give and the traffic starts to flow again, but the actual way how this deadlock was solved doesn’t really matter, as long as it is solved. Besides undecidability, it turns out there are quite some of these irreversible ‘crossroads’, such as granular indeterminacies, uncertainties, incompleteness, indecomposability, unpredictability, intractability, indistinguishability, and even things that are maximally unknowable. Fuzziness and information loss may be quite normal in nature, such as with the interaction between water and crystals, where water’s pentagonal shape may grip into a hexagonal crystalline lattice, as far as the structural elasticity is tolerant of such misfits, leading to all sorts of impurities but like sprockets with an inexact fit can still gear up evolution. As the study on quasi-crystals shows, life may very well arise from within the undefined cracks of an incomplete space-filling tilling.

Conceptually, this “constructability” is pretty similar to the “mechanical” “materialist” worldview for which many popular writers seem to blame Newton and Descartes, although its accompanying de-spiritualization is actually a recent mix between the advent of modern economical sciences with Marx’s historical materialism, the popularization of psychoanalysis in spite of Freud’s strong distrust of unconscious inner drives and Sartre’s bleak and blasé existential nihilism. However, the world of hard science, such as particle physics, is much closer to Alice in Wonderland, Borges’ unrealities, Bakhtin’s chronotope or Aboriginal Dreamtime. Contrary to modernity’s industrialized hope industry, an infinitesimal small number of self-appointed gurus are willing to jump up and trade their front-row seat at this spectacle in exchange for some hard currency. Despite that, if there is something our universe does not deserve it is the nihilistic fatalism of the stylish looser. We live in a world, where inside and outside the science laboratories things appear to move backward in time; where something can reach the finish line before it arrives, yet still cannot arrive before it left; a world where simple molecules can be made to disappear and reappear on a place a hundred miles away. A world where past events can be affected by future influences as long as their timelines were on different branches with a slightly fuzzy history. A world that gets thicker if you stretch it out. We live in a world where space is a tapestry woven with light and matter as threads and knots, but with noticeable other sorts of stuff, outside this space-time texture, that appear to be everywhere and nowhere at the same moment. A world far more miraculous than anyone could have expected.

Although evolvability an-sich appears to be open ended, the very fact that an organism is self-sustaining, in its simplest biological format a collective autocatalytic set with a structural and functional circuit, means that it is self-delimiting, self-correcting, self-regulating. Especially where the functional arrangement is simpler than the structural arrangement, information about the flow dynamics can spread easier/faster than the flow dynamics themselves, and in order to do so it must optimize the flow of information across the system. This typically results in an asymptotically periodic behavior. The system itself as well as its information flow, displays some tension between two opposing forces: one, caused by discontinuities, is “entropic” and leads to chaos; the other one is “energetic” and pulls the system toward an attracting manifold within which the dynamics is periodic. Outside a vanishingly small region, chaos always loses. In other words, most natural processes are cyclic, with a rhythm of their own, like our heartbeat, nasal cycle, sleep cycles, biological clock or breath, though it can be controlled by will as our ancestors used to be swimming apes. As emergent attractors go, they do seem to be abundant.

If we look at the onset of living systems though, when self-regulation hasn’t kicked in yet, studies on natural occurring curves shows that when something spreads on a territory, the curve of territory size versus time is S-shaped: slow initial growth is followed by much faster growth, and finally by slow growth again. Like the periodicity most self-sustaining systems converge to, when path dependence is the prime mechanism then it turns out the S-curve is universal. The overshoot-and-collapse behavior is normal for mechanisms with an ‘on’ switch but no ‘off’ switch. Toggle-free growth always will have a certain degree of criticality, where function and structure start moving out of phase, one moving beyond a critical point while the other builds up overcapacity due to some form of inward directed elasticity, such as overheated chocolate drink from the microwave, snow avalanches, landslides or earthquakes. The S-curve is a combination of tree-shaped “invasion” by convection, followed by “consolidation” by diffusion perpendicular to the invasive lines. Zoom in close enough and any interplay between population and environment, habitants and habitat, will show these S-curves. Tree-shaped invasion covers the territory with diffusion much faster than line-shaped invasion, not that the latter does not occur, but its “program” is simply less efficient and is outrun by the forking mechanism. Branching out over different scales will cover an area much faster than following a evenly distributed network of channels. Adrian Bejan has made enormous progress with researching these dynamics, and it applies to just about everything, from the self-similarity of capillary blood vessels, the fractalesque branching of the lungs, river formation, to how ideas spread and how memes propagate through ‘the news’. This logic even recurs in our limbs, the bone structure of our arms branches out from one in the upper arm to two in the forearm, to four fingers, creating great freedom of motion, while the four fingers themselves form a unit and along with the “opposable thumb” provide excellent grip. Here the forking cascading onwards along the neighboring limbs towards a buildup of motional freedom. Forking is more economical, it provides the most result for the least amount of effort. This sort of economics reoccurs everywhere as a converging goal, and is rediscovered time and time again, as the path of least resistance, the principle of least action, the Hamiltonian, Occam’s razor, Leibniz’s principle of sufficient reason, or Kauffman’s adjacent possible.

In a wonderful twist, this sort of economics allows for emergent attractors, such as with convection. For example, the earth is spherical because it allows packing the most stuff in a small as place as possible, for a minimal surface with a maximum compactness, but this also has the center of the earth act as an emergent attractor. Out here on the earth surface we’re always falling towards the center of gravity, it ensures that most of our activities happen in a very thin layer above and below the surface; it’s not like we can just jump over a traffic jam although some people act like they can. These attractors also appear on other levels either by natural evolution or by deliberate interference in a system. Even mild forms of joining different systems can cause enough disturbances to change its behavior, such as with the observer effect where the very act of observing disturbs what you’re observing. Subtlety offers some resolve, but as a real-life example Google has enormous problems of the re-affirming feedback loops of their predictive analysis. Wherever Google’s search facilities focus their attention it starts acting as a self-fulfilling prophecy. If a site appears in the top ten on the first page of search results, it starts attracting more traffic which makes it appear more popular and thus makes it appear high up in first page of search results. In a world with limited attention, popularity feeds popularity. This is where personalized search results become somewhat problematic, as Google’s commercial model is an advertisement company wrapped around a search engine, so their incentive is to push information towards end-users that is agreeable with their customers, the advertisers… but even without this bias their search and categorization algorithms try to find and suggest information that is thought to be most suitable for the searcher. This is effectively creating a “filter bubble” of self-affirming information and if no-one steps outside to get some more information, it’s like living inside a television.

A known characteristic for information-based market segments is that they show an unusual behavior which is known as ‘increasing returns’. Due to the reduced dependencies on physical limitations knowledge and technologies can be distributed very quickly, e.g. via downloads or television news broadcasts, and due to network effects it creates what is known as ‘path dependence’, a self-sustaining reinforcing feedback loop. These self-magnifications also happen in the news, international politics, investor communities or fashion industry. Often without an ‘off’ switch, if left uncontrolled these will eventually burst like any speculative bubble. Yet, these are all predictable phenomena with predictable events on their own timeline, like little programs, machines or organisms. They are only unavoidable if left on its own, but like a balloon with a piece of sticky tape on it, you can stick in a syringe and deflate in a regulated fashion. For economic bubbles, this means that value can be moved into several other industries. However, the modern-day notion of shareholder value has caused most businesses or industries to have lost their natural format. They’re built for growth, and too much growth means they explode, too little growth they implode, but in general, after the sixty-sixth six sigma overhaul, they cannot handle economic seasons anymore.

What happens is that at a certain moment when an industry or market segment is forming, there is a strong interplay between the environment and population levels, habitat and habitants, market and companies, which influences the perceived uniqueness of a service or good. This translates in rarity and imitability. For example, positive rarity is a qualitative discriminative characteristic where an offering is not too far ahead of a highly cohesive market. Negative rarity would imply the offering is so unique within an incoherent market segment it has difficulty demonstrating the value and return on investment, the market is so disjointed that the company has difficulty being recognized as being core-player in this particular market. The latter can be addressed by e.g. solid support for open standards by which the offering gains a variety of contextual settings and use cases which it would not have in its own right. The interpretation flips around in value when an offering’s aim has to deal with e.g. security, such as financial messaging networks, where uniqueness and rarity are positive attributes. Negative imitability would be an incoherent organized offering with quantitative differentiation where sufficiently many equivalent offerings exist on a market dominated by competition, while positive imitability could for example result in de-facto market leadership. To move from above mentioned negative imitability a company can choose to streamline their business and production processes into a well-organized and cost-efficient manner, thus making the supporting organization highly coherent. But overly high coherence leads to an another dead-end, as simple mass-production goes, if the only differentiating factor is price, investing in the newest technology will increase the price so companies like these simple run until replaced by a newer more efficient version.

It serves to avoid extremes, and paradoxically increased competition leads to conformity and the whole population of companies turns into a coherent “swarm ball” where most are doing pretty much the same. When an industry-wide bubble starts to float and loses touch with reality individual companies will start looking closer at their close competition, and usually start mimicking each other’s behavior and this works both ways. Being a ‘fast follower’ saves out on the costs of being a thought leader, and keeping close to the competition will ensure that if they have a hit with some novelty they can quickly hook into that trend and join the party. But when market dynamics have evolved to the extent that there are only a few main players, then these start acting like a unit. As markets don’t have an ‘off’ switch, when the first companies start to drop-out due to “auto-cannibalization” as their initial business was too far removed from the emergent de facto norm, and they have to swallow double the costs to make the switch, which is when the industry starts to deflate and needs to consolidate in a small number of survivors.

Investor speculation only amplifies these mechanics, as when an industry starts to grow it caused investors to flock towards this industry, and the more investors invest somewhere the more investors it attracts, and when an industry starts to deflate investors will move away, and the more investors exit the more investors exit. As if market dynamics weren’t enough, the current investor climate increases the risk for speculative bubbles. Bubbles are normal though, as there is always a delay between anticipation and response, of introducing a product and its adoption, but it becomes problematic when overshoot and collapse behavior expands beyond its natural elasticity. If investors wouldn’t rush out of a bubble, it wouldn’t burst at all, but as they try to maximize their investment they will try to linger on as long as possible so that they don’t cause a rush out. Trying to win a game that is being defined while it is played, self-fulfilling collective deadlock dominate the current investor landscape. If the market is ‘life-worthy’, emergent attractors will be at play, and certain phenomena appear to be moving backwards in time, making things happen in the present so it can happen in the future. Or applying some negative logic, emergent un-attractors indicate the moment of dissipation, where the disappearances of emergent attractors causing a collectively induced decoherence. Even if happening outside laboratory conditions, as it is functionally more simple than the structure it acts upon, this can only be but a very minor effect, only noticeable in ‘how’ things happen, and to an increasingly lesser extent, ‘when’ and ‘if’. However, despite its subtle third-order derivative ‘jerk’ influence, it is clearly noticeable with many investors and company policy makers, in a rather exaggerated way where the positivism variant of magical thinking has become so strong they’re simply ignoring other input, like the climate change deniers… Comes to show that logic does not have to be rational, or make sense whatsoever.

Companies that understand these dynamics though, in particular the interplay of perception, expectations, maturity of the offering, fulfillment and obsolescence, can make use of above described means to bypass the usual hurdles when introducing a new product. Apple’s introduction of the iPhone and iPad are magnificent examples of a vendor entering an existing market while having such brand recognition they can propagate their reputation into an adjacent market and grab a large piece of the client potential. The S-curve “overshoot and collapse” tendency of a hype or fashion trend is not merely a psychological effect, it is a natural systemic mechanism when a new technology is introduced and tries to ‘settle in’ within a wider population of related technologies.

Recent adventures in artificial intelligence have taught precise communication may very well be impossible. Ambiguity, irreducible undecidability, appears to be the norm as Marvin Minsky states; “It is an illusion to assume a clear and absolute distinction between “expressing” and “thinking,” since expressing is itself an active process that involves simplifying and reconstituting a mental state by detaching it from the more diffuse and variable parts of its context. [...] We can tolerate the ambiguity of words because we are already so competent at coping with the ambiguity of thoughts.” Once again the strange and intimate relation of order and disorder is at play here, and as a process which is forever taking shape a thought may be a smallest snapshot but is still an event with a minimal duration. For the active listener, participatory communication offers a high degree of mutual interpretability, but without some effort it is easy to get lost somewhere in between vagueness and clarity. Life has this incomplete and unfinished quality that allows magic to happen, as if time indeed works backward to boost a civilization forward towards fulfilling its potential, as if many of the “emergent attractors” combine here in irreversibility time-like structures, of events that have to happen. If there is a lesson to be learned from recent science, it is that “life wants to happen”. Life is unavoidable; it is woven into everything, even into complicated mathematical constructions. Although one can try creating a hierarchy of sciences, the boundaries are blurry and ambiguous, but it is clear that beyond the Kantian approach lays a world where all logic reasoning is an organization of analogue computations of a reduced biomimetic composition, not necessarily rational.

A vision that started arising in the mid 1960’s, around the time of the robotic arm started to become adopted, already a decade after the birth of ‘artificial intelligence’, was that “the factory of the future will have only two employees, a man and a dog. The man will be there to feed the dog. The dog will be there to keep the man from touching the equipment.” This is not happenstance, or an unforeseen utility, this is an emergent attractor that is going to happen sooner or later. Western society has been trying to shift towards a service and knowledge economy since it became clear manual labor started to demise. With offshoring, many manufacturing tasks have moved to China while much many ICT services have moved to India. This has allowed them to jumpstart their economy towards a Western level with an amazing speed. But the next phase is already happening, and in ten years from now robotics, either physical or software-based will be replacing many of the jobs made possible now, and competitive forces do not allow for an exit. In that sense Western society has also offshored future societal problems to China and India, and as Europe’s aging population seems to prepare for a slow retirement, it is up to these societies to come up with a solution. It is not just that China and India own the future, the future owns them.

This article is written without an executive summary on purpose, if you got this far, by now it should be clear that although we cannot fully predict the future, we can invent it.

Discuss

Thu Aug 14, 2014 at 08:58 AM PDT

The Banality of Austerity

by Paul Peters

Day after day, people previously unknown enter my living room via television news and online newspapers, spelling out what to think and what to be outraged about. For ever engaged with commenting on the most recent latest news, in rapid succession “the economy”, disasters, politics, wars and sometimes even a “soft news” item such as sports, most often football or a seemingly remarkable activity of some possibly even not unknown celebrity, are oozed in our general direction. More than a century after the invention of public relations, it appears the ideas and techniques of Ivy Lee and Edward Bernays have all but disappeared. While the internet is flooded with astroturf to try create the impression of grassroots to jumpstarts a viral marketing campaign, many a manager has spent some potential quality time on studying the works of a thousand and one management gurus, some Sun Tzu’s “Art of War” mixed with some Machiavellian posturing, and to top it off, a finishing of Neuro-Linguistic Programming.

The Italian word “furbo” signifies mental sharpness as well as cunning, and just like the English “clever” does not equate to intelligence or the power of reason, but to the ability of being shrewd, sly as a fox. While Bernays laid out ingenious plans on manipulating public opinion for political and commercial reasons, Ivy Lee advocated honest communications together with positive action instead of putting “lipstick on a pig”. Although both approaches are actively participating in shaping the news, irrespective of any artificial intent, surely the way of trickery has a tendency to “go viral”. Two observations from the past spring to mind here; Mark Twain’s “If you tell the truth, you don’t have to remember anything.” and Nietzsche’s “I’m not upset that you lied to me, I’m upset that from now on I can’t believe you.”. It may be obvious what the risk is involved with trying to blind the public eye, even when the latter is wearing blinders. But what happens if someone was not lying but their truth has become outdated? What happens if things done with the best of intentions turn out to have negative side effects, such DDT which saved millions of lives due to avoiding starvation, but at the same time lies at the cause of chronic toxicity leading to diabetes, cancer and even affect semen quality. Likewise wheat and refined sugar provided food and nutrition for the world but also cause chronic infections, which lead to obesity, cancer, arthritis, depression. Modern sweeteners even cause age-related diabetes with people in their twenties, while recent research also suggests Alzheimer’s disease is caused by chronic inflammation in a way that has the researchers label it as “brain diabetes”. Surely poisoning humanity was not a top-listed objective when anti-cholesterol-ism became an influential meme within our culture industry. Even more painful to confront is the 1985 Live Aid initiative where people stood up to gather funds to do something about Ethiopian famine, and with a global audience of some 1.9 billion people nearly $ 300 million was collected. As it turns out much of the money was used to wage six more years of war, killing about as many people as were saved by the aid, while most of the food was left rotting in the harbor. What exactly happened is still unsure and controversial, but at least it did cause foreign aid to be taken a lot more serious than before. One has to admire Geldof for his courage to keep going and create meaning where there was none. He might as well have written a song title “I Don’t Like The Rest Of The Week Either” and withdraw into obscurity.

Many such ambiguities lay at the roots of many an oligarchy, likely amplified by the use of game theory in strategic human resource development. Contrary to what is now known, game theory assumes people’s actions are entirely motived by rational self-interest. While even the hero from “Beautiful Mind”, John Nash, has further nuanced his early work in such a sense that he is essentially stating that game theory only works if one sticks to the rules of the game, it does not seem that these and other findings which support innate altruism have found their way into the economical sciences and organizational psychology yet. In other words, decades of management training have been acting on the wrong assumptions of what makes humans human, promoting an unhealthy sense that one’s best interests are at odds with nearly everyone else’s, which has led to both learned helplessness and learned egotism with the very people who were supposed to enable and support others in doing their best. Luckily life isn’t all that black and white, but when only 10% of people need to belief some meme for it to regarded as common sense, it should be clear that we have not fostered our cultural hegemony to live up to its potential. While organizational hierarchies already have a tendency towards a “rule by the few” due to delegation and thus specialization in the information, control and work flows, on top of that we get shared secrecy as a sort of corporate or private “reputation management”.

One such uneasy inconvenience concerns modern financial trade. Most trades have become automated and are done by computers which can perform tens of thousands of trades per second. Eventhough these so-called derivatives do not involve buying real, physical goods and thus have no direct impact on a good’s price, the indirect effects on the perceived value of goods are still unclear. Derivatives are “mark to model” instead of “mark to market” where valuation is determined by financial models rather than by being based on the current market price. Arguably “the market” is a model as well with idealizations of its own, yet derivatives make it possible to assign monetary value to e.g. the weather, war and peace, interest rates or currency exchange rates and it allows anticipatory adjustments to changes in supply and demand so to more effectively deal with systemic delays. For example a cold winter involves increased demand for heating oil and wood, which ideally need to be prepared, distributed and purchased on beforehand, especially when situations are so extreme normal means transportation become impossible. By using derivatives it becomes possible to finance such initiatives upfront, in a similar way as an insurance company compensates for the risk of a loss. When derivatives were standardized and introduced in 1973 at the Chicago Board of Trade they were a real improvement. Nowadays, nearly forty years later the world seems caught up in a web spun by derivatives, a self-sustaining race condition which nobody intended or even understands all that well.

In 1976 the New York Stock Exchange introduced the fully automated Designated Order Turnaround system to electronically route smaller orders, and in 1978 the Intermarket Trading System was adopted to provide an electronic link between the NYSE and competing exchanges, enabling brokers to access all markets. Those were real improvements at the time, providing much better accuracy and security. But we are now three and a half decades further, and technology has dramatically improved over that time. Not only do we have the several ‘laws’ that continue to accurately predict the major technological trends a study published in December 2010 of the “President’s Council of Advisors on Science and Technology” demonstrated a speed gain from algorithmic improvement of a factor 43.000, benchmarked over a fifteen year period for production planning tasks. This indicates a doubling in efficiency every year due to ingenuity. So we get the following ‘laws’:
1. Moore’s: Doubling of affordable processing power every two years.
2. Nielsen’s: Doubling of high-end network connection speed every 21 months.
3. Kryder’s: Doubling of affordable magnetic storage density every year.
4. Grosh’s: Computer performance increases as the square of the costs.
5. Ingenuity: Algorithmic improvement doubles efficiency every year.

In 35 years this means programs are some 30 billion times more efficient, with an increase in processing power nearly 200.000 times, on a network which is a million times faster while possibly dealing with several billion times more data, and all this for less costs than the investments done in the 1970’s. Considering the influence algorithmic improvement alone already, a computerized process that took a year back in 1976 can be done in a thousandth of a second in 2011, and on top of that we get all the improvements of computer hardware which also reduce a day’s work to a sub-second bleep. Even when using an electronic trading platform, on a per-second basis more trade is being done now than on a whole day in the year 2000. However fast it may be speed continues to be imperative as the result often translates in a win-lose situation where a stock may not be available anymore if one is just a fraction too slow.

During the last ten years the yearly derivative trade surpassed the value of all the world’s goods and services trade, as well as the entire world’s wealth, and with an annual yield averaging 30% per year for the last decade, derivative trade appears to be more lucrative than most other forms of business. Surely it is more profitable than the much advocated angel funding for start-up businesses where the large majority of institutional investors actually perform worse than pure chance, and this has worsened during the last decade. And with the ongoing crisis where risk-averse policies at retail banking cause every prudent midlevel bureaucrat to inflate their sense of importance by enforcing surreal requirements that no real person or small company can adhere to, one has to wonder where do these investors get the acumen and common sense that make them so profitable on the trading places? If large funds are so bad at judging the evolutionary potential of a start-up, how come they do continue to perform well with stock exchange? Evidently some very smart people have specialized in quantitative analysis, but “business intelligence” and “decision support systems” emerged in the early 1960’s already and matured during the 1980’s so what can it be that makes specifically modern trading so profitable? One has to wonder what one is actually trading in such a short amount of time, or more specific, what is it that initiates a trade event? Clearly in most cases the goods themselves are not being traded anymore, but mere information that is in some way related to it. Yet, it cannot only be the motions on the trading platform itself, as this will quickly lead to a series of collective deadlocks with one trader waiting for the other and vice versa. Also, it cannot be limited to the publication of corporate financial results and governmental key statistics, or any analytics coming from rating agencies, as for anyone willing to pay for a number of subscription fees this sort of information is freely available, and any differences in interpretation would quickly even out in a collective steady state, which, as a predictable pattern in the trading platform’s motions, can be detected and compensated for. It seems to be both, and a little more, investors appear to initiate trading based on the latest information and try to utilize the resulting dynamics before things die down again. Investors appear to be trading the news.

Eventhough in Europe and the USA the middle class has been shrinking while the lower classes have experienced wage repression since the early 1980’s, with the rise of the BRIC countries the global middle class has been growing significantly resulting in an increase in global consumption and global capital as every developing country hurries onward to a Western standard of living with comparable levels of prosperity. But even when focusing on a few bright spots such as China’s rise to being the world’s leading economy, along with wealth concentration, that only accounts for half of the 30% annual yield of derivative trade. How come the derivatives market has grown to some 30 times the size of the world economy, or more than 10 times the world’s wealth? How can there be more money than there is money? Undeniably, certain qualities are unquantifiable but it is doubtful that derivative trade is a manifested token of appreciation. Something doesn’t add up, and it appears to be the news.

In the idealized world of ‘the market’ information, money, goods and services flow freely and instantaneous, all consumers always know everything about everything, even the likely outcome of all future events, and will always make the best rational decision concerning buying something. On a global level supply and demand will always self-organize to reach an equilibrium state through an emergent spontaneous order. In normal systems however, the information flow often acts in support of the control flow so that processes acting on the resources happen when they should, the information flow about the system resource flows act as a regulation mechanism. But in a system as “the news” it is difficult to disentangle the meta-relation of information about information, just like the value of money is effectively expressed in terms of money, making it its own self-referencing nested complement. In other words, money is used to describe the value of just about everything, but the value of money itself can only be meaningfully expressed in terms of the ‘everything’ it values. Likewise, with “the news” a level of irreducible complexity is reached, with a fundamental ambiguity of multi-interpretable events. Not only do automated trading systems primarily use physics-based simplifications to construct an idealized picture of the world, so to be able to react as quickly as possible to any changes to the news, but it does so with events of irreducible complexity, events which are in the process of happening, events of which the consequences may only become clear decades from now. Eventhough an individual investor may compensate for the price changes due to their own actions, can they compensate for the indirect changes in the resulting actions of other investors if they don’t know the intricacies of their trading systems? On top of that, investor’s actions are reflected in the changes on the trading price on the exchange platforms which are reported in the news, both in a general manner or sometimes highlighting individual cases. Here, with two seemingly uncontrollable indirect feedback loops, we get to the core of how, in an indirect manner, a seemingly objective means of passive investment has started shaping the course of events and sometimes even dictating it. However ingenious these trading systems themselves are designed, consider for instance how awe-inspiring clever DNA is constructed and then consider that humans share half their DNA with bananas, then how smart are they really? We may be ruled by ants. If you ever wondered why ‘the market’ seems to act like Wile E. Coyote on steroids, this may be why.

Derivative trade allows an investor to be more profitable by dealing with the impression of some good becoming scarce or abundance than the actual event happening. As most traders keep an eye on each other whatever one investor does is mirrored by the others, and they start acting in a collective manner, a swarm ball, and beyond a 10% adoption rate any speculation quickly becomes “common sense”. Even if dealing with impressions and trying to compensate for indirect observer effects (as with front page news getting more attention making it front page news) these memes or factoids are propagated through the news and simply become the new norm. That is, if 90% of investors speculate a rise in the oil price, this turn drives up the price, because people expect it to. Whatever assumptions underlie the trader’s actions on the marketplace they appear to resonate through in the real economy via biased information provisioning. Whereas most economic ties and supply chains are primarily local and proximity-based, still the news is full of “the market”, and just like with one-to-one or few-to-few trades “the market” is primarily used as the default choice of objective criteria for principled negotiations, making it a general reference point, again with unintended indirect value resonance. It is no wonder most public companies have cultivated a quarterly accountancy panic with employees looking at short term results at the expense of their own long term success. And now the same has been happening with governmental policies, considering the sad truthfulness of envisioning a two hour presidential speech with expert-level tongue twisting tiptoeing around to avoid bumping into any imperfectly formulated statement to which the stock market can go stampede, enter in a collective phase-lock and cause a rapid succession of flash crashes even before the Q&A session can be used to clarify anything. Politicians are forced to live up to the imposed cartoonification of their public image. Even if neutral information provision had not been an exceptional luxury, most facts are meaningless unless interpreted and while modern-day news appears to be dominated by opinionators trying to provide us with readymade understanding, essentially economic sciences are an ongoing exploit trying to grow towards higher degrees of exactitude. The models are simply too simplistic, and unfortunately the map is the territory. Unless we reach a stage where trading platforms are smart enough to have no need for excessive simplification anymore, when they can quote Goethe as saying “Treat a man as he is, and he will remain as he is. Treat a man as he could be, and he will become what he should be”, which can be expected sometime between 2020 and 2025, what remains for now is a very hazy picture. So hazy that one has to wonder if we are not trying to create a “free market” by assuming things work like that, but in reality it is a gross and possibly harmful simplification. A simplification we cannot escape from, as it is a collectively self-perpetuating race which developed by accident and no individual participant can exit it without suffering irreparable damage.

Recent research showed that most investors are betting against “the Euro”, which may be personal preference or simply the models they are using. A rather not so convenient detail is that many economic theories only work in times of scarcity. In times of abundance people, and thus the economy, start behaving in unpredictable ways, displaying unselfish and humane behavior with irrational elements such as hope, trust and vision. Yet when an economy goes through a Schumpeterian “creative destruction” cycle because certain parts of the economy collapse, the resulting short-term behavior is pretty much predictable, so as an investor that deals with thousands of fleeting micro-investments the chances you’ll make a profit are much higher when you bet on a predictable course. Apparently some eight, nine out of ten investments are “negative” in the above mentioned sense, and as the stock market is reflected in the news, and most of what read, see or listen to nowadays has been molded towards a sort of accountancy, ideologies or other value systems have nearly completely moved away for a report on the motions of money. As “the news” has taken on the role of the “parliament” already a century ago, not only the politicians themselves have become two-dimensional but as people unconsciously anthropomorphize everything, they have come to embody and represent the whole of a country’s role in international politics. And so we see the Southern countries being bashed by a Germany demanding for “austerity”, while in reality Germany is not the leader in the EU, the EU is non-hierarchical so that it can form a confederate or a syndicate when needed. Germany, although in a typical Northern-European fashion they are quick to point out the weakness in the process, is only pleading for “austerity” in a rather impersonal cooperative way. Germany has been applying many “austerity” measures for the last ten years, and regarding the Southern countries as an equal they expect them to do the same. There is no place for nuance when dealing with the newest of the news, and although “austerity” may help to some extent, it is simply a predictable “negative” approach as dictated by the market, by a long chain of short-lived short-sighted twitches which have caught us all in an unintended rule of “economic fascism”.

“May you live in interesting times”… Were we to believe the mind numbing grind that passes for common sense, we would surely miss out on the magic of every day. Sure, a lucky surprise is easy to recognize as a miracle, but it takes a keen eye to see the wondrous in the mundane. Perhaps it are the enduring influences of Etruscan society where time moved in multiple directions, primarily from past to future, and sometimes from the future towards the past, but Italy’s past holds the keys to many futures. Although it seems to be the imposed norm since the introduction of commercial television, little of the defeatist fatalism of a predestination oriented society seems to stick to Italians although like everywhere pessimism is used as a general excuse for inaction. Nevertheless, with customary expertise in the gentle art of not saying ‘no’, contrary to the Northern tribes it is considered rude to violate someone’s worldview by pointing out the seemingly obvious. Anecdotal evidence has us believe the bumblebee is incapable of flying, as for a long time it wasn’t clear how the aerodynamics of its little wings could support a body of its size, weight and form. Unaware of being the subject of such controversy the bumblebee simply continues to fly, eat nectar and gather pollen for the young. Not held back by presumptions on what can and cannot be done, if a situation becomes impossible, many Italians will do the impossible.

One of the gems hidden in Italy’s recent history is laying the foundation for the invention of the personal computer. With a healthy obsession for design, former typewriter manufacturer Olivetti was able to harvest ten years of knowhow with scientific and commercial mainframe computer systems during a period of organizational and financial troubles and launched “Programma 101” in 1964. It was the very first desktop model, a programmable calculator. Some twenty years later Olivetti set the European standard for “IBM compatible” personal computers with the M24, followed by the 1995 “Envision” multimedia PC which was simply too far ahead of its time combining a computer with advanced audio, video, fax and telephony features. With unfavorable market conditions this meant the end, but nevertheless Olivetti had taken computing devices out of the basement and given them a place on the desktop.

Late 1968 the “Mother of All Demos” revealed the “oN-Line System” built at Stanford Research Institute, which featured many of the functionalities we are now starting to consider as normal, such as a mouse, network computing, graphical user interface and videoconferencing. These efforts later turned into the Xerox Alto as revealed in 1973 at Xerox PARC, which in turn inspired the IBM PC and the Apple Lisa. Like many of the endeavors in Silicon Valley up to the late early Eighties, the NLS was built with military funding, but with the shift towards ‘free market’ dynamics and commercial funding, increased pressure for profitability via an increasingly restrictive license model resulted in the ‘free software movement’, which tried to keep this important evolution free of obstructions. It is important to understand the role of software in the success of personal computing, before software if one wanted to use a text editor, a card game or a flight simulator, it was essentially a replaceable piece of hardware circuitry, a read-only memory cartridge, which contained the ‘program’. Temporary information was contained in the computer register, and could be written to an external storage device, such as a magnetic cassette. The introduction of random-access memory changed all this, instead of loading a program from hardware circuitry software could be used to make the memory region look like the same way like the cartridge.

Surprisingly, despite the ingenuity and style resulting in global trendsetting designs in all corners of the ItalPetrolCemeTermoTessilFarmoMetalChimica industrial complex, despite the often total commitment to the highest quality, and despite a large many people of the highest integrity, Italian business ethics appears to be a work in progress, every now and then resulting in a borderline obsessive compulsive display of sly mischief, as if to collectively compensate for all the good things Italy has to offer. It may be that because it is so noticeably needless compared to the excellence in other realms of human endeavor that it appears so embarrassingly grotesque although that of course adds to the magic and mystery, similar to the Buddhist pantheon where the most benevolent gods have the scariest and intimidating outward appearance, so to at least ensure some level of serious attention. Maybe such an imperfection is advantageous, like copper wire conducts electricity much better if some impure atoms are present. Maybe this is what happens with good people after centuries of being governed by powers that violate their need for self-determinacy, or as the sociological studies say “amoral familialism” due to a strong family identity and weak national identity.

Highlighting just the last ninety years, Italy’s political landscape has been dominated by a megalomaniac theatrical fabulist who in all probability kept up his paranoid corporatist juggling act by daily consumption of “Forced March” cocaine effervescent tablets, and when Il Duce finally fell from grace instead of handing over the governmental reigns to the communist Italian partisans who were the ones who had fought for it, at the onset of the cold war it was considered vital to avoid the rise of Italian socialism, and although less popular, the winner in every election for the next fifty years would be the Christian Democrats. Eventhough Italians themselves were no great fans of the fascist movement, Mussolini had been greatly admired by people like the political and financial elite of the time, gathering praises from icons like Freud, Edison, Lenin, Trotsky, Churchill, Roosevelt and even Ronald Reagan. At the time it was common to believe that “manufacturing consent” was useful and necessary because “the common interests”, the general concerns of all people, “elude” the public. The public was thought to be not follow reason but faith. And this naive faith required necessary illusion, and emotionally potent oversimplifications, to keep the ordinary person on course. Such indoctrination was thought to be at the essence of democracy as otherwise the common people would not submit to civil rule and constitute to a civilized society. Obviously Fascism hadn’t failed, the Italians had failed Fascism, and the Anglo-American interventions in Italian politics therefore had little issue with keeping intact much of the fascist power structure by sponsoring a clandestine “stay-behind” army, while also reinstating the Sicilian mafia for their help with the Allied invasion of Italy and granting them a monopoly on cocaine trade, some forty years before widespread usage became problematic. Besides, better have some responsible loyalists in place to guarantee payback of the many millions of dollars that Mussolini had borrowed from JP Morgan & Co. Wars don’t come cheap these days. As the establishment of the Italian republic had been the result of maintaining the organizational structure set up as a satellite nation state of Napoleon’s French Empire anyway, most Italians don’t have a highly developed sense of nationalist pride, of course not to be confused with the deeply rooted love of home. Italians’ attentiveness to others has resulted in so many double standards that Italian ethics has become holographic, yet that is not necessarily hypocritical, it only became so when government policies assume people are cheating, sought to compensate for that, and as a result started forcing victims to turn into perpetrators. In particular tax avoidance has grown into a national sport, but with the amount of taxes to be paid in Italy that has become the only way for a company or citizen to survive.

Whatever it may be, Italians are far too forgiving of each other’s flaws, and that is not really efficient as far as filtering out the wrongs go. It may be an acquired taste, but once one sees that Italians are unified by their diversity, things start making sense. As pioneering scientist Marvin Minsky realized; “What magical trick makes us intelligent? The trick is that there is no trick. The power of intelligence stems from our vast diversity, not from any single, perfect principle”. It is as if Italian business conduct is a way of letting off steam, Italians are not just creative in an exploratory way, but when they do create something new they do it very well. With their quality focus, ingenuity and personal integrity, it is as if there is no place for too many impurities there, and it concentrates itself there. Without the politics Italy is a pretty close approximation of heaven on earth. Mostly the “furbi” is just ignorance anyway, as with Gramsci’s cultural hegemony, where the worldview of the ruling elite becomes accepted as the cultural norm, the dominant ideology which justifies the social, political, and economic status quo as natural and inevitable, perpetual and beneficial for everyone. The dominant ideology is the ideology of the dominant class, and one only needs a 10% adoption rate to get there, for entrepreneurial Italy that means that only 0.3% of the population needs accept some factoid to make it “common sense”. The thing is that Italy doesn’t have a ruling class. Italy is the name of a country, a geographical region, but not a nation, and although it public administration employs nearly 10% of the population about two-third involves local governments, education, healthcare, police and military. It is actually the one-third remainder, with the state’s civil servants, where the power struggles occur which is clearly visible in the geographical bias as the Center and South provide the majority of employees, and as much as 90% of the “dirigenti”, the first and second level ministerial senior executives. A little less than 4000 people are “dirigenti” and intermingle directly with the central government, with the Italian parliament which has some 945 members spread over senate and deputies. This is less than 0.1% of the population. This is not a ruling class. This is a small bureaucratic collectivist pact of self-appointed opportunists pretending they are ruling with a few well-worded slogans, while in fact the Italian people are ruling themselves with thousands of different solutions. It is no wonder that “fare i furbi” doesn’t work, as no one in the parliament seem to be working either. No wonder the current power struggle seems to center on a professional clown and an amateur joker. Then again maybe ethics work backwards, like Etruscan time does, and it is the precursor of increased openness and a natural tendency to fight blind obedience to authorities that do not particularly deserve solidarity.

Philip Zimbardo’s renewed research on “time perspective” has some deep insights to offer concerning orientation and direction, which are very much in line with what we have come to know within sciences. Strong winters, for example, have a noticeable effect on people’s future focus because of the need to gather and store foodstuffs during the late summer period so to actually survive the long period of cold. Winter, of course, is a predictable phenomenon with a regular occurrence depending on the rotation of our planet around our nearest star, and in the course of time people have devised ways of keeping track of changes, by grouping star into star signs, so they can determine whether we’re just beginning or nearing the end of a season. As Zimbardo shows, in areas with warm winters, there is no real need to provision for the future, but if you’re locked in by snow and ice for half your life you’d better come up with a good solution. During the late middle ages, the 13th century, possibly an obvious solution to deal with growing winter duration at the end of the medieval warm period, hay was invented, cutting grass during the autumn, drying it and storing enough to keep horses, cows and sheep alive through the winter. Hay allowed cities to develop from former trade settlements along the intricate network of Roman roads north of the Alps and with the growing population it shifted civilization from the Mediterranean upwards. The Greek titan Kronos, the patron of harvest, was usually depicted with a sickly or a scythe, with which he allegedly beat his father Uranus, the night sky, to some extent symbolizing a conquering of the seasons. Kairos and Chronos signify two sorts of time, time as in duration, ranging from a moment or an era, and time as in cycles such as the Earth’s day-night rhythm. Only with the Buddhist “wheel of time”, Kalachakra (Kala signifies time while Chakra signifies cycles), do we encounter such notions which of form an integral part of the intricate cosmological tapestry where spatial and temporal worlds interweave. Yet, if the Mediterranean cultures came up with such elaborate concepts more than two thousand years before the Northern tribes, maybe Zimbardo has been overseeing some measures in the local “time perspective”, maybe all this is lacking is a sense of immediacy. As far as long-term visions go, the global humanitarian think tank “The Club of Rome” wasn’t named that way because it was founded in Reykjavik or Helsinki.

We are living in challenging times with events which the world has never experienced yet. Our own creations have come to fulfill an ancient vision, stated far back in history by Aristotle who foresaw instruments so advanced that they “moved of their own accord” and “the shuttle would then weave, and the lyre play of itself; nor would the architect want servants, or the master slaves.” Italy, while even the locals think it has been lagging behind on the more modern Northern Europe, has actually maintained a very large number of small and medium-sized enterprises, more than twice the average in the European Union, of which few depend on assembly line work. By taking it slow, Italy has retained skills that other countries have lost and has kept the chain of experience unbroken for many crafts, in science, medicine, engineering, architecture, arts and design. In rural Italy, within a radius of a half hour’s drive one can still find woodworkers with incredible skill and experience. It is not like Italy has grown backward by being left behind, but it has managed to mix modernity and antiquity in a way that has them ideally positioned for the nearby future. When automation will be automated and general purpose manufacturing means like 3D-printing and modular robotics mix with ICT, when carefully aimed stylish design will be vastly more important than mass production, Italy can harvest its diversity and all will make sense.

If we were to believe the mind numbing grind that passes for common sense, we wouldn’t have the braggadocious bold disregard of normal restraints that made Italians invent the telephone, radio, battery, internal combustion engine, helicopter, nuclear energy, plastic and mp3. If we were to believe the verbal tsunami the news machinery spatters out every day, we wouldn’t comprehend the limits of our understanding and we would never dare to dream, let alone realize one. We would never read The Harford Courant 1933 report on “A mechanical horse, designed to substitute for the farm animal or even light tractor, has been invented by an engineer here, Signor D. G. Alzetta. “I see no reason why legs should not be as fundamentally a motive force as wheels,” Signor Alzetta said. ”Practically everything that nature permits to move, except the enormous forces of the sea and glaciers, gets there on legs. Wheels were the invention or afterthought of men.””

Discuss

“Money is a tangible illusion, the frozen shadow of a thousand trade events.” – European fortune cookie

Pioneering environmental scientist Donella Meadows left us with a powerful as well as simple overview of  levers, of places within a complex system where a “small shift in one thing can produce big changes in everything”. Such complex systems could essentially be anything, such as a firm, a city, an economy, a living being, an ecosystem, an ecoregion or a geopolitical area. Donella described a system in very simple terms, as being in a certain state, and containing a stock, with inflows (amounts coming into the system) and outflows (amounts going out of the system).  Most people know where these levers are instinctively, but tend to adjust them in the wrong direction. According to Donella we need to grow understanding of these levers, where they are and how to use them. This understanding would help solve global problems such as unemployment, hunger, economic stagnation, pollution, resources depletion, and conservation issues. After some refinement Meadows comprised a list of twelve leverage points with explanation and examples, for systems in general.

Trade in its widest sense, such as global commerce, can be understood as a complex system as well, and likewise the dynamics of the most widely used trade commodity, money can be described in terms of stock and flow. Like a balance sheet does, to a certain extend.

To better understand the system of money, it serves to understand its goal in general, and there we come at the different functions of money. Its main functions are those of an exchange medium, a unit of measure, a measure of value and a value store. With these functions we move from trade towards banking and accounting, and back again. Obviously when exchanging goods and services money serves as a sort of universal good. Instead of receiving five chickens and a goat in exchange for a job well done you’d receive a certain amount of money, with which you can then buy goods and services that may be closer to your needs. In order to do that, money needs to act as a reliable yardstick so the money representing five chickens can buy you five chickens everywhere. This function coincides with valuation, the comparative measure of value, expressed in money, so that the money for one cow can buy you more than five chickens because a cow has more utilitarian value. And finally money should store value, during the exchanges as well as retain value in between exchanges, over time.

Simply said, money is “a matter of functions four, a medium, a measure, a standard, a store”. The ‘standard of deferred payment’ is an arguable function but it simply refers to lending a sum of money, with or without personal property acting as collateral. If the value of money is stable, then money can serve all function, but when it is unstable over time, then often another measure of value is taken, such as the gold standard. Nevertheless, this function overlaps with the ‘measure of value’, so the old rhyme still stands.

From a systems point of view, we can more or less define the ‘dimensions’ of money to address regional scope, quantitative differentiation (changes in degree), qualitative discrimination (changes in kind), and difference in time (duration).  In that sense money is a routine aiming to represent both an absolute (quantitative) and relative (qualitative) idea of value at a given place, at a given time. In that sense it is a ritual, a recipe, even a lever, making money a programming language.

The latter is very apparent with the ‘monetarist’ approach, as represented by Milton Friedman, possibly the most influential economist of late. Friedman maintained that there is a close and stable association between price inflation and the money supply, mainly that price inflation should be regulated with monetary deflation and price deflation with monetary inflation. Price deflation could be fought by “dropping money out of a helicopter.”

But is that really so? Recent exploits in ‘quantitative easing’ show that the helicopter didn’t travel all that far and for reasons unexplained was able to drop the money right into a number of bank vaults. It must have been the fuel prices. Yet, if money doesn’t circulate through “the economy”, how does it influence pricing? If some money is only part of a small isolated part of the overall economy, then how can it influence the rest, if it is isolated? Like a beautiful house in the mountains, it may have some intrinsic value, but what does its value matter in an overall context if there are no buyers? Apparently not.

But is printing money actually needed to deflate its value. When looking at the billionaires of Italy since the crisis of late 2008, while the economy is crumbling and is so low-down that it cannot recuperate, their riches have increased with some 40-50%. That 40% increase may have very well been the way inflation and devaluation expresses itself in a semi-open system. Maybe the ‘real’ economy shrank 30%, which would be in line with other countries in the EU. So, the problem here is that it has become so effective to play around and speculate with money, that like with derivatives you can earn more money by playing with impressions than actually doing something. Unfortunatelly this is completely detached of any reality baseline, and like with Friedman’s limited-range helicopter nine out of ten Italians are worse off today than they were ten years ago. A country where nearly everyone had some savings of their own has gradually been eating away on the savings, where much of the personal investments has been in houses while the population is shrinking, what does it actually mean that the Italian Euro has some 30% of its value? Well, very little as it is not reflected in some exchange rate where the value has been reset compared to other currencies. Except for the long term value store, house prices have been coming down significantly because people have run out of other savings, but as this is primarily private owning and doesn’t influence the banking world too much. But are the basic costs of living adjusting? Or simply said, is the amount of money for a shopping basket going down? No, because contrary to the general idea, there is no real ‘free market’ and competition is only a very minor shaping force of market dynamics in Italy. And still, while a Berlusconi’s fortune is adjusted for local devaluation, globally he simply got richer.

And this is what is wrong with the Euro. Simultaneous to its introduction in the Eurozone, price agreements were annulled. To stimulate competition most, if not all, agreements on bottom and ceiling prices are abolished. That included income guarantees for farmers so they’d at least get a minimum price for their milk, so that dominant buyers wouldn’t try squeezing the lemon beyond reasonability. Milk is a great example as it also had a maximum price because it is seen as a nutritious and vital part of a basic diet, so if some seller would increase the price this would impact the whole balance of what they can afford. All these arrangements were let go off in order to hear Finance Ministers claim for years on end that inflation has been under control, which may be another way to say that all the prices going up was not their responsibility.

Maybe if we stretch out everything over hundreds of years on a global landscape, where information flows freely to inform everyone about everything we can indeed speak of a ‘free market’. But when we have regional tightly interwoven socio-economical and geo-political webs, local community, these act as a unity. A city state or a province is a self-sustaining collective ‘organism’… a complex system. Essentially every such region has a mature and cohesive socio-economical web which is self-proficient enough to provide the basic living conditions, and these regions cooperate and collaborate in different ways, forming a confederation or a nation state, with local specialization such as concentration of industries. If such industries are vital to the functioning of other regions, like milk is used for cooking, you’d like to ensure some stability.

Yet what we see within the evolution of technology is a tendency towards increased commodification, to maximize the interchangeability of a resource so that it can be applied within a larger variety of contexts. Up to now we primarily see a history of commodification due to technical progress and market forces, followed by competitive defensive reaction of defending ones turf. This would usually follow a few patterns, such as delayed payments and low-interest loans so that the delay buffer can be used to make appear a certain amount of monetary value which is then used to finance debts. If problems are of such a scale that it spills over into other regions, then one can try to adjust the local exchange rate to adjust the whole web of impacted regions to recalibrate to the new situation.  From a systems approach this is quite limited, with the mutual enforcement of accelerating technological and societal trends the world has gotten too small for that. We are seeing a continuous friction between the shared function of money. On one side it’s a value store, so if there is a lot of money it is stable with respect of minor fluctuations and you’d like to have a stable and predictable value over a long time so that any arrangement such as savings and pension funds retain their value. This is a passive function of money. On the other hand, as an exchange medium on a market place, the active function of money is highlighted and even in the form of indirect money, like securities, stocks, bonds, options, derivatives, the aim is exploit a difference such as a price difference between one continent and another. And you can even try to exploit differences in exchange rates by trying to gauge the overall dynamics of one market versus another.

So, there is a fundamental conflict as far as the timescale of money goes, and we also see that with the geo-economical scope of a currency like the Euro. A single currency automatically forces towards financial, economic and social teamwork, and this can easily respect each other sovereignty within a mutualistic setting. This was known before the Euro was introduced and it was agreed that it was the shortest path towards a European unity and peace. As long as national governments sink back into nationalism, divide and conquer tactics, they will punish their own population.

Taking the long term view, even without the intermediate layer of national governments, the socio-economical coherence of regional communities should be addressed. Automation of manual and mental tasks, productivity increased have started to become apparent after 1995 and are accelerating to such a degree that by 2025-2030 the fully automated part of the world economy will pass by the ‘normal’ economy in value. Add to that the fact that by 2020 the average cellphone has the same computing power as the human brain, advances in modular robotics, and self-learning artificial intelligence and mass-unemployment is a realistic future scenario. With the aging population and advances in medicine (regenerative medicine, cloning, turning of the ‘death genes’) and older people will only get older, and sometime around 2050, 2060 dying will be optional. Now that the babyboom generation is starting to retire, the impact is double. Every pensioner has a drop of income of some 30-40% which is enough to cover the basic expenses but makes it challenging to finance the extras. Their job position however is replaced by a junior, someone at the beginning of their career, who also doesn’t earn enough to finance the extras in life. Those extras are what make a rich country rich, and even if the pension has been funded correctly it is the impact of the spendable income that has governments worried and deliberately shortcutting a country’s pension system into forcing additional labor years isn’t going to fix that one. The most valuable solution ahead, is a base-income, and that is only viable when applying a dual currency model, with local money which can adjust itself via exchange rates, so that it maintains a consistent value in itself. Along with that the Euro can be maintained as a global currency just like Eurodollars used to.

There is a viable future there, for banks to facilitate diversity, taking the lead as “certified valuators”, which is actually where banks and money originated from. Instead of a ‘gold-standard’ the standard for the future is information, not as static data, but as a living localized process. It can solve one of the primary paradoxes of money; a ‘universal coin’ does not imply a ‘uniform coin’. There is a future in context-dependent universal rating mechanisms which establish mutual interpretable value. Of course, on a meta-level such ‘universal rating mechanism’ will have context-dependent interrelational value too, and there are ample opportunities there for the financial business.

It doesn’t matter that some societies are more oriented on a baseline of materialized value goods such as houses, land and other semi-scarcities, or other societies have a baseline of credit with more immaterial goods like trust, mutual dependency or goodwill. The same difference already exists between Small and Medium-sized Business and the monopoly money as governments are using it. The issues and problems arise from these entities using the same coin, the scale of things have gotten so much apart the elasticity of the relation is gone, and neither side can really do something about issues of the other… which is quite apparent in the current self-fulfilling recession. If money is a universal recipe, it is worth evaluating whether in most cases it actually still needs a uniform currency.

Discuss
You can add a private note to this diary when hotlisting it:
Are you sure you want to remove this diary from your hotlist?
Are you sure you want to remove your recommendation? You can only recommend a diary once, so you will not be able to re-recommend it afterwards.

RSS

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site