All of the variation, the diversity and everything that is interesting is rooted in entropy. The flawed nature of nature prevents emergence from becoming repetitive. There may be nothing more natural than variation. This however comes with a consequence that is just as interesting. The variation isn’t restricted to only the matter in the universe. Variation over time is the observation. This results in the bulk of emergence becoming extinct. Everything becomes extinct; either through abrupt failure or through success and transcendence. Change is always in the cards for everything.
This makes human loathing of change seem a bit counter intuitive. This is because entropy is only one module of the machine. Normalization is the process by which the successes propagate. This is extremely interesting because normalization is not by a long shot… well… the norm. Like most human endeavors, most natural experiments fail. Abrupt extinction is by far the most common occurrence. Entropy produces more variation than normalization can produce successes. Even as such, success is still subject to variation, transcendence and thus extinction over longer periods of time.
The evolution of the modern human is credited with some form of systemic entropy. The Savanna Hypothesis suggests that human evolution encountered a disruption that accelerated the variation and produced interesting and useful characteristics in our ancestors. This would be one particular instance where entropy was exacerbated and very disruptive; resulting in novelty. Of course normalization played a role; as the characteristics that Natural Selection had endowed our ancestors with influenced the manner in which the novelty was expressed.
The understanding that resulted in the crafting of artifices has proved to be extremely disruptive to the biosphere. The combination of the natural predisposition to normalize and fill a niche’, and the constant change associated with the resulting technological progress seems to have created an inner struggle in modern humans that doesn’t seem to exist in the whole of humanity; but rather is more evident in the developed world. Civilized humans are interesting and unique for many reasons that are affirming and concerning as well. The concerns of extinction risk revolve around the idea that maybe a more general instance of normalization means the abrupt extinction of civilized humans. At this very moment, the implementation of a strategy of “mutually assured destruction” has normalized the most dangerous scenario that one could imagine. This doesn’t just entail the extinction of civilized humans; but also the bulk of life on the biosphere. We have put all of life as we know it at risk as well. We have even narrowly escaped this scenario on one occasion. We forget this; in the illusion of the safety of our brick homes, in the fog of political ideology and deodorant ads. Cognitively, we attend to our immediate surroundings; which is an artifice that divides us from the natural world that bore us. Our perception of reality has thus become an artifice. We have forgotten who we are; and our place in the universe. We have created silly notions like property, justice and inalienable rights; while teetering on the destruction of an entire global ecology that appears to be rare in all that we can survey. This is an inconvenient fact for the optimist.
The cause of these issues is clearly the production of entropy in the absence of normalization. I would like to suggest that the absence of normalization is rooted in the disconnection from nature that our modern conveniences and memes have caused by hijacking our attention. Science has the potential to mitigate some of these effects by directing attention to nature; however natural distributions may not allow for this to become the norm. If attention to science is proportional to scientific endeavors in the immediate surroundings, it would seem that we are currently playing a negative sum game. Opportunities for people to be in nature and thus connect directly can also be a viable influence, however in a world where working in a building and going home to a building with a television and a beverage both marketed as a “reward” leaves much to be desired as well. I can’t help but see this as more exacerbated entropy that would only enable similar types of dangers to that which we have created in the past.
My contention is that this is most likely to end with the extinction of specifically the technologically progressing human, by a combination of the normalization associated with niche’ existence and by the entropy and resulting novelty that is associated with transcendence. I find it difficult to reason out a dichotomy of human and machine when the competitive advantages of merger is so great. I also find it hard to reason out a place for an evolved species in a high tech environment, for the reasons that I have previously expressed. I also find it difficult to buy the notion of humans becoming pets for the AI as the AI is not likely to be tied to the biosphere as legacy humans are and the opportunity to explore and advance might be more appealing than carrying the dead weight of a bunch of freeloaders. This of course requires some qualification. When humans began domesticating dogs, they had a practical purpose. The superior senses of the dog helped people in hunting and protecting the group. It was symbiosis. What practical purpose can a human provide for super intelligence?
Work as we know it is only about 100 years old. Before there was essentially only business and subsistence. I would suggest that is likely to make a comeback. This of course requires some qualification as well. There has been an ongoing trend to refine production methods with technology and pass the technology to the general public. This is happening with technologies like 3D printers, for instance. This movement toward automation would only simplify this process. A combination of availability and necessity seems evident in the coming decades as the technologies are in the works and the crises are as well. There has also been a long running trend of decentralization since the time of Adam Smith, the birth of the New World and the enlightenment. There doesn’t seem to be a defeater to this trend. It seems that the end of the era of the 5 / 40 job may just return us to a state of relative self sufficiency like we previously had lived under. I’m speaking of legacy humans of course; though I can’t imagine the remaining humans numbering as much as a billion.
The notion that the AI would take the proverbial crown from humans is based on the fallacy that we wear it now. If there is anything that we are not, it is in control. We are on the verge of “causing” our own extinction every day, with every “decision”. We are not the drivers. We are driven. We are the product of and a vehicle for natural law… and the AI will be too.
Many developed countries are struggling with the economic instability associated with saturated markets. The common denominator is often supply and demand. For many, the issue is lack of growth of domestic patronage. This is a probable ceiling for every GDP.
Much of the issues based upon current political memes concerning immigration and acceptance of refugees are rooted in the saturation of the markets in the countries in which they exist. A developed world melting pot of sorts seems to be the political solution to the lack of growth in the markets.
The healthcare market in the US was patched by mandating insurance for those who often need it the least. This is the strategy of the famed “Obamacare”; which was originally referred to as the ACA (Affordable Care Act). An industry needed more patrons; so the government forced it with legislation. This was of course temporary as the ceiling, though raised was still finite. Legislation for the promotion of illegal immigration is a hot topic in the US as of late. This is probably because illegal aliens are seen as at least potential consumers. Making citizenship more easily attained however is not part of the agenda. This is by all accounts pernicious. By giving illegal immigrants limited rights, the markets might be floated for an extended amount of time without the obligation to new citizens in the event of financial crisis. It has the appearance of a ponzi scheme where a class that falls in between second class citizenry and illegal alien is led on without any of the inalienable rights given to naturalized citizens. This appears to parallel the conditions that the influx of refugees falls under as well.
The issues in Europe are similar. In Germany for instance, the refugees don’t seem to be enticed toward the benefit of citizenship either. This is a problem for many reasons. The most important is probably the fact that these people are not migrants of their own volition. Though the hype of the issues with this are a bit over inflated, the issue still remains. Naturalization is not the primary intent; and possible financial boons will be taken advantage of.
In Japan the push for population increase is falling upon the Japanese women. They are being coerced in more and more despicable ways to have children. This is a huge issue for those who wish to devote their lives to their careers. In trying to preserve their culture they are adding a blight to it with this issue.
The most concerning issue with this wide spread problem is the political “solutions” to it. In third world countries, population control methods are being implemented. One of the most promising that has been demonstrated in several cases is the promotion of higher education in girls and young women. Where the youth have educational resources and encouragement, few females want more than one child if any. Careers become more of a focus. In the developed world, especially in the US, spending and promotion of educational resources have fallen off. This is also the case with funding for science. It’s been pointed out that population control is reserved for the third world to make way for population increase in the developed world. This developed world melding pot is sold as one thing and used as another.
My intuition is that policies would rapidly change in the throws of financial hardship. This is unacceptable. Immigrants and refugees should be enticed toward citizenship. Any other policy is ethically devoid. We can no longer refer to the west as the “Free World” under these conditions. The term developed world is losing meaning by the day.
An Approach to a Scientific Economic System
An Open Project Proposal
By: Tory Wright
Socioeconomic systems though complex and chaotic, are very measurable and probably somewhat predictable; with the benefit of the many scientific disciplines. Though much measurement and prediction is occurring under the current neo-capitalistic paradigm, an approach based on General Systems Theory would be more likely to produce the desired outcomes and coordinate human society with external systems. This would also be more likely to assist in mitigating extinction and existential risk.
The Model is based on a common tuple. <T ,U ,Y ,Q ,Ω, δ ,λ,> The tuple denotes two subsystems. The Western characters on the left represent the Particular function of the socioeconomic system. This is the distributed manufacturing and distribution system that today’s business models compose. It states that over a period of time ( T ), an input to the system ( U ) produces an output ( Y ); resulting in a particular state ( Q ). The Greek characters on the right represent the Archetype function of the system. This is the administrative function of the system. This would replace the ancient political structuring with a multi-disciplinary study. It states that an admissible input to the system ( Ω ) brings about a transition ( δ ); that results in an observed output ( λ ). The model would be based upon observed outcomes.
The Archetype is a theoretical and experimental resource that aims to produce generalized axioms for creating project models. The merit of the archetypal axioms would be based upon the observed outcomes in the Particular.
The Particular is an applied and experimental resource acquisition and distribution subsystem. It would use the axioms produced by the Archetype to create individual project models. It would also be a field testing ground for the axioms produced by the Archetype.
The Archetype and Particular are modeled after the theoretical, experimental and applied domains of the scientific community. The difference however, is there would not necessarily be a peer review process. The axioms would be based upon the observed outcomes in the field. This is the essence of the interaction between the Archetype and Particular. The socioeconomic system itself would be a complex, self-organizing system. It would be the product of it’s initial conditions as opposed to being a product of artifices. The Archetype produces the axioms for the creation of individual project models; and the Particular tests the efficacy of the axioms through experimentation in the field.
The approach is based upon the functions of physical and biological systems. It would self-organize by responding to the general environmental conditions in a naturalized manner. This would be accomplished by computer mediation. Data driven, multi-disciplinary analysis, inferential statistics and observed outcomes might balance human influence with the overarching systems. Naturalization is most probable when following the most accurate approximations of natural axioms.
Since the system would be based upon the observed outcomes, practicality might be intrinsic to the system. The system is poised to produce desired outcomes as the observed outcomes are the metric by which the efficacy of the axioms are to be measured.
It’s difficult to produce a political description of a system that is apolitical. The most accurate description may be a balance between Instrumentalism and Proceduralism. The Archetype is somewhat Instrumentalistic and Epistecratic however it is influenced by the Particular which is Proceduralistic. Since the Archetype is charged with producing the axioms, it fits within the description of Instrumentalistic. Since it would likely be those with higher education that would be analyzing the system, it would fit the description of Epistecratic. The Archetype wouldn’t however have control of decisions. The Particular would allow participation in the process; thus it would fit the description of Proceduralistic. It would be the outcomes in practice that would be the metric for decision making.
Risk management might be based on the theoretical principle that Entropy through Normalization begets Novelty; that over time might become that which is Long Normal. Efforts to remove Entropy from the system through analysis by multi-disciplinary inferential statistics would be likely to minimize unfavorable consequences. Coordination with the local, environmental, extra-terrestrial, behavioral, biological and physical systems would be likely to produce less Entropy, and thus the desired outcomes; as unexpected outcomes would likely be minimized. Consideration of externalities in the formation of individual projects would likely be intrinsic to the system.
It is said that, “The universe is in the business of Entropy”. That is the observation. Entropy is by far the most common emergence. Extinction is thus the most common outcome. This however requires some qualification. When considering archaeological and geological time spans as opposed to historical time spans, extinction is the sole outcome. This would suggest that concerns over extinction risk are more immediate goals. It might be better to categorize as abrupt extinction risk. It would stand to reason that more long term goals would be subject to a more advanced theoretical understanding than our current one when the relevant conditions are upon us. The best approach toward long term goals might thus be to advance our theoretical understanding. This too however requires some qualification. The advancement of our understanding has brought about an awareness of new risks that we hadn’t previously considered. Extraterrestrial risk factors such as asteroid strikes were not likely to be addressed as little as 50 years ago.
Crises are another risk factor that are recurring at an accelerated rate. This may suggest that our current economic paradigm is entropic. It would stand to reason that some degree of normalization is in order. In the event that a pure systems theoretical paradigm is not the outcome, a socioeconomic theory with such a basis could prove useful just the same; for the purpose of risk management alone.
That which is to survive and become novel and eventually long normal, is subject to normalization. This probably entails coordination with a critical mass of existing systems. The focus on normalization is likely the most effective axiom for risk management by our current theoretical understanding.
We have suffered the consequences of an ancient, Coercion based socioeconomic system for upwards of 10,000 years. Our understanding of natural systems has long since advanced beyond the point to support it’s incoherence. We however struggle with economics as it has become a heuristic. Economics is one of the strongest environmental pressures and thus likely one of the most difficult to reform. It would stand to reason that only strong environmental pressures would be likely to produce reform as a response.
Given that our socioeconomic paradigm is indeed sufficiently entropic, General Systems Theory might suggest that many of the issues that we face are consequences of our inputs to the overarching systems. It would be in our best interest to do the analysis and the math to determine more empirically if this is the case. This is not something that is currently being done by Economists despite it’s appeal to reason. This leaves us arguing widely from a state of ignorance. We will not have to wonder so anxiously about whether or not we will have a future if we do the work to provide one for us.
The Argument: https://gfxgarage.wordpress.com/2015/08/
Though there would be a great deal of scientific data and processes involved in such a system, I would have to say no. The basis itself is not indicative of the characteristics of natural systems in general. Rather the main tenant of RBE is that “the resources are the common heritage of all of the inhabitants”. It’s not made clear as to whether or not that means humans alone; however suggestions throughout the explanation tend to suggest that it is. The basis for this reason appears to be sociopolitical and very socialistic.
The major difference between RBE and currency systems is the lack of a unified metric for valuing products and services. This doesn’t appear to be a problem with RBE as distribution is Open Access and thus doesn’t require it. There is the social value of products and services which is dynamic and somewhat Democratic; in that products and services would be utilized based upon public want and need. This of course would be dependent upon availability with respect to the initial survey. My argument here of course requires some qualification. Species propagation is dependent upon many factors; one being resource constraints. Where resources are apparently abundant, species impulsively take advantage. This is observed in all ecosystems. There is really no scientific argument for sustained abundance due to the manner in which all biology propagates. The observed favorable impact of economy, scientific methodology and technological advancement has been a rise in the standard of living and only that. RBE does not seem to be capable of removing the coercive nature of resource calculation and distribution for that reason. This argument also requires qualification. It’s not the physical abundance or scarcity that invokes impulsive responses like population growth. It is the perception of the abundance or scarcity of resources that brings that result. In any situation where resources are perceived to be scarce, the natural impulse to hoard is to be expected. There are no defeaters to the phenomenon of scarcity in RBE; only the phenomenon of artificial scarcity. For this reason RBE seems to be more coherent than the current system on this topic specifically. Of course most humans are only going to be concerned about the socialistic fairness that would appear to be intrinsic to it. This however is not likely to be the case in practice as abundance is likely to be thwarted by our own impulses to take advantage of surplus. Natural competition for resources is a fact of nature that seems to defy all proposed solutions. The notion of Abundance is not realistic; and arguments that require abundance for the favorable outcome are fallacious. This paragraph is a basic explanation of the arguments that follow in this article.
RBE only addresses the lack of knowledge of the resources available on the biosphere alone. The plan for calculating the carrying capacity must be dynamic in that carrying capacity is more than a division of resources among the populous. RBE takes this into account however there is no descriptive plan for calculating carrying capacity. It is of course reliant upon the technological advancement; efficient and effective usage and re-usage however there is no real plan to deal with these specifics that could effect the outcome. RBE seems to be truncated and too narrowly focused to produce the outcomes that are being promised. This is because it only focuses on the distribution of resources to humans. It doesn’t consider the biosphere as a complex, self-organizing system that needs to be managed in a naturalistic methodology. For this reason, I find it to be lacking in solutions for ecological issues, health and well being, ethics and security. This isn’t however because the system couldn’t address these issues in detail after the fact. It’s because of the issues that could arise due to a foundation that promotes a social heuristic that isn’t likely to value the fact that closed systems do not exist in reality; and human social systems are to be subject to natural law no matter how advanced. Distribution of resources among humans has little to no relevance on the management of the biosphere as an ecology. Though it has relevance to the health and well being of the population there is no clear argument for how it will promote it in a competitive environment. This argument requires some qualification of course. The previous paragraph explains that though there would likely be large advantages to RBE the basic competitive nature of self-organizing systems isn’t being addressed directly. The distribution of resources toward public health is going to be dynamic and there is no declaration of the sovereignty of that aspect. The basis of RBE is political and thus easy to manipulate. History has taught us grave lessons concerning this. The same principle applies for ethics. In competitive environments human amygdalas promote insecure and defensive types of behaviors. RBE does not appear to address this in an effective manner. The movement away from the warlike society of yet is a wonderful thought however RBE does not have a sufficient argument for it could achieve this as it is based upon the notion of abundance being feasible. I have already addressed this. It also does not seem to have a specific plan for protection from off world natural disasters. As a matter of fact, it tends to ignore not only the resources that space could provide, but also the dangers. Again, humanity is subject to natural law no matter how advanced.
RBE seems to be a political ideology to be scienced the shit out of. Though I think it has the potential to be a much better system than the one we currently live under, I also think it has the potential to be much worse. It appears to be another truncated political system that would produce more struggling with systemic issues than it solves. This is because the foundation doesn’t directly address the issues. It doesn’t create a heuristic that is coherent. It appears to be political ideology in which scientific reasoning is to be imposed. This doesn’t appear to be an effective approach to a scientific economic system as the approach itself is not scientific. It’s socialistic and instrumentalistic. I’m not confident in RBE.
Everyone knows beauty when they see it; but what is it exactly? What are the characteristics; physical, philosophical and spiritual? Is it in the eye of the beholder or the properties of the universe… or both? Let’s look at this question in depth.
Up until the 1800s there was thought to be obvious observable, physical evidence of unfavorable characteristics in human behavior. In the time of Freideric Nietzsche, physically unattractive people were thought to be morally unappealing as well. When confronted by a person that shared this belief and expressed it to the homely Nietzsche he replied, “Do you know me?”. It seems silly in hindsight to lend credence to such a notion; but there is an interesting fact about the way that the brain processes that particular type of information that could explain the confusion.
Gustatory impulses are processed in an area of the brain that is located beneath the boundaries of the Temporal and Frontal Lobe. This is where the physical reactions to unfavorable behaviors, thoughts, ideologies, forms etc. are processed as well. This is why vomiting often accompanies horrible tragedies, accidents, traumatic experiences etc. This not only correlates the more severe forms, but also the more benign. Some of the more benign forms can be normalized in the Frontal Lobes as Novelty.
The notion of unattractive people being prone to moral depravity led to a study. The researchers were testing the idea by testing a prediction that an average of the facial features of a large group of the worst criminals would produce the types of facial features that would distinguish criminal impulses. What actually happened was the average of the facial features in both the male and female studies produced portraits of very good looking people. What they found from this study and the independent studies that followed, was attractiveness is normative to a large degree. Attractive people essentially have average, normal features and we impulsively find that attractive.
There is good reason for us to prefer what is normative. It’s often an indicator of health, strength, social functionality etc. It’s not quite as shallow as we tend to think. It’s also not quite as black and white. The image above shows that Normative Appeal is essentially the rule. This is the case even though we find differences to be beautiful as well. Novelty is normalized with what is considered Long Normal when the gustatory response is not present or not strong enough to outweigh the interest. Marilyn Monroe’s beauty mark is an example of a small imperfection that made her more interesting; and added to her beauty. It’s that very small lack of bilateral symmetry that made her more interesting. Humans may strive for normality, but we are also bored by it. That which is different without being disruptive or destructive is often interesting to us.
All of this information requires some form of metric for comparison and contrast. Beauty is a spectrum. We find some things to be more beautiful than others. We also have varied accounts of beauty; so it also seems to be subjective to a small degree. The metrics are however dynamic; since we find so many characteristics to be beautiful. There is an interesting phenomena that occurs when the realistic human metric is forced on the observer. In this case small inconsistencies can be extremely unappealing. This is what is happening with the Uncanny Valley. Many of the inconsistencies with stick figures to cartoons to 3D cartoons to more realistic characters are forgivable under many metrics. This persists until the image nears reality to the point that it forces the realistic human metric. This is what all portrait artists who do realistic portraits struggle with in their final pass.
When an image becomes so close to a realistic human there is really no other metric to compare it to, than a realistic human image. This is something that humans are very sensitive to. We use this skill not only to distinguish one person from another but also to judge mood, health, physical fitness etc. All of the characteristics, their benign opposites and more account for our perception of beauty. Michelangelo tended to produce ideological beauty where as Picasso tended to push the bounds of asymmetry. There are many types of beauty and it appears that the overarching axiom is Normative Appeal. The homely Nietzsche was ideologically beautiful in his intellect. The most heinous criminal can have the physical appearance of a character from Greek mythology; and small inconsistencies can either put us off or drive us wild. The phenomenon of beauty is in itself beautiful; because of how immensely interesting it is.
The model is based upon General Systems Theory and the Epistemology of David Bohm’s Implicate Order. This is to produce the most complete and coherent socioeconomic system as practical
< T, U, Y, Q, Omega, delta, Lambda >
In the tuple above, the ( T, U, Y, Q, ) is the Particular portion of the mathematical framework for the model. It indicates interactions with and within the socioeconomic system. It represents time (T), input (U), output (Y) and state (Q). It denotes that input produces an output and results in a particular state over a certain length of time. The ( Omega, delta, Lambda ) is the Archetype portion of the mathematical framework for the model. It also indicates interactions with and within the socioeconomic system. It denotes that admissible input ( Omega ) through transition ( delta ) results in the observed output ( Lambda ). The Archetype functions as theoretical reference for the Particular which is the platform for practical application. The input ( U ) can be compared with the admissible input ( Omega ) to insure that the output ( Y ) results in the desired state ( Q ). The Particular also provides testing for the Archetype. Axioms provided in the admissible input ( Omega ) are tested in practice for refining theoretical value.
The Implicate Order was intended to provide the most coherent cognition as practical however the attention to “wholeness” could be extremely useful in modeling a socioeconomic system. The tendency to consider systems as fragmented hierarchies could result, and has resulted in considering them as closed systems contrary to the physical reality. Where all interactions are considered, there is minimized opportunity for unexpected outcomes. Where there is a pragmatic ( Omega ) the ( delta ) produces an ( Lambda ) that is as similar to expectation as practical.
To develop the Archetype, analyzing data sets for interesting relationships with cross disciplinary Inferential Statistics could produce the axioms for an initial hypothesis. The hypothesis is then tested by constructing business models in the Particular for practical application. The data that results feeds back into the Archetype to refine the axioms. This feedback loop begins the self-organization.
In trying to model a socioeconomic system that is generally coherent, General Systems Theory seems to be the obvious choice for a basis. A multi-disciplinary study towards the goal appears to be the route. The issues that we have faced with Socioeconomics has generally been due to either lack of understanding or more recently, lack of implementation. The accrued entropy has made the need for fundamental change not only more evident and accepted but also more dire. The attempts at developing contingencies have been a long line of partial solutions. Though at this stage such a change could produce large effects, it may still be too little too late. General Systems Theory may provide a conceptual basis for a more coherent socioeconomic system. Realizing that socioeconomic systems are most likely to be coherent if they are inherently self-organizing systems, the model would require that particular property. This may be possible by modeling the system to be intrinsically dynamic, abstract and of course decentralized. This can only function properly if the inputs are considered with a high degree of coherence themselves. Rather than relying on the failed attempts at incentives that civilized society has defaulted to for thousands of years, mathematical attractors might be employed by the scientific disciplines that are relevant to the specific use case; be it Physical Science, Botany, Psychology etc.
The dichotomy of “Particular” and “Archetype” distinguish the theoretical (Archetype) and practical (Particular) usage of the tuple in the image above. The Particular represents the practical applications of the economic theory for business models and the Archetype supplies the modeler with axioms to ensure coherence in individual application. It’s important that admissible input (omega) be well researched across the relevant disciplines to ensure that the transition (delta) produce the intended observed output (lambda). This being the case, the input (U) can be checked against the axioms associated with the admissible input (omega) to ensure that the output (Y) brings about the desired state (Q).
Inclusion of all variables is extremely important due to the fact that there really are no closed systems. The fact the consideration of input and output relies upon a created boundary doesn’t suggest that it is an accurate representation of the physical state of the system. Entropy can more easily arise when variables aren’t accounted for as unexpected effects are likely whether or not the intended function exists. This doesn’t necessarily mean that destructive effects are probable in any certain instance; however they become more probable as instances accrue in multitude. Inclusion of as many variables as practical is essentially a preemptive solution to risk management in a more scientific sense.
Are there financial incentives to secure data and funds? In too many cases it’s not the case. When considering risk as possible loss of funds alone, one could expect that funds spent on security measures would be part of the equation. Another variable would be securities like insurance. The goal of course would be to get the smallest possible number as the yield. Negative numbers would be best.
It’s important to keep in mind that insurance is paid without exception; even if no losses are taken. This is the most common form of security. It doesn’t seem to be a stretch to suggest that insurance and network security are weighed by their ability to prevent overall interference with the bottom line. It’s trivial to find instances of huge losses accompanied with little to no security measures. In all cases this is covered by insurance.
So what is the financial incentive to secure funds? It’s an interesting question with a disturbing answer. This is because there are really no local incentives. They are primarily global in that they are based on the health and stability of the economic system. This of course is not a part of any entity’s bottom line. This is a “feature” and a function of the “Free Market”.
Businesses that handle data often try to secure it. For many this is their bread and butter; and since it’s often for sale, it makes sense to lock it up. This is especially the case if they are a high profile company. Possible loss of patronage would be a financial incentive to secure data and even funds in that case. This however is only the case if there are competitors to lose patrons to. The major ISPs really have no financial incentives to consider the wishes and / or needs of their patrons as they too often have no other choice.
The most disturbing scenarios are those instances where banks “suffer” heavy losses. The insurance company secures the funds whether or not the bank tried to. This however get’s worse. Stolen money is illegal money. In order for the thief to be able to benefit from the theft, the money must be laundered. Banks are known to launder hundreds of billions yearly; just to get it back into circulation. This is done by falsifying legitimacy and essentially buying it back at pennies on the dollar. How’s that for negative losses?
Now consider the incentive for securing the financial data on the proposed IOT refrigerator that orders food for you. Every bit of the disturbing scenario described in the previous paragraph could happen without your knowledge. Your account gets wiped out. The insurance covers it and the bank buys it back at pennies on the dollar. So one might suggest that it’s the lack of security that is the cause of the problem; however even if the company that produced the refrigerator is held at fault, their insurance still covers it. Revisit the second paragraph and consider the implications. It’s also important to keep in mind that the company that sold you the refrigerator likely has your and many others financial data; which makes them a viable target.
The most disturbing aspect of this all too common scenario is the flow of capital. In this ever more connected world, crises are poised to come more and more frequently. This is an implication of maximized consumption. This model should be expected to rapidly punch itself out. The “Internet of Things” under these conditions, as initial conditions is a stupid idea. The reason that it’s not seen by those who promote it, is because they are only considering their own bottom line.
At some point, the rapid concession of crises will promote fundamental change. Even with a socialistic solution such as Universal Basic Income, there will still be entities being fleeced by this exponential entropy. On a political note, the new Feudalism that David Brin warns of is a real concern. Saturated markets and very calculable, and finite consumer allowances would be fought over in the background. Maximization of profit would continue to aggregate markets and wealth to an unfavorable end. It’s a mathematical fact.
So what are the financial incentives for security? In the big picture, there are none; none at all.
In an attempt to create a graphic to illustrate a very generalized representation of the Crisis Cycle, I used strait lines to indicate four specific economic states. This being cyclic of course insisted that it would repeat as it has in our economic history. The graphic thus had an appearance similar to a saw wave produced in the oscillators of the synthesizers that are used to create digital instruments for digital music production. This is what is seen in the graphic above.
The next graphic depicts the four states that I wish to focus on in order to reduce the Crisis Cycle into explanatory segments. The legend at the bottom of the graphic points to the states represented in the saw wave pattern and to the written explanations below.
This is an analysis of the Crisis Cycle as it is expressed under Capitalism. Of course the previous economic paradigms have had similar results; however the components and the social orders were much different. The underlying drivers were the same though.
Our economic systems are growth based. Economic incentives are leveraged to maximize growth. The one most influential appears to be the corporate model. Corporations are coerced toward growth by dividends that are promised to stockholders; who help to fund corporations by buying stocks. This is mutually beneficial while the market is growing as the increasing profits are shared with the stockholders by increasing the value of the stocks. The corporate model also has an advantage over small business as it can leverage its ability to trade in much larger volume and even provide services for itself to cut costs even farther. This allows corporations to have more competitive pricing, more resources for expansion, more to offer manufactures as a distributor, more resources for marketing and more funding for research and development etc. During the growth state the corporate model is poised to control most of the markets, The growth state begins with growing numbers of businesses. This is the horizontal growth that makes economies stable. Since there are so many businesses with so little overall influence, if one or even many were to fail, there would be little felt by the economic system. As corporations continue to grow and corner markets, the growth becomes more vertical. This means a smaller number of larger businesses with more overall influence in the economy. Such businesses can actually leverage their interests when they are in the interest of the economic system. This isn’t necessarily destructive when corporations are providing growth for the economic system.
When the economy is heavily influenced by large corporations, mistakes made by them is felt in the economy. This is a situation where the interests of a large corporation being leveraged can be destructive. This is because this situation is indicative of growth maximum. This is characterized mainly by market saturation and flux in the economy. Since large corporations begin to lose the advantages that they once had in this state, the ability to continue securing dividends becomes more questionable with time. In order to continue increasing profits, large corporations have been employing new strategies. Small businesses are now being bought out in the interest of risk management. Research and development is a risky proposal in that, it may or may not pay off. The advent of “Start Ups” allows large businesses to buy proofs of concept rather than investing in projects with a probability of failure. This however enables the instability of the economic system by working against the needed horizontal growth. This of course compounds the problem. Nefarious behaviors are also more likely in such a urgent situation. Corporations are addressing issues in ways that are destructive not only to the economy but also to the public establishments. Tactics like offshore shelters and regional monopolies are some of the most well known. There are also instances of not delivering on agreements for subsidies though the subsidies are accepted. Anti competitive behaviors to defend cornered markets are fairly common. Mergers are still occurring even though it’s likely to further destabilize the economy. Ex-corporate employees have taken positions in government organizations making regulation improbable even though the organizations are still being funded. When corporations become so influential that the well being of a substantial percent of the population relies on the well being of individual corporations, there’s little leverage for accountability. Reform is unlikely in this state due to this lack of leverage. This suggests that the economy is to continue becoming more and more unstable.
Falling stock prices, large mistakes or even concerns about impending decline can set off a chain of events that has catastrophic effects on an economy. Something similar is probable in an economy that is both at growth maximum and unstable. Since decline is statistically likely, it is expected. This has the effect of a percentage of the population preparing for the event by saving. This is currency that is dormant as opposed to in flow. This of course compounds the problem. The rising dividends are an eventual source of failure as the gap between the profit margins that secure them and the dividends themselves closes. When there is little confidence in a companies ability to produce a return, the most likely outcome is loss of stockholders. This is an eventuality for any corporation and a larger problem during economic instability. The nefarious behaviors can have catastrophic effects as well. An instance as large as the real estate scandal in 08 could create a chain reaction in other unstable markets, sending the entire economy into decline. This is all due to an expectation of growth under growth maximum. Over time the need for growth becomes more dire and less likely until the economy collapses under its own weight. The result is economic depression. This includes increased instances of hunger, disease, homelessness, suicide, mental illness, etc.
In the midst of economic depression, the populous is coerced to create solutions for the resulting issues. Behaviors become more frugal as access to resources is more constrained. Localized partnerships are more reliable as infrastructure is less reliable. Gardens become a tendency, barter becomes more common. Grass roots solutions begin to rebuild the foundation for the economy. Public services for food, clothing health care, and housing are an imperative as society regroups.
The most concerning issue intrinsic to the current economic system is it’s basis on growth. The lack of sustainability that results produces issues that are not only economic but also ethical, moral and legal. Loss of capital, property, health and even life is an expected result from this model. This is in keeping with previous monetary systems. It’s well understood more modernly that the perceptions of scarcity entice those more sensitive to threats to become more aggressive. This results in disparity and has since the dawn of civilization. This expresses itself through the cycle until the system collapses.
The most appealing part of the saw wave is the pinnacle. If there were no incentive toward growth there would be no fertile soil for the nefarious behaviors to grow. This however isn’t a likely scenario as incentives are the mature technology of political systems. This is in spite of their cyclic, catastrophic failure. Political institutions have a tendency to try to coerce the behaviors that are deemed favorable through positive and negative incentives. This at times has the opposite effect or some strategy arises that enables sidestepping. Overall incentives have been proven generally ineffective.
An attempt at solutions for Capitalism tends to result in the same conclusion. Reform is insufficient for a significant favorable result. The outcomes that Capitalism has produced have been liberating and have raised the standard of living under growth; however Capitalism has the opposite effect under growth maximum. This is keeping with previous economic systems. The social hierarchies have always been built with access to resources as the primary driver. All of the disparity that resulted from nefarious behaviors was likely in the interest of previsions for inner circles. This was promoted by the more aggressive or fortunate allying with each other until the social hierarchy was built. This obviously still occurs today. The evidence is overwhelming that this is to be expected under any currency system.
The Crisis Cycle may not necessarily be a part of humanity’s future. Models are being formulated that mitigate many of the issues that arise with monetary economics. This is a very opportune time for such an occurrence. New models could be implemented during decline given that they are a path of least resistance. This may not be unlikely as a collapsing system would be easy to exit. The probability is better still if the types of solutions that the new models are offering correspond with the types of solutions that are employed under recovery. Now is the time to research and develop post currency solutions.