Critique of The Future of a truly stable economic order by Jan de Dood
An email sent to Jan 12/10/2012
An interesting read, much I align with, and much I disagree with.
I found this bit on page 5 particularly resonated:
Philosophical speaking, you could say that we have a linear perception of time, while time is currently experienced multi-dimensionally, and infinitely. The more infinite one’s view, the less one is bound by the perceptions of the age in which one lives. Spiritual dimensions, which are rarely recognised in terms of future human development, are often left out of current probability theories.
While I align with much of what you say on page 9, I offer you an alternative perspective that you do not yet appear to have considered.
Definition of money as a market value
Money seems to contain two different and very complex functions.
One function is human value – this is unique to each and every one of us, and can change in any of us due to circumstance and context; and it tends to include things like survival value, likes and dislikes, habits, etc.
The other function is a scarcity function. The less common a thing is, the more it is valued.
In each of us it is our personal perception of scarcity, rather than any objective scarcity, that we use. Our perceptions are open to many influences, and politicians and advertisers are well aware.
These two functions multiply out to give a market value.
The problem, is that real abundance (because it has zero scarcity) always multiplies out to zero. Thus, even oxygen in the air, the single most valuable thing to human life, has no market value under ordinary circumstances, as we all already have as much as we need.
This is very important, as it means that markets cannot deal with abundance in any meaningful way, as they must always value abundance at zero.
Thus the idea that markets can deliver abundance to all, is clearly a nonsense.
Markets can only ever deliver real abundance to a select few within the system. The logic of this is inescapable.
Utility of money as a concept and a tool
Money has served humanity very well during our development, as during most of that time most of us had to deal with real scarcity of many of the necessities of life.
However, that is now changing radically.
The exponential growth of computing power is about to start delivering robotic systems that can build and maintain themselves, and can produce goods and services. All such goods and services become radically abundant, and therefore have zero market value.
Age of abundance
These developments will lead to a new age of radical abundance, and will bring an end to the utility value that money once had in society.
Life beyond money and markets will be something so different from past experience that few are able to imagine it. All will adapt to it, but it is the transition phase that will take some careful management.
We need to be growing a shift from country identification to identification with sentience (even beyond global identification with humanity as a whole).
On pages 10 and 11 you express a view of the future grounded in the experiences of scarcity from the past.
On page 12 the focus on the past as an indication of the future is only valid if the contexts are analogous. In our case they are not. We are in an age of exponential growth of computing capacity, and the beginnings of an exponential growth in the productive ability and capacity of robotics and automation in general.
It is this growth in productive capacity that is unlike anything else in humanity’s past.
It is this growth that is changing the context of being, and making money and markets a liability as a valuation tool.
Markets cannot do anything with abundance other than value it at zero.
There is no way to deal sensibly with abundance in a market based valuation system (which is what an economic/monetary system is).
What people actually need is an abundance of a few key necessities of life – air, water, food, shelter, security, education, transportation, and communication.
We now have the real ability to create systems that can deliver all of these things, and maintain themselves, without any need for further external input (other than sunlight as the energy source). And there is zero economic incentive to produce such technology (and massive economic incentive to prevent its production).
I put to you the thesis that while money and markets have without doubt served humanity very well in the past period of scarcity, their very existence is becoming a major threat to the future development and prosperity of all of humanity (and all other life on this planet).
It seems to me that the most import question of our age is how we manage the transition from a scarcity based world (money) to one of abundance (cooperation empowered by robotics and hi bandwidth communication).
On page 13 you introduce the term “intrinsic value” without making any attempt to define it. As such it appears meaningless.
The analogy of financial leverage with real world leverage seems very weak to me. Leverage in the financial world is about risk. Those who are able to create the illusion of wealth creation, and are thus able to bring in the “herd” behind them, can create massive profits for themselves, without actually creating anything of real value – and actually destroy real value for others.
This seems to be what most of the finance industry has been up to for a long time (Bond markets, ForEx markets, Futures markets, Derivatives markets etc).
I align with your description of the depth of systems, and actually it goes far deeper.
We have many levels of highly evolved organic systems within each of us, and within the ecosystems that sustain us. These are often forgotten in economic discussions because they are (or have been) abundant (and therefore have zero economic value).
I fundamentally disagree with the concept of deleverage that you define on page 14. It seems to be an attempt to ascribe value to many of the financial processes that are, in reality, little short of fraud and theft (at many different levels).
Most growth trends are sigmoid (S shaped), that is they start from some point, go through a period of essentially unrestrained exponential growth, until they run into the limits of that particular environment, and growth flattens off to some level compatible with that environment. Sometimes, if there is a finite limit of some material that is used up, then there is a population crash.
As a species, we do not seem to face any such limits yet.
Our sun converts some 700 million tons of hydrogen to helium every second, releasing enough energy to support a population of a billion billion human beings.
There is no shortage of matter on this planet, or in the nearby reaches of space. So we could quite easily keep expanding to fill up the region of space surrounding our sun, with orbiting space craft that use matter far more effectively for sustaining life than does this massive ball of rock we call planet earth.
If one looks at the evolutionary history of life, all of the major advances in the complexity of life are characterised by new levels of cooperation between formerly competing systems.
It seems very clear to me, that if humanity wishes to survive and prosper, then we need to take the competitive systems of markets and money out of our considerations of our future direction, and instead focus our attention on the sorts of cooperative systems (with attendant stabilising strategies) that can deliver global (and beyond) abundance of all necessities (including freedom and security) to every individual (no exceptions).
This is actually a technical possibility, but there is no possible way (in practice or in logic) to justify such a thing in economic (money and market) terms. Such abundance is simply anathema to markets – markets are fundamentally driven from scarcity.
I agree with your characterisation of social unrest on page 15, and it seems to me that the most effective way to narrow the gap between rich and poor is to completely automate and decentralise the means of production for all essential services. This allows the economic system to continue for non essential services, and it fundamentally alters the dynamics. People will no longer need jobs to survive, and they will need to choose something to do with their time. This is a very different dynamic from that experienced by most in today’s world.
I align with your analysis (on page 16 – Control and certainty) that highly connected and interconnected systems suffer from a lack of resilience, and that we need to build far greater redundancy into our systems; though we have very different conceptions of the most stable and efficient way to achieve that outcome.
Under “structure” on page 17 you indirectly address the need for new levels of cooperation, yet without developing the underlying logical need for such a thing (you leave it in the realm of the intuitively obvious, which it is to many of us, and not to many others).
The rest of what you express on page 17 seems very probable under current trends, and it is not inevitable.
It does clearly demonstrate that economics has come to the end of its utility as the dominant force in the direction of human affairs.
We must move beyond markets and money, or be forever in economic slavery.
Certainly there is a sense where one must “go with the flow” rather than trying to resist the flow directly; and there is also a sense in which there are key points in any topology (geographic or strategic or any other meta level) where a flow can be diverted with minimal input of energy. These points have both spatial and temporal aspects in whatever coordinate system one is considering.
Page 20 – there is a sense in which all traders are “Rogue Traders” – most particularly the likes of George Soros (with all respect to George, it is not about him personally, but about the entire values framework within which he, and most others, operate).
You speak of dishonest gain, and I wonder if you have a distinction between honest and legal. The entire financial system, with its debt based creation of money, seems dishonest to me. The entire notion of charging interest seems dishonest. If money is a proxy for goods and services, most goods require upkeep and maintenance if in storage, and actually lose value. How is it that people expect money to gain in value if stored?
That makes no sense.
Align completely with your description of raiders and day trippers.
I agree completely with your statement on page 27 “Wealth needs to be spread in a more social fashion to every country and every global citizen“, yet cannot see any logical way of achieving this in a market based system, as market value is essentially scarcity value; and markets will always tend to an optimal level or scarcity that produces the greatest flow of money.
To achieve such wealth spreading one must be in an abundance based paradigm. The only such paradigm available at present comes from automation and robotics – the google self driving car being one of the best examples currently in the public view of the level of automation we can now achieve.
On Page 24, your section “Labour participation” indicates clearly that the consequences of the continued exponential development of computing and automation have not been adequately considered.
Very soon, we will be able to automate any process.
I have been working with computers for 40 years now, and have seen massive change, and have also been to the Foresight Conference on nanotechnology and the future held at Google’s Palo Alto headquarters last year, and seen the projections for what will come of the latest research developments as they mature from laboratory to production.
On page 25, I align with your characterisation of social poverty.
Having been told 2.5 years ago that I was terminal cancer, and there was nothing known to medical science that could alter the probability of my survival (50% 5 months), I have gone through quite a process. I appear to be free of tumours, and am well past what I was told was the 1% survival probability. On the basis of my investigations, actions, and results, it seems that the medical system is much more interested in making profit than it is in delivering health to people. Once you put money in the system, it distorts all of the incentive structures.
I see no evidence for anything resembling a “collective field”, the reality appears to be something altogether different, and it often looks and acts like a “collective field” – so the notion of “collective field” could be used as an effective shorthand, just as the notion of “selfishness” can be used as shorthand in respect of genes.
It is strange to me, how on page 26 you set out so clearly that a money driven society is incompatible with human welfare – yet fail to actually reach that conclusion explicitly.
Page 26 is a very clear analysis of the reality, that what is valuable in times of real stress is actual commodities, not proxies.
Gold has been a useful proxy because of its rarity and its longevity under storage (it does not corrode or erode easily).
I agree with you that social connections play a very important role in times of stress (and actually at all times). The roles of broad social trust networks with high bandwidth communication is only beginning to be explored by most, and seems to me to be an essential stabilising factor in the coming age of abundance.
Align completely with your comments on Food, though we disagree on the most effective way of guaranteeing it. To me, the only really stable solution is to completely decentralise production, to the point of complete personalisation of production.
Taking energy from grain is a very inefficient way of doing it. Direct solar energy technologies are far more efficient.
I see no role for money in any of this, once we are past the point of actually having created these systems.
Having access to funding would greatly speed the creation of these automated systems, and even without it, they will be created, it is just likely to take about 10 years longer to happen.
Pages 29 & 30 I agree with almost all you say about the dollar’s value, and you fail to make clear the obvious, that the value is a market based (and therefore scarcity based) value. As such it cannot deliver abundance to any but a select few.
Your second paragraph on page 31 accurately states the reality, but fails to identify the systemic cause.
Yes the abundances of land, water and air are being eroded, and that is precisely because any such abundance has zero value in a market situation. It is not until it becomes scarce in some aspect that a market will start to value it.
This is the fundamental reason why I say that markets have passed their utility for humanity, and have become more of a danger than they are an asset. The incentive structure is fundamentally inverted from the one that humanity (with our emerging technology) now requires.
It very much depends what you mean by “frugal policies”. If you mean developing technologies that recycle all essential nutrients on a house by house basis, then yes I agree with you.
If you mean reducing choices of individuals, and forcing more people into poverty, then I can only disagree in the strongest possible terms. And you have stated earlier you desire to see wealth more evenly shared. So it is very hard to determine exactly what you mean by the use of the term “frugal” in this instance.
You Geographic analysis is interesting for what it leaves out – and I see that you bring it in a couple of pages on.
Africa has been exploited by colonial powers for the last 300 years. In that time a culture of power abuse, exploitation, and corruption has become the norm. Most of the fruits of their labour have been exported for the use by foreign nationals (first mostly European then largely American, and now the Chinese are taking an interest).
Your sentiments on the latter half of page 33 have some validity, and not so much as you seem to give them.
I’m not gathering a lot of support, mostly because I have taken myself so far from the norm that there are few, if any, like minded people around.
I can live with that.
I don’t like sentiments like those you expressed being used to cast doubts on anyone’s integrity by others up to no societal good.
I am 99.9999+% clear that economic growth is not compatible with generating or maintaining abundance. Markets and abundance simply do not mix well. Markets cannot assign a useful value to abundance.
The rebelliousness you assign to Africans on page 36 is true of all people, at all levels.
That is something that those at the top of the current pyramid need to consider very deeply.
It is time to give everyone their freedom, to empower every individual to self actualise in whatever fashion they think fit, provided that they respect the lives, freedoms and property of others in doing so. And everyone needs access to enough space to survive – which may mean turning many of our deserts back into forests – which is a simple enough task with appropriately abundant robotics.
Completely align with your first paragraph on Page 37.
I do not align with Empire, at any level.
I align to free individuals cooperating by choice, in a system that rewards such behaviour, and disincentivises cheats at any level.
A lot in what you say about Europe, and it seems to me to be even deeper.
There is a very deep resistance to rule in many European traditions.
I completely align with your final paragraph on page 42.
I suspect we have very different conceptions of what that might look like.
Agree that Keynesian economics is flawed, but not on the why of it being flawed.
The whole idea that any market system will lead to full employment is a logical nonsense.
All markets tend to an optimal level of scarcity that produces an optimal flow of money. That scarcity applies to everything, including labour. There is a structural incentive within a market economy to maintain a level of unemployment.
This is no longer acceptable.
In my understanding, it is no longer in the interests of the majority of humanity to have our systems dominated by market based valuation systems.
If we are to enter an age of prosperity and abundance that is potentially available from robotics and automation, then we need to completely rethink our governance models – which to me means planning to move economic systems to a secondary or tertiary role in society.
If people have all of their necessities guaranteed, then they are actually free to devote themselves to whatever takes their interest.
It will take some a long time for many to become truly aware of this possibility.
Managing the transition is going to be the really interesting bit.
I agree with your second paragraph, that many people are genuinely interesting in becoming involved in their own governance. We have seen the beginnings of that here in our little town with our coastal management group (www.teamkorowai.org.nz).
Your last paragraph on page 44 does have some truth to it, but not as much as you imply.
Humans are genetically and culturally driven to form communities, money need not be a factor in the process, and most often is not (I belong to far more voluntary communities than I do to economic communities).
I disagree with your first paragraph on page 45.
In my experience, most in society involve themselves in economic activity out of necessity, and most would rather not have that necessity present.
For many of us, money detracts from the experience of community, and does not enhance it at all.
Completely align with your analysis on the second paragraph.
Once money became a commodity in and of itself, and not merely a token in the exchange of goods and services, then the incentive structure inverted, and the incentive became to make more money, which means optimising scarcity to levels that produce maximum flows of money – and not meeting the needs of all in society.
Greed is so systemic, that it has completely corrupted not only the economic system, but also the legal and judicial systems – to the point that greed now has full legal protection.
Your first full sentence on page 46 is the reality that the vast majority of people face “They often do not have the luxury of being too choosy because the work they would rather do is not available to them.”
The “Actual transactions” section is fundamentally flawed. If everyone has all they need, then there is no need for trade.
If the exponential trends of robotics and computing continue for the next decade (and indications are that they will continue for the next few decades), then we will very soon reach the point where automation can supply all of the necessities to all individuals at no cost.
This allows for individuals to interact free of the need of trade, where people can truly be of service, and can give gifts, without thought or need of return.
I agree with your last paragraph on page 47, that we are genetically and socially primed for cooperation at the widest level, we only need the tools and the contexts to do so.
I align with most of what you say on page 48, up to the point that you bring in the term “market”.
Markets are not required.
Markets were required historically, and we are now rapidly approaching the point where technology makes almost all markets redundant.
As they say in marketing, satisfaction is the difference between expectation and delivery.
To gain maximum satisfaction we need to cultivate minimum expectations (tending towards zero).
The dumbing down of people and standards are the direct result of the incentive structure in having money as a societal objective.
The incentive to optimise for short term monetary goals is the reason that most of the redundancy in our systems has been removed. This is exceptionally dangerous. Actuaries rely on accurate data to create their risk tables, and accurate data has only been available for a very few years. Thus low probability high impact risks are not accurately incorporated in societal planning. We just had a great example of that in Christchurch NZ – a hundred miles from me. A series of major earthquakes has damaged over 80% of the buildings, and most of the roads, sewer and water systems. Massive infrastructure costs.
The whole world is very vulnerable to similar events under the current models.
The model I propose mitigates all such risks.
It seems to me that our potential is in fact unlimited, which gives us complete access to the choice of any possible potential.
Having actually worked as a fisherman, and having caught, processed and delivered to market enough fish to feed 3 people for 1,000 years, I know how hard that work is.
I have also spent 30 years designing, developing, documenting, and supporting computer systems.
Now, I am trying to grow all my own food, and it is not an easy thing to do.
I would greatly prefer to have automated systems doing all the hard work of soil management, weed and pest management, water storage and management, temperature management etc.
My “bliss” is found in intellectual pursuits, and in making contribution to empowering others in finding and following their own bliss – where-ever that may responsibly lead them.
When I have the tools, I will start to do some serious exploring in the domain of what is possible in genetics.
My daughter wants dragons and faeries – it might be fun to make some for her.
Should be possible in 1/10th g of a space habitat.
Intuition is a powerful tool, particularly when coupled to logic and reason for affirmation.
I rely on both.
Basically align with the rest of your principles and Water stuff.
Pg 59 – The idea of cooperatives, and cooperative banking is a powerful one to champion as a transition move.
Pg 64 – agree that patents and the entire concept of intellectual property have been and are being severely abused by many, purely for profit reasons, and without serious consideration of the harm being done to individuals within society. These rules, and the rules around copyright, need to change.
The idea that anyone develops an idea completely by themselves, independent of the rest of society, is a nonsense. Without culture and society as starters, we are worse than most other animals. We need to learn from others to have any idea what we need to do.
Certainly if someone puts in years of work to produce something, then some reward is due, and usually this happens if lawyers and corporations are kept out of the picture.
Page 66 – there is a lot of industry generated propoganda around food and nutrition. Two years ago I went vegan after being told I had 5 months to live and there was nothing known to medical science that could alter my survival probability. I seem to be completely free of cancer, and I feel fine – and I have had nothing to eat except plant matter for 2 years and 5 months.
A varied plant diet can be fully nutritious, and have a fairly small footprint on the planet’s ecology.
As we develop robotic systems to tend gardens closely, and remove weeds and insect pests, and chase away birds – we will be able to largely do away with pesticides, and make gardens even more productive. We should be able to support 10 people per hectare, including living quarters and play room, in comfort.
With smart systems, all rainwater would be stored in deep underground vessels, and used as necessary. Most water used in the house would be recycled through the gardens.
Large scale movement of water should be largely unnecessary with smart use of local water resources – in most situations.
It is now 8 years since I used any sort of soap products, and I smell far less than previously.
Smart wood burners will be very efficient.
For the last 15 years, we have grown all of our heating wood on our half acre section.
Page 68 agree completely that in times of rapid exponential change, past performance is not necessarily a good predictor of future performance.
The exponential changes in automation that are coming very soon will change so many paradigms that very few will have any experience with that level of change. Most people will adapt to it just fine, but few will be able to plan ahead with any degree of certainty at all.
Agree completely with your page 69 assertion that people will need to be able to use both their intuition and the reason, and to have no problems mixing and matching, and changing priorities between them. I’ve been well practiced in that for 50+ years, and have spent much of that time pushing boundaries of logic and knowledge across many domains.
It seems to me that the notion of “source” is not actually accurate.
What seems to actually be happening is association of percepts and concepts that deliver new percepts and concepts, and that associative and intuitive capacity is the result of the way brains store and retrieve information in a distributed fashion, that is very closely analogous to how LASER holography works.
Learning to trust the intuitions that brain delivers is one of the hardest things, as most people get taught by the school system to ignore them.
I was fortunate to be fast enough to take the intuitive answer, and then to back rationalise a logical response, as fast as I could talk – so most people had no idea what I was actually doing – they thought I was being rational and following their rules, but I wasn’t.
Page 74 – I would modify the right to “food and water”, to “healthy food, clean water, clean air, adequate shelter, communication, sanitary living conditions, freedom of travel and association”.
Page 75 – your point 4 does not resonate with me.
It seems to me that human beings are capable of infinite diversity, and that crowds are vastly over rated. I would much rather see a large collection of individuals than a crowd. Crowds are very dangerous things, that tend to operate at very low levels of awareness. Individuals are capable of much higher levels of awareness.
It seems, that in large measure, we align on many things.
The major difference is, that I do not see financial systems playing a large part in the long term future of humanity.
If they do, then my intuition tells me that the future will not be very pleasant for most.
For me, I see the clear need to develop a strong network of people who are committed to global cooperation and individual empowerment; and to have that network working to make the transition from scarcity (as defined by market valuation) to radical abundance for all (no exceptions).