While I agree with you that looking at energy flow in a system is useful, looking at information structures and flows is even more useful.
Markets are fundamentally based in the presence of scarcity. One only goes to a market to buy when one is experiencing a lack of something, or to sell if one has an abundance of something that others lack. This has made markets a very useful method of distributing scarce resources throughout history.
However, things are changing.
We are now developing tools of automation that allow us to capture information and automate production at a rate that is exponentially increasing our productive capacity. For a large and increasing set of goods and services there is no longer any need for scarcity, we have the capacity to deliver universal abundance.
When faced with universal abundance, markets break down.
Universal abundance implies an ability to meet all demand, then a bit more – which demands a price point of zero.
Markets cannot value anything with a price point of zero at anything other than zero.
There is no logical way to incentivise any market or capital based system to actually deliver universal abundance, yet natural justice demand of us that we do so.
Any market or capital based system is inherently incentivised to maintain major asymmetries where large numbers of people fail to get the basic necessities of life – food, shelter, communication, education, transportation, medical care.
We are not short of energy.
The sun converts 600 million tons of hydrogen to helium every second. That is the equivalent of about 1,000 Hiroshima bombs going off per person per second.
Even the tiny fraction of that which lands on Earth is about 1,000 time humanity’s current energy use.
We are not short of energy.
We are not short of mass. We live on a huge ball of it (Earth).
We are not short of technologies to capture energy or manipulate mass to meet our needs.
What we lack is an efficient suite of organisational structures, one which has as its highest values individual life, and individual liberty; that embraces diversity – and empowers every human being to self actualise in whatever way they responsibly choose.
No market based system of values can do that, because markets must always value such universal abundance at zero.
Capitalism as a system has reached the end of its social utility.
It now poses more immediate risk to each and every one of us than it delivers in rewards.
We need to find ways of transitioning beyond capitalism, beyond any sort of market values, to a system that values individual existence (every sapient individual – human and non human) and their liberty, above all else.
Until we have such a system – we are all at risk.
Science is very close to delivering us extended lifespans, so that most alive today will have the option of living on indefinitely, in good health, in biologically young and fit bodies, for as long as they choose to live.
We have the ability to automate any process we choose to focus on, including the processes of manufacture and maintenance of automated machinery.
That makes it in the long term self interest of all of us to develop systems which don’t simply tolerate diversity, but actively support and encourage it.
No amount of tinkering with capitalism can do that.
Market based values will always value any sort of universal abundance at zero or less, and will always have systemic incentives to destroy universal abundance (just look what our copyright and patent laws are doing to abundant information).
Sure energy flows are a useful modelling tool.
So is identification of rate limiting steps in any process.
So is automation.
So is the idea of nutrient flows within ecosystems – and sometimes it can be complex organic structures that become the limiting factor in organic systems.
Consider that fractals are a very information efficient method of transmitting complexity – see one example I wrote some simple code to demonstrate recently – https://tedhowardnz.wordpress.com/2014/07/09/playing-with-chaos
What is needed is a melding of biochemistry, ecology, systems theory, and advanced exploration of generalised algorithm and computational spaces (as per Wolfram et al).
Our choices seem rather stark – we either consciously choose radical abundance, or at some point the system we are in is going to tip over a point from which it is unable to recover (at least from the perspective of human life).
Thank you for your expansion, and that gives me a far deeper set of useful assumptions upon which to build a conceptual framework with which to communicate the notion I am trying to communicate.
Consider it in this fashion.
Yes, it is true to say that in the first instance markets were about delivering abundance, and that was an aspect of the natural asymmetries of distribution that existed at that time. Some individuals had abundance of some sets of things and scarcities of other sets of things, while others had abundances and scarcities of different sets of things. Trade was useful for both parties. Money was a useful tool in allowing you to find any member of the trading community that wanted your abundance, and then match that surplus with any other member of the trading community that could supply your scarcity with their excess (rather than having to find an overlap in a single trader). An efficient tool in such an environment.
The key thing to get is that markets are fundamentally founded in those asymmetries of distribution. Both abundance and scarcity are important in the functioning of markets in this sense.
So in times of real asymmetry of distribution, markets are a valuable tool.
However, the situation has been changing significantly.
As we have developed technology, we have the ability to deliver a universal abundance of an ever increasing set of goods and services (through accelerating automated production at ever higher levels).
The problem with any universal abundance is that in a market situation, there is no longer any asymmetry of demand – all demand is now zero (having been met) so the price point (the intersection of the supply and demand curves) is at zero.
This is a necessary condition of universal abundance.
The incentive structures of markets cannot deliver universal abundance consistently.
There must be a non-zero price point for markets to function.
Having a non zero price point means there must exist unmet demand.
The logical and inescapable conclusion – markets cannot support the delivery of universal abundance.
Or phrased different, poverty for some is the natural outcome of any market based system.
We have the technical capacity to deliver an abundance of all the necessities of life to every individual, yet we do not do so because there is no market based incentive to do so.
Logical conclusion – markets value profit above human life and liberty.
Logical conclusion – only by changing value sets, and choosing to value life and liberty, universally, can we create systems that truly provide the possibility of the sort of long term stability and safety that allows for very long life.
The possibility of extending human life indefinitely demands of us that we transcend the values of the market place, and instead develop systems that supply the necessities of existence and liberty to every sapient life form (human and non-human, biological and non-biological).
I started programming computers over 40 years ago.
I have run a software company since 1986.
I have no reasonable doubt that automation to a level that automates the maintenance of the automated means of production is possible, and I also have some feel for the scale of the difficulty of the problem (without doubt the biggest single engineering challenge yet proposed). Doable, and requiring significant resource allocation.
There can be no economic justification for such a thing.
It is, by definition, beyond the realm of market based values.
There is certainly a strong set of self interest for any self aware entity with an interest in long term survival, and that is not at all the same thing as a market based justification.
So my thesis remains the same.
The evolution of technology that allows for automated and distributed production has created and environment where the sorts of asymmetric distributions that made markets a useful tool for humanity no longer need to exist. In such an environment, market based measures of value actually become a strong existential risk factor, as they incentivise forms of behaviour that create artificial asymmetries to maintain market values.
Such artificial asymmetries are clearly “unfair” to those on the scarcity side of the distribution. That sense of injustice becomes a major risk factor for all. The system is inherently unstable and unsafe.
If we desire long life, that requires whole new sets of risk mitigation strategies, the risks generated by maintaining market based distributions simply are no longer acceptable.
In games theory terms, one viable strategy for the elimination of cheating is the provision of universal abundance.
We must develop migration strategies to take us beyond market based values and into the sorts of security available from universal abundance based strategies.
Transcending the market based paradigm is now clearly (beyond any shadow of reasonable doubt in my mind) the single greatest risk mitigation strategy available to us (individually and collectively).
Glad we agree on the values 😉
I tend to look at things in terms of the incentives and probabilities involved. In computers, the probability distributions are tight – either state zero or state one with probabilities 0 or 1. Biology and most of the rest of reality tends to have many more states and wider probability distributions.
The work of John Maynard-Smith introduced me to the concept of multiple stable state equilibria as a special case of more general multiple attractor probability topologies.
When I look at the fundamental incentive structures in markets, they always require some unmet demand to function – that incentivises the production of unmet demand, even when we are capable of meeting all demand.
I can easily see us developing technology to the point that within minutes of developing and testing any technology the plans are available to anyone who wants to create it with their automated production technology. I can image that some people will be early adopters of some technology and others will be more risk averse and wait a few generations before adopting.
All people are fundamentally creative.
I can easily imagine a society in which all people who work – who cooperate with others in the production of something, do so for the love of doing it – with no need for reward in a market. Creativity will be about design for the most part. And there will always be a place for hand crafted creations, even if they are functionally indistinguishable from automatically produced duplicates.
Once we have automation to the point that it can do all the drudgery, then all shackles are off the creativity.
We are still constrained by the survival and freedom needs of ourselves and others (which includes thermodynamics and all aspects of physics, chemistry, cosmology and biology), and that leaves a great deal of scope for creative freedom.
I tend to agree with all you have written, except that most of it is simplifications of more complex situations.
A bifurcation diagram is a two dimensional representation of an n dimensional probabilistic topology. So it is a simplification of something that is much more nuanced and subtle (like a line drawing of a mountain range versus actually walking over the mountains (with all the subtleties of the hidden valleys, ridges, rocks, gravels, streams, plants, textures, and slipperyness, stickyness, etc), except that it isn’t restricted to 3 spatial dimensions, and can have many more. If you’re a Dr Who fan think a mountain with TARDIS qualities, where small changes in local context can mean massive changes in the topology of the mountain both near and far.
I am also aware of the “punished by rewards” work – and agree that there is a vast array of motivational factors at play in every human.
Again the three brain model is a good first order approximation of a far more complex set of systems. It seems that most brains have between 20 and thirty major centres of organisation, and many more minor centres. And it is possible to go down to individual pattern recogniser bundles in the neocortex and even lower to individual neurons. The arrays of levels and short circuits are mind numbing in their complexity.
I can only agree with your latter sentiments, except with respect to markets.
To me, it is clear in logic that markets are always anti human in their incentive sets at anything other than the most basic of exchange levels. All higher order structures are predicated upon and incentivised to maintain scarcity at some level. There can be zero meta level incentive to take any price point to zero (the definition of universal abundance). So in this sense, any market based values are anathema to universal abundance – there is no escape from that. A universal basic income allows a bit of time to transition away from market based values, but is not a stable long term solution.
Applaud your efforts.
I had 17 years as a fisherman, and the last 28 years developing and supporting software for our fishing industry nation wide (New Zealand that is – not USA).
I have also alongside that worked at various levels within my local communities to increase the awareness of ecological connectivity.
Like you, I see a lot of room for improvement in recycling. Currently our systems are very wasteful of energy and nutrients, and we are far too liberal with poisons (insecticides, herbicides, antibiotics and antivirals).
We can all make a difference at this level, with our day to day choices.
I am now vegan, and organic where possible.
Far too few people are yet aware of the degree to which different groups of plants and animals have evolved to exist with other groups – and the levels of benefits each gets from the relationship. Our industrial fishing and farming techniques seem to be degrading the nutrient value of the foods they produce at the same time as they are raising the calorific value harvested per acre.
The medical costs of growing food as we do are huge.
I have proved to my own satisfaction the link between diet and cancer risk, having been told 5 years ago I was terminal cancer, and had all tumours gone 3 months after radical change of diet (short version of a long story).
We have room for many orders of magnitude improvement, and it concerns me that the incentive structures in a market based system simply don’t support such outcomes. The major incentives are to produce cheaper longer-lasting foods – the more subtle aspects of quality are lost on most people – they simply don’t have the money to be worth targeting with information, or to be able to afford the more expensive food. I spend more on food alone that most receive in retirement benefits.
Hence I put a lot of time and energy into raising awareness of the incentive structures underlying the assumptions that most never question.
I spend time here because John is one of the few economists that are actually starting to question some of the dogma of economics. I got to speak to Milton Friedman a few years back, and he got what I was talking about almost immediately, but unfortunately died a few months later.
So I keep on keeping on 😉