Evonomics – transformation

Seven Ways to Transform 21st-Century Economics — and Economists – continued discussion

Neoliberalism starts on the simplistic assumptions that (a) people are naturally always competitive and (b) the economy is rational and self correcting. ….
It functions through very complex cycles or reactionary human dynamics.
We need a theory of spiral economics that recognizes these facts.

Hi Dan,

Kind of.

It is more complex than that set of assumptions.

People have a vast set of possible strategies available, and what gets to express will be the result of many different levels of contextual factors, involving levels of stress, threat, opportunity, possibility, habits, social relationships, implicit boundaries, values, etc.

What does seem to be true is that for systems to maintain high order complexity, cooperation is required. And for such cooperation to exist, there must be attendant strategies to detect and remove cheating strategies – at higher levels, that is essentially what we define as morality. Ethics, morals, are an essential boundary condition for the maintenance of complex systems.

In so far as neoclassical economics tends to ignore that fact, and tends to act as what is essentially a justification strategy for cheating strategies, it has become an existential risk to the cooperative that is human society.

And it is extremely complex.

Currently economic systems perform many levels of important function in the operation of our society, and we must be conscious of all of those (and they are many {many many}) as we design transition systems to take us from an age based in scarcity and competition into an age founded on universal abundance and cooperation (with competition in a subsidiary role).

Fully automated systems give us the possibility of delivering goods and services to everyone, with little or no human input.
And in creating such systems, we need to be conscious of the necessary limits that are required for all levels of life to exist.

We are social entities,
We require social interaction, and such interaction requires boundary conditions, or it degrades into chaos.
Individual life and individual liberty need to be our highest values, and the value of life requires that we constrain liberty within the boundaries necessary for survival.
So it is a very complex recursive process of complexity and the sorts of boundaries necessary to maintain each level of complexity. And boundaries have very complex sets of attributes, like spatial and temporal flexibility, selective permeability, active transport, etc. A very complex, non-trivial exercise.

And as well as the levels of social responsibility, we must be aware of the lower levels of ecological responsibility required. We need to be active managers of our environment, maintaining non-threatening diversity, enhancing security, etc. Very complex issues.

Adherence to rule based systems cannot get us there.
Any fixed rule that isn’t extremely context sensitive is bound to create perverse outcomes.

The idea of a spiral is sometimes a useful analogy, and sometimes not.
There can be entirely new emergent domains, that don’t really fit the spiral analogy, and it does kind of point in the general direction of something.

Rationality is but the tiny tip of the vast subconscious set of computational systems that makes up a human being in a set of social and ecological contexts.

The very idea that markets measure something useful is now changing.
It really is worth thinking about the fact that oxygen in the air is worth nothing in most markets, yet is arguably the single most valuable thing for every individual human being (deprived of it for just a few minutes and we are dead).
We now have the technology to produce a vast range of goods and services in that sort of universal abundance, but doing so will be resisted by market incentives, because everything that was once profitable in a market situation that becomes universally abundant removes that source of profit. Intellectual property laws are exactly that sort of market response to universal abundance – destroying it to create marketable scarcity.

The system is becoming fundamentally unstable.
Its foundational assumptions are eroding.

We must change.
Reverting to simple assumptions is a classical response to stress.
In this context it becomes suicidal (on a species level).

We are in profoundly complex times.
That complexity must be accepted and embraced.
Any attempt to over simplify it will result in chaos and destruction.

And we need to make progress quickly and universally.

There are many very real sources of risk, many of them not of human origin.

We require massively redundant sets of fully automated systems of production, both on planet and off planet, urgently.
That requires transition to abundance based living.
And that requires individual acceptance of the necessary boundaries for social and ecological survival (all levels).

We have many different sorts of systems present.
Some are simple, some more complex.
Some are linear.
Some are exponential.
Some are cyclic.
Some involve recursive emergence.
Some involve non-linear complexity.
Some involve chaos and randomness.

Being human embodies all such classes of systems simultaneously, whether we are aware of them or not.

[Forgot that I had already responded to Dan above, and did it again in a different place:
“Neoliberalism starts on the simplistic assumptions that (a) people are naturally always competitive and (b) the economy is rational and self correcting. A new economic theory must start with the assumption that (a) people are naturally competitive (greedy, selfish, aggressive) AND cooperative. The choice of competition vs cooperation is a blend of rational and IRRATIONAL (emotions, beliefs, attitude, and cultural values) behaviors. (b) markets/economic systems have no innate intelligence and do not self-correct. It functions through very complex cycles or reactionary human dynamics.”]

Hi Dan

To me it is more complex than that.

Evolution can and does certainly have its competitive aspect, and when you look at it closely, competition does not lead to complexity.

When you look closely at evolution, complexity always emerges from new levels of cooperation, and raw cooperation is always vulnerable to exploitation by cheating strategies, so there develops something of an evolutionary arms race between cheating and attendant anti-cheating strategies – at every level of cooperation (from sub-cellular all the way on up).

One key part of understanding how this works is seeing what sort of conditions lead to the emergence of cooperation, and that comes about when existential threats are more common from sources that are not of your gene pool, either other species or some set of “environmental” factors.

How that works in practice can have a lot to do with reproductive cycles etc.

So the common misconception is that humans are fundamentally competitive.
Actually, it is much closer to reality to say that humans are fundamentally cooperative, and they can compete when necessary.

It is more accurate to say that we have create an economic systems that makes competition necessary, rather than to say that humans are in any way fundamentally competitive.

We actually embody many levels of cooperation.
And we also (necessarily) embody many levels of attendant anti-cheating strategies, like jealousy, our sense of injustice, an urge to punish cheats, etc. What tends to confuse people is the simplistic rationalisations of many of these strategy sets that have been accepted into our cultural explanations of such things. Most such explanations are fundamentally wrong in very important ways.

So your part (a) is correct in a sense, and is sufficiently over simplified to be dangerously open to misinterpretation if left simply as expressed.

Part (b) is partly correct, and partly misses the biggest issue with markets.

The fundamental issue with markets is that they are a scarcity based measure of value.
When most things were scarce, and the only thing really universally abundant was oxygen in the air (which wasn’t even recognised as a thing), then markets made sense, and worked.

Once we developed automation to the point of being able to deliver anything at all in universal abundance, then the problems started to emerge.

Anything universally abundant has no value in a market – by definition – no value in exchange.
When most people as individuals value having an abundance of all the necessities of life, and most of the pleasures, this places the needs of individuals and the incentives of markets in direct opposition, as the capacity of fully automated systems to deliver universal abundance exponentially expands into new sets of goods and services.

Value in exchange disappears when something reaches universal abundance, and with it market value, profit, and capital value.
For those invested in the abstract value of money, that becomes a real issue, and they will attempt to block the emergence of any universal abundance to retain market value.

We see that in IP laws (Intellectual Property), a mechanism to prevent universal abundance of information and to retain market value.
It institutionalises poverty of information.

It creates conditions where the masses experience lack of necessity when the only reason for such lack is the need for the abstract notion of profit to keep the market based system of capital in operation.

And worse, it creates levels of predatory strategies that are fundamentally based in dishonest, in deception and lies at ever more abstract levels – purely to survive in very competitive markets.

One could sort of get away with it, and disguise it, when it only applied to the abstract notions of information and ideas. But as automation moves ever deeper into the physical realms of manufacturing and delivery, then the issue becomes ever more obvious to ever more people.

UBI (Universal Basic Income) gives a mechanism which can give us time to transition to abundance based systems; which may always contain something of a hybrid character (such complexity is in fact quite common in the biological realm).

And without a mechanism like UBI, the systemic injustice will produce subconscious level forces that pose an existential risk to all – where-ever they are in whatever distribution.

So yes – sort of (b) is kind of correct, and it misses entirely the fundamental risk present in markets, in the context of exponentially expanding computation and automation.

And it is not all doom and gloom.

Exponentially expanding computation allows us to do more with less.
And we need to become very clear about the very many levels of very necessary boundaries required to sustain the many levels of complexity present and emerging and likely to emerge in the not too distant future.

Morality is one such set of boundary conditions that is absolutely required for the existence of complex social organisms like ourselves.
And there will be higher level analogs for every level of emergent complexity.

Complexity demands boundaries, just like cells without cell walls disperse and lose their complexity and just become ocean.

We must have the necessary minimum set of boundaries to sustain the complexity present.
And that will be an ever changing strategic landscape as new levels of strategy are explored and new levels of complexity emerge.

So – yes, and it is necessarily much more complex.

About Ted Howard NZ

Seems like I might be a cancer survivor. Thinking about the systemic incentives within the world we find ourselves in, and how we might adjust them to provide an environment that supports everyone (no exceptions) - see www.tedhowardnz.com/money
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