Capital Institute – 2020 Inflection Point

2020 Inflection Point

[ 23/6/20 ]

I’m a yes and a no to this John.

The major theme I certainly agree with, but the reasons and systems behind it are deeply more complex than this points to, and some key elements of understanding are missing.

One of the key things that few people seem to yet appreciate about evolution, is that complexity always results from new levels of cooperation. Competition is the mortal enemy of true freedom.

We are the most complex thing we yet know of.

We are far more about cooperation than we are about competition.

The focus on the role of competition in evolution, to the exclusion of the foundational role of cooperation in all new levels of complexity, is a major pathology in our current society.

Another key issue we have is that markets must value anything universally abundant at zero, yet humans require a universal abundance of key needs. Thus there is a fundamental problem in using markets (or their derivative measure money) as a primary valuation tool.

Another key issue is failing to understand complex adaptive systems. Many people and many institutions keep searching for rules or laws to solve problems, and fail to comprehend the necessary consequences of Goodhart’s Law “Any observed statistical regularity will tend to collapse once pressure is put upon it for control purposes”. Thus we see people proposing laws and rules around particular measures to solve problems, without understanding that the measure they have chosen will collapse as soon as it comes under pressure. This is a deeply recursive notion.

So yes, we need to be fundamentally cooperative, and that cannot be naively cooperative, we must be alert for cheats and exploitation, and must have (or be able to rapidly develop) effective mitigation strategies at all levels. So we need to look deeply at what is actually happening.

We need to get the basics right, material flows, energy flows; then we need the successive levels of understanding and strategy, successive levels of freedom and responsibility.

And we need to appreciate that it now seems beyond all reasonable doubt that what we each experience as reality is our own personal subconsciously created model of reality, and the more stressed we become the more simple the model is.

Add to that the fact that survival in reality often demands of us that we make decisions very quickly with little information – so we often must use vastly simplistic models when urgency leaves us no other choice, but that does not mean that reality is in any way simple.

And we agree that there is a demand now for fundamental reform of the economic system.

Some sort of universal income set at a level that anyone can actually survive at, seems to be the most effective intermediate strategy, to give us time to develop systems that can effectively replace all the many levels of essential functions that markets currently perform. And that is a seriously complex problem space, and demands a wide diversity of responses.

[followed by John replied – …’Love this in particular:
“Competition is the mortal enemy of true freedom.”
I have a finance friend who is a competitive athlete and once said, “I’ve never seen anything that is not enhanced by competition.”‘…]

Hi John,

Yeah – I know what you mean.
But what your athletic friend is failing to notice is that he was raised in a family that cooperated to allow him to survive.

We cooperate to do just about everything we do.

There would be a huge amount of cooperative effort going into the organisation of all of the events he enters.

There is no all out competition.

Even when your friend is at his most competitive in running, he is still cooperating at multiple levels, but isn’t aware of it.

He is not all out competing. He isn’t shooting or stabbing or poisoning the other competitors. Such competition as does exist is in a strictly limited realm.

And I enjoy competition. I love golf. I have raced cars, motorbikes, yachts, aircraft. I have a national title for precision landing of an aircraft. We used to have this thing where clubs would “raid” each other. We would declare ahead of time that one club would mount a raid on another club’s field within a time slot (usually a 1 hour window). So the defending club would have aircraft in the air, trying to “shoot down” the attackers before they got to the field (In this case shooting down meant getting in behind them and calling “Dat dat dat dat” over the radio – kills were usually fairly obvious, but sometimes interesting dogfights ensued – I never lost one).

But we didn’t actually hurt anyone, or damage anything (other than contributing CO2 to global climate change).

There is nothing wrong with competition, provided it is done on a cooperative base.

Trying to build any complex system on a competitive based is going to fail – the competition will destroy the boundary conditions required to maintain that level of complexity. For an autistic spectrum geek like me that is just blindingly obvious, but would take me years to explain in detail in anything like a formal proof to anyone else.

The critical problem is that our experiential reality is a vastly simplified model of the complexity within which we exist. All that simplification is done by multiple levels of subconscious systems that few people have much conscious awareness of. So most are simply not aware of the cooperation that sustains them, it is subconsciously filtered out of the experience as an unnecessary layer of complexity that is a given and thus does not need to be brought to the attention of awareness.

That was fine when it was a given, but for some time now we have been changing systems, and failing to notice that we have failed to understand the systemic ground that supports the complexity that is us – and that ground is cooperative – necessarily.

Everyone needs to appreciate that fact – particularly economists and politicians.

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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