Saturday, January 14, 2012

More on Maintaining the Quality of Distributed Monetary Operations Decision-making

Any complex system that follows the general methodology recipe laid out in the prior post, has a chance to grow.

Any system that exceeds coherency tolerance limits, has a chance to implode, regardless of size or past.

As we lecture to engineers, methods drive results, but only with constant addition of new methods for retaining coherence among existing methods. Just avoid screwing up existing methods, and new options will always become obvious. Our bigger race is over tempo. There are always very few options that will scale.  It boils down to who will recognize & explore emerging options first - and converge soonest to the inevitable?

Metaphorically, whenever some sub-group decides it's okay to change the tires, without consulting drivers/passengers in a moving car, that's when things can go horribly wrong. Pick your imagined permutations of screwups by stakeholder groups in any system.

Then imagine what underlying method they might always use to maintain coherence within all their nested tolerance limits, thereby allowing system growth.

While data & direction & tactics/strategies/policies are all meaningless without context, there has to be one, overall method that is constant regardless of context.

We're always juggling emerging variables, within coherency tolerance limits, while searching for permutations that maximize further options. That is the general solution to the Traveling Entrepreneur Task. It's a constant parsing problem. Since expanding options are synonymous with more levels of indirection, it's also synonymous with system growth, which simply amounts to re-ordering from less-flexible to more flexible and adaptive systems.

That just brings us back to endlessly parking available energy, and the concept of reverse-entropy. Why? Just statistical fall out from the rules originating with the last Big Probability Event (supposedly a Bang). All methods we know are just permutations of those given rules.

To be logically consistent with reverse-entropy, monetary operations, as one minor part of cultural growth, are simply a bookkeeping method for coherently denominating increasingly distributed transaction patterns. If you keep in mind that the overall goal is a 2-stage optimization task, then you can always help maintain a coherent, steadily growing nation. The 2-stage optimization is simple. Keep the components - people - well maintained, AND grow the nation. Anything less gets boring very quickly. Small minds think distracting intoxication, big minds think cultural thermodynamics.

How, exactly, do we juggle existing/emerging variables, look for new options, and avoid the worst repercussions ... and do all that faster than others? The simple answer is by using highly connected human systems. Every group, by definition, is an analog computing network, exchanging messages between nodes. Group intelligence is held in the body of discourse, not in the component people. Group intelligence grows by constantly adjusting the inter-connectivity patterns and interaction rates, to increase net autocatalysis.

Autocatalysis rates (innovation) are managed my maintaining open & rapidly collaborative systems. Highly recombinant systems are, by definition, intelligent and agile. We need highly recombinant "culturetics" far more than recombinant genetics.

In the trivial case of monetary operations, how do we make fiscal/monetary/tax/criminology policies optimally serve national growth? Seems rather simple.

First, always maintain & adequately distribute enough fiat currency to allow quality of distributed decision-making to proceed without undue constraints. Any excessive distribution disparity is as stupid as generals hoarding most weapons and thinking they still command a useful army.

Second, regulate patterns of bookkeeping use in ways that inhibit fraudulent decisions, and encourage productive decisions.

Third, tax specific transaction patterns in order to further tune distributed actions to fit group policy goals.

Everything else constitutes local, tactical details. In that regard, the general rule is for policy staff to stay out of most, but not all, local tactics, and not meddle overmuch in the quality of distributed decision-making.