Thursday, February 6, 2014

Steering Aggregate Adjustments To Distributed Change: Developing A Faster/Leaner/Better Aggregate OODA Loop



For aggregates to persist, every distributed component process must change?

That is always obvious once said, so why does so much distributed friction persist, over the seemingly obvious?

In his most recent review of the historical negotiations leading up to launch of the European common currency, Bill Mitchell has dredged up a statement which, in hindsight, reveals amazing levels of mal-adaptive reasoning.

The avowed purpose of the euro currency was to "reduce the level of unemployment by fighting inflation."

It is truly amazing to see how that perspective has turned out, in our existing context. The implication, then and now, is that a slight majority of Central European Policymakers were and are STILL fixated on the mythical benefits of a gold-like, static currency standard. The entire monetary policy for the common currency has been one grand effort to peg their currency value to a contentiously derived figure which they presume is static, but which must in reality, dynamically float.

As a truly deranged consequence, Europe has embarked on a mad effort to stabilize an incidental metric, inflation, which is at heart, an indicator of the dynamic flow of adaptive value between the necessarily diverse forms of capital.

Think for a moment about the lunacy of Europe's grand strategy.

Do we bother stabilizing the net flow of water between oceans, rivers, lakes and tidal basins? Or do we simply navigate on all of them, as and when needed?

Do nations regulate, across their aggregate population, how many bodily resources flow between specific sub-classes of muscles, fat deposits, organs or other body tissue types?

And does the biological cell regulate the intrinsic "value" of a given ATP-molecule? Or does every cell only the adaptive impact of ATP, when used "wherever & whenever needed" in the cell?

Answer to all 3 questions: Surviving aggregates do NOT pursue maladaptive strategies for long.

They certainly do NOT do so during those spurts when we actually adapt and evolve. As an adaptive, aggregate response to aggregate context, we let the relative ratio of all instances of net resources "float." Independently, we then regulate, through our collective, distributed efforts, ONLY those net resources which can be commandeered and leveraged by citizens within each nation state.

In short, we act and survive as an aggregate of inter-dependent members, not as isolated individuals. The entire ideology of capitalism for the sake of capital is merely a method searching for a purpose.

By their own admission, the European founders embarked on their common currency to improve the AGGREGATE or general welfare of all citizens in all member countries. Yet their operations have been functionally orthogonal to their stated mission.  As a result, they have clearly degraded rather than improved general welfare, for tens of millions of their own citizens.

Are they only slow on the uptake, or is this a guaranteed consequence of the still divergent views of rentiers and coordinators?

It has been perennially argued and so far proven - since the first fiat currency unleashed quantum jumps in fiat policy space and policy agility - that there is no obligatory relation between unemployment and inflation.

The entire argument depends on the very definitions of both inflation and unemployment, which are rarely precisely defined in given arguments as context-dependent terms.

The presumed link between unemployment and inflation is only a straw man smokescreen raised by rentiers opposed to the very policy maneuverability that generates the higher return-on-coordination in the 1st place!

We can't see "our" aggregate causality for our distributed views!

Europeans, as well as we here in the USA are left with a simpler, stark proposition. We have no need for active "monetary policy" whatsoever?

Rather, we need an agile, automatic-stabilizer monetary policy, backed by agile fiscal policy?

Curiously, the latter view has been consistently espoused in evolving forms, from early colonialists, to Ben Franklin and Alexander Hamilton, and on to Abraham Lincoln's Greenback and eventually to our current fiat currency regime, crafted largely under the guidance of Marriner Eccles and FDR.

Why is anyone surprised? That has always been the way in which all "social" aggregates have maneuvered to survive and thrive, throughout the entire history of all aggregates, not just biological ones.

The logic of social species simply expresses the timeless logic of aggregates. What we call social aggregates are merely those which display seemingly greater LOCAL degrees of freedom (at least on planet Earth, where we're still confined).

The constant, aggregate logic is to guarantee that the aggregate survives in a Natural Selection Market, by allowing all of the aggregate's component members to seek aggregate benefit .... by freely trading SOME local degrees of freedom, in return for net-adaptive access to SOME aggregate degrees of freedom.

Aggregate success obviously tracks the QUALITY of distributed decision-making.

In evolutionary terms, it is quite easy to maintain net profitability in that pool of trades - but only when people actually use ALL of their heads, not just some, and not just their weapons.

Our dominant social friction seems to be over fair - i.e., adaptive - distribution of (or access to) our aggregate benefits. Every time we generate more new resources than anyone previously imagined ... we stop and fight over dividing up the spoils.

Instead of absorbing the biggest lesson. That we generate more than we can imagine ... again ... if we'd only not pause to fight over past successes!

In practice, we're in a constant fight over whether to actively waste new assets by uselessly hoarding them, or to adaptively leverage any and all assets, while exploring our newly emerging aggregate options. It's a question of stopping in the middle of an evolutionary path, or never stopping, and to instead always keep going.

Managing that friction is where the demand for real thinking comes in. In practice, our kids always go on, as we slowly stop. The real question is whether we're going to try to limit the options our offspring have access to.

This is actually astounding. It tells us a lot about our actual context, and our own impact on our own outcomes. Humans have come this far, and yet we cannot mediate juvenile frictions that arise among our own citizens, who are members of our own country? Ancient tribal customs worked these methods out perfectly, tens of thousands of years ago. Are we only confused, distracted and self-conquered by our own, growing numbers? So that we're not even leveraging what we've ALWAYS known?

Yes. Emphatically yes. As always, we have met the enemy, and they is us.

The only question is what we're going to do about it. 

What new methods will we invent to redirect emerging resources away from the next emerging battle with ourselves?

Our current primary social friction seems to be largely between just two of our arbitrarily defined, sociological "personality-types" - rentiers and laborers - which are analogous to biological cell types. To further our embarrassment, rentiers and laborers are clearly mutual symbionts, neither able to exist without the other. They are only virtually defined as different, yet act too stupidly to intelligently leverage their own return-on-coordination. Go figure!

With only cursory examination, the perennially under-regulated rentier outlook is exposed for what it is. A intellectually lazy, parasitic approach that mindlessly seeks to HAVE it's culture, and EAT MOST OF IT too (or at least hoard it).

Rent seeking is simply a non-adaptive approach not yet adequately regulated by the diverse co-owners within the same aggregate. The best & most common defense for the rentier fraud is "Why didn't you stop me?"

Meanwhile, with similarly cursory examination, the perennially under-organized laborer outlook is simultaneously exposed for what it is as well - the same intellectual laziness, expressed only slightly differently. A overly passive approach that works harder at avoiding rather than fulfilling the responsibilities of co-owning it's own aggregate.

By both methods, an intellectually lazy aggregate and it's options remain parted!

You could NOT make this up, or anticipate such an outcome for such a large culture of the supposedly most intelligent species ever to walk this planet. Certainly not after 10,000 years of rapidly evolving, human cultural history.

Our reality is that laborers are always trying to give away their aggregate ownership responsibilities, and rentiers are always trying to minimize the intellectual work they must perform in order to accept all those aggregate benefits, and keep them coming. As John Boyd famously said, their default goal of the rentiers is to just "don’t interrupt the money flow, add to it."

Is it any surprise that many people conclude that democracy won't work, even though it obviously can, has, and will again, in fits and spurts? Democracy is just another word for an agile aggregate, capable of maneuver context management. Democracy, when it does work, depends on an adequate quality of distributed decision-making, rather than the fallbac, of lazily TRYING to rely upon the transient crutch of Central Planning. No matter what the form, Central Planning always fails, since it can never scale planning as fast as aggregate options expand. It's only a matter of when, not if.

You also couldn't make up this escalation of useless parlour talk about whether democracy works, but you can predict it's inevitability, unless we better educate and better train our own personnel. Aggregates ARE what aggregates practice, no matter how smart their members are before they initiate "team" or aggregate practice.

Evolving methods drive evolving results. Until our evolving education and training methods more closely chase our evolving demand for faster/leaner/better coordination, we won't maintain an evolving democracy. We won't be able to explore, or controllably manage, our continually expanding options.

What part of Duh! are we NOT teaching our children? All of the details, and NONE of the context?

There is a better way. If we focus on coordination skills first, we'll ALWAYS be able to muster whatever adaptive rate, form and direction we need, when the hour strikes.

Things won't improve until labor, in aggregate, calmly and purposefully acts more like an aggregate owner, and until rentiers simultaneously, in aggregate, calmly and gracefully accept the overwhelming return-on-coordination among all co-owners. Until then, our Aggregate Adaptive Rate will continue to lag and our Output Gap will only increase. This is an aggregate organizational task, not a conflict to be won. To make things easier on everyone, we need "a more perfect union" - NOT disorganized squabbling.

One example conclusion follows from this expose.

The concept of keeping a "land-use-tax" obligation in balance with a "labor-tax" is only a crude beginning to a more general social-organization method. The range of so-called "Intellectual Properties" has now extended far beyond mere land itself, and the divisive rentier-vs-laborer competition now rages over every new niche that citizens invade via coordination.

To balance labor-taxes, a more general "Intellectual-Property-Use Tax" is clearly called for, to provide measured incentives for both random invention AND aggregate leverage (redistribution) of aggregate skills AND actual production. It always boils down to aggregate agility in regulating adaptive tolerance limits on all new methods employed of, for and by the host aggregate. Call it social responsibility or whatever you want, just get on with it quickly, so that our culture can move on, just as quickly. Aggregate tempo and maneuverability always matters, more than anything else.

Many other adaptive conclusions will soon be obvious to rentier/laborer enclaves, once they start working together, not just negotiating periodically.

Our next, adequate, and distributed solution this week ...... is always better than a supposedly perfect, Centrally Planned one, in some fanciful future.

Clearly, to guarantee that an organized citizenry can always QUICKLY consume all new resources and leverage every new option that it collectively produces, there has to be fiat or on-demand equivalency between labor and all other forms of capital. The ultimate logic of any social species is to provide rapid translation between all local forms of intrinsic capital, so that all capital translations are SPEEDILY valued and denominated per a FLOATING, aggregate-adaptive-rate scale.

The immediate benefit for us is to NOT impair the quality of our distributed decision-making, by judging decisions according to any subjugate, distracting and overly narrow metric which is too divorced from aggregate context.

In other words, just avoid any and all instances of Central Planning, where decisions for many are attempted BY too few, wielding a fraction of the aggregate feedback and knowledge which is too small.

Our constantly emerging aggregate benefit?

Just adjust more aggregate decisions, sooner. That's how all aggregates stay closer to their unpredictable, aggregate adaptive paths.

How do aggregates do that? By ever more frequent and continuous substitution of inexpensive prevention for the overwhelming cost of expensive repairs.

In practice, that means constantly inventing new social instrumentation methods, so that quicker, distributed decision-making benefit from earlier feedback from MORE of our aggregate. The alternative is slow, less distributed decision-making, more divorced from early & full aggregate feedback.

In this way, the aggregate adaptive value of all "markets" is entirely tied to them being equally open to real-time feedback from all citizens. If not fully open to all, in real-time, then market operations instantly veer towards more random purposes which are, by statistical definition, less adaptive for the aggregate. Again, it is only a question of when, not if.

May be state this in even more general, and therefore even more adaptive terms?

In our present tax system, EVERY form of capital transfer should be regulated by the entire range of aggregate feedback, through one, constant "Capital-Use-Tax" rate. That one tax rate should hold for all definable forms of capital leased from the aggregate.

How could this help? First, we could get rid of our currently arbitrary hodge-podge of labor-use taxes and/or land-use taxes and/or other IP-use taxes. Second, unless every voice is heard and valued, the aggregate impact of unpredictably emerging inter-dependencies cannot be detected and managed through cheap, early prevention. Instead, management is less successfully attempted through late and more costly repair alone.

Finally, any transient deviance from a uniform, "Capital-Use" tax rate would also be more clearly seen by all as an interim expression of flexible, not permanent, policy.

Now we're back to a simple, parlour-talk issue. Why is democracy always superior in the long run? 

Simply because all the rights and responsibilities implied by citizenship act as highly agile, distributed checks and balances. That's how we KEEP the cardinal rule of social species, that all national assets are in reality leased from the aggregate, and not owned independent from it, in opposition to aggregate Adaptive Rate.
One immediate consequence is the need to regulate inter-aggregate trade. Clearly, the currently promoted definition of "free" trade is a myth and oxymoron. Today's perversion of "free trade" only means that non-labor forms of capital movement are NOT taxed, while labor-capital is selectively taxed. The illogical reason for that aggregate policy is self-evident, as well as self-defeating for for both labor and rentiers alike.

Every form of trade, foreign or domestic, can be allowed ONLY after it's current and emerging adaptive value is evaluated by the full range of democratic feedback. For aggregate agility, however, no single, isolated action should be instantaneously prohibited in practice. Rather, to guarantee aggregate survival, the growth or expansion of all volume trades and/or trade agreements must soon be vetted and constantly reviewed through aggregate feedback.

Without constant deference to democratic feedback as our most reliable assessment method, we cannot claim to be pursuing aggregate adaptive rate as our Adaptive Path.

And if we as a people are not going to continuously pursue our best estimated adaptive path for the USA, why bother with any other charade whatsoever?

If we're going to pursue democracy for the return-on-coordination, surely we should pursue rapid coordination everywhere, or not bother doing so anywhere at all?

To continue co-organizing our own aggregate growth and distributed capabilities, we need that principle of Adaptive Fairness as our constant, orienting reference, while using it as the Desired Outcome which we are always chasing.

Lacking such a reference, we're left without a map, wondering which way our growing aggregate should go.